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E-export: International barriers to e-commerce adoption

I was recently asked to explain what I meant by :

“International trade agreements need to help, not obstruct, e-export”
as mentioned in this Internet marketing usage in Estonia post

Well the problem is manifold but I have to be careful here as I am no expert on international trade agreements or government policy.

I will try not to embarrass myself or altex..too much 🙂
Here goes:

E-commerce is a good thing in many ways (putting aside the ‘globalisation acceleration’ and ‘augmenting the digital wealth divide’ arguments):

The consumer wins:

1. Better choice
2. Lower prices (look at music and travel for example)
3. Easier for non-city dwellers to buy stuff too. ( If you live in the middle of nowhere with a credit card then you can get almost whatever you need)

The business wins:

1. Increased access to new markets
2. Cost and time efficiencies in most business processes (especially sales and marketing..something I do know a bit about)

The government wins:

1. Consumers are happy + businesses are happy = Gov is happy
2. (+ GOV BONUS PRIZE : more tax being collected, which no doubt will be needed to look after increasingly ageing populations without private health care..but that’s not for this blog)

But before we get too excited about this technology revolution….and YES it IS a revolution. Consider this by Ian Davis and Elizabeth Stephenson of McKinsey’s (extract from 10 trends to watch in 2006) :

“The technology revolution has been just that. Yet we are at the early, not mature, stage of this revolution. Individuals, public sectors, and businesses are learning how to make the best use of IT in designing processes and in developing and accessing knowledge. New developments in fields such as biotechnology, laser technology, and nanotechnology are moving well beyond the realm of products and services.
More transformational than technology itself is the shift in behavior that it enables. We work not just globally but also instantaneously. We are forming communities and relationships in new ways (indeed, 12 percent of US newlyweds last year met online). More than two billion people now use cell phones. We send nine trillion e-mails a year. We do a billion Google searches a day, more than half in languages other than English.”

…there are a few issues 🙁

So I would like someone to point me at the specific texts of international trade agreements that help overcome these barriers…if they exist? Or should I continue to assume that most international agreements are obstructive through negligence?

Please use comments or contact me by email.

1. Lower cost telecommunications. Just how much should broadband access be? Why are some countries so expensive relatively to salaries? (I know, its lack of competition! The question was rhetorical)
Why is Estonia (outside Tallinn) more expensive than the UK or France (last time I looked)?
If the world wants e-commerce then the world needs cheap telecommunications, and I mean really cheap. Like SKYPE cheap 🙂
2. More people need to go online. Let’s not be EU or USA centric here, but think globally too. Ok, so Estonia has Tiger Leap (that’s cool…for schools) but what about all the micro-businesses? And everyone else? Computers are still too expensive for many. Perhaps computer recycling would be a step? Hey Hansapank- got any old computers you want to give away?
3. Domain names. altex wants to buy several .ee domain names. Guess what? We are not allowed!! So I have to buy .coms instead. This blog is a .com but I would prefer to give my money to Estonia to be honest. Domain name buying needs to be quicker and easier (think godaddy.com).
4. Multilingual “paperwork”. E-commerce standards and other important documentation need to be in every language. When, for example, will we see W3C standards in Estonian? How can we ensure non-discriminatory accessibility if people do not fully understand compliance guidelines?
5. Lower transaction costs. Generally speaking e-payment systems need to evolve dramatically and the cost of using them drop dramatically too! Transferring a payment to an EU company via my Hansapank account costs 30€. Why?

In some countries, like the UK, people still use chequebooks! Dinosaurs!

Credit card adoption rates need to super accelerate too.

Why do you think Estonian levels of e-commerce purchase are so low? It’s not just the ‘desire to dress up and go shopping’.

It’s also because many people who want to buy from foreign suppliers (who only take credit cards and do not accept Estonian debit cards or e-banking) can’t.

The fact is however that Estonia is light years ahead in e-banking etc. and this is definitely one area where it can lead the way.
6. Tax benefits. It’s nice to see governments planning generous tax credits for companies doing business online. This follows their decision to also award generous grants for people building environmentally friendly housing.

And was that a green pig that just flew past my window? Oh I must have been dreaming……
7. Security and confidence. People are genuinely and rightly (sometimes) concerned about their privacy and fraud online. This whole area is a can of worms as individual freedoms must be respected but the hackers must be beaten too. I would hate to have the job of solving that one.

Oh and SPAM is starting to get really annoying.
8. Digital signatures need to carry the same legal weight as ‘real ones’ and e-documents, including email, should be recognised ‘legally’.
9. Clarity of definitions. What’s a “good” and what’s a “service”? Digital delivery of knowledge is what exactly? It blurs the line and no doubt creates headaches for GATT and GATS negotiators who have plenty to do already?

So not only does each country need to have an ENLIGHTENED and ACCELERATED domestic policy ‘unit’ that looks specifically at facilitating e-business and export online but also international organisations like the WTO, UNCITRAL and the EU need to really get moving.

I mean it’s not rocket science, is it?

In the meantime we can sit and watch:

1. Admirable e-innovators who risk more than they should for the ‘not as big as they should be’ prizes
2. Proud e-governments who fund their own e-agendas but leave small businesses to wonder what to do next
3. Multinational corporations who can afford the best “e” talent and knowledge and just make even more money and solidify their economic strangleholds (but not for long)

If I was a conspiracy theorist I could argue that big business is holding back e-business because they know how successful the SMEs and developing nations will be at ‘stealing’ their market share once they are fully enabled. But I am not a conspiracy theorist so I will just forget about that 😉

NOTE: It’s encouraging to see UNCITRAL moving forward. The General Assembly Adopts New Convention on Use of Electronic Communications in International Contracts .but I suspect it’s still not enough or fast enough for many SME exporters of Estonia.

It’s time that governments and international institutions started playing the e-game at the right speed. The speed of light. Business demands it.

Some bedtime reading:

1. http://europa.eu.int/information_society/ecowor/ebusiness/index_en.htm
2. www.internetpolicy.net
3. www.gbde.org
4. www.uncitral.org

PS. I am not a technologist, just an internet marketer, but anyway I bet there are whole bunch of enormously complex integration issues that need to be resolved too.

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