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The Economic and Social Impact of Electronic Commerce 23 INTRODUCTION Electronic commerce has many potential benefits for developing countries (DC). In this chapter we will describe the potential benefits of Electronic Commerce for developing nations and provide case examples that illustrate this trend. The widespread adoption of electronic commerce is especially important for developing countries. The benefits for developing countries range from social to economic. Some of the benefits include: improvement of international coordination, an open economy promoting competitions and diffusion of key technologies, efficient social and infrastructure services, a competitive communication sector, and increased buyer productivity. The impacts of electronic commerce in a developing country can be helpful rather than detrimental. Electronic commerce has the potential to tie developing countries into the rest of the world so they are no longer considered outsiders. For example, electronic commerce can enable more people to access products and services that once were not available. Another benefit is that electronic commerce stores are available 24 hours a day, 7 days a week. As the infrastructure for electronic commerce keeps growing, services that were not offered in the past become available. Many of these benefits have not been proven yet, but the technology is now available, and developing countries are looking forward to these benefits. The high cost of technology may still be detrimental in many developing countries; however, the constant innovation of software and hardware will hopefully reduce these costs. Consumers in developing countries can benefit from electronic commerce because they can buy products that could only be found in major cosmopolitan cities. Electronic commerce is closing the gap between those countries that have wide availability of products and those with limited availability. The basic purpose of electronic commerce is to provide goods and services to consumers who do not live close to the physical location of the product or service and would otherwise have a hard time acquiring these products and services. Society and consumers alike have only begun to enjoy the benefits of electronic commerce. Since new developments are made on a continuous basis, it will eventually affect every individual. Some of the benefits enjoyed by society and consumers, for example, are ease of transaction, comparability of products, quick delivery and the ability to make any type of transaction at any given time of day. Electronic commerce facilitates delivery of public and social services, such as healthcare, education, and distribution of government social services at a reduced cost, improving the quality of care and living in these communities. For example, health care services can reach patients in rural areas (Turban et al., 2000). Copyright © 2003, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.
24 Vinaja Another benefits is the fast dissemination of information, information is distributed in a matter of seconds, instead of several months. Electronic commerce can help people become better educated and better informed. Many educational opportunities are becoming available to developing countries. For example, the availability of virtual universities provides the opportunity to learn and earn college degrees. In addition, many developing-country universities are focusing on curricula that might contribute more directly to economic growth, and network connections for administrators, professors, and students will be increasingly important. The communications and information delivery capability of the Internet can benefit all sectors of society. The areas of education, health, social policy, commerce and trade, government, agriculture, communications, and science and technology could benefit from the improved access to information provided by the Internet (Sadwosky, 1996). Access to information affects political democratization efforts at the global level as well as within nations. There seems to be a connection between the free flow of information and movement toward democratization. This fact has been observed in a number of countries recently (Hay et al., 2000). NEW DEVELOPMENTS Several organizations such as the ITU (International Telecommunication Union), the GII (Global Information Infrastructure), the NII (National Information Infrastructure), the OECD (Organization for Economic Cooperation and Development), and the EU (European Union), are striving to develop standards and policies to promote global Electronic commerce. (Hay et al., 2000). The ITU is a worldwide organization, where 189 member states and some 570 sector members representing public and private companies and organizations with an interest in telecommunications cooperate for the development of telecommunications and the harmonization of national telecommunication policies. In 1998, the International Telecommunications Union, in conjunction with The World Trade Center in Geneva and the World Internet Service Key launched the “Electronic Commerce for Developing Countries” (EC-DC) project (Ntoko, 1999). The project Electronic Commerce for Developing Countries (EC-DC) is an activity of the ITU Telecommunication Development Bureau (BDT). EC-DC assists developing countries in the use of electronic commerce by addressing the technology, policies and strategy issues related to electronic commerce. It provides a framework for neutral and non-exclusive partnerships with industry thereby creating the environment for cost-effective solutions to the benefit of developing Copyright © 2003, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.
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About the Authors 259 Eric Cloete B
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