The promise of e-business for less developed countries (LDCs)

Abstract

Industrial development options for less developed countries (LDCs) hinge increasingly on leveraging e-business as a means of promoting upgrading within global value chains. E-business represents a major opportunity for third world companies (TWCs) that can access and use it effectively and a threat to those companies that cannot. E-business holds great promise for TWCs in four key areas: leveraging the potential productivity gains from internet-based B2B e-commerce; maximising operating synergies; exploiting systemic efficiencies and connecting and deepening links, to global production and trade networks. By not making the transition to e-business, TWCs may be placing themselves at risk of becoming less competitive in the globally interconnected market, impacting on both their current market positions and long-term viability. The concordant effects of marginalisation and exclusion are likely to be a combination of: deepening poverty; high unemployment; widening inequality; a weak and rapidly eroding export base and low and even negative growth rates.