ICT, Competitiveness and Trade Development

V6

ICT, Competitiveness and Trade Development:

What Works and What Does Not

Discussion Paper for the World Summit on Information Society

by Alwyn Didar Singh

December 2003

International Trade Centre Geneva

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Content

Executive Summary ............................................................ Error! Bookmark not defined.

Introduction ........................................................................... Error! Bookmark not defined.

1.1 Definitions ............................................................. Error! Bookmark not defined.

Chapter Two: E, Competitiveness and Development Error! Bookmark not defined.

2.1 E and Trade Competitiveness ........................... Error! Bookmark not defined.

2.2 International Trade concerns ............................ Error! Bookmark not defined.

Chapter Three: E-Strategies to promote e-Trade ......... Error! Bookmark not defined.

3.1 Complexities and levels of relationship between E and Business ... Error!

Bookmark not defined.

3.2 Putting E to work ................................................. Error! Bookmark not defined.

Phase 1 : Experimentation ............................. Error! Bookmark not defined.

Phase 2 : Consolidation .................................. Error! Bookmark not defined.

Phase 3 : Integration and Dissemination ... Error! Bookmark not defined.

3.3 A framework for e-Trade readiness ................ Error! Bookmark not defined.

Chapter Four: Strategies for Development ................... Error! Bookmark not defined.

Chapter Five: Practices which work and practices which don’t .... Error! Bookmark

not defined.

Chapter Six: What’s next and topic for discussion ..... Error! Bookmark not defined.

References ............................................................................. Error! Bookmark not defined.

Annexes .................................................................................. Error! Bookmark not defined.

Annex 1 : ........................................................................... Error! Bookmark not defined.

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The designations employed and the presentation of material in this publication do not imply

the expression of any opinion whatsoever on the part of the International Trade Centre

UNCTAD/WTO concerning the legal status of any country, territory, city or area or of its

authorities, or concerning the delimitation of its frontiers or boundaries.

Mention of firm names, commercial products and brand names does not imply the

endorsement of ITC.

The opinions expressed are those of the author and do not necessarily reflect the views of

ITC.

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Executive Summary

The potential of e-Commerce and e-Trade is no longer a matter of debate. Despite the initial

hype and subsequent dot-com crash, it has moved into the realm of a noteworthy reality.

Since e-Commerce already affects the economic relations between and within countries and

since it will continue to do so more and more, e-Commerce has to be considered as a matter

of key policy consideration. As such, developing countries must not only appreciate and

address its potential for industrial and trade growth, but also consider it as a means of

survival in this new world of Internet-based business and trade.

This paper seeks to draw attention to a number of factors that are shaping the two-way

interaction between the emerging new economic landscape – the changing market place, on

one hand and the application and potential of ‘E’ or ICT for trade, on the other. Implicit to the

analysis is the question of whether the role of trade development and promotion in the new

economy differs in any significant manner from the role it has hitherto assumed. There is little

doubt that ICTs and the changing marketplace are interrelated as is the process of

technological innovation and the diffusion of ideas, products, services and best practices that

innovation entails.

For SMEs the impact and context of ICT essentially implies the Internet1. On this rationale

the paper focuses on the Internet and e-Commerce related issues and the potential for SMEs

in e-Trade. It seeks to identify what works for SMEs in developing and transition economies

and suggests a methodology that could help these SMEs use that information and

knowledge for ensuring success in this new digital economy.

This new economy which is rapidly evolving and changing all the rules of the marketplace;

offering a powerful technology (ICT) that itself turns outmoded ever so often and presents

itself in forms that impact and change the process and cultures of enterprises themselves.

Ultimately ICT is a tool. A highly advanced and powerful tool that is changing the

marketplace and at the same time providing tools to adapt to and gain from that change.

Learning to use and adapt that tool to your requirements will determine the level of success

1 An important feature of the ICT industry/sector lies in the growing technological interdependence and

convergence between its three core segments i.e. computer hardware, software and telecommunications

equipment. Growing convergence and interdependence is particularly evident in the essential role of each

segment in the establishment and development of the Internet.

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that you will have in this new economy. Each enterprise (and nation) must identify what

works for them. Several have already done so and tasted the flavour of triumph. This

monograph based on an analysis of 15 e-Trade country studies presents the essence of that

success. Using an e-Trade Readiness Matrix it lists out ‘what works and what does not’ and

suggests that till such time you can yourself build capacity to analyses and assess what

works for you, use these recommendations as a guide.

The objectives and structure of this discussion paper endeavour to follow this analysis. The

Introduction sets the stage by defining and raising the major issues of ‘E’. Chapter Two

describes E and its relationship with competitiveness and development as also the reality of

the digital divide between and within nations. Chapter Three seeks to explain the

complexities of the relations between E and trade development and some of the tools that

have been developed to address the digital divide by ITC – particularly for SMEs. It also

presents the key factors that determine the e-Trade readiness of economies and SMEs and

presents a simple framework for carrying out that assessment at country level. Chapter Four

expounds an uncomplicated formula for e-Trade gap identification that can then be used for

developing strategies for trade development. Based on the 15-country research and the e-

Trade development matrix, lessons from both successes and failures are highlighted in a

tabulation of what works and what does not. The monograph concludes by placing forward a

hypothesis that there are key factors for e-Trade that need to be put in place for an

integrated and consolidated development. While countries work at this, SMEs can and

should develop intermediate strategies that can work around the gaps and find solutions and

opportunities even in an emergent environment that can be exploited for gainful result.

Research has shown that there are many who have successfully done so and continue to.

That is the primary lesson of this treatise.

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1. Introduction What works and what does not in e-facilitated trade development, as evidenced by the programmes and activities spawned from ITC’s vision of e-facilitated trade development, and in the context of e-enabled trade through enterprises and in particular SMEs in developing countries, is the theme of this paper. This theme should be relevant to government strategy-makers, industry representatives, e- market representatives, SME representatives, e-solution providers and international agencies promoting the adoption of ICTs. There are several ways of attempting to address the issue of what works and what does not. One commonly used approach is to list a series of good examples of SMEs and highlight what they have done right. In doing so, one can assume that these are ‘good practices’ and other enterprises or SMEs should take them as models to ensure their own success. Another such approach which can be used independently or concurrently with the previous one, consists in adopting a paradigm for the usage of e -, developing it and deriving guiding principles which can help practitioners seeking to implement e - and encourage them to maximise its benefits. In support of this paradigm approach, the paper will consider three levels of abstraction in its study:

- Policy and regulatory measures that favour the development of e-Business practices, e-Commerce and e-Trade and harmonise national approaches in diverse areas including telecommunications, trade, competition, intellectual property, privacy and security, which constitute the ‘macro level’.

- Trade facilitation or trade support initiatives, which constitute the ‘meso level’. - Enterprise initiatives, which constitute the ‘micro level’.

1.1 Definitions What do we understand by ‘e’? Today, just about everything has been given an ‘e’ context: From e-commerce to e-business; from e-literacy to e-enabled, from e-government to e-democracy. In name and concept, the old terms and what they implied are now seen in a new perspective that is partly already a new reality and partly still only hope or vision. The oft-used prefix ‘e-‘ denotes the interaction of the manipulation of information, currently mostly digital representations in electronic form, with the term which follows. This explains e-literacy as being literacy in the manipulation of digital information, and e-government as the manipulation of digital information for the purpose of governing. As such, e- can be considered as a way of doing things, as opposed to the thing to do. Amongst the many ways of doing things, its popularity as a desirable way lies with the fact that more often than not it is either more efficient or more effective than the present way, or even both, and sometimes it even allows to do things which were not possible before. As a corollary, e- cannot convert the wrong thing to do into the right one; it can only do better the right thing to do. By definition, e-Business is the application of the manipulation of digital information to business processes. Its benefits come from the efficiency gain and increase in effectiveness of a company’s internal processes and can be extended to the business processes of suppliers and customers. Again, there is no successful e-business without a proper business

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behind it. However there is also another level to e – the e mindset or perspective that seeks to adapt processes and business cultures to the rapidly changing digital or new economy market place. In doing the first properly helps to ensure that the latter will also follow. That is one of the practices ‘that works’. An e-Enterprise (participating in e-Business) could be defined as an enterprise prepared to conduct commerce and trade in this new economy. This means it has created and embraced a business strategy informed by changing economics, new opportunities, and new threats. It has laid down the necessary technology infrastructure to support new business processes. It has used information technology to hone internal business processes. Thus prepared, the enterprise is able to conduct e-Commerce: "the commercial exchange of value (money, goods, services, or information) between an enterprise and an external entity (an upstream supplier, a partner, or a down-stream customer) over a universal, ubiquitous electronic medium." 2 Whenever a business manipulates information via digital representations in any aspect of its commercial activity, essentially order taking and order processing but also pre-sales information and after-sale service and support, it is considered to be engaging in e-Commerce. E-Commerce reduces transaction costs3, and increases sales by increasing reach or making new businesses altogether possible4. It is thus useful for existing businesses as well as an opportunity for new businesses, and as such, e-Commerce is far more about strategy and business management than it is about technology. E-Trade is simply e-commerce across international borders5. And finally, e-facilitated trade development is the promotion of ‘e’ as a way to increase competitiveness and develop trade.

2 Doyle et al, 2000

3 E-Commerce increases efficiency in the use of time and procedures through the use of technologies ranging

from email and instant chat to EDI (Electronic Data Interchange) and automated supply chains. EDI has a role

here both for business to business as well as for governments, e.g. quicker and smoother trade transactions for

businesses by using EDI for customs clearance, trade procedures, etc.

4 New businesses, such as IT enabled businesses (based on information technology and linked through a network

for digital transmission and exchange), call-centres (network linked service centres that customers can access

through the Internet for information, guidance, maintenance and services such as bookings, reservations,

software support etc.), software and maintenance services, as well as ‘digital commerce’ (goods, services and

digitised transactions that are completed and supplied on-line). 5 Singh, A. D., 2000, Coming to terms with the Magic letter ‘e’, ITC Executive Forum E Brief ITC, Geneva

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2. Chapter Two: E, Competitiveness and Development In a rapidly globalising world, the very factors and definitions of competitiveness and competence are themselves undergoing fundamental change. Enterprises and especially SMEs in developing and transition economies are mostly not even aware of these changes and new requirements. To be ‘E’ compatible itself is grossly misunderstood or misinterpreted. This chapter will seek to establish the correlation between E and competitiveness to show the value of E for development. The rationale in this chapter is that the expansion of E in a country should have a direct effect on competitiveness. This, in turn, should have an impact on trade growth and development. Since overall development is a much larger subject, this paper will focus specifically on E in Trade development based on the premise that trade development contributes to the overall development of an economy. 2.1 E and Trade Competitiveness Businesses with an appropriate strategy which gives them a fair competitiveness based on negotiating power, have the potential of becoming more efficient or more effective with e-, and sometimes are even capable of implementing strategies which they could not implement at all without e-, thus becoming even more competitive on domestic markets as well as international (trade) markets. Because such business strategies require access to resources appropriate for the utilisation of ICTs, developing and transition economies which wish to promote and develop the competitiveness of their businesses need to ensure that the environment (i.e. the pool of resources) is conducive to e-based or e-enhanced competitiveness. It is in this context that in this scenario of sharp technological intensity of e-business that e-trade development (and by that criteria or implication – governments, trade promotion institutions and development agencies) has in recent years been assigned the task of helping enterprises, particularly SMEs, anticipate, aid, benefit from, and respond to, ICT-driven changes. 2.3 Addressing the Digital Divide Differences in the diffusion of information and communications technologies are exacerbating the disparity both between countries and across regions and social groups within countries. The OECD in a recent paper6 has argued that such differential rates of technology diffusion are a persistent fact of economic history, however the advent of the Internet and its perceived economic significance have served to focus attention on narrowing the digital divide. While electronic commerce offers opportunities to increase productivity and to improve access to information and to markets, developing countries and small and medium size businesses are usually at a disadvantage to reap these benefits due to poor telecommunication infrastructure, lack of appropriate IT equipment and software, and inadequate skills to use and support e-Commerce applications. Addressing these issues therefore is the prime responsibility of governments and agencies. It is widely recognised that there would be significant benefits all round if people and enterprises of developing and emerging economies are able to take full advantage of the Internet and other information and communication technologies.

6 Tigre and 0’Connor, 2002

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Even though there have been some limited initiatives on the front of e-commerce in almost all developing countries and economies in transition, these have yet to see an organized and concerted effort towards this direction. This is mainly because e-commerce issues cut across a broad range of technical, legal, economic and institutional questions for which the appropriate responses are yet to be devised. At the same time, government efforts to accelerate such development have been tardy. One should thus be aware that e-commerce issues should not be treated solely from the ICT perspective. These technologies no doubt enable e-commerce but there are many other issues, mostly non-technical, that must be taken into account while trying to formulate policies conducive to the growth of e-commerce. As economies around the world continue to be driven by ideas and powered by technology, it is imperative that developing countries too take necessary steps to create an enabling environment where they find themselves better positioned to benefit from competitive advantage offered by ICT and probably its most significant product, eCommerce. In fact the need to adapt to new technological advancement especially with regards to information and communication technologies is fast becoming an economic imperative rather than a mere question of choice or options.

Before looking at strategies for trade development at the country level it is important to first assess the level of preparedness of the economy and of enterprises. There are also a large number of position papers with recommendations for how a country can become 'e-ready' and effectively use and benefit from ICTs. These perspectives range from a focus on business and export-oriented growth with industry self-regulation, to strong government consumer protections and equitable access programmes, to local content and cultural reception of ICTs. These underlying models could easily be turned into assessment tools. In fact, many of the models have corresponding assessment surveys (for example, a business / export / self-regulation focus underpins APEC's survey). This report does not seek to analyze them further. 2.2 International Trade concerns E-Commerce is also an agenda of concern for developing and transition countries in the WTO. The issues of e-Commerce/e-Trade and its implications on the international trade regime are mainly of tariff and access. Does the global environment ensure equal right of entry and right of use? Unfortunately not. Can the WTO and the International agencies ensure such access to all their members? Probably not. Though there is little doubt that e-Commerce is an important and major issue for world trade, there are several aspects of it that need to be further studied especially from the point of view of their implications for the developing world. Most of the e-Commerce and Internet technical and economic developments on the one hand and negotiations and discussions at the WTO, ITU etc. on the other, are taking place in the absence of a broader more integrated framework which takes account of the needs of and potential for developing countries with regard to e-Commerce and the information and communications technologies which facilitate it. There are several impediments to the availability of and access of this medium in developing countries and unless these are addressed simultaneously, the gap between the developed and developing world and that between the poor and rich will only widen. Therefore, while considering the promotion of e-Commerce as part of the world trade agenda, the issues of

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infrastructure, investment, availability and marginal cost of hardware and software, awareness, education and training need to be also addressed and redressed.

There is another angle to this. For developing and transition economies e-Commerce can itself become a non-tariff barrier. As more and more international trade and supply chains become digital over the Internet, those enterprises not part of them either stand to lose the trade opportunity or else pay a higher price or charge for the service or trade deal (as a ‘fine’ for not being e-compatible). There are several examples of developing country suppliers receiving payments electronically and banks having to make special dispensations (and therefore charging an additional fee) from them till such time as the banking regulations and arrangements for such transactions are not in place. There are also cases of large buying houses in the West charging an extra fee is suppliers do not conform to the requirements of their digital procedures. In some cases this could result in the buying arrangement itself being dropped.

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3. Chapter Three: E-Strategies to promote e-Trade

It is today accepted that E-Business is the way of the future and has tremendous potential for developing and transition economies - for businesses in the new digital economy and for governments as a tool for development. The issue is whether the enterprises and governments in these economies will be able to put in place strategies to ensure competitiveness and development. To survive in the digital economy, SMEs need to design a strategy which takes e- into account, as well as have access to the resources necessary for the implementation of e-Business, e-Commerce and e-Trade, according to the requirements of this strategy. A proper strategy as well as the proper balance of the human, information & know-how, physical assets, and networks & relationships resources will make business e-ready and globally competitive.

3.1 Complexities and levels of relationship between E and Business Such startegic designing requires understanding of the complexities of E in so far as it can and does impact business. E impacts businesses both directly and indirectly. It can do so in three ways7:

o in business o as a business o for business

The first is obvious and has already been explained in the definition of E and e-Commerce. e- in business is the way E can have a direct impact on businesses through the improvement of the effectiveness or efficiency (or both) of the business’ production or marketing processes, which directly lead to competitiveness improvements. As earlier mentioned, here the impact is not restricted to the technology and in fact effects the very business culture itself. The second is where E is the business itself. This e- as business is the way E can have an impact on businesses: directly for the business which offers e-products or e-services, and indirectly for the businesses which benefit from these e-products and e-services. This e-Business is the emerging and new opportunities that the ICT revolution and especially the Internet have created. This is leading to entirely new forms and models of businesses that earlier did not exist itself. For example, the very successful, Internet auctions; digitised e-Marketplaces; digital products etc. And finally e- for business is the way E can have an impact on businesses indirectly through the business environment in terms of the availability of quality e-resources or the e-availability of non-e resources, e-government services, e-specific legal environment, etc. The creation and nurturing of such an environment is an essential responsibility for governments and development agencies and one of the key factors of success in the E world.

The basic tenet 8 here is simple:

- Human and economic development are the primary goals of societies - Trade fosters economic development - Competitive businesses are engines of trade - E can help businesses be competitive

7 As identified within the e-Trade readiness paradigm developed by ITC’s ‘e-Trade Bridge’ programme. 8 As stated within the e-Trade readiness paradigm developed within ITC’s ‘e-Trade Bridge’ programme.

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For e to help businesses become competitive, institutions at the following levels must take initiatives:

o Macro level (Government) o Meso level (Support institutions) o Micro level (SMEs)

These initiatives serve one or more of the following purposes

o e- for business o e- as business o e- in business

The following matrix outlines the relationships between levels and purposes within this

paradigm9 :

To select the most effective and efficient initiative, tools and measures are needed to determine the present situation (assessment). Some tools and measurements work better than others; and experience shows that given a specific situation some initiatives are more effective and efficient than others. 3.2 Putting “e” to work Putting ‘e-‘ to work for trade development is the facilitation of trade with ‘e-‘, i.e. e-facilitated trade development. This includes promoting the use of ‘e-‘ to develop trade through the

9 As derived within the e-Trade readiness paradigm developed by ITC’s ‘e-Trade Bridge’ programme.

e for business e-as business e in business

Macro level

Initiatives taken by the macro

level institutions concerning

resource creation to facilitate

the utilisation of ICT by SMEs.

Policies, strategies concerning the

creation of a pool of resources

which are needed by SMES to

utlise ICTs (human, financial,

physical assets, information &

know-how, and networks &

relationships)


level to institutionalise

businesses dealing in e.

National telecommunication

companies, national internet

access providers, etc.)


level institutions that use e in

the management of their

busineses. Using ICTs to

conduct the transactions of macro

level institutions (government

procurement, information

dissemination, on-line

administrative procedures, etc.)

Meso level

Initiatives taken by the meso

level institutions concerning

resource allocation to facilitate

the utilisation of ICT by SMEs .

Provision of resources to SMEs

(HR training on e from institutions,

financial support for e from the

finance organizations, etc.)

Initiatives by meso level

institutions that use e to

conduct their business . Using

ICTs to produce and market

products and services (training on-

line, selling equipment on-line, on-

line financing, etc.)

Micro level

Initiatives taken by SMEs

concerning resource

acquisition to facilitate the

utilisation of ICT. Measures by

SMEs to facilitate a paradigm shift

enabling ICT usage

Initiatives by SMES to utilise

ICTs to manage their business.

Digitisation of management

(planning, execution and control of

the resources of a business)

and/or business processes

(production and marketing)

Initiatives by meso level

institutions in the e-industry.

Enterprises whose businesses are

enabled by ICTs (ISPs, web

designers, solution providers,

portal managers, etc.)

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improvement of competitiveness, as well as facilitating e-Trade, and also naturally includes using ‘e-‘ within the facilitation process and activities themselves. The benefits derived from the appropriate use of ICTs in terms of improving the effectiveness and efficiency of international trade are now so compelling that developing and transition economies may no longer be able to sustain a competitive edge without them. In the face of these challenges, and since the development of national capacities for improving the trade performance of businesses is ITC's overriding objective, ITC has been playing an important role to ensure that partner country enterprises receive practical assistance and unbiased advice on when and how to use these new technologies to compete internationally. ITC has therefore been focusing on the SME sector in order to drive and maintain growth by building institutional and individual/enterprise capacities in developing countries and economies in transition. Of course, the Internet is much more than just a medium of communication, and has yielded innovations in products, processes and markets. By 2000, the dramatic changes in the international marketplace prompted ITC to examine how the Internet was affecting developing country SMEs. During the past four years therefore, ITC has experimented with doing old business in new ways and engaging in completely new businesses – for itself and for its development partners, to look at the changing marketplace and experiment with ways to use “e” within business as well as develop new products and services that exploit the benefits of information and communications technology. This has been an evolutionary process and the lessons learned have been used to develop e-working practices. The first phase was characterized by experimentation, the second by skills development and consolidation. The third Phase of e-working is expected to be characterized by integration and dissemination. Phase 1: Experimentation ITC’s early undertakings introduced the use of ICTs for the purpose of generating and disseminating information which could impact competitiveness, such as its Market News Service.

Market Intelligence news service ITC’s Market News Service has delivered market intelligence on green bean prices to Kenyan farmers to help them achieve price premiums. This information on commodity product prices is collated and produced from ITC headquarters and then sent via e-mail, fax and hard copy all over the world. The MNS Market Updates are often broadcast on radio to reach farmers more efficiently over a wider catchment area.

The theme of the ITC’s second Executive Forum in 2000 was “Export Development in the Digital Economy”. The Executive Forum provided the ideal mechanism to bring together key private and public sector stakeholders across a range of developing countries to explore the needs, challenges and solutions for succeeding in the new e-economy.

Old Business in New Ways ITC initiated a project in December 1999 to help 315 speciality coffee producers in Brazil gain experience of using the Internet to conduct coffee auctions. Coffee auctions are, of course, commonplace in the coffee industry. However very few of the stakeholders/clients understood the impact of new B2B and B2C trading practices on the auction process. The results of this experiment were very encouraging. The producers involved were able to achieve a price premium of 40%, raise awareness of their quality and gain experience in the use of one form of electronic trading platform. This activity still lives on today as can be seen on www.cupofexcellence.org .

http://www.cupofexcellence.org/

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Even at this early stage in the development of the dot.com phenomenon, ITC had initiated a number of e-trade projects. The first noteworthy project was the development of a website to promote artisanal or craft products from developing countries. The Virtual Exhibition was a non-transactional information portal providing an electronic showcase for craft producers.

New Business Opportunities ITC conducted in-depth research on the potential for the ICT hardware, software and service sectors in a selected number of transition economies. The results of this research were shared openly with businesses, government representatives and trade associations in national business roundtables. These ICT Business Roundtables have proven extremely effective in helping partner countries take stock of their ICT assets and develop trade strategies based on these.

A Cyber-marketing Guide and the Secrets of Electronic Commerce quickly followed this modest first attempt. The Secrets of e-Commerce is a business guide explaining the ins and outs of e-commerce in language which the layman can understand. This guide has been adapted at the country level and is now in circulation in several countries. Concurrently, ITC explored methodologies to maximise the adoption of ICTs by partner countries and their SMEs. The result of this exercise was ITC’s Strategy for e-Facilitated Trade which advocates creating awareness, building knowledge, and creating competence in e-trade. Phase 2: Consolidation Based on these early experiences, and ITC’s e-Facilitated Trade Strategy, a more focused approach was conceived, i.e. the multi-donor funded e-Trade Bridge programme for SMEs. This programme offers a portfolio of information, events, and training and advisory services to national governments and trade support institutions to help them encourage and make real the e-trade ambitions of SMEs. From earlier use of e-tools for trade development the spotlight shifted to e-tools for e-Trade development (see details in Annex). Within this programme, new products and services have been developed which can now be delivered through national partners to build e-trade capacities in developing countries. These include national e-trade country reports, e-Business resource book/DVD, diagnostic tools for use by SME advisers, cases on ICT implementation to be used as models for replication, new e-trade training materials and guidelines for hosting awareness raising seminars and training events (see annex for details). The programme is now active in 30 countries. This particular report is based on an analysis of 15 country studies and one regional report completed as part of this initiative. In addition, ITC is developing other complementary e-trade activities including, for example, research on the impact of B2B e-trade platforms. This will have a particular relevance to intra and inter-regional trade, as well as the ongoing trade in commodity products. In the area of trade law, an E-Commerce Legal Kit has been developed to help SME managers understand the significance of e-commerce with respect to commercial contracts and dispute resolution. ITC is also developing new tools to promote e-tradeable services and adapting some core products to meet the needs of marginalised economic actors (e.g. women entrepreneurs, poor producers). Phase 3: Integration and Dissemination ITC is now poised to enter the third development phase of putting e- to work. As development agencies, countries and SMEs become more aware of the potentialities, challenges and limitations of e-facilitated trade, their focus shifts from access to e- to implementation of e- based on what works and wherever it makes sense. This paper and the interactions at WSIS are steps in this direction.

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So, while ITC should still pursue its efforts to create awareness and build knowledge with partner countries which still require these, ITC should focus on integrating and disseminating e-trade competence to SMEs on a large scale within partner countries which have reached or already have the level of awareness of e- and the level of knowledge which they desire. For this to happen, the tools developed to improve the e-trade competence of SMEs need to be further refined and adapted through use, and a programme designed for the purpose of creating competence in e-Trade, such as e-Trade Bridge’s “e-nabing SMEs” component should be undertaken on a large scale. From an e-Trade Bridge the programme could now transcend to an e-Trade ‘Highway’ for SMEs to cruise on. This falls perfectly in line with ITC’s strategy for e-facilitated trade evoked earlier in the experimentation phase. 3.4 Conditions and factors for e-Trade Development Levels of E adoption In order to place in perspective the key factors required for implementing E at the country level for trade development, it is important to first asses the degree of adoption of E in the country or economy. To do this ITC has evolved the concept of an E-Trade Balance Sheet that serves as a measure of development or success at three levels, i.e. the enterprise or micro level; the trade support or meso level; and the overall environment or macro level. This concept finds depiction in the figure below which combines the three levels and an ALOR analysis (similar to a SWOT) indicative of the positive and negative factors that need to be addressed, i.e. the assets and liabilities of each level, as well as the opportunities and threats used to consider further plans and corrective actions to be taken.

Micro

(enterprise)

Meso

(trade support network)

Macro

(national environment)

E-Trade Balance Sheet

Assets Liabilities

RisksOpportunities

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Key Factors In carrying out such an assessment, the research findings themselves serve as guidelines indicative of the gaps or divides that need to be ‘bridged’. In doing so the assessment or questionnaires used must address the key factors that need to be in place for the successful implementation of e-Trade development for SMEs. These include inter alia :

Micro Level (Enterprise level) 1. Attitude, culture and use of IT in industry

Desire and motivation to use IT

International orientation (export focus)

Actual use of IT in industry 2. e-Professionals availability and e-Trade capabilities

IT professionals availability

Use of websites / e-commerce

General level of IT skills of workforce 3. e-Business environment including for e-trade

Overall external business environment in the economy

e-Banking availability

Venture capital availability and Investment climate

Conformity to laws

E-Trade requires an enabling environment that is dependant on several inputs – IT services, banking and financial framework, regulatory and investment climate and a favourable and supportive bureaucracy. The research would seek to list out these factors for each country. At enterprise level it is also important to asses the actual use of IT in industry as well as the status of the IT industry. Is there a favourable attitude towards this industry and technology and are enterprises aware of the benefits it can bring?

At enterprise level the availability of professionals is crucial – both IT and management trained. Are they readily available and if not are such services such as website hosting eCommerce enabling, ERP etc. both available ad affordable and can they workforce adapt to their usage fairly easily.

Meso level (e-Trade support level) 1. Trade Promotion Agencies

Initiatives by trade promotional agencies

Availability of data & trends 2. ICT Infrastructure

Connectivity and costs

Cost and affordability of PCs

Incubator facility if any

3. HR Framework

IT training capabilities of universities / IT institutions

e-literacy level of the population

E-Trade requires certain basic enabling and supporting services and infrastructure without which its development is just not possible. The framework therefore looks at both the hardware and software aspects of the issue. On the one hand it examines the telecom infrastructure - the information highway on which e-Commerce rests and develops. Since the main issues here are access and the cost of connectivity, the research seeks to find out the level of PC penetration, total number of Internet accounts and the pricing of some comparable connection plans of the existing ISPs. Initiatives for any incubator type facilities are also outlined. It also comments of the trade support services and initiatives by trade promotion agencies both in the public and private sector. For the HR framework it looks at the level and quality of IT education as well as how much of IT-literacy there is in the country? The latter would impact on the overall growth of e-Commerce in the country.

Macro Level (Policy Framework) 1. Policy & strategy at national level

Government policies / strategies

Government body / Institution leading the ‘e initiative’

Government support to trade associations

Particularly for developing economies, governmental interventions and strategies are of crucial importance. The research asks if e-Business is a national priority and if so, is there a formal policy and strategy and who is leading the initiative. If government is serious about this then what is the status of IT in Government and plans to make public services available to citizens – particularly for trade and

14

2. e-Government initiatives

e-government initiatives

use of IT by government 3. Legal & regulatory framework

Legal framework

Regulatory bodies

Certification agencies

commerce. E-Trade transactions on the Internet require a legal and regulatory framework. Does the country provide it? In case of dispute, is redress available and possible through the existing legal establishment? Are secure transactions possible and is cyber crime including IPRs being addressed. These are the questions both investors and consumers want to address before starting e-Trade.

3.3 A framework for e-Trade readiness In order to asses the e-Trade readiness of individual countries as well as for comparative analysis of the weaknesses and strengths of countries, or determining the implementation domains which will maximise a country’s e-Trade readiness, a simple ranking structure as outlined below can be used. For a first pass approach, it is presumed that each of the levels being outlined in the study, i.e. Micro, Meso and Macro are all essential for e-Trade, and that equal weight is given to each of their components, so that general comparisons across levels can be performed.

Grading: Factor/component in place or action taken: +++ (3) Partially in place/Planned but not operationalised: ++ (2) Not available/No Action Planned yet: + (1)

(The assessment column may also be split into e- for business, e- as business, and e- in business for a more detailed assessment of e-readiness.)

E-Trade readiness framework Country X

Macro Level (Policy Framework)

Policy & strategy at national level

e-Government initiatives

Legal & regulatory framework

Macro Level Index -

Meso Level (e-Trade support

level)

Trade Promotion Agencies

ICT Infrastructure

HR Framework

Meso Level Index -

Micro Level (Enterprise level

environment)

Attitude, culture and use of IT in Industry

e-Professionals availability & e-Trade capabilities

e-Business environment including for e-trade

Micro Level Index -

National Index -

15

The 15 country studies done as part of the eTrade Bridge programme have been analysed and ranked on this e-Trade Readiness Matrix. Some of the results of this can be seen at Annex 4. The objective here is not to grade individual countries against each other but rather to see how effective they have been in addressing the core e-Trade Readiness issues which have been researched in the country studies. This e Trade Framework concept and the matrix developed therein are based on the premise that each of the key factors has an equal level of importance or weightage. This is presumed so as the hypothesis of this monograph is that all the key factors are interlinked and integrated and together they interconnect with each other to produce an e-enabling environment for e-Trade Development.

16

4. Chapter Four: Strategies for Development In most developing countries, some form of development goal or another has been achieved in spite of the fact that the current state of the Macro-Meso-Micro initiatives profile is less than fully comprehensive. This seems to indicate that development goals are not always dependent on all initiatives being in place at all three levels, and that there is hope for achieving some development goals in less than perfect situations. It also implies that there is value in being able to identify which development goals are achievable given the present situation, and which are not. Rather than suggesting a methodology for assessing the present situation and searching on a global and large scale for development goals compatible with it, let us take a point of view compatible with the capabilities of individuals involved in economic development even within small organisations, as not doing so would restrict the applicability of the methodology to very well funded institutions. Irrespective of which Macro, Meso, or Micro level it belongs to, each participant in the development of a country’s economy may have particular development goals and will wish to identify what actions are necessary in order to maximise the sought after development. Building on the previous chapter’s e-Trade framework, such economy participants may use the following gap analysis methodology for the purpose of identifying such necessary actions. First, identify the Macro-Meso-Micro profile necessary for a selected development goal, i.e. using the table below, assess which Macro, Meso and Micro initiatives are necessary for the achievement of this goal and indicate them with a ‘Y’ or a ‘X’ in the appropriate cells of the first column. Second, assess the current situation of initiatives at all three levels and indicate their presence or completion with a ‘Y’ or a ‘X’ in the appropriate cells of the second column. Third, review the assessments made so far in the first two columns and identify Gaps, i.e. situations where initiatives are required for the achievement of ‘Development goal X’ but not yet implemented, and indicate these gaps with a ‘G’ in the appropriate cells of the third column.

17

Gap identification with the

E-Trade readiness framework

Init

iati

ves r

eq

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ed

fo

r

‘de

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pm

en

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X’

Cu

rren

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Ide

nti

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Gap

Macro Level (Policy

Framework)





level)

Trade Promotion Agencies

ICT Infrastructure

HR Framework

Micro Level (Enterprise level

environment)




Fourth, for each identified Gap, write down a detailed description of the initiative(s) which would eliminate the Gap when completed, and therefore which would make the selected development goal achievable. Note that for a given Gap, there can be more than one such initiative. Fifth, assess whether the implementation of the required detailed initiatives above is within the capability of the organisation conducting this analysis. If this is not the case, determine whether the organisation can form an alliance with another organisation which has the capability to implement the required initiatives, or whether the organisation can influence other organisations which in turn can implement these initiatives. The required initiatives identified in step four, as well as the method of implementation identified in step five constitute a good basis for developing a strategy capable of achieving the selected development goal.

18

5. Chapter Five: Practices which work and practices which don’t The essence of this paper is to highlight areas of strength and weaknesses for the E sector and at the same time provide the reader from partner countries and institutions with a summary of what works and what does not for the design, promotion and implementation of e. Based on the 15 country studies10 and the regional study11 conducted within the e-Trade Bridge programme, the following synthesis of practices which work or do not work is presented from the Macro – Meso – Micro perspective while using the e-paradigm ‘E for business, e as business, e in business’ 12

What works at the Micro level Language does not seem to present a problem as a number of non English speaking

SMEs are developing English web site to access global markets

SMEs are experimenting with E locally before widening their efforts and offering their services abroad

What does not work at the Micro level Low investment of time and resources in the development of websites generally

speaking

SMEs not using local language lose local markets opportunities

SMEs taking up initiatives in e-trade without adequate training or hiring e-professionals

SMEs entering the area of e-trade and internet without ensuring sufficient funds to implement the project successfully

Higher costs of the electronic payments is an impediment to dealing on line

B2C projects offering online payments / transactions in an economy which has very small credit card base

Lessons learned at the micro level Unless websites are constantly updated, SMEs can not expect credibility and success

in e-trade

To be competitive in marketing themselves on the web, SMEs must use best technologies

Language is an important issue for SMEs and their website and IT usage must be adapted depending on the market they seek to access

Loss of credibility in delayed or poor supply must be avoided at all cost in e-trade

SMEs must update or hire requisite skills when they begin using new technologies

Though not always a pre-condition to e-trade and export, ensuring seamless and reliable transactions are a must for e-trade

In the e-world just as in the real world financial issues must be adequately addressed

Competitiveness and special promotions are important issues for developing country enterprises entering the area of e-trade

e-commerce startups must be sure of their market before launching web-based enterprises and meso level financial framework needs to be improved

10 These are (in alphabetical order) El Salvador, Guatemala, Honduras, India, Kazakhstan, Kenya, Kyrgyzstan,

Philippines, Romania, South Africa, Tajikistan, Tanzania, Trinidad and Tobago, Uganda and Vietnam. 11 This was a Regional e-Trade Study for the Caribbean. 12 See annex 2 for the full comparative table on “What works and What does not”

19

----------------------------------------------------------------------------------------------------------------------------- --------

What works at the Meso level Trade Promotion Agencies helping SMEs create web pages, conducting computer

training courses, promoting crafts and goods made by small entrepreneurs etc. at their website.

ISPs offering several varieties of options in terms of speed and cost for internet connectivity

Promotion of development of computer centers and cyber-cafes by ISPs, TPOs and as a business

Hardware and software, products and services at affordable prices ensured through a competitive local IT environment for import and manufacturing / assembly.

Promoting computer / IT training through public and private institutions.

Governments / banks offering venture capital and loans at a lower interest rate for e-trade /export oriented projects

Virtual mall created by a credit card provider that allows online trade

What does not work at the Meso level Trade Promotion Agencies attempting to promote e-trade without having adequate

knowledge regarding e-business

Monopoly telecom services leading to high cost of internet access

Low PC penetration and high cost of Internet connectivity.

Curriculum of educational institutions not in sync with ICT developments / requirements.

Consumers hesitating to give their personal information on the web or using credit cards

Lessons learned at the Meso level TPAs have an extremely important role in developing and transition economies and

must ensure that they are adequately qualified to promote the right services for SMEs

Different services such as call centers, BPO services, software, digital products and services, all require different connectivity and speed options which must be competitively catered for by the ISP providers

Competition must be encouraged to ensure the lowering of internet access cost

ICT and e-trade environment are directly influenced by hardware and software costs

e-literacy, e-awareness and secure online transactions must be ensured in the local business environment

----------------------------------------------------------------------------------------------------------------------------- -----------

What works at the Macro level Appointing a nodal agency with a mandate for implementation from the highest

political authority

Fiscal rebates for hardware importation

Demand and supply of ICT professionals is more or less balanced in the country

Adoption of E-Commerce Laws / regulations stipulating that government offices must provide for electronic transactions in their interaction and processes.

e-government as a model and business opportunity for SMEs

Government agencies and TPOs raising the level of awareness of SMEs regarding legal framework for e-commerce

What does not work at the Macro Level Countries announcing a policy / intention to promote e-commerce / e-trade without

working out a strategy / action plan

20

No incentives to motivate exports through electronic commerce

Shortage of e-professionals in the country leading to a stifling of e-trade potential.

Producing qualified and skilled ICT professionals without local local demand leading to brain migration.

Government computerizing its departments without setting up inter departmental linkages and intranets

SMEs embarking on e-trade without having sufficient knowledge of the laws and regulations that would impact on their transactions

Lessons learned at the Macro level Clearly enumerated e-strategies are a must for developing and transition economies

where government has an important promotional role in ensuring an e-enabling environment

Fiscal incentives are a strong motivating factor especially for SMEs in developing countries

Not all countries and economies can have the right mix of availability and demand of e-professionals, therefore having flexible immigration policies may be required in some economies

Unless government sets an example within its own house, it can not expect its citizens to follow suit.

Introducing e-government promotes not only an e-environment, but is a business opportunity for the IT sector. It also motivates government employees to learn to use computers and software.

Besides the requirement of an e-commerce law, the fact of having one ensures a positive signal for promoting e-trade

Setting up a legal framework is not enough without ensuring its enforceability.

21

5. Chapter Seven: What’s next and topic for discussion There is no simple strategy or solution that can be applied or used across all economies, especially when the candidates are developing or in transition. The situation in such countries is both many-sided and changing rapidly. The ICT technologies, Internet and e-Commerce impact at different levels and therefore must be understood at diverse dimension. They are technologically information intensive and operate simultaneously at both the micro-economic (enterprise) level as well as the macro-economic (societal/national) level13. They are resulting in new organizational forms that require a completely new organizational culture and new skills to both operate and design functions. All of these mandate a new perspective and approach to policy planning and strategy, especially in developing countries and economies in transition where the development of electronic transactions on the Internet are still in their infancy and where the resources available have several competing and compelling demands. It is also important here to distinguish between policy and strategy. Though one follows from the other, it is necessary for an eCommerce export strategy framework to aim for a focused target oriented approach rather than the usual 'volume of promotion' or the 'muddling through' approach. Developing countries and economies in transition have neither the resources nor the time to aim at broad-band or ostensibly comprehensive strategy aimed at transforming their entire economies to match the requirements of the new economy. In this context short or medium term strategies are essential to gain from the trade and developmental benefits of eCommerce. Like any first adventure in uncharted waters, the analysis contained in this paper is by essence tentative and incomplete in both scope and content. Many issue-areas that are closely related to the new economy, and which have potentially significant implications for trade development and future strategic approaches at the enterprise, country or global level, have not been taken up. There are of course several good practices that work and many that are not so successful. It is not the mandate of this monograph to outline every possible initaitive or issue that works or does not and to list them all. It has however been the intention to use the 15 country studies as case research to highlight real-life examples of situations and initiatives at the national level that have a direct bearing on e-Trade competence and development. The data from the country studies was analysed on the basis of a common framework which was then developed into a matrix of e-trade readiness. The above analysis at global, regional and country level has shown that each of the key factors in the frame work are an important ingredient of the overall e-environment. They are also integrated and interconnected as the absence of one or the other appears to impact on the balance. The hypothesis this therefore suggests is:

The more you focus on each factor in the framework the better will be the e-environment and e-Trade readiness/competence

There is however another angle to this conclusion. Can enterprsies survive and succeed in e-Trade even when all the key factors are not all in place? This is a distinct possibility as developing and transition economies may not always have the resources and capacity to ensure all the factors and initiatives.

13 UNCTAD, 2000

22

Framework issues and their importance at distinctive stages of development It would therefore be of interest to list out some of the major e-Trade and e-commerce services that have developed and see how important the key framework issues are in the context of their importance to that product or service. For the purpose of this matrix, such importance is adjudged as being of crucial importance or otherwise to the establishment and maintenance of that e-Trade item. In other words, can the e-Trade service or product be developed despite the low or nil availability of the key factor? The matrix below seeks to address this question. Matrix to show the importance of Framework issues for e-Trade products and services

So

ftw

are

Ex

po

rts

IT e

na

ble

d s

erv

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s

eM

ark

etP

lac

es

Dis

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eb

sit

es

Dig

ita

l P

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uc

ts

Dig

ita

l S

up

ply

ch

ain

s

Micro Level (Enterprise

level environment)

Attitude, culture and use of IT in Industry Y N Y N Y Y


Y N Y N Y Y

e-Business environment including for e-trade N N N N Y Y


level)

Trade Promotional Agencies

Y Y Y N N N

ICT Infrastructure N

(not

crucial) N Y Y Y Y

HR Framework Y Y N N N N

Macro Level (Policy

Framework)

Policy & strategy at national level Y Y N N N N


N N Y N N N

Legal & regulatory framework Y Y Y N N Y

(Legend: Y = Yes, it is important or an issue; N = No, it is not a key issue)

From the above matrix it would appear that several of the e-Trade services and products are not entirely dependent on all the factors being in place. This would therefore suggest that despite the non-availability of all framework items in place, enterprises can attempt to climb up the ladder of e-enabled Trade. This has been and is true in many cases across developing countries. However, the view of this monograph is that this holds good only to a limit and to a time and a scale. To raise the

23

enterprise’s and the country’s e-Trade competence to the next level or paradigm, several inter-linking factors must together come up to speed. This is the road map suggested for developing and transition economies and their enterprises – identify the factor gaps as per the matrix suggested and work out startegies to address them in as integrated and coordinated a manner as possible. SMEs should of course consider alternative and intermediate staregies that can work around the gaps. That can seek and address e-business openings both domestic and global that can be coverted to gain by using management skills that exploit the technological oppurtunity. They must build internal capacity whitin their enterprise to do so. For development agencies it is a dual role – assit countries to address the key factors while at the same time train SMEs to employ what works and avoid what does not.

24

References

Principal References - Publications

Aldaba, F., Gonzalez, M., & Guiang, G. (2002). ICT Infrastructure and E Readiness Assessment of the Philippines ( A Study Prepared for the World Bank and DTI). Ateneo Research Network for Development, Manila.

Bandyopadhyay, S. (2001). Competitive Strategies for Internet Marketers in Emerging Markets. Competitiveness Review, 11 (2), 16-24

Bishop, B. (1999). Global Marketing for the Digital Age. US: NTC Business Books.

Burgonio, M. (2003, April 15). ICT Investments Up By 478%. BusinessWorld. p. 7.

Cairncross, F. (1997), The Death of Distance, Orion Business Books, London.

Catherine L.Mann, Sue E. Eckert, Sarah Cleeland Knight. Global Electronic Commerce - A Policy Primer, Institute for International Economics, Washington DC, July 2000

Daly, John A., and Miller, Robert R., 1998, Corporations' Use of the Internet in Developing Countries, International Economist Intelligence Unit, 1999, Competing in the digital age: How the Internet will transform global business Economist Intelligence Unit and Booz, Allen & Hamilton, New York Economist, July 1997, Asian electronic commerce, Economist, London.

Economist, June 1999, The net imperative: Business and the Internet, Economist, London.

Electronic Payments & Commerce Limited, E-Readiness Assessment -Trinidad & Tobago, First Floor, 1 Oxford Street, Whitstable, Kent , CT5 1DB, England, March-April 2002

Finance Corporation, Discussion Paper Number 35, The World Bank, Washington, D.C.

International Telecommunication Union, 1999, Internet for Development, www.itu.org.

International Trade Centre, 1999, Innovating for Success in the Export of Services – A handbook, International Trade Centre UNCTAD/WTO, Geneva.

ITC (2000). Secrets of Electronic Trade. Geneva.

ITU Basic Indicators, 2003

Kalatoka, Ravi and Andrew Whinston (1997). Electronic commerce: A manager’s guide. Reading, Massachusetts. OECD, 1999, The economic and social impacts of Electronic Commerce: Preliminary findings and research agenda, OECD, Paris.

Poon, S. and P.M.C. Swatman (1995). The Internet for Small Businesses: an enabling infrastructure for competitiveness. Proceedings of the Fifth Internet Society Conference. Hawaii.

Porter, M. (2001). Strategy and the Internet. Harvard Business Review, 63-78.

Secret of Electronic Commerce. ITC/MATRADE

Sheldon, L., & Strader, T. (2002). Managerial Issues for Expanding Into International Web-based Electronic Commerce. S.A.M. Advanced Management Journal, 67 (3), 22-30.

Singh A. Didar, 2000, Electronic commerce: Some implications for firms and workers in developing countries, International Institute for Labor Studies, ILO, Geneva

Singh, A. Didar, 1999, Electronic Commerce: Issues for the South, South Centre, Geneva.

Singh, A. Didar, 2001, A Rainbow Technology for a Rainbow People: E-Business Capacity Development for the CARICOM, Commonwealth Secretariat, London

Sprano, E., & Zakak, A. (2000). E Commerce Capable: Competitive Advantage in the New World Economy, 10 (2), 114-131.

Steinfeld,C. (Spring 2002). Understanding Click and Mortar E Commerce Approaches: A Conceptual Framework and Research Agenda. Journal of Interactive Advertising, 2(2), 1-21.

UNCTAD, 1998, Implications for trade and development of recent proposals to set up a global framework for electronic commerce, UNCTAD, Geneva.

UNCTAD, 2000, Building Confidence: Electronic Commerce and Development, UNCTAD, Geneva.

What Is E-Commerce, Guidelines and information concerning on line electronic commerce via the Internet, Bolton Institute, 2002

25

ITC's national e-Preparedness reports of the following countries

E-Preparedness Report - El Salvador

E-Preparedness Report - Guatemala

E-Preparedness Report - Honduras

E-Preparedness Report - India

E-Preparedness Report - Kazakhstan

E-Preparedness Report - Kenya

E-Preparedness Report - Kyrgyzstan

E-Preparedness Report - Philippines

E-Preparedness Report - Romania

E-Preparedness Report - South Africa

E-Preparedness Report - Tajikistan

E-Preparedness Report - Tanzania

E-Preparedness Report - Trinidad and Tobago

E-Preparedness Report - Uganda

E-Preparedness Report - Vietnam

ITC's B2B e-market place - country profiles of the following nations

- India

- Nepal

- Sri Lanka

References - Websites

Cable News Network www.cnn.com

Confederation of Indian Industry www.ciionline.org

http://business.vnn.vn

http://trade.fpt.vn

http://www.b2vn.com

http://www.eBusiness2vn.com

http://www.intracen.org

http://www.smenet.com.vn

http://www.tienphong-vdc.com.vn

http://www.vcci.com.vn

http://www.vietnamshop.ne.jp

http://www.vietrade.gov.vn

http://www.vnnic.com.vn

http://www.worldbank.org

https://www.vietnamshop.ne.jp/company IABD Sustainable Development Department, SME Observatory, Trinidad and Tobago, www.iadb.org/sds/SME/publication/gen_167_445_e.htm, 9/06/2000 Industry Sector Analysis USDOC, International Trade Administration Computers and Peripherals, US & Foreign Commercial Service and US Department of State, 2001 http://www.ita.doc.gov/

International Labor Organization www.ilo.org International Market Insight, Financial Services; Investment Services; Economy U.S. & Foreign Commercial Service and U.S. Department of State, 2001. http://www.buyusainfo.net

International Trade Centre www.tracen.org

National Association of Software and Service Companies www.nasscom.org National E-Commerce Secretariat of Trinidad and Tobago, Trinidad and Tobago National E-Commerce Survey, 2001, http://ecommerce.gov.tt Nelson, Robert E. and Muroki Mwaura (1995). Growth Strategies Of Medium-Sized Firms In Kenya. http://www.nbs.ntu.ac.uk/cgb/CONFER/1998-03-a/Nelson.doc.

The Economist www.economist.com UNCTAD, Policy Issues relating to access to participation in Electronic Commerce, Nov. 1998, www.unctad.org

26

United Nations www.un.org

www.aseansec.org/view, November 29, 2002.

www.bayantrade.com, April 15, 2003

www.bridges.org, November 27, 2002.

www.brint.com, October 21, 2002

www.citem.com.ph/e-services. February 2, 2003

www.digitalfilipino.com. October 15, 2002.

www.digitalphilippines.org. November 29, 2002

www.dti.gov.ph., October 17, 2002.

www.ecommerce.gov/apec, November 27, 2002.

www.mcconnel.com, April 9, 2002 and April 15, 2003

www.witsa.org. September 9, 2002

27

ANNEXES

28

Winning With the Web (WWW) Initiative of ITC under the e-Trade Bridge Programme

The WWW aims to identify and disseminate best practices in e-trade and in the usage of ICTs to improve

business effectiveness and efficiency. These best practices can then be used as examples of what can be done in

e-trade and with ICTs even if the country’s current environment is far from ideal and holds back SMEs’ efforts.

The WWW programme generates written cases, which are used as models for SMEs to follow in order to

implement these best practices for their own benefit.

This programme is being implemented in three phases.

WWW Phase A

The e-Trade Bridge team at ITC’s headquarters in Geneva searches the web essentially for SMEs in selected

countries participating in the e-Trade Bridge programme, but also for cooperatives, associations, NGOs and

support institutions which have designed and operate effective websites for the purpose of improving their

marketing or production operations.

The team then selects the most suitable websites and evaluates them using a standard evaluation form before

writing short cases describing the website and explaining what good practice it has implemented.

WWW Phase B

National Consultants at country level search locally for companies or organizations, which have implemented the

use of ICTs to improve the effectiveness or efficiency of their marketing or production business processes (in the

form of a website or not). They interview (using a pre-set questionnaire/guideline) the managers of companies or

organizations, which have been short listed, and write-up cases on the good practices these have used to

implement ICTs.

WWW Phase C

Phase C directly assists identified SMEs to become e-enabled for e-Trade. This involves establishing a plan of

action to make the SME e-ready, usually including assessment of management and export-readiness and

assessment of e-opportunity followed by training or counselling interventions and additional support and

services as required.

The National Consultant then writes up a case documenting how a local organisation went about improving the

effectiveness or efficiency of one of its marketing or production business processes by using the appropriate

information or communication technology.

The following is a tabular depiction of the lessons taken from the Best Practice cases of SMEs in the Winning

With the Web format of Phase A – Phase B – Phase C and arranged (where lessons of success or failures were

found) under Micro and Meso Level.

Examples of good and poor practices of SMEs adapting to e-trade: Website based research

Enterprise/Website What works What does not Lesson

Micro Level (Phase A)

Cambodia Hagar Design http://www.hagardesignltd.com/

The website is a good example of a simple but attractive design to promote the products of a SME

There is no information request form which can facilitate the first contact

A clear and simple design website focused on products and the SME can improve the sales

Cambodia Cambodia Craft Cooperation http://www.bigpond.com.kh/users/

cambodian-craft/

The catalogue of products is very diversified and divided in two groups (the ones for the International market and the ones for the domestic market)

There is no online order form which limits the possible gain in time for the ordering process

It is important to have a good catalogue and to merge it with an efficient online ordering system.

Annex 1

http://www.hagardesignltd.com/

http://www.bigpond.com.kh/users/cambodian-craft/

http://www.bigpond.com.kh/users/cambodian-craft/

29

Costa Rica Horizontes http://www.horizontes.com/

They offer a customized travel service and eco tourism therefore promoting their specialized Niche.

The website is US market oriented and only in English version. The fact that there is no Spanish version limits the access to other possible markets.

Communication (language) is an important issue for SMEs. Their website must be adapted to the market they target in priority but also to the other potential markets.

Costa Rica R.F Meseta http://www.rfmeseta.com/

The Online Order system is effective and encourages the potential buyer to become a member

There is no direct link between the Online Store Web and the Order Coffee web page

A SME or a Cooperative can improve the sales through a well organised and clear online order system on its website

Guatemala Mayans Craft http://www.mayanscrafts.com/

The layout of the products is well designed using smart techniques to promote the SME’s products

SMEs have to take care of the presentation of their products if they want to attract potential buyers

Kenya KSM (Kenya Suitcase

Manufacturers) http://www.kenyasuitcase.com/

This SME website offers to sell products which are totally unconnected to its corporate name (suitcases) thus leading to doubt and lack of credibility.

SMEs must create a synergy between their main products and their corporate name

Kenya Cyber Kenya http://www.cyberkenya.com

The website has been design for a regional market grouping several neighbouring African countries

The structure to provide information about the training is poorly designed.

SMEs have to clearly detail the information about their products and services.

Kenya Marketingscapes http://www.marketingscapes.com

They propose a free consultation and evaluation of the marketing needs of the potential client

Offering free services can make a great impression on the customers and bring them to the enterprise for then using other paid services.

Nepal Himalayan Herbs Trader http://www.himalayanherbs.net/

This website has poor ordering and confirmation arrangements therefore leading to confusion for the buyer.

SMEs have to focus on the effectiveness between the phase of attracting a potential Buyer and the phase to make easy the purchase

Malaysia Rohini IT Entrepreneur Solutions http://rites.esmartbiz.com/history.

htm

The website is counterproductive for this SME as its design and presentation is very poor. How could the client be confident when a SME specialized in IT has a so poor a website

It is important that the website is well reflecting the SME and its activities

http://www.horizontes.com/

http://www.rfmeseta.com/

http://www.mayanscrafts.com/

http://www.kenyasuitcase.com/

http://www.cyberkenya.com/

http://www.marketingscapes.com/

http://www.himalayanherbs.net/

http://rites.esmartbiz.com/history.htm

http://rites.esmartbiz.com/history.htm

30

Micro Level (Phase B)

El Salvador Sweets – El Palacio de los

Postres http://www.sweetsbakery.com

(currently under reconstruction)

Thanks to the website, the institutional salesperson on a client-visit can show the different products that are offered using the buyer’s computer.

Right now the website is in Spanish which means that the company is currently targeting Spanish speaking clientele. If the intention of the company is to attract a wider audience, they should have an English portal on their website

SMEs should to develop their website in both local and English language for catering to the domestic and international markets.

Philippines Fiera De Manila Inc. http://www.fmi.com.ph

The SME uses their website to disseminate information on forthcoming seminars and trade exhibits and also uses the Internet to research new ICT trends, which are used in conceptualizing themes for their various seminars, special events and trade fairs.

The use of customer contact database has facilitated prompt decision-making. The use of ICT in (FMI) Fiera De Manila Inc’s marketing and production functions has resulted in sales increases and electronic interactivity between FMI, clients, and partners

Philippines Andamar Inc http://www.andamar.ph

Andamar’s website has proven to be an effective tool in finding new customers and taking orders. PowerPoint slide presentations are now being used for product presentations

The apparent benefit derived from email and IT is improved communications between marketing and production functions, and between the company and its buyers

Kyrgyzstan

Cheri Service

http://www.price.kg

The Cheri Service Company began with stationeries sales and developed its activities until they launched an on-line prices database. Up to today profits from allocation advertisement on the website not only exceed all disbursements but also helped develop the organization.

Application of ICTs in the work of the SME exceeded management’s expectations.

Turkey Garipogullari co. http://www.garipogullari.com

This enterprise has shown that an SME, which wants to find new customers from abroad can do so through its own web site and also through useful B2B sites.

Intelligent usage of the Internet technologies can be used in order to find customers, to respond to sales inquiries, to shorten response time and to decrease communication costs

Uganda Mukono – Womens’ task force

Thanks to ICT, accessing information on favourable markets and market prices has enabled the women to make correct decisions on what type of vegetables to produce and when to produce them.

Communication with customers also reduces wastage since the women are informed of customers’ requirements and know what to produce and when it is needed

Micro Level (Phase C)

http://www.sweetsbakery.com/

http://www.fmi.com.ph/

http://www.andamar.ph/

http://www.price.kg/

http://www.garipogullari.com/

31

Honduras Manufacturas Del Trópico S.A. de C.V. (Del Tropico)

Del Tropico has not yet fully explored the potential or taken advantage of the marketing opportunities offered by the Internet

Aware of this handicap, the management established in the company’s 2002-2007 Business Plan an e-commerce project

Turkey Silpo Screen Manufacturing and Sales Ltd. Co

Due to a lack of ICT, the enterprise was not able to identify its competitors' names and strategies and establish its own strategy accordingly.

The use of ICT will reduce the lack of essential information for the good process of the enterprise

Kenya Adelphi, The Leather Shop http://www.adelphileather.biz

This enterprise has created an electronic shop-front to the International Market so as to sell more and access new markets using the internet

The Use of ICT allows the SME to attract potential Buyers

Meso Level (Phase A – Gender Issues)

India SEWA (Self Employed

Women’s Association) http://www.sewa.org

SEWA’s website is well structured, easy to navigate and contains all the information that a woman in India would need to know about her rights

A website has to well reflect the activity of the Association

Morocco AFEM (Association des Femmes

Chefs d'Entreprises du Maroc) http://www.afem.ma

The website contains information to attract the audience and is helpful to women who wants to create their own activity

A website which provides enough information and a network to establish a SME.

South Africa TWIB (Technology for Women In

Business) http://www.twib.co.za/index.html

The website is capable of attracting its intended local and foreign audience as the outside shell of the website’s is appealing. The website content is very detailed with a lot of links to other useful information.

Effectiveness to attract women in ICT’s activities through a website

Meso Level (Phase B – Gender Issues)

Uganda CEEWA (Council For Economic

Empowerment For Women Of Africa)

CEEWA has been able to use Information and Communication Technology (ICT) to improve women’s skills in business management by introducing them to computer skills.

Information and Communication Technologies can be effective tools that could make a positive impact in gender mainstreaming and empowerment especially the rural women

http://www.adelphileather.biz/

http://www.sewa.org/

http://www.afem.ma/

http://www.twib.co.za/index.html

32

Annex 2.

What Works and What Does Not

The statement below combines the e and business paradigm as well as the key factors that

have been used in the framework and lists out actual examples of what works and what does

not as culled out from the research. The examples are presented reflecting both, the type of

e-business, as well as the factor in the matrix that they would correspond to. An interesting

feature of this tabulation is that several of the examples actually overlap between different

types of business as well as different factors of the matrix. This further strengthens the

argument that there are strong inter-linkages between the factors as well as the three levels

of micro-meso-macro.

Examples of good and poor practices of SMEs adapting to e-trade in the context of the e paradigm i.e. E for business, e as business and e in business

E-Biz Type / (Factor)

What works What does not Lesson

Micro Level

E in business (e-trade capabilities)

Web page creation is considered a one time affair and poor maintenance of websites

Unless websites are constantly updated, SMEs can not expect credibility and success in e-trade

E in business

(e-trade capabilities)

SMEs tend to set up websites using non-professionals who do not create a dynamic design that would allow for quicker access

To be competitive in marketing themselves on the web, SMEs must use best technologies

E in business


Even in non-English speaking countries SMEs were found setting up English websites in order to access global markets

Relaying only on English in non-English speaking nations deprives SMEs from possible collaborations and transactions with the local environment

Language is an important issue for SMEs and their website and IT usage must be adapted depending on the market they seek to access

E for business


SMEs having a desire to take part in e-commerce / e-trade, but failing to update knowledge in ICT / IT / Internet

Desires and intentions need to be matched with training and experience

E for business


SMEs setting up websites and marketing on internet without first addressing logistical problems of production and shipping etc.

Loss of credibility in delayed or poor supply must be avoided at all cost in e-trade

E for business

(e-professionals availability)

SMEs taking up initiatives in e-trade without either training their staff or hiring e-professionals

SMEs must update or hire requisite skills when they begin using new technologies

33

E in business

(e-business environment)

SMEs first experimenting and streamlining e-commerce initiatives in the domestic markets and only then taking the plunge to offer products and services abroad

Though not always a pre-condition to e-trade and export, ensuring seamless and reliable transactions are a must for e-trade

E for business


SMEs entering the area of e-trade and internet without first ensuring sufficient funds to implement the project successfully

In the e-world just as in the real world financial issues must be adequately addressed

E in business (e-business environment)

Higher costs of the electronic payments making companies desist from selling online and dealing with returns in e-trade being complicated.

e-banking facilities need to be competitive and locally available

E in business (e-business environment)

Online stores created by and for SMEs need to offer discounts on their product prices in order to promote sales

Competitiveness and special promotions are important issues for developing country enterprises entering the area of e-trade

E in business


B2C projects offering online payments / transactions in an economy which has very small credit card base

e-commerce startups must be sure of their market before launching web-based enterprises and meso level financial framework needs to be improved

Meso Level

E in and for

business

(Trade Promotional Agencies)

TPAs helping SMEs create web pages, conducting computer training courses, promoting crafts and goods made by small entrepreneurs etc. at their website.

Trade Promotion Agencies attempting to promote e-trade without having adequate knowledge regarding e-business

TPAs have an extremely important role in developing and transition economies and must ensure that they are adequately qualified to promote the right services for SMEs

E as business (ICT Infrastructure)

ISPs offering several varieties of options in terms of speed and cost for internet connectivity

Different services such as call centers, BPO services, software, digital products and services, all require different connectivity and speed options which must be competitively catered for by the ISP providers


Monopoly telecom services leading to high cost of internet access

Competition must be encouraged to ensure the lowering of internet access cost


Promotion of development of computer centres and cyber-cafes by ISPs, TPOs and as a business

Low PC penetration and high cost of Internet connectivity.

Access to the internet is more important than tele-density for developing countries

E as business

(ICT Infrastructure)

Hardware and software, products and services at affordable prices ensured through a competitive local IT environment for import and manufacturing / assembly.

High cost of hardware and software leading to low PC penetration

ICT and e-trade environment are directly influenced by hardware and software costs

34

E for & as

business HR Framework)

Promoting computer / IT training through public and private institutions.

Curriculum of educational institutions not in sync with ICT developments / requirements.

Several levels of IT education and training are required depending on the market requirements of e-commerce / e-trade. Both a business opportunity and institutional requirement.

E for

Business

(Financial

framework)

Governments / banks offering venture capital and loans at a lower interest rate for e-trade /export oriented projects

E in business (e-Security in financial framework)

Consumers hesitating to give their personal information on the web or using credit cards

e-literacy, e-awareness and secure online transactions must be ensured in the local business environment

E as business (e-business environment)

Virtual mall created by a credit card provider that allows online trade

Where e-banking and online electronic payments are an issue, such initiatives by a third party are mutually beneficial for all the players

Macro Level

E for business (Policy & strategy at national level)

Appointing a nodal agency which has a mandate for implementation from the highest political authority

Countries announcing a policy / intention to promote e-commerce / e-trade without working out a strategy / action plan and nominating a nodal agency for implementation

Clearly enumerated e-strategies are a must for developing and transition economies where government has an important promotional role in ensuring an e-enabling environment

E for business (Policy & strategy at national level)

Facilities to import computers and software tax free

No incentives to motivate exports through electronic commerce

Fiscal incentives are a strong motivating factor especially for SMEs in developing countries

E for business (Policy & HR Framework)

Allowing easy movement of e-professionals between countries depending on market requirements

Shortage of e-professionals in the country leading to a stifling of e-trade potential.

Not all countries and economies can have the right mix of availability and demand of e-professionals, therefore having flexible immigration policies may be required in some economies

E for business (Policy & HR Framework)

Demand and supply of ICT professionals is more or less balanced in the country

Producing qualified and skilled ICT professionals without there being sufficient local demand leading to them leaving for more lucrative employment abroad.

Brain drain is a serious issue for many developing countries and there are both positive and negative angles to this issue which individual counties must decide for themselves

E in business (e-government initiatives)

As per the E-Commerce Law / regulations stipulating that government offices must compulsorily provide for electronic transactions in their interaction and processes.

Unless government sets an example within its own house, it can not expect its citizens to follow suit.

35

E for & in

business (e-government initiatives)

e-government as a model and business opportunity for SMEs

Government computerizing its departments without setting up inter departmental linkages and intranets as well as using the network for access of citizens i.e., e-government

Introducing e-government promotes not only an e-environment, but is a business opportunity for the IT sector. It also motivates government employees to learn to use computers and software.

E for business (Legal & regulatory framework)

Legislating and e-commerce law based on UNCITRAL e-commerce model law.

Expecting to promote e-commerce / e-trade without establishing a legal framework for the same.

Besides the requirement of an e-commerce law, the fact of having one ensures a positive signal for promoting e-trade

E for business (Legal & regulatory framework)

Government agencies and TPOs raising the level of awareness of SMEs regarding legal framework for e-commerce

SMEs embarking on e-trade without having sufficient knowledge of the laws and regulations that would impact on their transactions

Being small enterprises with limited resources, SMEs require capacity building in the area of legal framework

E as business (Legal & regulatory framework)

Establishing designated agencies to ensure legal validity and enforceability of digital signatures and electronic records.

Setting up a legal framework is not enough without ensuring its enforceability.

Some country level examples of what works and what does not

This works:-

An example of focused B2B marketing from India

JustPaper.com Website: http://www.justpaper.com

Just Paper.com has a range of handmade paper collection and handcrafted handmade paper products. Justpaper.com aimed for a web presence to establish the brand "JUSTPAPER.COM" as a quality B2B supplier of handmade papers, products and gift items for the benefit of vast clientele abroad by providing them a direct access to quality products. The website showcase its entire range of products to business customers across the globe. The website offers: Interactive interface for business enquiries of paper products Online order and payment using credit card. Offer its 'buying-agent' services to global buyers of paper & paper products E-Catalog displaying the exclusive range of handmade paper with more than 100 products Results: Rs 3000000 (starting from zero) in first working financial year. 200-250 queries per month. A long list of clients all over from USA and European Region.

http://www.indiamart.com/success-stories/index.html

http://www.justpaper.com/

36

This works too:-

An example of Networking successfully from the Philippines

pesocard website: http://www.pesocard.com

Pesocard has been catering to international Filipino communities. This website offers the several services, including: -Door to door cargo -Bank to bank remittances -Regalogram (buying gifts online) -Appliance financing program -Pabahay plan or house financing program -Hatid-sundo service or airport transfers and Hotel reservation -Overseas placement of Filipino workers -Accident benefit insurance -Mobile disco, Photo service, Courier services This site is affiliated with government offices such as the Social Security System and Pagibig, Philippine Airlines and Goldilocks (pastry and cake shop) and several hotels and shops. Its bulletin board carries announcements on class reunions and testimonies from satisfied customers. These online marketplaces and services have been beneficial to e-trade, as it has encouraged exports and imports and services whether in small or big quantities.

Macro-level good practice example: Guatemala

SEADEX (Automated Export License Service)

Website: http://www.exports.com.gt

Before 1989, to obtain an export license, exporters had to go to each government entity involved in the process, around 10 days was the time frame usually needed to obtain a license. Under a plan led by AGEXPRONT, all required officials from the different governmental entities were provided a joint space in the Ministry of Economy so that exporter one place and obtain their clearances there. In 2002 the export license process became automated and export companies could solicit the license online. Through an automated process licenses are awarded online. Today there are about 500 companies that perform all of their export transactions online. AGEXPRONT has also enabled online payment of this service with credit or debit cards, thus giving a complete online service for export license needs. With this service enabled, companies can rely on an automatic and safe way to make their export declarations in just a few minutes with a user friendly computerized form. The highest standards of electronic security and infrastructure has been provided through this service.

http://www.indiamart.com/success-stories/index.html

http://www.pesocard.com/

http://www.exports.com.gt/

37

A successful e-marketplace

Bayantrade

Website: http://www.bayantrade.com

This online marketplace was established in June 2000 by a consortium of six Philippine conglomerates in manufacturing and service industries. It aims to serve as a marketplace of indirect supplies such as office supplies, computer equipment and maintenance, repair and operations items. According to the WB-ARND Report (2002), BayanTrade had 191 buyers, 175 from consortium companies and 16 firms outside the founding conglomerates as of 2001. With the total transaction volume amounting to P5.4 billion pesos in 2001, BayanTrade is the largest e-commerce marketplace in the Philippines. It aims to be the country’s gateway to the global business to business trading communities in a broad range of industries.

This does not work:-

A lesson of what does not work from an example in Honduras

CADECA (Compania Avicola de Centro America) Website: http://www.cadeca.hn

Founded in 1967, CADECA was producing chicken meat and commercial quality eggs and selling it in the local market. In 1991, it changed it's production goals concentrating only on chicken meat production. In 1999, CADECA created their web site to offer products on line. They were the first enterprise in Honduras to sell products on line both for the domestic and export market. Unfortunately they did not get the results they had expected even though they had invested large amounts in publicity and promotions. CADECA even offered a lower price on their products on line, delivery in a special packing to make the product more attractive, and most important, at no additional cost. The amount of product sold through the net was not enough to even cover the costs of operation.

CADECA, has analysed the problem and come to the conclusion that their most important hurdle was that only a small amount of the population have computer access, and considers that in order for more people to use B2C, it is necessary to inform and educate the general public on this topic.

They still offer their products online since they want to offer good service and to keep an image of a modern enterprise and now they changed strategy and are concentrating on other markets outside Honduras. Honduras has a large amount of people who live in the United States; some of them buy on line chicken to be delivered to their families in this country. The obvious lesson is to understand the market properly.

This helps:

Raising Awareness Among Youth and Parents: Tunisia Tunisia has created a program to raise awareness and sensitize young parents to the importance of e-commerce as well as information and communication technology. Specialized seminars, radio and television programs highlighting fun, interesting, educational and health-related web sites are very popular. They also ran a campaign "One Computer Per Family Campaign". Through this families can buy a computer configuration based on an AMD processor with printer and multimedia pack for less than $500 payable over 36 months, subsidized by the government. The equipment is assembled in Tunisia

http://www.bayantrade.com/

http://www.cadeca.hn/

38

Annex 3

The e-Trade Bridge programme

The e-Trade Bridge programme’s goal is to create internationally competitive, e-competent businesses

and to build national e-trade capacities within the institutions which support them. The programme

features products and services to enhance the e-competence of SMEs for international

competitiveness, initiatives to enhance the capabilities of national and regional networks of institutions

and trainers and counsellors, and mechanisms to foster international exchange and cooperation

amongst stakeholders.

The programme is modular and features products and services to enhance the e-competence of SMEs

for international competitiveness, initiatives to enhance the capabilities of national and regional

networks of institutions and trainers and counsellors, and mechanisms to foster international exchange

and cooperation amongst stakeholders.

The e-trade bridge programme consists of four major components to be implemented following the

research phase. These are the Kick-off Meeting, the WWW programme, the Strategist’s Training and

the e-nabling SMEs programme for training trainers and counsellors. Although they are linked in a

logical sequence, each is a stand-alone activity and can be run independently in a partnering country.

Normally ITC will work with one or more national partner organizations to implement the

programme. This document is designed to provide such partner organizations with a clear

understanding of the various components of the programme. For this purpose a brief overview of the

preparatory research phase, the kick-off meeting, www programme, the strategy training, the trainer’s

training and the Web-based platform is provided in the following section. Also an overview of the

process by which ITC establishes cooperation with a national partner and an outline on the role and

responsibilities of the national partner organization during the research phase is provided.

The research phase

The objective of the research phase is to identify the state of ‘e’ in the country. The report consists of

three parts namely the E-Balance Sheet, the E -Map and the E-Action Points. Once the e-balance sheet

and the e-map are completed, the various actors and relevant activities in the country will be

identified. These findings should also give some indication as to what gaps exist with a view to

recommending solutions. This will form the final section of the report: the E-Action Points.

The Kick-off Meeting

The national e-Trade Bridge Kick-off Meeting forms the platform for EMDS’ e-Trade related

interventions in partner countries. The purpose of this event is to develop a shared vision of the

national e-trade context, facilitate local ownership of ITC’s e-Trade initiative, and focus on turning

broad e-commerce policy statements into concrete action points.

Winning With the Web Component

The Winning With the Web (WWW) component is the natural follow-up to the e-Preparedness Report

and the Kick-off Meeting. The WWW aims to identify and disseminate best practices in e-trade and in

the usage of ICTs to improve business effectiveness and efficiency. These best practices can then be

used as examples of what can be done in e-trade and with ICTs even if the country’s current

environment is far from ideal and holds back SMEs’ efforts.

The WWW programme generates written cases which are used as models for SMEs to follow in order

to implement these best practices for their own benefit. It also aims to make SMEs e-ready, i.e. to take

SMEs which have not yet reaped the benefits of using ICTs and help them to make use of ICTs,

through a web presence for marketing purposes or through the use of ICTs to improve the

effectiveness or efficiency (or both) of other business processes.

39

The WWW programme is designed to primarily benefit senior managers and owners of small and

medium sized companies. However, it can also benefit Internet Service Providers, e-commerce

solutions providers, web designers, business consultants, associations and training and related

organisations offering e-trade and ICT services.

Workshop for Strategists

The National e-Trade Strategy workshop provides assistance to national governments in formulating

and assessing their international trade strategies to determine the extent to which their strategies

respond to the challenge of trading across borders using the Internet and information and

communications technologies (ICT). A key workshop objective is to promote an exchange of views,

which lead to the formation of practical policies and programmes to assist small and medium sized

enterprises to compete internationally. The work shop is offered over three days involving a

combination of lectures, practical exercises and group work, conducted by national and international

experts from developed and developing countries.

e-nabling SME’s

This is a capacity building initiative, which provides a national group of trade development

professionals with the necessary tools, materials and skills to design and develop training and

counselling interventions. The aim of these interventions is to help client companies (SMEs) leverage

information and communications technologies (ICT) and e-business practices to improve their

international competitiveness.

The program is delivered over approximately 12 months and comprises a series of short in-country

workshops interspersed with periods of several weeks during which participants are asked to carry out

practical assignments to consolidate what they have learned. Participants are supported by mentoring,

performance feedback, and peer group exchange. A web-based platform provides access to materials

and resources, and allows interaction with EMDS’ wider network of e-trade development

professionals.

During the training, particular emphasis is given to building the competence of participants to develop

and implement training and counselling interventions aimed at helping SME managers use ICT/e-trade

(ET) to:

Enhance the development and implementation of their plans to go international;

Identify and research target markets; gain international visibility for their companies; and

promote themselves effectively to their client groups world-wide;

Make use of ICT and e-business practices to improve their business processes;

Improve the effectiveness and efficiency with which human and technology resources are

managed in their company

The program targets trainers and counsellors of small and medium enterprises who will be trained to

assess enterprise needs, and to design and deliver a range of interventions to improve the e-

competence of enterprise managers. These individuals are likely to have some experience/knowledge

of business management, international trade, and ideally will have some knowledge of e-trade issues.

They may be working within multiplier organizations, SME support organizations, providers of

commercial services, training or consultancy organizations, or be independent agents. They will have

some familiarity with computer applications (including databases and spreadsheets) and the use of the

Internet. The training of trainers and counselors is generally carried out in partnership with a national

HRD institution, which coordinates the training of trainers and acts as a focal point for all activities.

The training program is delivered in four instalments:

Management Competitiveness Programme for SME’s

Export Competence Programme for SME’s

e-competence for SME’s

e-competence for Strategists

40

Each instalment incorporates a range of diagnostic tools and complementary solutions. Below is

comprehensive coverage of these tools and solutions:

Management Competence Programme (Management Readiness)

Diagnosing Management Competence:

- NeedSME An e-Tool for Management Diagnostics

- DemandSME An e-Tool Assessing Demand for

Training

- The Business Management System Guide on Enterprise Competitiveness

Designing and Verifying Business Strategy:

- PlanSME An e-Tool for Strategic Planning

- Strategy Design How to Design and Verify Business

Strategies

Building Marketing and Production Capabilities:

- Quantity Producing at the right Quantity

- Quality Producing at the right Quality

- Time Producing at the right Time

- Cost Producing at the right Cost

- Communicating Getting your Message to your Buyers

- Distributing Getting your Products to your Buyers

Export Competence Programme (Export Readiness)

- Diagnosing Export Competence

- Export Potential Assessment An e-Tool for Export Potential

Diagnostics

Managing Export Transactions:

- Dispatching Work Initiating Production to Fulfil Export

Orders

- Estimating Production Costs Accurately Calculating the Cost of an

Export Order

- Performing Freight Operations Delivering your Products to your

Overseas Buyers

- Prompting and Responding to Sales Inquiries Communicating to Get Export Orders

- Scheduling work and Routing Planning Production to Fulfil Export

Orders

- Preparing and Negotiating Specifications Meeting Customer Needs with Accurate

Product Specifications for Exporting

- Pricing and Quoting Calculating Sales Prices and Preparing

Quotes for Exporting

- Getting Paid Understanding Financial Processes and

Procedures for Exporting

- Exhibiting at Trade Fairs An Example of Task Management

According to the BMS

- Access to Finance for the First Export Order Philippines Survey

- Access to Finance for the First Export Order Tanzania Survey

- ManageSME An e-Tool for Managing Transactions for

SMEs

E-COMPETENCE FOR SMEs (E-Readiness)

Diagnosing e-Opportunities:

- E-Opportunity Assessment An e-Trade Tool for e-Potential

Diagnostics

- Using e-Trade Tools for Competitiveness:

- Verifying Strategy Researching Buyers and Competitors on

the Internet

- Designing Promotions Building Web Presence for your

Enterprise

- Purchasing and Expediting Finding Suppliers on the Internet

41

- Prompting and Responding to Sales Inquiries An e-Trade Tool for Customer

Relationship Management

- Cases in e-Business:

- Case Preparation Guidelines

- Winning With the Web

- Website Best-Practice Cases


- Best-Practice Cases in e-Business


- Cases of e-Business Competence Building

- E-COMPETENCE FOR STRATEGISTS (E-Readiness)

- Assessing Country e-Preparedness

- Guidelines for Assessing Country e-Preparedness

- Country Assessors Handbook

- Guidelines for Assessing Regional e-Preparedness

- Regional Assessors Handbook

- Country e-Preparedness Reports

- State of e-Business and Potential for Development in _______

- Regional e-Preparedness Reports

- State of e-Business and Potential for Development in the Region

- E-Business Resource DVD and Book

- E-Business Links in __________

- National e-Trade Bridge Websites

- Training Strategists for e-Trade:

- A Resource Book for Training Strategists for e-Trade

42

Annex 4.

Global e-Trade Readiness Index (Matrix No. 1) based on an analysis of the country study

research.

Nation E

l S

alv

ad

or

Gu

ate

mala

Ho

nd

ura

s

Tri

nid

ad

an

d T

ob

ag

o

Ro

man

ia

Kazakh

sta

n

Ta

jikis

tan

Kyrg

yzsta

n

Ken

ya

Tan

zan

ia

Ug

an

da

So

uth

Afr

ica

Ind

ia

Vie

tnam

Ph

ilip

pin

es

Glo

bal


level environment)


2 2 3 2 1 1 3 2 2 3 2 3 3 1 3 2.2


3 2 3 1 2 1 2 2 1 2 2 2 3 2 3 2.1


2 2 2 2 1 1 2 1 2 1 2 3 2 1 2 1.7

Micro Level Index 2.3 2.0 2.7 1.7 1.3 1.0 2.3 1.7 1.7 2.0 2.0 2.7 2.7 1.3 2.7 2.0


level)


1 1 3 2 2 1 1 2 2 1 3 2 3 1 3 1.9

ICT Infrastructure 2 3 3 3 3 3 1 1 1 1 2 3 2 2 3 2.2

HR Framework 3 3 3 3 3 3 1 3 2 2 2 3 3 1 3 2.5

Meso Level Index 2.0 2.3 3.0 2.7 2.7 2.3 1.0 2.0 1.7 1.3 2.3 2.7 2.7 1.3 3.0 2.2

Macro Level (Policy

Framework)


2 2 2 3 3 2 1 2 2 2 2 3 3 2 2 2.2


1 2 2 2 3 1 1 3 1 1 1 2 3 2 2 1.8


1 3 1 2 3 2 2 2 1 1 2 2 3 2 2 1.9

Macro Level Index 1.3 2.3 1.7 2.3 3.0 1.7 1.3 2.3 1.3 1.3 1.7 2.3 3.0 2.0 2.0 2.0

e-Trade readiness

Index 1.9 2.2 2.4 2.2 2.3 1.7 1.6 2.0 1.6 1.6 2.0 2.6 2.8 1.6 2.6 2.1

Grading: Factor/component in place or action taken: 3

Partially in place / Planned but not operationalised: 2

Not available / No action planned yet: 1

The matrix above has listed out the progress or grading of each of the 15 countries (in

alphabetical sequence) against the three levels of micro-meso-macro factors. The grading is

also factor-indicative as well as global-indicative.

43

There is another dimension of this analysis. Based on the same data of the 15 country

reports the e-Trade readiness could be projected as those of the countries that are at the

most successful level, less successful level and the least successful level. The success

level matrix (Matrix No. 2) below also includes an indication of the e-commerce micro index

ranks and the networked readiness index ranks of those amongst these 15 nations which

figure in the Global Information Technology Reports14.

Most Successful

Level Less Successful Level

Least Successful Level

Nation

Ind

ia

So

uth

Afr

ica

Ph

ilip

pin

es

Ho

nd

ura

s

Ro

man

ia

Tri

nid

ad

an

d T

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level environment)


3 3 3 3 1 2 2 2 2 2 1 1 3 3 2


3 2 3 3 2 1 2 2 2 3 1 2 2 2 1


2 3 2 2 1 2 2 1 2 2 1 1 1 2 2

Micro Level Index 2.7 2.7 2.7 2.7 1.3 1.7 2.0 1.7 2.0 2.3 1.0 1.3 2.0 2.3 1.7

Meso Level

(e-Trade support

level)


3 2 3 3 2 2 1 2 3 1 1 1 1 1 2

ICT Infrastructure 2 3 3 3 3 3 3 1 2 2 3 2 1 1 1

HR Framework 3 3 3 3 3 3 3 3 2 3 3 1 2 1 2

Meso Level Index 2.7 2.7 3.0 3.0 2.7 2.7 2.3 2.0 2.3 2.0 2.3 1.3 1.3 1.0 1.7

Macro Level (Policy

Framework)


3 3 2 2 3 3 2 2 2 2 2 2 2 1 2


3 2 2 2 3 2 2 3 1 1 1 2 1 1 1


3 2 2 1 3 2 3 2 2 1 2 2 1 2 1

Macro Level Index 3.0 2.3 2.0 1.7 3.0 2.3 2.3 2.3 1.7 1.3 1.7 2.0 1.3 1.3 1.3

e-Trade readiness Index 2.8 2.6 2.6 2.4 2.3 2.2 2.2 2.0 2.0 1.9 1.7 1.6 1.6 1.6 1.6

* E-commerce micro index Rank 2001 - 2002

29 28 37 70 75 53 65 64 73

** Networked Readiness Index Rank 2002 - 2003

37 36 62 81 72 58 73 63 71

* Global Information Technology Report 2001 - 2002

** Global Information Technology Report 2002 - 2003

14 GITR, the Global Information Technology Report 2001-2002: Readiness for the Networked World, was

produced under a joint effort by Information Technologies Group at CID (Center for International Development)

of Harvard University and the World Economic Forum.(http://www.cid.harvard.edu/cr/gitrr_030202.html)

44

Observations from the Success level Matrix:

This e-trade readiness matrix shows the status of e-trade preparedness for all the 15 nations

studied from different regions. This matrix while giving the overall e-trade readiness index of

the nations, also shows the sub-indices at each of the three levels (micro, meso and macro).

From the e-trade readiness matrix, it is apparent that the more successful nations have each

of the key factors either already in place or at an advanced stage of planning for all the three

levels.

At the enterprise level, the SMEs mostly have the right attitude and make use of ICT in their

business with skilled professional’s availability not being a problem. The SMEs have a

relatively more conducive environment for e-business and e-trade.

At the support level, the more successful economies had reasonably good ICT infrastructure

and reliable internet connectivity is available at affordable costs. While robust education and

training institute structures take care of the demands for skilled professionals, there are trade

promotion agencies taking initiatives to promote e-trade.

At the policy level, the governments have strategic planning with most of them having

strategies for eCommerce/e-Trade development in place. They also have legal and

regulatory systems in place or these have already been planned for and expected to be put

in place shortly. These governments also are putting ICT to use for their own functioning with

the implementation of several e-governance projects at regional level and national level and

most of these governments have their own departments using PCs and having websites.

This is rather in contrast with the situation prevailing in the nations seen as least successful

in terms of e-Trade readiness. These nations are seen as having poor ICT infrastructure.

While some nations still use out dated technologies which have poor reliability, generally the

infrastructure in these nations has poor national coverage and Internet connectivity is seen

as that of inferior quality and/or expensive. It is also seen that there is nil or very limited role

of trade promotion agencies in these nations supporting e-business activities. Skilled

professional’s availability is also an issue in these nations.

The above features would indicate that these nations have no strategies at the policy level.

This is clearly seen in the matrix from the low macro level index of these economies. These

45

countries are either not having policies or they are at an early stage of planning. Very few or

no e-government initiatives were seen here.

Other countries falling in the middle category though do not show a common trend. They are

seen as lacking at some of the sub levels. The matrix clearly shows an imbalance in the

three levels for these nations. A general observation shows that most of these nations seem

to be having a reasonable to good support level index, but have poor enterprise level or

policy level indices or both.

This appears to be reflected at the enterprise level also as the reports indicate that there are

serious gaps starting from awareness level right up to e-Transactions. Though it is possible

that some enterprises may become e-enabled by sheer application and grit of their own,

unfortunately the meso and macro level factors will restrict not only their potential but also

their on-line transactionabilty.

Date post:	15-Apr-2017
Category:	Government & Nonprofit
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ICT, Competitiveness and Trade Development

Government & Nonprofit