Brandon Snyder
With the e-commerce bang of the 1990s and the rise in western economies, many institutions began to think that e-commerce is a great way to develop less privileged countries. The World Trade Organization (WTO) even considers e-commerce as “the key force in integrating less developed nations into the multilateral trading system.” The WTO believes that the Internet can increase the margin of rich and poor if the proper steps are not taken that can result in the poor being left behind in the Internet’s markets. However, many scholars believe that if the Internet and e-commerce are used to bridge the digital divide that now exist, that the less developed nations will become more dependent on the west then they are today.
The reason that many of these international institutions believe that information technologies (ITs) and information and communication technologies (ITCs) can help under developed countries is because they look at the success of these technologies in already developed countries. This article does not argue that e-commerce can not help economies; however, it does argue that it will not succeed in under developed countries without the proper infrastructure and participation. A number of studies illustrated by the article reveal astounding facts that many under developed countries are not ready for the use of Internet and e-commerce.
A study was conducted to measure participation using three variables that were similar to those used by employees of the WTO. The variables studied were access to personal computers, telephone usage, and the average cost of a local telephone call. The data shows that although the least developed countries (LDCs) have the highest percentage growth, less than 10% of citizens of developing countries (DCs) and even less in LDCs would even be ready for e-commerce participation. The reason for this is the cost of local telephone calls that would prohibit the majority of citizens in these countries to access the internet.
The next study performed was a study on infrastructure. The main components of this study were enrollment in high level education and the different sectors of e-commerce. Using the sectors of e-commerce, the study could separate the types of e-commerce known as business-to-business (B2B) and business-to-consumer (B2C) into two different categories. There are four sectors to e-commerce where the manufacturing and merchant wholesale are considered B2B and the retail and service sectors are considered B2C. What the study found was that 93% of e-commerce is done in the B2B sectors where as only 7% of e-commerce is done in B2C sectors. This study can show that the widespread belief that sites such as Amazon and eBay have a limited benefit on the economy. Furthermore, after looking at the low enrollment in high level education one can notice that LDCs and DCs not able to compete in B2C sectors nor are they ready to compete in the more rewarding B2B sectors. With the LDCs and DCs exporting more oil, gas, and agricultural products their ability to compete will be limited in e-commerce. More over, it is pointed out that without a large middle class the demand for manufactured goods is limited as well in these countries.
In conclusion, e-commerce has definitely benefited some of the world’s greater developed countries. But pushing e-commerce into LDCs and DCs is a potential danger that the WTO and other institutions might want to reconsider. Although e-commerce has worked here in the
