Back to E-commerce Workshop

Back to Notes and Findings 

Jim Henry (Monitor Company consultant, investigative journalist)

"Internet for the Rest of Us"

Jim discussed some of his work on projects relating to development and Internet access.

-Based on the idea that Internet access is a basic human right

-Tensions between the business and academic world

1. Context: Developing countries are getting left behind

• Internet adoption is taking off. It's been the fastest global technology launch ever.

• There has been a surge in e-commerce

• We must beware of technology optimism

• low Internet penetration in developing countries

• the first world dominates the Net

• will we see and Enclosure Movement by the first world? (to ensure property rights)

• there has been some sluggishness on the part of governments. Not wanting to interfere too much; laissez-faire. (This is curious, as the Internet began as a government project!)

• We've all heard that half of humanity has never made a phone call. (!) [The group debated the source and accuracy of this factoid.]

e-commerce depends on trade, technology, capital markets, labor/education, media/communications, and governance

It is important that we learn by NOT doing; others' experiences should guide future efforts.

2. Benefits/Barriers

Benefits: market expansion, access to technology and capital, transparency

Barriers:

• Infrastructure: low IT expenditures, expensive to upgrade
• Telecom access is expensive, and "data"=luxury.
• Technology clusters, where IT skills are concentrated, are favored
• Difficult to get access to capital markets

Communications sector hasn't been seen as important in many public agendas

• The point was raised that wireless access can be much cheaper than landlines
• Camella Rhone: Many people in developing countries don't know "what is out there." An awareness campaign is an important part of Internet adoption.
• Tom Ehrgood: The appliance itself is not critical, but the environment of people is.

Jim echoed that the solution to IT use and Internet deployment will not be device-driven.

C. Live Projects

• -Extremadura

• -poorest region in Spain, near border with Portugal. Very limited telecom penetration.

• -Good site for alternative connectivity solutions

• -"Los conquistadores" project

• -supporting the use of IT in schools, community centers, hospitals, government, and entrepreneurial clubs

• -using broadband, wireless/fiber hybrid technologies at 1/100 the cost of copper.

How does the "First World" affect IT in developing areas?

-debt assistance (including in-kind assistance), licensing policies, immigration/labor flight, taxation of global e-commerce, telecom settlements, intellectual property rights, domain names.

-the technology is only a piece of it.

Jose Maria Figueres: Is connectivity a fundamental right? Should it be written into the constitutions of countries? In Costa Rica, the telecom company is currently a state-owned monopoly, with 25 mainlines per 100 people, though it is now opening up to competition. At the same time, the number of Internet users is increasing. Is now the time to introduce free Internet service and serve a huge percentage of the population?

We discussed the free-ISP model briefly. Of particular note was whether the free-ISP would actually have to support the costs of international links. We also discussed advertising-based free access that is already available in the UK, US, and elsewhere.

Matt Hoffman (Infotech Strategies; Computer Systems Policy Project)

"Are Developing Countries Ready for Electronic Commerce?"

Matt has worked on issues of e-commerce readiness with the CSPP, an association of CEOs of IT firms in the US.

There are two visions of the future:

• -the "Jetsons" future- technologies of automation and propulsion are pervasive
• -the "networked world" - people using information technology to aid in their daily lives.

The "networked world" vision is more appropriate for today and extends beyond just e-commerce.

A recent report from the Commerce Department stated that while the average annual salary in the US is $30,000, the average salary of employees in the IT field is $56,000.

"Readiness" is more than just an Internet connection.

3 elements: technology, application, planning

CSPP developed an "E-Commerce Readiness Guide" -provides a snapshot of telecom and IT industries, and the supporting environment of education, business, and government.

The Guide is best used to begin conversations on IT strategy between leaders in business, government, and community.

Matt highlighted three "readiness" assessments that made use of the Guide:

• Ohio - (state) a three-year project with $1.5 million in funding, half from the private sector; developed a robust methodology
• Santa Clarita Valley, CA - (region) using local governement as a role model by moving services online (online permits, electronic procurement, geographic information systems)
• Ashland, Oregon - (town) a "quick and dirty" assessment completed at one sitting around a table.

Three steps for using the readiness Guide:

• -do the assessment
• - decide where you want to be
• -do something about it.

Matt also highlighted further developments of the Guide, saying that CSPP supports the use and adaptation of the Guide by others.

• APEC has developed its own version of the Guide for use by countries in the Asia-Pacific region.
• The Center for International Development at Harvard is working to expand and recalibrate the Guide to be more appropriate in a developing country setting. (http://www.cid.harvard.edu/ciditg/ ) James Guyton (Harvard CID) said a few words about their work on the Guide.

Tom Ehrgood (Compaq)

"E-Commerce in a Regional Context"

Tom brought us back to a definition of "e-commerce."

-buyers, sellers, and suppliers all linked through a network

There are other supporting pieces:

-security, shopping, customer care.

Internet use is skyrocketing

There are basically three levels of IT application that we are looking at:

• knowledge sharing and management
• business automation and enterprise resource planning
• high-level e-commerce systems operating on top of the other two

The US is a leader in IT because:

In the 80's, it looked at its own strategic competitiveness slackening

-US invested heavily in information technology and reengineering. These investments have placed it in an advantageous position today.

Who is ready, and how do you get to a state of readiness?

Should e-commerce be regulated or unregulated?

Tom described his work with APEC (Asia-Pacific Economic Commission), a group working regionally on economic issues.

-APEC has adapted the CSPP E-Commerce Readiness Guide to fit its specific set of countries and circumstances.

In the Lincos context, e-commerce is just a point application within the broad capabilities of the system.

Questions for the group:

What can we do to make Lincos work?

What sort of government programs would be appropriate to achieve this goal?

The growth in e-commerce so far has largely been an unregulated, bottom-up development.

The Internet itself was initiated as a government project.

The Lincos project is also designed to be a bottom-up initiative, providing services to specific communities.

• -a program such as this increases a country's overall systemic capacity for IT
• -this makes the "networked world" that Matt Hoffman mentioned much more realistic.

Governments have a roll in creating an environment that is conducive to e-commerce

-promoting infrastructure deployment, creating an appropriate legal framework, ensuring access to markets.

The World Trade Organization will decide on some of the rules that make up this environment.

What sort of technical assistance from developed countries is appropriate?

-for instance, USAID has very little money for e-commerce projects.

• Camella Rhone made the point that policy certainly plays a role in e-commerce and that you cannot separate government from the discussion. Also:
• In a country that already imports more than it exports, will e-commerce just result in easier access and more goods pouring in? What kind of enabler is it really?

(Camella was asked to say a few words about the Jamaica Digiport

-Digiport is a free-zone designed to attract investment by businesses in the informatics field.

-it supports telemarketing and customer support businesses, as well as a school for programmers.

Digiport has also fostered the growth of many start-up companies, created by people coming out of the technical schools.

(Raj Malhotra was asked to say a few words about Interlink Communications.)

Interlink offers digital services in the healthcare field, including transcription services, billing, etc

If you imaging technical skills as a pyramid, with the highest skills for the most advanced applications at the top, there is a vast supply of technical (though not as advanced) captured in the base of the pyramid.

-Raj pointed out that McKinsey Consulting has projected that e-commerce in rural India alone will amount to US$50 billion within just ten years.

With the appropriate infrastructure, you can deploy all sorts of services.

Once you have the hubs in place, it gets much easier.

Raj is interested in linking to other connectivity and business models such as Lincos.
 
 
 
 

Jeff Conklin (TradeAccess)

Jeff provided some insights into his real-world experience of trying to use e-commerce solutions in the developing world.

A key point: Is it money that makes the world go 'round?

TradeAccess was actually trying to make money with their e-commerce activities in the developing world. It proved to be very difficult. In 1995, the company began trying to use the Internet for developmental goals. They have since curtailed these activities because:

-they had a very tough time making money at it.

-access to capital markets was very problematic.

TradeAccess sells a web-based product to assist manufacturing firms to promote and manage their exports.

They chose countries with much trade in manufactured goods.

Business was difficult- even in Malaysia's highly-touted Multimedia Super Corridor.

Jeff noted that the Internet is a medium that promotes and empowers the individual.

Is this empowerment contrary to any governmental initiatives on the Internet?
 
 

The TradeAccess model sparked a discussion of the merits of goods vs. services for e-commerce.

• Jim Manzi asked why TradeAccess didn't also go after digital services.

The TradeAccess product is a strategic tool for offshore manufacturers.

• Geoffrey Kirkman made the point that the internationalization of services is closing the gap between trade in goods vs. services

It was noted that problems with delivery, such as poor infrastructure, are still very real.

• Dan Crisafulli brought up the issue of language and the Internet. A common language can promote interaction between different parties. At the same time, a country could be limited in its interactions by language barriers.

Colin Macaly

• To conclude, Colin Macaly led us in a review of the major points of the morning's sessions:

• -If all of this infrastructure were rolled out, what would the world look like?

• -For E-Commerce to be successful, large investments in a variety of sectors are required. (eg, skills training, education, etc.)

• -a community-level assessment is necessary for setting e-commerce strategy

• -planning must involve all 3: technology, people, policy

• -services vs. products?

• -policy and e-commerce are inseparable.

Wrap-up

Sandy Pentland

Jose Maria Figueres