Trade promotion organizations and business firms in developing countries are increasingly using online computerized databases for their market research work, as more of these countries become equipped with telecommunication facilities. The type and volume of trade information available through online databases has expanded dramatically over the last several years, with new databases of interest to business and trade organizations continuously being introduced on the market.
Despite the growing attractiveness of online sources of market information and the progress of telecommunication technologies in developing countries, the cost of using databases is still relatively high. The charges for "searching" such databases often come to between $100 and $300 an hour, which is expensive for many organizations in developing countries.
The costs should not, however, be seen in absolute terms only. The type and quality of information obtained should also be considered. Some trade periodicals, directories and reports offer the same market information as online databases, at a lower cost but after a certain delay, which may extend from a few weeks in the case of periodicals to several months for less frequent publications. In a number of situations an online search can therefore be regarded as a complementary research tool rather than a substitute for traditional library work. But printed sources do not meet all of the needs of an exporter or importer in today's fast-moving international trade environment. Online databases should therefore be looked upon as one of the principal sources of trade information in the years ahead. The question then becomes one of selecting and using them effectively to save on costs. Major savings can be made and costly errors avoided if the online search is performed efficiently through a sound knowledge of costs, online sources and search techniques.
Understanding the costs
If a trade promotion organization or a business firm already has a microcomputer that is linked through a modem to a telecommunications network, the initial investment for starting online search operations is usually quite low. Most database "hosts" (i.e. firms or organizations that offer database services) (for instance "Data-star," "Dialog," "Eurobases," "GBI," "Profile") do not charge any "entry fee" or fixed subscriptions. Instead they bill the client only for usage. A minimum budget (for example $50 per host) should be foreseen however for acquiring the necessary technical manuals to conduct a search. In addition, in most countries the telecommunication agencies charge a small monthly or yearly subscription fee that is necessary for obtaining the transmission access codes and support services.
Usage costs for overseas data communications are invoiced separately by the telecommunication agency (in local currency) and the host (in the currency of the host country, except if the contract is made through a local agent).
When a database is accessed through a long-distance telephone call, the cost is very high, and transmission is often unsatisfactory because of noise on the line and interruptions in the telephone connection. A far better solution is to use a "packet-switching network" (PSN) (i.e. a system transferring groups of data ("packets" of data) by telephone lines through modems, making it possible to achieve reliable, high-speed data communications between computers) available in the home country or a neighbouring country (for example "Bahrnet" in Bahrain and West Asia, "Racsapac" in Costa Rica and other Central American countries, "Telepac" in Singapore and other Southeast Asian countries, "Sytranpac" in Cote d'Ivoire). The invoice for such a service is based on the time spent online and the volume of data transmitted. In any case the total cost will be much lower than normal telephone bills. A PSN invoice usually resembles the example in the box on page 6. …