National E-Trade Strategies: Beyond Access

By Gillies, John | International Trade Forum, January 1, 2003 | Go to article overview

National E-Trade Strategies: Beyond Access

Gillies, John, International Trade Forum

To increase exports and improve national competitiveness, developing countries need specific e-trade strategies that go beyond the issue of access.

Companies trade, not countries. Unless national trade strategies can be expressed in company-level impacts such as new business startups; the number of companies online; e-transacted export sales; and total new jobs, then they are not worth developing. The question for senior government officials responsible for trade is, "Will the growth in computer networks change the way trade is conducted?" If the answer is yes, then e-trade matters.

From access to application

The e-readiness debate has focused on information content, connectivity and access on the one hand, and the application of "e" to the health, education, and business sectors on the other. Among these applications, very few studies have focused on applying "e" to the practice of international trade. What are the goals of e-trade and how do we know if we are achieving them?

At ITC, we define e-trade as the application of information and communications technologies (ICT) to improve export competitiveness of companies. Firms can take advantage of these technologies to transform business processes so that they can compete more profitably, as well as to conduct trade electronically across national borders.

Export assets, e-trade choices

ICTs are transforming the way companies do business, but they are an engine of trade in their own right. The worldwide trade in ICT products and services by developing countries in the past decade has outperformed trade in general by a ratio of 2:1. At present, this trade is highly concentrated in only a few countries. Meanwhile, the bulk of developing countries' export earnings continue to come from commodity sectors, including agriculture, minerals, wood and fisheries.

Clearly, developing countries have strategic choices to make. They can introduce the benefits of ICT to traditional export sectors or shift resources to "new economy" sectors, where ICT is either the product or is integral to the product/service value. These choices will determine the distinctive nature of e-trade in terms of export sales, employment and the alleviation of poverty.

Measuring e-trade performance

Assume for a moment that a functioning e-commerce legal framework and telecommunications infrastructure exists in your country. What would you expect from a dynamic, burgeoning e-trade economy? It would include:

* growing trade in ICT hardware and software products and services;

* growing trade in e-friendly or information-rich sectors (for example, media, publishing, finance and tourism);

* growing trade in commodity products through business-to-business (B2B) e-marketplaces;

* shift in country trading partners to those that are using ICTs well;

* fewer imports of web services through the development of a competitive national Internet support industry;

* more companies using e-transaction tools or having an e-transaction capacity; and

* rising real incomes in those sectors where ICT is strategically deployed.

To achieve this "ICT-enabled" trade vision, national trade strategy-makers need to set specific and measurable targets. Instead of saying, "we must increase B2B e-trade" the target should be expressed in quantifiable terms. For example, "we must increase e-trade in commodity products through B2B e-marketplaces by 20% to US $ 215 million by 2004". Moving from the broad vision to specific values allows strategy-makers to determine the resources needed to achieve the goal.

Scenarios for e-trade development

The origin of the word strategy comes from the Greek strategia or "generalship". As in battle, there is no one plan that will marshal resources to deliver victory. The same can be said for strategies to deliver e-trade success. In China, for example, the primary flavour of e-trade is digitization with a heavy secondary emphasis on technology, business incubation and rural development. …

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