The OECD has been a pioneer in addressing the challenges and opportunities of electronic commerce and the digital economy in the industrialised countries. It is natural then that the Development Centre should assess the scope for e-commerce in developing countries. But like the sailors in the strait of Messina, the research should avoid at once the scylla of technological pessimism — seeing an inevitably widening “digital divide”
between industrialised and developing countries — and the charybdis of exaggerated claims about the Internet’s potential to resolve a host of development problems that have heretofore proved intractable.
The novelty of the Internet means that there is little historical evidence on which to venture projections of future trends, even in the OECD countries. As industry watchers claim, a year is very long in Internet time. E-commerce is evolving rapidly, with the corporate landscape being continuously transformed by start-ups, acquisitions, and failures, and with new technologies coming to market almost daily.
An analysis of its potential in developing countries has to be guided by a realistic assessment of: i) the prospects and timeframe for improving Internet access and affordability in low-income countries (no Internet, no e-commerce); and ii) the major sources of current and likely future demand for e-commerce transactions and web-based services in developing countries.
The obstacles facing developing country entrepreneurs, whether in penetrating world markets or in expanding and diversifying sales in their domestic markets, include limited information about market opportunities, limited access to financing, and limited capacity to satisfy the quality, cost and logistical requirements of overseas customers. How can the Internet and e-commerce be used to lower if not remove these barriers?
One of the key barriers identified here is the limited trust potential customers may have in on-line developing country enterprises. The paper also points to some of the initiatives, private and public, aimed at strengthening trust. Above all, it demonstrates the need for sector-by-sector research on the scope for small entrepreneurs in poor countries to tap into this new reservoir of technologies for their own benefit and that of their communities.
This paper, on which the authors based their article in the Financial Times on the day of the Okinawa summit of the G-7, represents an early contribution to a major Development Centre research project on e-commerce for development, under the heading “Globalising Technologies and Domestic Entrepreneurship in Developing Countries”.
Jorge Braga de Macedo President OECD Development Centre September 2000
OECD DEVELOPMENT CENTRE Working Paper No. 164 E-COMMERCE FOR DEVELOPMENT: PROSPECTS AND POLICY ISSUES by Andrea Goldstein and David O’Connor
To learn more about this author, visit OECD Development Centre's Website.
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Created in 1962 by the Organisation for
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