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40 Sharma and Gupta
valuation would be difficult to determine. More importantly, it is argued that duties
will crush the development of e-commerce and stunt its growth. If implemented in
some countries, it would simply drive business offshore and on-line transactions
would simply take place in a state or country where there is no such tax. Since trade
policy - like tax policy - is based on such distinctions, governments may find it
difficult to determine jurisdiction and tariff revenue rights. Moreover, the laws and
regulations that a consumer relies on for protection at home may not apply in the
merchant’s country. Indeed, in some quarters, there are concerns that the scope for
the Internet to transcend national boundaries could emasculate the ability of
regulatory bodies to fulfil their objectives. Thus, there is a need to update regulatory
frameworks and strengthen co-operation between regulatory bodies to achieve the
goals of economic regulations without jeopardizing the efficiencies likely to be
associated with the growth of e-commerce (Penbera, 1999; Anonymous, 2000).
Impact on Employment and Labor Policy
The growth of e-commerce is likely to have both direct and indirect impacts
on labor markets as well as the composition of employment. Since e-commerce
may create more knowledge-based products, it is likely to drive widespread
changes in the labor market, shifting the composition of workers required to
produce and deliver a product or service (Anonymous, 2000). There would be shift
in kind of skills needed. Faster rates of innovation and diffusion may also be
associated with a higher turnover of jobs. This may create more turbulence, as
workers would need a skill upgrade from time to time. This may result into change
in swift labor policies for reallocation of labor to the changing needs of the economy
(Anonymous, 2000).
ADVERSE BUSINESS EFFECTS
While e-commerce has enhanced business effectiveness and efficiency, it
has created some adverse effects as well. This section discusses major adverse
business effects of e-commerce.
Emerging Monopolistic Trends
Since e-commerce transcends geographical boundaries, many big firms with
known brands may not only expand their markets, but may also enter into new
business activities across the broad spectrum of business activities. This may help
to reduce the costs and prices, but it would have a greater danger of creating a
monopoly of e-commerce by a few corporations or networks of corporations.
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