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    Investing in the Internet


    Exporters and Importers in Developing Countries:
    © International Trade Centre, International Trade Forum - Issue 1/1999

    How can importers and exporters in developing countries best take advantage of the Internet? A wealth of information exists on the rapid evolution and the benefits of the Internet. Less exists on how to sift through this information for the practical lessons and tips for exporting and importing firms, as well as trade support institutions.

    Many aspects of the Internet are evolving rapidly, from the technology, to the business plan, contents development and promotion methods. Yet the articles in this Close Up section suggest that trade-related organizations should not wait to introduce this revolutionary tool in their work. Instead, they should take advantage of lessons learned from those who have already begun to use the Internet.


    One lesson learned is to link the Internet to an organization's main business goals, rather than relegating the task of integration primarily to technicians, as seen in the interviews with Internet experts and the article "Linking the Internet to Your Marketing Strategy".

    A second lesson is to ensure resources for marketing and maintenance, and not just installation and initial design. Some experts suggest as a rule of thumb to dedicate one-third of resources to start-up costs, another third to promotion efforts and the final third to updating and maintenance.

    Another emerging lesson is that some businesses are more suited to sales and delivery via the Internet than others. Music, books, software, travel services and financial services are a sample of business sectors that are in the forefront. Service industries in particular have much to gain, as can be seen in the article "Tips for Service Firms".

    Most organizations can already take advantage of the Internet's potential to reduce communications costs, encourage closer links between organizations in different locations, find relevant business information and contacts, and even streamline purchasing and supply management. See "Manage Your Purchasing with the Internet".


    At the same time, one must take into account Internet-related constraints relevant for firms in developing countries using the Internet as a trade support tool. Among them are telecommunications infrastructure gaps, the need to develop more local sites, translation (English is still the dominant language on the Internet), challenges to adapt existing laws to this new medium, and higher costs for installation and access.

    Building familiarity with Internet use is also difficult when there may only be a few computers per company. (A recent International Finance Corporation study on company use of Internet in developing countries underlines that fewer people per company have Internet access in developing countries, as opposed to companies in developed countries.)

    One must also keep in mind that the Internet as a global tool for trade is still in development; a number of these issues are outlined by ITC's Trade Information Chief, Bernard Ancel, in "Exploring International Markets".

    A frequently cited constraint is related to infrastructure. The International Telecommunications Union notes that developed countries have 312 Internet Service Providers (ISPs) per 10,000 people, while there are 6 Internet Service Providers per 10,000 in developing countries; there are 2.5 telephone lines per 100 people in developing countries, versus 54 lines per 100 people in the developed world.

    Towards practical solutions

    The articles in this section provide partial answers to some of these constraints: the beginning use of satellite dishes for Internet access, instead of telephone lines; examples of free information on the Internet, such as "how-to" sites, free software and discussion groups that can help get companies going; mega-sites that provide shortcuts for trade research; tips on building Internet culture (such as use of news groups, e-mail, web sites); and promotion strategies (see pages 36-37 about ITC's services exporting site).

    Without a critical mass of computers and supporting infrastructure, business-to-consumer applications may not be the first step for many firms in developing countries. Research summarized in the article "Small Firms and the Internet: Force or Farce?" shows that caution is in order regarding sales. Yet it also shows that firms that invest in the Internet are encouraged by its marketing and communications applications.

    Experts view e-commerce as far broader than sales and/or delivery via the Internet. E-commerce is coming to be accepted as an umbrella term for all business-related Internet activities, such as gathering market research, providing market intelligence, offering links to business contacts and information, posting product and service descriptions, and interacting in business-related news groups-all elements covered in the articles of this Close-Up section on the Internet.

    Natalie Domeisen, Forum Editor, conducted the interviews and coordinated this Close-Up section.