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    Are Developing Countries Ready?


    Three ITC surveys
    © International Trade Centre, International Trade Forum - Issue 1/2001 

    How many firms are plugging into e-trade?

    A series of surveys conducted in preparation for the Executive Forum 2000 indicates that e-competent firms are the exception. The survey results, and the Executive Forum 2000 consultation, reveal that there has not been a concerted effort within the business community of most developing and transition economies either to acquire e-competency or to use the Internet as a tool to increase or, at the very least, maintain international competitiveness. This is particularly the case of the SME sector - the sector that, in the majority of developing countries, makes the greatest contribution to national export performance.

    Exporting SMEs - use of ICTs 

    In one survey, ITC contacted 50 "connected" SMEs in South-East Asia, North Africa, the Middle East and eastern Europe. Each has a web site. The objective was to acquire their views on ICT as a business development tool and in so doing, gauge their e-trade readiness.

    The survey produced surprising results. It revealed that connectivity is seen as a valuable communication tool, but not as an essential aspect of competitiveness. The use of ICT was acknowledged as important to establishing a modern and innovative business culture within the enterprise but was regarded as having no, or minimal, direct impact on sales prospects or purchasing efficiencies.

    Few of the managers contacted considered web strategy an integral part of their overall business. Nor did they believe that the application of ICT would become a fundamental element of their long-term business development strategy. For the vast majority, the seamless e-transaction is a long way off because of perceived difficulties in introducing online financing and payment, and customs collection and taxation applications.

    Garment exporters - electronic purchasing practices 

    A second survey of developing country SMEs focused on the use of the Internet to generate purchasing efficiencies. The survey covered garment exporters in Bangladesh, the Philippines and Sri Lanka who imported a significant amount of their fabric requirements. The survey confirmed that e-mail was the only application so far used by these enterprises. Most did not see a need to use the Internet to find new supply sources. None used the "request for quotation" facilities provided by Internet-based applications. None bought or managed international logistics over the Net.

    National trade promotion organizations 

    A third survey of 51 developing and transition economy trade promotion or-ganizations showed uneven response to the demands of the digital economy. Less than half canvassed by ITC indicated a specific e-trade component in their national export development strategies. Among the countries that have an e-trade strategy, few have an integrated approach to ensuring that the right environment exists for e-trade growth and even fewer have established a comprehensive programme of support to the business sector.

    Brian Barclay, ITC, coordinated the Executive Forum 2000. Natalie Domeisen co-moderated the e-mail discussions for Executive Forum 2000. 

    E-trade capability defined 

    "E-trade capability" means a firm can:

    • Conduct preliminary market research and identify possible commercial partners.

    • Promote capacities and establish an e-presence through a web site.

    • Initiate and maintain regular contact with prospective clients and suppliers through e-mail.

    • Acquire credit references.

    • Negotiate terms and contract specifics.

    • Exchange and sign contracts on the basis of digital signatures.

    • Order materials to produce contracted goods, and monitor production and delivery status.

    • Expedite clearance of imported materials through customs.

    • Coordinate production and delivery with subcontractors.

    • Provide the buyer with information on order production and delivery.

    • Coordinate shipment with freight forwarders.

    • Acquire certificates of origin and other export documentation.

    • Organize payment to suppliers through the local banking system.

    • Receive payment from the buyer through the international banking system.