The Next Generation Information Infrastructure for International Trade

By Henningsson, Stefan; Gal, Uri et al. | Journal of Theoretical and Applied Electronic Commerce Research, April 2011 | Go to article overview

The Next Generation Information Infrastructure for International Trade


Henningsson, Stefan, Gal, Uri, Bjørn-Andersen, Niels, Tan, Yao-Hua, Journal of Theoretical and Applied Electronic Commerce Research


Abstract

Regulators and actors in international trade are facing a difficult challenge of increasing control and security while at the same time lowering the administrative burden for traders. As a tentative response, the European Commission has introduced the concept of "trusted traders": certified traders that are in control of their business. Trusted traders are entitled to trade facilitations, faster border crossing, and fewer physical inspections. To enable the use of trusted traders, changes are required to the information infrastructure (II) of international trade. This article complements existing works on e-Government interoperability by a theoretically driven approach with theoretical development of the II concept and how II can be modified as additional focus. Following the principles of IS design research, this paper presents a design proposition for the II of international trade. Using theories of II development and change as kernel theory, our proposition presents a redesign of IT, organizational, human, and change and collaboration elements. The design proposition was evaluated and verified with proof of concept installations and a stakeholder value assessment. The paper contributes to the domain of II and how they may be changed to meet new requirements.

Keywords: Information infrastructure, International trade, Design research, E-customs, I3 model

1 Introduction

International trade faces a difficult challenge. Concerns over terrorists using international shipments in their attacks, the spread of contagious diseases, and increased tax fraud has caused consumers and governmental agencies to demand enhanced control and traceability of products from producer to end consumer [51]. At the same time, growing global competition is forcing governmental authorities to reconsider the administrative burden put on trading companies to ensure competiveness of national actors. For example, the European Commission (EC) aims to lower the administrative burden for companies in the European Union (EU) by 25% by 2012 [14]. These seemingly opposing pressures present a significant problem for actors involved in international trade.

The idea of a "trusted trader" is one approach currently being discussed in the EU to address these pressures [46], [52]. The trusted trader concept can potentially lower the administrative burden for traders and ensure a high level of control and security. It represents a paradigmatic shift in the relationship between governments and traders: instead of governments controlling businesses, companies accept responsibility for their traded goods and agree to demonstrate their control over processes upon request. If the trader is able to meet predefined requirements, it is granted a "trusted trader" status, which allows for trade simplifications and faster border-crossings. The status implies that governments will perform fewer physical inspections of the trader and accept periodical reporting of export and import data instead of specific details of each shipment, which gives the exporter greater flexibility and possibilities to rapidly respond to customer inquiries.

This paper reports on a joint project in which trade governors, traders, IT suppliers, and academic partners collaborated to redesign the information infrastructure (II) of international trade to meet the requirements of the trusted trader concept. The current process of international trade relies on an II that supports transaction based reporting and a fundamental distrust of traders, which run counter to the trusted trader concept. The technical infrastructure supporting traditional customs processes consists of silo systems limited to the specific business or governmental domain in which they are implemented [28]. When information is shared across organizational borders, it is still mostly done by printouts on physical paper. A truck with export goods crossing the Russian-Finnish border may be required to present as much as 40 different paper documents to be granted passage [47]. …

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