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
4 comments:
Ecommerce is something that has busted the U.S. and western countries economies greatly, but in developing countries access to computers and internet seems sparse and education to use those computers, as you mentioned seems key to its success. I dont see Africa having easy access to computers or knowing how to efficiently use them any time soon. Could our use of ecommerce and our improved technologies be used to better the third world countries, definately, but i dont believe that having third world countries participate in the ecommerce themselves is really the key. Perhaps in countries such as China that have gained more access to things like computers and have already made progress toward economic growth, but i think our advances in technology should be used more by say teaching africans how to better produce their agricultural products or crafts and then using our successful ecommerce to sell more of them around the world, something like the global gallery on a much larger scale to mass sell their products and give them a greater economic gain. the posibilities seem endless, and maybe i'm wrong, there is a man, i forget his name, who is working to give a computer with internet to every child in third world countries, so maybe this next generation can make vast differences and use ecommerce to change the direction of their countries, wouldnt that be amazing.
-knost.6
I'm sorry , i got lost somewhere in the second paragraph. It could be because I'm on a handful of antihistamines or it could just be that I was thinking about ebay the whole time. I find e commerce is important as a new option but people will always value having things in their hands as soon as they buy it. Once we get vacuum tubes going everywhere allowing for instantaneous delivery, e commerce might replace going to the store personally. I find that if I cant get something for cheaper on e bay, I will go to the store to get it.
raake.2
Let me tell you about ecommerce growth on the internet. I buy everything I buy online. I refuse to go into a store and buy something locally, usually because the price is that much cheaper online. I do not understand people who buy things (especially high ticket electronics or other high ticket items) in stores. The premium that is paid due to the store’s overhead is ridiculous. I think it is incredible what the internet has done for competition and the lowering of prices for every item. The competition that the internet breeds allows companies to offer items at lower prices than ever. Ill be the first to tell you that shopping on the internet can save you a lot of money…
chay.3@osu.edu
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