The Role of The Role of Information Technology Information Technology

ininForeign Trade Foreign Trade

1. IntroductionInformation technology ('IT), as defined by the Information Technology Association of America (ITAA), is

"the study, design, development, implementation, support or management of computer-based information systems, particularly software applications and computer hardware."

IT deals with the use of electronic computers and computer software to convert, store, protect, process, transmit, and securely retrieve information.

1. Introduction…cont’d IC Technologies facilitate the delivery of basic

social services: Health Education Agricultural extension services Good governance

In general: Those who can best receive, process, adopt

and innovate information are winners! Conducting old businesses in new ways and

embracing new business opportunities has now become part of any economic transformation.

Growing use of ICT as a medium for business information/knowledge processing and exchange.

1.1. Motivation and Objective Not much is known about the application of ICT in

facilitating domestic and international trade. Objectives of the study

Assessing the ICT and trade policy environment Identify gaps in the legal and regulatory frameworks Assessing the awareness and usage of ICT in foreign

trade . Methodology (several methods):

Systematic analysis and review of policy documents Review ICT and trade statistics from secondary data Primary survey data Interviews with knowledgeable informants Case studies.

General problems of Non-IT based Foreign trade transactions

The general problems of non IT based foreign trade transactions are:

Lengthy and complex Documentation Maintenance of transactions and also

monitoring the usage of foreign exchange

Slower Communication between buyer and seller

Existence of human errors while filling documents.

Limited information on target markets .

Marketing opportunities are limited. Market research information not

available easily.

Need for Information Technology in Foreign Trade

The need for IT in foreign trade is to satisfy consumer’s demands for:

Lower Prices Faster transaction High quality of products and

services.

Enterprise and Owners profile

Majority of the firm managers are male(93%)

80% have either college diploma or degree

48% are sole proprietorship, 43% partnership

The majority (65%) are engaged in retail and whole sale trade

More than 50% employ less than five workers

ICT Penetration and Utilization

What type of ICTs used? Fixed line, mobile, fax, PBX, PCs, LANs,

Website, internet. Number of Tel. Lines Frequency Percentage

1 - 3 29 72.5

4 – 6 3 7.5

7 – 10 4 10.0

16 1 2.5

TOTAL With Fixed lines 37 92.5

W/O Fixed Line 3 7.5

Total 40 100

ICT Penetration …cont’d

Number of Mobile Tel. Lines

Frequency

Percentage

1 14 35.9

2 7 17.5

3 7 17.5

4 7 17.5

6 2 5.0

20 1 2.5

41 1 2.5

TOT. W. Mob. lines

39 97.5

Do not use mobile

1 2.5

Total 40 100

Purpose to connect to the Internet

0

10

20

30

40

50

60

70

80

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(e-m

ail)

Infor

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onse

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Purpose

Firm

s(%

)

Series1

ICT Penetration …cont’d E-mail services are the most important use of

internet. Annual Expenditure for the Internet Connection

Birr No. of

companies Percent

0 - 20,000 14 40

20,001 to 40,000 6 17

40,001 – 60,000 7 20

60,001 – 80,000 3 9

Above 80,000 5 14

 Total 35 100

Sales via the Internet

About 45% stated that they have received orders via the internet.

However, online payment has not been possible.

Purchase via the Internet

About 45% of the firms have made orders via the internet to purchase goods and services.

What Motivates?Main Motivations Number Percent Rank

reduce production/service procurement cost

16 40.0 25(2)

speed up product/service procurement process

16 40.0 49(1)

outreach to new suppliers 14 35.0 15(3)

Because of competition from competitors

10 25.0

prevent theft and crime 12 30.0

avoid corruption 8 20.0

Others 1 2.5

Advantages of Using ICT in trade

Advantage Number of firms

Percent of firms

Rank

Reduces transaction cost 37 92.5 60(1)

Expedite sales and purchases 26 65.0 22(3)

Better security of transaction 26 65.0

Helps to deliver goods and services faster

26 65.0 39(2)

Improve customers satisfaction

30 75.0

Avoid corruption 17 42.5

Others 2 5.0

Elements of IT used in Foreign Trade

Internet

Electronic Bulletin Boards And Closed Systems

Software and Data Products

INTERNET

Through the Internet, businesses are now able to find suppliers and buyers, conduct valuable market research, and post information on their products and services. At an even more sophisticated level, exporters can now use the Internet to do everything from submitting documentation to booking a container on a ship.

Internet Allows:

Faster and cheaper communication between buyers and sellers of various countries.

Publishing of various sites to promote goods and services.

Searching of prospective markets. Getting acquainted with latest trade

laws applicable in other countries.

Sending of visual samples of products and also advertisements of the product / service to the buyer by email.

Getting market survey information from different countries.

Exchanging copies of documents.

Electronic Bulletin Boards

The openness and semi-chaotic structure of the Internet can be overwhelming. Fortunately, businesses can take advantage of more controlled closed systems. For example Economic, the U.S. Department of Commerce's Bulletin Board (EBB) allows users to search through Trade Opportunity Leads released every business day. The EBB is also a source for statistical releases from a variety of government agencies such as the Bureau of Census, Bureau of Economic Analysis, Bureau of Labor Statistics, and the Federal Reserve Board.

In addition, the U.S. Chamber of Commerce is now marketing the International Business Exchange Network (IBEX), a new system to help exporters find, qualify, and negotiate with business partners worldwide via personal computers. IBEX also gives users access to a wide range of services and market research from both the private and public sectors

Software and Data Products:

Hundreds of export-related software products and databases are on the market. Some categories include tariff information, export accounting software, documentation software, duty drawback software, contact directories, trade' statistics, market information, and export control software.

Uses of Software and Data products:

For reduction in complexity and increasing the accuracy in documentation.

For proper maintenance of accounts in domestic as well as foreign currency.

For faster transaction.

EXAMPLES OF SOFTWARES IN FOREIGN TRADE:

EXPORT-INDIA VISUAL IMPEX VISUAL AKASH VISUAL SAMUDRA VISUAL X-PORT LOGI-SYS

Conclusion:

Information technology is a part of all businesses in the current era of Digital progress. The incorporation of IT in foreign trade enables it to operate effectively and efficiently, thus resulting in the economic growth of the country

Conclusions…..

Although the potentials that ICTs can offer for human and economic development are well known, some countries has not been able to fully benefit from developing the ICTs industry as a sector and using ICTs as an enabler.

Not much is known about the use of ICTs in facilitating domestic and international trade.

The main goal of this project has been to assess the use of ICTs in facilitating trade and thereby identify the gaps in policy and regulatory frameworks to promote e-trade.

Conclusions… On the positive side:

ICT is considered as a cross-cutting edge in the SDPRSP and PASDEP documents.

The industrial development strategy recognizes that an efficient and reliable telecommunication infrastructure is crucial to expand the ICT sector and improve the usage of the technology for industrial development in the country.

Practical efforts are observed on the expansion of ICTs infrastructure

Although, still more efforts are needed, ECuA’s reform and modernization are encouraging.

The draft ICT policy has clear guiding principles for the implementation process including long, medium & short term plans.

Conclusions… On the negative side: Most sectoral policy documents reviewed did not

clearly articulate the role gov’t can play to facilitate the use of ICTs. The agricultural policy has yet to provide specific

directions on the use of ICTs in the system of production and in the distribution of agricultural products.

The trade policy does not explicitly recognize and appreciate the role of ICTs in facilitating trade.

Very little attention has been given to the role of the private sector’s participation in ICTs development

The current Foreign exchange directives have serious bottleneck for the development of e-commerce

The absence of an appropriate legal and regulatory framework is one of the main constraints for the expansion of online trade.

Tentative Recommendations Mainstreaming of ICTs in all sectors of the economy. Ensure ICT friendly legal and regulatory

environment: The use of electronic document electronic signature legal recognition enforceability

Develop ICT oriented education and training systems, science and technology policies and strategies

Liberalization of the telecom infrastructure Providing incentives for ICT development :

tax, private sector capacity building programs, trade facilitation centers

Tentative … cont’d appropriate institutional arrangement that will

facilitate an effective co-ordination, monitoring and evaluating ICTs application.

Formulate comprehensive communication & broadcasting policies.

Encouraging capacity building programs on ICT skills development in the public & private sector.

develop specific ICT private sector development programs like Technology parks, business ICT incubators for Business Process Outsourcing (BPO).

BIBLIOGRAPHY:

www.google.comwww.encyclopedia.comwww.wikipedia.comwww.altavista.com

Thank you

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