By Kati Suominen
Ecommerce is opening entirely new opportunities for developing countries to promote entrepreneurship, job-creation, productivity growth, trade across borders.
Ecommerce and online tools enable countries to grow both their intensive and extensive margins in trade – increase both the number of exporting firms, the range of goods and services exchanged, the number of markets reached, and the volume and value of sales. And it enables developing country companies and consumers to access a wider variety of goods and services at a lower cost, streamline trade operations and logistics, and access new data to create new operational efficiencies, deeper market insight, gain in competitiveness, and even productize data as a new revenue stream – all without building their own expensive IT infrastructures.
Ecommerce is breaking the “iron law” of international trade – that exporting was possible only for a few. In 21st century digital economy lies an opportunity for creating a medieval town square where buyers and sellers come together – at the global level. A market where anyone can sell to anyone, anywhere anytime, and where no-one is hampered by their location from participating.
However, as our new report shows, this aspiration will not e gains from digitization are not automatic. The enabling environment for digital trade is suboptimal in many developing countries, impeding the translation of the new technologies into trade and growth. There are two challenges standing in the way of solutions.
- Lack of actionable, granular data on the enabling environment key to companies engaged in ecommerce. While the key components of the enabling environment for ecommerce are by and large understood, there is still relatively little data and mostly only anecdotal evidence as to the obstacles companies face when engaging in ecommerce in any given country.
- Lack of systematic collaboration between public and private sectors in many countries to fashion ecommerce policies and regulations, or pool efforts to unlock specific challenges to ecommerce together, through public-private partnerships.
It is the private sector, from online merchants to ecommerce platforms, logistics companies, payment providers, IT companies, and others, that makes ecommerce happen. The private sector is as such closest to the opportunities, challenges, and solutions to ecommerce development issues, and as such critical for informing and guiding policymaking on ecommerce issues around the world. Private sector is also engaged in a stunning array of projects to bring women, rural populations, and SMEs into the stream of ecommerce. Yet the gaps in data on private sector views and systematic public-private collaboration limit developing countries ability to fuel digital trade – to prioritize policy choices and investments in digitization and e-Commerce, or to build on the private sector’s ongoing work to boost connectivity, fuel logistics, and indeed, to create entirely new ecommerce markets.
The purpose of this new report is to tackle these challenges in three ways:
- Discuss the findings of two new surveys and an index developed by the author that get at the challenges of enabling environment for digital trade by asking those closest to these challenges – companies engaged in ecommerce as merchants, ecommerce platforms, IT companies, or payment or logistics providers.
- Provide highlights of the various projects being championed by the private sector to cultivate ecommerce worldwide, including among such segments as women and rural entrepreneurs.
- Based on these findings, map out policy pathways to undo priority challenges to ecommerce and to fuel public-private partnerships in ecommerce development.