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III.d. E-Commerce in the Service Sector: E-COMMERCE AND SMALL ENTREPRENEURS
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Article Overview: Certain segments of the service sector are especially amenable to the introduction of ICT, to the establishment of a Web presence, and to transacting business electronically.
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III.d. E-Commerce in the Service Sector: E-COMMERCE AND SMALL ENTREPRENEURS
Certain segments of the service sector are especially amenable to the introduction of
ICT, to the establishment of a Web presence, and to transacting business electronically.
For instance, the international travel and tourism industry is increasingly moving online,
and developing countries that either currently attract or aspire to attract a sizeable tourism
business need to react accordingly. As the World Tourism Organisation writes, “niche
players are no longer constrained by the cost of breaking through geographic barriers.
The niche player can now tackle global markets. For just a few hundred dollars of ISP
charges and with some careful planning and design, world markets can be captured by
organisations which, a few years ago, could not have contemplated looking beyond their
own borders. Global distribution is available to the smallest players” (WTO, 2000). As in
OECD countries, there is presumably scope for small operators of tourism-related services
(tour operators, B&B and mini-hotel businesses, restaurants, etc.) in developing countries
to transact directly with overseas customers or at least to advertise their facilities. Tourism
associations/boards can provide a useful intermediary function, aggregating lists of various
categories of service providers on their websites.
The list of other services that are potentially cyber-deliverable is an open one, limited
in a sense only by the imagination. Already, offshore data processing centres in developing
countries — and even some low-wage developed countries — provide data transcription
and “back-office” functions for insurance companies, airlines, credit card companies, banks
and various other service enterprises in OECD countries. Telemarketing firms can afford
to hire remotely located sales persons to pitch their products. Customer support call centres
of dot.com and other ICT companies in OECD countries are among the fastest-growing
segments of the offshore services sector25. India and the Philippines have developed into
major locations for offshore data entry and computer programming, while India has also
built up a fairly sophisticated software development capability (dependent on highly skilled
personnel). Translation services, editing, proof reading and even e-publishing are other
candidates for remote service provision, though ones that obviously require more than
basic literacy in at least one language. Local ISPs and other entrepreneurs in developing
countries may be able to compile information on Web use habits that has a potential
market value to international companies. Also, music produced by developing country
artists can be digitally recorded and distributed via the Web; already there are websites
marketing recordings of African and other artists.
Small-scale entrepreneurs in developing countries can also benefit as users of remotely
provided services via the Internet. In the case of their ICT systems, the Internet makes
possible remote diagnostics and online technical support as well as delivery of software
tools and applications26. In the case of other types of capital equipment, while the Internet
may not be the only way to make technical inquiries, request repairs, or order replacement
parts or new tooling, it may be the least cost, quickest, and most reliable means to do so,
especially if secure payment can be made electronically as well.
Another attraction of the Internet is the possibility of joining a discussion group with
other equipment users and entrepreneurs in the same business to share experiences,
including on the solution to specific technical problems. While such information sharing
may occur informally at the local level, the global community of users may offer additional
valuable information; needless to say, this benefit is especially pertinent where an
entrepreneur is geographically isolated from his/her peers or where the local user community
is thin.
OECD DEVELOPMENT CENTRE
Working Paper No. 164
E-COMMERCE FOR DEVELOPMENT: PROSPECTS AND POLICY ISSUES
by
Andrea Goldstein and David O’Connor
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