UNCTAD today released Building Confidence, a report that focuses on the political, analytical and practical challenges faced by developing countries in the context of the rapid globalization of electronic commerce.
UNCTAD was one of the first international organizations to identify the potential of electronic commerce for developing countries, as well as for trade in general, said the organization’s Secretary-General, Rubens Ricupero, on the occasion of the publication of the report. "Electronic commerce is quickly emerging as a particularly visible and spectacular incarnation of globalization", he said. "At this stage, it is still too early to say whether it will narrow or broaden the gap between rich and poor. However, it is safe to say that the rapid expansion of electronic transactions constitutes a major opportunity for trade and development: it can be the source of a significant number of success stories by which developing countries and their enterprises can reach new levels of international competitiveness and participate more actively in the emerging global information economy", he stressed.
Building Confidence relies heavily on the conclusions that emerged from a number of expert meetings and workshops held in Europe and throughout the developing world over the past two years, in which more than 2,000 experts, scholars, practitioners and decision makers participated.
According to Bruno Lanvin, head of UNCTAD’s Electronic Commerce Section and leader of the Building Confidence team, "this is the first time that such a vast and diversified body of experts has been called on to contribute to such an endeavour".
Where will the digital divide run?
One of the working hypotheses of this new book is that e-commerce is much less about technology than about strategy, imagination and political will. It gives many examples of successful e-commerce endeavours in remote areas of the developing world. In a central chapter of the book, on the state of e-commerce, the authors have deliberately chosen to focus on Africa, showing that, despite the continent’s long-standing backwardness in infrastructure and the tendency of its telecom providers to maintain high prices for Internet access, a true potential exists for the expansion of e-commerce among African enterprises. This in itself could be seen as a powerful tool against the so-called "digital divide".
However, the focus of further efforts in this area, says UNCTAD, should be on e-commerce that is business-to-business (B-to-B), rather than business-to-consumer (B-to-C). Building Confidence also stresses the fact that, once signs exist that local enterprises (in particular SMEs) are ready to gear up for e-commerce, a "virtuous circle" is created whereby investors are encouraged to help finance the extension and improvement of local telecommunications infrastructure, with tremendous potential impact on society as a whole in education, health, environment and government.
E-commerce moves away from technocrats, towards civil society
The report strongly insists that many of the current international debates on e-commerce are marred by preconceived ideas and misperceptions. Developing countries wishing to assess the potential effects of e-commerce on their own economies would therefore be well advised not to take the "dominant models" that have guided the spectacular growth of e-commerce in OECD countries at face value.
E-commerce is not traditional commerce through electronic means. It is based on a whole new series of business and industrial models, which could truly revolutionize the way governments and enterprises work and contribute to national and international welfare. The very concepts of property (including intellectual property), profit and market valuation are being turned upside down by the e-commerce revolution. For developing countries, this means that experience should be the basis on which national regulations and strategies are drafted. It also means that the voice of developing countries needs to be heard more strongly in international debates on e-commerce, based on their own experiences, successes and failures.
UNCTAD also argues that e-commerce strategies will affect local societies as a whole. Hence, the formulation of national e-commerce strategies (the authors speak of an "e-commerce culture") needs to be based on the assessment and expression of the needs, fears and ambitions of all parts of civil society. Building Confidence proposes a new concept to address this issue -- "e-velopment", defined as an integrated approach to the economic, social and political dimensions of using information technology strategies for development -- and recommends the constitution of national task forces along those lines.
Access, knowledge and trust
"Sharing knowledge and building confidence should be fundamental principles of globalization", the report advocates. It insists that the vicious circle of underdeveloped telecommunications infrastructure and low level of integration in the world economy can be broken by e-commerce, and that local governments have a crucial role to play in that regard, by creating the proper environment for their own enterprises (especially SMEs) to develop and use e-commerce strategies. It also indicates how developing countries can enhance their own "knowledge base" in the e-commerce arena by being open to exchanging experiences with their own enterprises and those of other countries, whether developing or developed. The report further stresses that, although security concerns over Internet transactions are often "overemphasized", trust and confidence can be built, and "self-confidence" (defined as pride in the use and promotion of local languages and cultures through e-commerce) is an important ingredient in the process.
Building Confidence contains an index, glossary, bibliography and large compilation of Internet references. Its companion CD-ROM includes not only the full text of the book itself, but also UNCTAD’s database on trade in digitalized products, videos, and a large selection of the multimedia presentations made at recent UNCTAD workshops, expert meetings and round tables on electronic commerce and development. "Taken together, the book and the CD-ROM can constitute a powerful tool in the hands of governments, businesses and analysts interested in electronic commerce and the enhancement of its use in developing countries", says UNCTAD’s Lanvin.
In less than 200 pages, Building Confidence offers a rare combination of practical and statistical information as well as useful insights into some of the most hotly debated aspects of electronic commerce, such as taxation, security and intellectual property. It also provides a list of recommendations for stimulating e-commerce in developing countries.
Both the book itself, which is to be released soon in French, Spanish and Arabic, and parts of its accompanying CD-ROM are available on the Internet.
