Leveling E-Commerce Opportunities for Developing Countries

20 Pages Posted: 4 Jun 2015

See all articles by Jeffrey Ray

Jeffrey Ray

Swiss Management Center (SMC) University; University of Maryland, Baltimore County (UMBC)

Date Written: December 31, 2011

Abstract

Recent studies have raised a disturbing issue concerning the ability of developing countries to compete in the E-business marketplace. Historically, researchers have been optimistic and anticipated that E-commerce technologies could be leveraged and benefit underdeveloped countries. Aside from a slight improvement in communications, recent studies have shown that businesses in developing countries do not benefit from advances made in E-commerce technologies. While E-commerce technologies help foreign countries access the markets of underdeveloped countries, they do not return the favor and help businesses in underdeveloped countries. The net result of this unfortunate situation is an unfair level of competition imposed on businesses in developing countries caused by an increase in the digital divide. This paper assesses the level of E-commerce support developing countries are currently realizing, investigates potential benefits or opportunities that E-commerce technologies could bring to bear, and then reviews the barriers that are keeping these opportunities from being realized. Coordinating the actions of government and industry to encourage investment in E-commerce technologies by government, businesses, and individuals, is recommended so businesses in underdeveloped countries and reap the same advantages as their counter parts in developed countries. Given businesses in developing countries did not get to influence the design features associated with improvements to information and communication technologies; it is unlikely they will offer businesses in developing countries the same efficiencies they do to their counterparts in developed countries. The application of the social shaping would allow developing countries to leverage public policy decisions to influence how technology evolves in their local market places. The governments of underdeveloped countries can provide some assistance by adopting policies and regulations, or even to implement laws, to facilitate development and control of E-commerce infrastructure within their own territories. From a global perspective, however, this would be a piecemeal solution. Some kind of international regulation would therefore be preferred. Creative legislative solutions are called for, but at the international level.

One approach is to mirror how US municipalities encourage private investment for making infrastructure improvements. Due to tight US municipal budgets, many local county governments leverage land zoning approvals to entice real estate developers into making road and utility infrastructure improvements. By making the infrastructure improvements surrounding the land parcel they are developing, the developers become eligible for zoning and building permit approvals. Costs are prorated to customers for each finished lot the developer sells. A similar approach could be adopted where external businesses desiring to participate in the online market place of developing countries are required to make investments to improve the E-commerce infrastructure position in return for authorizations to conduct business. By integrating approvals to enter the market place with requirements to stand up infrastructure components in government regulated e-portals, the improved E-commerce capabilities could also be leveraged by the businesses within the developing countries, and equal access to E-commerce benefits would be provided to all businesses. Before the products and services of networking and telecommunications service providers are approved for use, the service providers should be required to reduce the gaps in technology and human infrastructure contextual enablers, and level the competitive playing field. An international treaty supported by a list of adopting member states would be a good way to ensure adoption of the approach world-wide, and may encourage positive leveraging of E-commerce capabilities that facilitate growth in underdeveloped countries.

Keywords: e-commerce, developing countries, digital divide, information and communication technologies, ICTs, leveraging e-commerce, leveraging technologies, government coordination, social shaping, international regulation

JEL Classification: A13, D63, D78, F12, F14, F15, F31, F42, F43, L51, O19, O20, O33, P21, P45

Suggested Citation

Ray, Jeffrey, Leveling E-Commerce Opportunities for Developing Countries (December 31, 2011). Available at SSRN: https://ssrn.com/abstract=2108365 or http://dx.doi.org/10.2139/ssrn.2108365

Jeffrey Ray (Contact Author)

Swiss Management Center (SMC) University ( email )

Balz Zimmermannstrasse 7
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Switzerland
+41 (0)41 500 16 22 (Phone)

HOME PAGE: http://www.swissmc.ch

University of Maryland, Baltimore County (UMBC) ( email )

1000 Hilltop Circle
Baltimore, MD 21250
United States
(410) 455-2537 (Phone)

HOME PAGE: http://www.umbc.edu/se/

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