Overview of Global Trends and Issues
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1 Overview of Global Trends and Issues Torbjörn Fredriksson Chief, ICT Analysis Section UNCTAD, Division on Technology and Logistics E-Commerce, SMEs and Development: the Perspectives for and Strategies of Latin American Countries, February 2013 Geneva, Switzerland 1
2 E-business vs. e-commerce E-business: the use of ICT to: facilitate business processes e.g. by o communicating with governments, suppliers and clients o purchasing or selling goods and services on line (e-commerce) automate business processes manage resources and implement business policies (in marketing, human resources, finance, etc.) 2
3 What is electronic commerce? A working definition OECD: An e-commerce transaction is the sale or purchase of goods or services over computer mediated networks (broad definition) the Internet (narrow definition). Payment and delivery of the good or service can be offline. Orders received or placed by telephone, facsimile or conventional mail are excluded. What about mobile commerce? Fast growing phenomenon in developing countries Raises similar issues as e-commerce 3
4 The ICT landscape is evolving Mobile revolution LAC : from 10 to 112 subs. per 100 inh. Rapid uptake of Internet-enabled mobile phones Number of Internet users growing About 40% of LAC population used the Internet in 2011 Improved access to international broadband Spread of social media About 25% of LAC population used Facebook in 2011 Governments eager to provide e-government services Cloud computing raises new opportunities and risks 4 Sources: UNCTAD, ITU, Internet World Stats
5 Internet usage in selected LAC countries Users per 100 inhabitants, 2011 Affordable Internet access is needed for e-commerce 5 Sources: ITU.
6 Internet access from home in LAC Share of households, percentage, 2011 Particularly relevant for business or government to consumers 6 Source: ITU.
7 Broadband penetration in LAC Fixed broadband subscriptions per 100 inhabitants, 2011 Affordable broadband Internet access is important to make e- commerce attractive 7 Sources: ITU.
8 Fixed broadband prices in LAC Residential monthly subscription, 2011, PPP$ 8 Sources: ITU.
9 E-commerce is growing fast Amazon net sales (USD billions) from $2.5 billion to $61 billion ~43% outside North America 9
10 Current e-commerce measurement Limited data Very little official statistics on e-commerce Private data sources Varying, opaque methodologies Limited geographical coverage, focus on developed countries Expensive Only partially covered by Partnership s Core Indicators Orders received or placed by enterprises (UNCTAD) or placed by individuals in a household (ITU) over the Internet. o Do not measure value of transactions o Do not capture domestic vs international dimension o Do not consider impacts of e-commerce 10
11 Lessons from European business surveys (1) 11 Source: Eurostat
12 Lessons from European business surveys (2) Larger enterprises more active in e-commerce 37% of large companies had "e-sales" 13% of small companies had "e-sales" 19% of large companies turnover from e-commerce 4% of small companies turnover from e-commerce Cross-border e-commerce sales not fully exploited 12 Source: Eurostat
13 What do UNCTAD data show? (1) Share of enterprises using e-commerce varies considerably o More than half of all enterprises in Brazil places orders on the Internet o More than 95% of enterprises in Chile and Cuba did not in 2007 Source: UNCTAD 13
14 What do UNCTAD data show? (2) The larger the enterprise, the more use of e-commerce 14 Source: UNCTAD
15 E-commerce in Latin America Share of Internet users who buy online Source: emarketer, Internet and e commerce report for Latin America
16 Opportunities for developing countries AS EXPORTERS Access markets domestic/foreign Overcome distance Fragmentation Offshoring of services Business process outsourcing (BPO) Information technology outsourcing (ITO) Knowledge process outsourcing (KPO) AS IMPORTERS Access to goods and services at lower prices (consumers) More competition Access to knowledge and technology + Link to e-government! 16
17 IER 2010 findings E-commerce and micro-enterprises in low-income economies Micro/small businesses key for poverty reduction Limited impact of e-commerce due to: Few micro-enterprises use computers or the Internet Limited trust in on-line transactions Lack of awareness of possibilities/limited digital literacy Lack of data/research hampers assessment But some success stories exist: Web-based marketing of handicraft (Botswana, India) Tirrupur knitwear cluster, India (B2B) Taobao.com (China) E-Choupal (India) farm inputs to soya growers Growth-oriented enterprises more likely to benefit
18 Challenges and issues Access to affordable ICT infrastructure (Internet, broadband) Digital literacy Electronic payment infrastructure (quality/price) E-commerce platforms local content Branding/recognition Delivery and distribution network (physical transportation) How to track, monitor and tax transactions Legal framework to build trust Risk of bias/unfair competition Circumvention of trade barriers Licensing, immigration restrictions, bans 18
19 Some issues for discussion in seminar How to facilitate greater use of domestic e-commerce in the region? How to enable micro and small enterprises in LAC to better access international markets? What barriers/policy responses are most important in LAC? How to secure development gains from e-commerce? Need for better data on e-commerce in LAC countries? UNCTAD training in March 2013 in Panama 19
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