Mann, Institute for International Economics 1 Networked Readiness and Trade Competitiveness: Lessons From Global Electronic Commerce Catherine L. Mann

Mann, Institute for International Economics

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Networked Readiness and Trade Competitiveness:

Lessons From Global Electronic Commerce

Catherine L. MannInstitute for International Economics

[email protected]

Chapter 9

mailto:[email protected]


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On what does E-Commerce Depend?

• Access to global market– strongly affected by private ownership of the network in an

environment of competition and independent regulation.

• Services infrastructure– require a supportive fundamental policy environment (including

openness to trade and cross-border investment)

• Flexible Market-oriented environment– rule of law (the belief that laws will be equally enforced for all)

and the overall balance of competition and regulation (rather than e-commerce specific regulation)


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E-Commerce: Innovation, Application, Transformation

OLD BUSINESS

Old Business

•Process: Doing old things (inventory, accounting) better

GEOGRAPHY

TIME

DATA

•Markets: Information rich, global, networked

New BusinessNew Consumers,& Government

NEWBUSINESSES

•Product: New products & services contingent on Internet; bundles


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An Indicator of E-Commerce Intensity

• Cost savings• Industry readiness,

product fit• Internal, External Use• Stages of use• No consistent method

or measurement!

SectorFood Ingredients 4Consumer goods 3textiles 3energy, chem, natl res. 1

Pharmaceuticals 4metals/metal products 1Indus eqpt & Supplies 3Electronic Components 5Autos 3

Internet Intensity

Higher figure is more intense use of e-commerce


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Implications for GDP Growth

Growth of ICT sector

ICTs Alone

Productivity growthfrom ICT-assisted

transformationthroughout

economy

Structural Policies, Networked ICTs,

Human Resources

Change in productivity (potential growth of GDP)


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E-commerce and Trade Exposure


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E-commerce and Trade Competitiveness


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Exposed and Ready. Consider an economy where the trade cones are tall and the readiness cylinder is tall (e.g., the U.S. or Singapore). Such an economy is exposed to e-commerce through trade, and its ability to use e-commerce (because the environment is facilitating) also is great. Such an economy is likely already enjoying productivity gains and faster growth. Less exposed, but Ready. Consider an economy where the trade cones are relatively short, but the readiness cylinder is tall (e.g., Australia). Here is an economy that is using e-commerce in the domestic market to enhance resource usage and gains in productivity and welfare. The tallish import cone indicates that imports are in e-commerce intensive sectors, which, when combined with a tall readiness cylinder, implies that domestic businesses will be able to obtain cost efficiencies from those imports. On the export side, the cone is not so tall now because the country’s Networked Readiness is high, but the domestic environment is good, so exporters will be able to find new opportunities in new trade sectors. Exposed and less Ready. Consider an economy where the trade cones are tall and the readiness cylinder is short (e.g., Philippines or Mexico). Such an economy is exposed to e-commerce through trade, but firms will find it hard to take advantage of the opportunities because the Networked Readiness of the economy is lagging. Firms in this economy might lose international market share, particularly in sectors that use e-commerce intensively, because their exporters cannot use e-commerce effectively. Moreover, gains from the efficient use of e-commerce by importers and domestic firms will be reduced. Less exposed and less Ready. Consider an economy where the trade cones are short and the readiness cylinder is short as well (e.g., Russia). This economy is unlikely to receive much of a boost from e-commerce technologies because the domestic policy environment is not particularly facilitating. Moreover, the trade channel is unlikely to be the factor forcing policy reforms.


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Electronic Commerce

• Flat Rate

• Access

• Bandwidth

• International

• Real Time

• Secure

Services Infrastructure is Key

The “e” in e-commerce to catalyze reforms that support the “c” in e-

commerce. Private-public virtuous circle to promote reform.

Finance

TelecomDistribution

• Competitive

• Multi-modal

• Customs


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• Build awareness at the local level• Access and incubators within communities serve

community interests and build on community strengths • Grow Internet entrepreneurs from existing community

leaders and entrepreneurs.Government intervention: • Preserve incentives to innovate; • Beware permanent cost projects• Promote diffusion out of parks

Beyond Infrastructure to Business

Documents

Mann, Institute for International Economics 1 Networked Readiness and Trade Competitiveness: Lessons From Global Electronic Commerce Catherine L. Mann