A partnership with academia

Building knowledge for trade and development

NEWS

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Nineteen students and professors from Colombian university members, Universidad EAFIT and Universidad Sergio Arboleda, joined UNCTAD’s Scarlett Fondeur Gil June 1 for a Vi videcoconference presentation of the 2015 Information Economy Report (IER).

This edition of the IER focuses on the potential of electronic commerce for developing countries.

“Buying and selling goods and services online offers well-known benefits for businesses and consumers,” Fondeur Gil said. Small business can gain access to global value chains and international markets, and consumers can choose from a wider variety of products at competitive prices, she added.

However, e-commerce also brings risks. Growing cybercrime and fraudulent activities in 2012 generated estimated losses of USD 3.5 billion, and “some developing countries are concerned that the arrival of foreign competitors will affect the competitiveness of local enterprises” and products.

 

“The global market for e-commerce is changing rapidly, with new business and new countries becoming more important,” she said.

Although business-to-business (B2B) e-commerce is significantly larger than business-to-consumer (B2C) e-commerce in terms of value, the latter is growing much faster and developing countries and transition economies are expected to account for 40 percent of B2C e-commerce in 2018. However, forecasts anticipate a slight decrease in the share of Latin America and the Caribbean (4.2 percent to 3.7 percent).

To evaluate the readiness of countries to exploit the potential of e-commerce, UNCTAD developed a B2C e-commerce index covering 130 countries. Indicators include Internet usage, availability of secure servers, credit card penetration, and postal service.

"This index allows countries to identify relative strengths and weaknesses," she said. ”The highest-ranked countries in Latin America according to the index were Chile, Uruguay and Trinidad and Tobago; Colombia came in at number 71.” The low penetration of credit card usage in Colombia may explain its ranking, she explained.

The report proposes that countries develop regional strategic plans to promote electronic commerce. Policies should integrate elements related to Internet infrastructure and broadband access, trade facilitation, cyber legislation, and enterprise development, among others.

“Any strategy or policy to facilitate electronic commerce must be adapted to the situation of each country, and should begin with a careful assessment of the country’s strengths and weaknesses,” she said. The IER’s index may be a useful tool, but “in many developing countries, there is a complete absence of statistics related to electronic commerce.

“UNCTAD urges member states to identify pertinent and relevant indicators, and collect the data,” she said. “Such data are essential for monitoring and evaluation, the design of policies based on facts, and  the periodic evaluation of existing strategies and policies to adapt to an e-commerce environment in constant evolution.”

Academia can also provide valuable input. More research is needed about the wider implications of electronic commerce, such as the distributive effects between large and small companies, and impact on employment, earnings and job quality, among other areas, she concluded.

Read the report

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