Transcript APEC and the New Economy

Networked Readiness and Trade Competitiveness:
Lessons From Global Electronic Commerce
Catherine L. Mann
Institute for International Economics
[email protected]
Chapter 9
Mann, Institute for International
Economics
1
On what does E-Commerce Depend?
• Access to global market
– strongly affected by private ownership of the network in an
environment of competition and independent regulation.
• Services infrastructure
– require a supportive fundamental policy environment (including
openness to trade and cross-border investment)
• Flexible Market-oriented environment
– rule of law (the belief that laws will be equally enforced for all)
and the overall balance of competition and regulation (rather than
e-commerce specific regulation)
Mann, Institute for International
Economics
2
E-Commerce: Innovation, Application, Transformation
OLD
BUSINESS
NEW
BUSINESSES
Old Business
New Business
New Consumers,
& Government
GEOGRAPHY
TIME
DATA
• Process: Doing old things (inventory, accounting) better
• Product: New products & services contingent on Internet; bundles
• Markets: Information rich, global, networked
Mann, Institute for International
Economics
3
An Indicator of E-Commerce Intensity
• Cost savings
• Industry readiness,
product fit
• Internal, External Use
• Stages of use
• No consistent method
or measurement!
Internet Intensity
Sector
Food Ingredients
Consumer goods
textiles
energy, chem, natl res.
4
3
3
1
Pharmaceuticals
metals/metal products
Indus eqpt & Supplies
Electronic Components
Autos
4
1
3
5
3
Higher figure is more intense use of e-commerce
Mann, Institute for International
Economics
4
Implications for GDP Growth
ICTs Alone
Growth
of ICT
sector
Change in productivity
(potential growth of GDP)
Structural Policies,
Networked ICTs,
Human Resources
Productivity growth
from ICT-assisted
transformation
throughout
economy
Mann, Institute for International
Economics
5
E-commerce and Trade Exposure
Mann, Institute for International
Economics
6
E-commerce and Trade Competitiveness
Mann, Institute for International
Economics
7
Mann, Institute for International
Economics
8
Mann, Institute for International
Economics
9
 Exposed and Ready. Consider an economy where the trade cones are tall and the readiness cylinder is tall (e.g., the U.S. or
Singapore). Such an economy is exposed to e-commerce through trade, and its ability to use e-commerce (because the environment is
facilitating) also is great. Such an economy is likely already enjoying productivity gains and faster growth.
 Less exposed, but Ready. Consider an economy where the trade cones are relatively short, but the readiness cylinder is tall (e.g.,
Australia). Here is an economy that is using e-commerce in the domestic market to enhance resource usage and gains in productivity and
welfare. The tallish import cone indicates that imports are in e-commerce intensive sectors, which, when combined with a tall readiness cylinder,
implies that domestic businesses will be able to obtain cost efficiencies from those imports. On the export side, the cone is not so tall now
because the country’s Networked Readiness is high, but the domestic environment is good, so exporters will be able to find new opportunities in
new trade sectors.
 Exposed and less Ready. Consider an economy where the trade cones are tall and the readiness cylinder is short (e.g.,
Philippines or Mexico). Such an economy is exposed to e-commerce through trade, but firms will find it hard to take advantage of the
opportunities because the Networked Readiness of the economy is lagging. Firms in this economy might lose international market share,
particularly in sectors that use e-commerce intensively, because their exporters cannot use e-commerce effectively. Moreover, gains from the
efficient use of e-commerce by importers and domestic firms will be reduced.
 Less exposed and less Ready. Consider an economy where the trade cones are short and the readiness cylinder is short as well
(e.g., Russia). This economy is unlikely to receive much of a boost from e-commerce technologies because the domestic policy environment is
not particularly facilitating. Moreover, the trade channel is unlikely to be the factor forcing policy reforms.
Mann, Institute for International
Economics
10
Services Infrastructure is Key
Distribution
Telecom • Flat Rate
• Access
• Competitive
• Bandwidth
• Multi-modal
• Customs
Electronic
Commerce
Finance
• International
• Real Time
• Secure
The “e” in e-commerce to catalyze reforms that support the “c” in ecommerce. Private-public virtuous circle to promote reform.
Mann, Institute for International
Economics
11
Beyond Infrastructure to Business
• Build awareness at the local level
• Access and incubators within communities serve
community interests and build on community strengths
• Grow Internet entrepreneurs from existing community
leaders and entrepreneurs.
Government intervention:
• Preserve incentives to innovate;
• Beware permanent cost projects
• Promote diffusion out of parks
Mann, Institute for International
Economics
12