E-commerce Commonwealth Business Factor

Research: Savita Bailur

Project Objective

The E-Commerce Commonwealth Business Factor Project analyzed the dynamics of e-commerce in four Commonwealth countries - Malaysia, Australia, Trinidad & Tobago and South Africa. In particular, this study aimed to:

• Examine the channels through which e-commerce enhances export promotion, investment, investment linkages and joint ventures in theoretical and practical considerations in the sample countries.
• Examine the importance of e-commerce in the sample countries and its practical relevance to trade and investment facilitation.
• Highlight the institutional, macroeconomic and technological framework in the sample countries for e-commerce.
• Provide practical national strategy orientated policy recommendations aimed at enhancing both the relevance of e-commerce and its effectiveness in raising domestic competitiveness.
• Provide case studies as examples of successes and failures in e-commerce with a view to addressing the inherent strengths and weaknesses existing in these countries.

Background

The context of the study was Jones et al’s (1997) report which concluded that there would be a 10-15% advantage accruing to Commonwealth-based organisations that invest in or trade with Commonwealth partners. This advantage is brought about by commonalties in language, infrastructure, legislation and regulatory frameworks. The 1997 study indicated that a 'Commonwealth Effect' exists both in trade and investment, with the magnitude being more pronounced in the case of foreign direct investment. The share of intra Commonwealth investment was found to be as high as 58%. In the case of trade, the share averages at 39% for imports and 35% for export in the last 25 years. Overall, the results suggest that the Commonwealth can indeed be thought of as a de facto trade and investment network.

Jones G., Lundan S., Burke S.B., 'Commonwealth Trade and Investment Study'. Commissioned by the Commonwealth Secretariat and Hanson Cooke Publishing Ltd. University of Reading October 1997.

Methodology

Bearing in mind the above hypothesis, research was conducted to analyze and to observe the state of “e-readiness”, current competitive structures, and future competitive potential of e-commerce in Australia, Malaysia, South Africa and Trinidad and Tobago. These countries were deliberately chosen to reflect the diverse e-commerce challenges facing the Commonwealth:

• Australia is one of the most developed Commonwealth states in e-commerce, having made excellent progress in the area since the mid 90s;
• Malaysia has invested highly in e-commerce, most notably through the creation of the Multimedia Super Corridor;
• South Africa is the most technologically advanced of African nations and as such, provides a gateway to the rest of Africa; and
• Trinidad and Tobago represents many of the smaller Commonwealth states (the latter constituting over half the Commonwealth), which could greatly benefit from the adoption of e-commerce but equally use their Commonwealth status to interact with other member countries and exchange e-commerce experiences.

Fieldwork was conducted in Australia, South Africa, Malaysia and Trinidad and Tobago over a period of six months (March - September 2002), during which extensive interviews were conducted with Government, Chambers of Commerce, national infrastructure providers and other stakeholders, multinationals, SMEs and e-commerce consultants. National policies and strategies were examined, and inputs and updates requested from those interviewed.

The resulting draft report 'Fostering Competitiveness in the Commonwealth through Electronic Commerce: Experiences and policies adopted in four Commonwealth countries' was produced at the end of January 2003 and was discussed at a Roundtable on 10th February 2003 at the Commonwealth Secretariat with High Commission representatives and key trade and industry figures both from the public and private sector.

Conclusion and Recommendations

The report concluded that although there was no direct evidence of a Commonwealth Effect in e-commerce within these four countries, the Commonwealth’s de facto trade and investment network offers rich potential for fostering competitiveness. In particular, this study recommended:

• The establishment of an Intra-Commonwealth Electronic Commerce Portal, serving as a b2b exchange for existing and future commerce, as well as an information centre on legislation and policy.
• A follow-up regional dissemination programme in the near future, principally in Asia-Pacific, Africa and the Caribbean.
• Education and awareness of e-commerce in the Commonwealth, particularly for small and medium enterprises.

The project team

Paul Baker and Ram Venuprasad were responsible for research planning, data collection and country reports. Savita Bailur was responsible for the consolidated report and Richard Bourne, Head of the CPSU, managed the project. An advisory committee of experts assisted the project:

• Avenash Apersaud, Managing Director of State Street Bank
• Dr Mohan Kaul, Director General of the Commonwealth Business Council
• Dr Sarianna M Lundan, Associate Professor, University of Maastricht
• Professor Tim Shaw, Director of the Institute of Commonwealth Studies
  
• Ram Venuprasad, Chief Project Officer E-Commerce, Special Advisory Division

For more information, please contact Richard Bourne.

See the report 'Fostering Competitiveness in the Commonwealth through Electronic Commerce: Experiences and policies adopted in four Commonwealth countries' below.

The questionnaires below were sent to private sector and public sector organisations for the compilation of case studies.