11 December 2003
Speech by Mr. John Burley, Director, Services Infrastructure for Development and Trade Efficiency, UNCTAD
National Strategies for the Information Society and the Role of Regional and Global Organizations
ICT strategies for trade and development
When we talk about enhancing trade and development, people tend to focus on the multilateral trade negotiations and on the role they play in expanding developing countries’ exports and generating economic welfare. While these are certainly justified arguments, I have repeatedly emphasized the importance of building domestic supply capacities in developing countries, as a key precondition for taking advantage of the global trading system and new market opportunities. This is not to say that issues such as trade agreements and market access rules are not important. But if countries and companies do not have the capacity to compete with their products and services on the global market, trade and the resulting effects on development and growth will be rather limited.
I see the emergence of ICTs in a similar context. ICTs can be an important tool for enhancing the international competitiveness of companies in developing countries, in particular SMEs. Experience has shown that the application of ICTs can reduce transaction costs in the production and exchange of goods and services, including in services such as transport, customs, banking and insurance. They also bring increases in the efficiency of management functions; enable enterprises to introduce changes in the work place; and enhance flexibility in production processes. By adopting ICTs, enterprises in developing countries can upgrade their products on the value chain and thus expand their participation in the various stages of production and export processes. ICTs provide opportunities for increasing exports not only in the ICT sector, but also by enabling buyers and sellers to enter new markets. ICTs also lead to the emergence of new ICT-enabled activities and industries such as outsourcing of services, thus promoting the diversification of the economy and expansion of employment opportunities, including those of women.
But what can governments do to support the adoption of ICT by the business sector, and particularly SMEs? Which are the main constraints exporting companies are facing and which policy measures are most effective in addressing these constraints? How much should be left to the business sector itself and where is government intervention necessary?
Therefore – and this is the main subject matter of this event – it is important to formulate and implement ICT policies and strategies. This requires the involvement of all stakeholders, including the public sector, the business community and NGOs. National ICT strategies should include measures to improve human skills and the capacity to apply ICTs, develop and improve infrastructure; build a legal and regulatory framework that can create trust and confidence and support the growth of e-commerce; provide incentives and support for the adoption of e-business, especially among SMEs; and establish mechanisms to monitor and measure ICT access and usage and to facilitate planning and benchmarking of progress.
These are all elements common to any national e-strategy. Their application will naturally vary from country to country. Each country will need to identify its own approach and its own priorities for its ICT development, based on its particular circumstances and needs. There can be no “one size fits all” definition of national ICT strategies.
In UNCTAD’s latest E-Commerce and Development Report, launched three weeks ago, we discuss in-depth the topic of ICT strategies for development. We make suggestions on the design of a strategy framework and analyse the policy options in areas ranging from legal and regulatory issues to telecommunication, human resource development and business development. The Report is available for free download from the UNCTAD web site.
UNCTAD’s work on ICT strategies and policies
UNCTAD has been active in supporting developing countries to develop their ICT strategies, in particular in policy areas related to trade and development. We have organized a series of regional events on ICT strategies (Bangkok, jointly with ESCAP in November 2002; Tunis June 2003; Geneva for transition economies, jointly with UNECE October 2003; and Brazil November 2003). These conferences brought together practitioners from the regions who discussed the latest developments in e-commerce and e-business, e-finance, e-tourism, Internet access and usage, legal and regulatory issues related to the Internet and the possibilities offered by open source software, and make suggestions on policies that have worked well to advance the information societies in their countries.
The regional conferences resulted in the adoption of declarations of ICT strategies and policies. The declarations express the commitment by governments to take action towards creating an enabling environment for the use of ICT by the business sector and to enhance ICT skills and capacity in their countries. A document that compiles all the declarations is available in this room.
Regional dimension
The discussions during these regional events have shown the common interests, needs and opportunities that can be addressed better at the regional and sub regional level, which is also the focus of this panel.
Let me give you some examples of ICT-related sectors where developing countries have demonstrated a strong potential and increased their export capacities, and where regional and south-south cooperation could further strengthen development.
One example is the tourism industry. Here the use of Internet has contributed significantly to its growth by providing potential tourists immediate access to information on destinations throughout the world. The Internet has led to the emergence of a new tourism demand in the form of customized individual travels based on a “do-it yourself” approach.
So far, most tourism-related information is generated and maintained by developed country service providers. But some developing countries have started to exploit the possibilities offered by the new technologies and created their own tourism web portals, offering online reservation and payment facilities. UNCTAD is launching an e-tourism initiative that aims at strengthening the capacity of the tourism industry in developing countries, in particular the least developed countries, to increase its visibility and better market its tourism potential using the Internet. Cooperation at the regional level can be particularly useful for developing regional e-tourism portals and promoting tourist destinations at the regional and sub regional levels.
Another sector that has grown strongly during the past few years is the outsourcing of certain business process, in particular in the ICT – enabled services (such as software, data processing, customer care, finance and administration). Of course, much of this is taking place between companies in developed countries (e.g. US and UK) and those in developing countries (especially India). But we can now observe a growing cooperation among developing countries in this sector. For example, companies in Cambodia or Bangladesh are receiving outsourcing contracts from Indian companies. Or delegations from African countries are visiting South Asia to learn about how to build capacity and become competitive in the sector.
Advances in ICTs have also impacted favourably on transportation processes and have reduced trade transactions costs. The availability of efficient transport services is crucial for economic development as transport services are essential for reaching world markets, strengthening global integration and attracting foreign investment. At the Johannesburg Conference on sustainable development, delegates called for an integrated approach to policy-making at the local, national and regional level for transport services with a view to provide safe and efficient transport.
The development of sophisticated management and operating systems based on ICT has provided efficient cost control, optimum use of equipment and a new quality in customer relations. In order to fully benefit from the potential brought about by these developments, governments are seeking to put in place the necessary physical and legal infrastructure. Providers of transport services also need to develop information systems to improve their competitiveness. There is much scope for enhancing transport systems at the regional and sub regional levels.
Apart from improving local infrastructure, the use of ICTs facilitates the exchange of transport-related information between countries. This increases the productivity of transport equipment and reduces delays in the movement of goods. UNCTAD’s ACIS programme contributes to this process by facilitating the exchange of information among adjacent countries, among the operators of different transport modes and between the operators and their clients or customers. All this facilitates the management of the flow of goods along transport corridors with significant financial and economic gains resulting from reduced operating costs and increased transport carrying capacities.
Another successful UNCTAD software programme is that of customs automation, or ASYCUDA, which benefits from and directly supports sub-regional cooperation. Quite apart from its impact on improved efficiency through reduction of customs clearance times (from for example several days to just a few hours) or increased national revenue and reduced corruption, ASYCUDA also generates standardized trade data on a sub-regional basis thereby facilitating opportunities for expanded trade.
In light of the outcome of WIS and the various events here, we will prepare for our next conference, UNCTAD XI in Brazil in June 2004, by cooperating with others in building partnerships in the area of ICT for trade and development, so as to continue to help developing countries become competitive in regional and global markets.
10 December 2004.
Information:
aisi@uneca.org
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