Session 3 a Integrating Regional Markets Trade Facilitation

Session 3 a: Integrating Regional Markets Trade Facilitation and ICTs as a tool to support competitiveness in emerging and transition economies Mr. Frank Mc. Cosker Global Senior Director, EU, Multilateral Organisations & Bilaterals Microsoft

Overview: ICT as a tool to support competitiveness in emerging and transition economies Successful national strategies Benefits of e-commerce and e-business strategies Case study What needs to be done?

Point of departure ICT has significantly contributed to increasing the productivity and competitiveness of the enterprise sector Benefits have so far accrued largely to developed countries, and a small group of advanced developing countries in transition Internet-based business methods have enabled economies to use their resources more efficiently, achieving faster productivity growth Data from the OECD countries points to a strong link between investment in ICT and faster growth. On average, OECD countries invest around 7% of their GDP in ICT, twice as much as developing countries. Global e-business market is estimated around US$ 2. 3 trillion (2002), and 30 OECD countries accounted for 95% of total value.

Successful national strategies to promote the competitiveness of the enterprise sector E-business environment Industry, enterprise and SME levels 1. e-Leadership by 4. Awareness, managerial skills & pre-competitive investments among MSMEs governments 2. Market competition in ICT 3. Trust & security policies 5. Human capital 6. Complexity in ICT hardware and software solutions

Benefits of e-commerce and e-business in emerging and transition economies Most economic benefits begin with: Transactions – “front office” relational & product innovation to improve market reach & productts • Integration –“back office” process & organizational innovation to improve production and management • Product input integration and production solutions • Procurement and supply chain management • Finance, online banking and accounting solutions • e. Learning solutions to upgrade employee skills Customer development & e-marketing solutions • Market research • Business profile information • Catalogues, pricing, advertising • E-business solutions to buy & sell services via Internet • Ordering • Billing • Payment • Customer service and support solutions • Feedback • Reference and referral building • New product promotion

Case Study: Need for simplifying trade forms to reduce data and document requirements 7 -10% of value of international trade is spent on custom formalities today A typical international transaction involves: • 30 parties, 40 documents • 200 data elements – 60% of which need to be retyped at least once • Delay of 88 -208 days between delivery and payment Low government operational efficiency to collect customs revenue Lack of uniform trade procedures making trading with neighboring countries (natural market) often more difficult than with OECD countries Reduced FDI opportunities

UNe. Docs: Using the Internet for efficient international trade A set of international trade forms in electronic format (and paper) format Based on international trade standards (GATT, WTO, WCO, UNCITRAL, UNLK, UN/EDIFACT) and best business practices Toolkit available to any trader with Internet connection

Benefits of UNe. Docs: success stories Balkanpharma e-business benefits/now can: Plan production to meet consumer need and market demand Manage stock more efficiently Cut inventory costs while increasing sales P & P benefits from e-customs process: Expansion into more EC air and sea routes Now clears 15, 000 consignments through customs annually GE Hungary’s online auctions with suppliers cut procurement costs by 9%, saving $680 million

Benefits of UNe. Docs: Success stories Czech Republic: 75% trade documents for in-transit goods processed electronically $2 million cost, but higher trade revenues expected Example of efficiency in Central and Eastern Europe Poland’s CELINA System: Trader registration in only 2 minutes Error rate dropped 95%

What needs to be done to promote the use of ICT as a tool to support competitiveness? Requires leadership and public-private partnerships Challenge existing ways of working Public sector managers need e-trades, e-commerce and e-business planning skills Involving multi-stakeholder public-private partnerships (PPPs), as implementing can be risky, expensive and difficult Develop a culture of e-business among SMEs Promote the development of trade in goods and services via ecommerce Promote strong protection for intellectual property made available over digital networks Resource mobilization Mainstream ICT into development programmes Monitoring and evaluation Increase technical assistance through multilateral institutions, which are an indispensable source of expertise, advice and assistance.