The Executive Forum on Export Development in the Digital Economy taking place in September is being organized partly as a result of requests from our first Executive Forum. Electronic technology has changed the business landscape, but for a developing country it is often difficult to obtain the services, the overview and the expertise that are readily available in the industrialized world with regard to the e-marketplace. Nevertheless, all companies compete in the same world. How can they, how can developing countries, export successfully in this ever more competitive environment? The ITC’s Executive Forum was established to help these countries find some of the answers. The July brainstorming with experts on e-commerce investigated the range of issues that need to be tackled by strategy-makers at the Forum itself.

"In our first working session we tried to answer three main questions:

1. What is happening in the market? That is, how is e-business changing markets? Is this a new business or old business conducted in a new way?

2. Why do e-commerce? I.e. what are the challenges for a developing country?

3. What investments do firms have to make to compete?

Rather than talk about problems, we need to hear about solutions. And more and more, we have found, cultural issues – how people do business in different parts of the world – have become as much part of the discussion as the technology."

How is e-business changing markets? Consumer expectations are changing. They want 24 x 7 access.

Who does e-commerce? That’s like asking: are you exporting? I.e. do you want to do business outside your community?

But opening a web-site is like opening another office, with all its costs. It is not necessarily the best way to digitally export or participate in the digital economy.

What investment do firms have to make to compete? Outsourcing has now become very very inexpensive. There are intermediaries who will manage your online presence for free. Partnerships are a growing trend. Electronic registers through industry portals, particularly for services, can be a real aid, even indispensable."

"Is e-business old or new business? At St Gallen in Switzerland’s premier business school, we have found that there are two dimensions to that question. One is when you simply electrify the channels of access and delivery – from mail order to ‘amazon.com’. The other dimension is that of enhancing the product for the customer. This can mean bundling products – sometimes directed at very small segments—and going beyond your conventional business. For example, yourhome.ch was started by a Swiss bank to offer services for anyone who wants to buy a house. Now it even features products and services from other banks and insurance companies."

"We have been trying to create a B2B marketplace in textiles. Our experience and knowledge is that you cannot just trade information on your web-site. It is extremely important to have the offline services provided online in order to make the industry assimilate your model."

"We persuaded textile buyers to give us the names of their suppliers. We then approached the suppliers at a local level and explain to them how they can promote their products online. With some suppliers we have to educate them on what the Internet is. For others we take responsibility for putting their products online. But we do not get in the way between suppliers and buyers. They still have to deal with the transactions online. Having the transaction online and providing services from logistics to vendor assessments and credit ratings enables buyers to have it all in one place to do their offline business online. For the suppliers in developing countries it just requires Internet access in their plant and showing the procedures to follow when they get an order."

"I don’t find the Internet is a very good tool to acquire new customers because of the high cost of getting credibility online. It is usually easier to concentrate on other activities through the Web, such as dealing more efficiently with existing customers."

"In Peru and South America we need a different model from that of the advanced countries for developing e-commerce and the Internet. For example, 400 radios in Peru are connected through the Internet. Some US$ 200 million are sent back from the US to Latin America every year through what are today very expensive transactions. In addition, there are all the voice transactions that could take place through the Internet.

We need to build a model that uses the Internet for transactional purposes rather than information. For example, in 1993 we began to sell cakes via the Internet – for people abroad, so that they could send presents to the folks at home. To help a group that was selling potatoes and making US$ 300 a month, we set up a PC in a church with support from the Ministry of Agriculture and gave distance training to a network of mothers to take commands online in their community centre. Now they make US$ 1500 a month, a big income for them. But that requires education. And we need to build a national structure – only 1.5% of the population is connected at present.

"In South-east Asia the brick and mortar companies are already going to click and mortar. An Indonesian gas, oil and construction company I know invested US$ 1 million in procurement in the first year and decided to go online with this B2B business. As a result it has developed into a portal which has Singapore and a US company as investors, with US$ 10 million paid up capital and a $ 100 million valuation. Developments in the US and Europe give us examples to follow suit where appropriate. E-commerce at this level is coming up very fast."

"The first thing to do is to educate the providers about the exportability of their products."

"If e-developed countries continue to grow at the present astronomical rates are they still going to want to buy from countries outside this group? I would answer a very big ‘yes’. Ninety percent of what we export now is raw material inputs to the developed countries."

"We need to develop an e-culture in developing countries so that companies understand what they can gain from it. A site to promote Nigerian companies is run from London. It is updated twice a day and is free but it has found it difficult to attract even 10 new companies to register in the past year."

"Tourism is one of the services we sell very well. The credit card problem meant that our organization became an intermediary for this business. In future a means will have to be developed to answer the problem that credit cards are only economically viable for transactions of over US$ 50."

"Credit cards are not common or the standard way of making payments everywhere. In India they are experimenting with a service where you pay cash on delivery."

"Governments can encourage e-commerce by using it themselves. Singapore was the first country to approve digital signatures. I can pay my taxes in Singapore online."

"If authorities promote e-government, that is one good reason for business to invest in electronic technology – a major client, the public sector, is online."

"The lack of statistics on service exports encourages governments to ignore this very large part of the economy. For example, at least 20% of exports are from services. OECD has even estimated that the amount of services in world trade is actually at least 40%."

"The commoditization of services would be very dangerous. In services, standardization tells you nothing about the quality of the service or the range available. For example, the services available now online include legal transcription, health care delivery and environmental impact monitoring, all of which depend on very individual service. There are ways of measuring the quality of service apart from experience: references, certification and ISO 9000 standards among them."

"You can make e-commerce access as easy as you want, but unless you can promise a buyer at the other end of the line, you are not going to attract sellers to use your marketplace."

"Don’t start your participation in the digital economy by planning to become a fully international e-based company. Start from what you know. Our experience is that you need business sense and leadership but what works is still to focus on what you do best."

"In the first six months of 2000 we have seen a number of B2B procurement initiatives, but they fall into two categories:

• regionally focused B2B marketplaces, and

• industry specific, global marketplaces, for example in autos, aerospace, oil and energy, and retail.

The reality of deployment is that many are still in their early stages.

Though many of these initiatives are increasingly driven by the large buying systems, arising from a desire to increase control over their supply chain, some suppliers have not been happy with the situation. So new companies have sprung up, operated by the large companies but independent of them –providing a neutrality to the transaction that did not previously exit, with the advantage of sponsorship and commit from the buying organization.

In this world it is not about being the first person to get a press release out signalling your existence. The winners will be those who actually get people to trade.

Nor are these open markets. The buyer companies will continue to compete in finding suppliers and negotiating individual contracts with suppliers."

"We have found in Australia that it is not enough to run a training course for a small company. You have to work with them – someone has to help them to integrate what they have learned into their business practice immediately. Ideally they should have a ‘champion’ to go to for help, too, when things go wrong."

"Intergovernmental organizations need to launch an initiative to persuade governments to invest or allow investment in infrastructure, education and e-commerce. The most profitable companies on the Internet are IBM and Intel – infrastructure providers. But we are just at the start of developments in electronic technology. In 30 years we will have a global brain that functions without your intervention. You ain’t seen nothin’ yet. The problem is that developments are driven by IT people while NGOs that concern themselves with social values and universities are doing nothing."

- Vadim Levitin, COO, E-Commerce Institute, San Diego

"What is the most valuable thing to you as a business person? Your relationship with the customer. It does not matter whether it is online or offline. Are you ready to outsource your main asset? I am not."

- Vadim Levitin, COO, E-Commerce Institute, San Diego

"In our experience credibility and competence are the major concerns of companies in developing countries that want to get into e-commerce. Last but not least is technology and its tools – not least but not first. That is why the companies are willing to pay US$ 1,500 a day for proper training and our seminars are packed. They understand when we tell governments: do or it will be done to you by some American or European company."

- Vadim Levitin, COO, E-Commerce Institute, San Diego

"Egypt, I believe, is very typical of developing countries in these respects:

- The economy is fragmented. We have micro-enterprises rather than small and medium-sized enterprises. The largest company in Egypt could not be considered a medium-sized enterprise in the United States.

- The technological environment is far behind the advanced countries: 100,000 Internet subscribers and fewer than 1 million PCs.

For importing, electronic systems are of use. Exporting is a different matter. Most of our exports are raw materials.

So Egypt's e-commerce policy has been based on what we call 'culture-oriented' products -- what cannot be exported from any other country, such as Egyptology. We have focused on what to do to build digital trust, and to provide services that our businesses can use we have created technology-access community centres for SMEs. These can act as the agent to build web-sites on behalf of a small enterprise. Emails are translated into Arabic and delivered to the company for response.

But e-commerce today is still small - less than US$ 5 million in a year, and based mainly on international transactions."