Electronic commerce, international trade and employment: review of the issues

Abstract

Electronic commerce is a relatively new phenomenon. Its rapid expansion since the mid-1990s has drawn attention to the impact it will have on promoting trade, economic growth and development. In addition to the many benefits associated with e-commerce, concern has been rising in regards to the widening technological gap, 'The digital divide' among countries and sectors within countries. Electronic commerce and the Internet are posed to stimulate trade by lowering the cost of gathering and processing information from distant markets, by creating global access to specific goods and services and by making it possible to send over the Internet goods and services that traditionally required physical delivery. Electronic commerce is expected to directly and indirectly create and destroy jobs. New jobs will be generated in the information and communication technologies sector, while the indirect creation of jobs will occur via increased demand and productivity. At the same time, some reallocation and destruction of jobs are expected as a consequence of changes in the way of doing business. The net effect on employment will be the resultant of a complex set of interactions and will by no means be uniform across countries, geographic areas, industries or skill groups. This paper will review the issues relevant to the impact of e-commerce on international trade and employment. Any discussion on these issues is necessarily tentative since evidence of the impact of electronic commerce on economic and social processes is only beginning to accumulate. The paper is organized as follows: Section I, provides an overview of electronic commerce and its economy-wide effects. Section II, includes some indicators that shed light on the growth e-commerce and the overall state of e-readiness in the region. Section III, highlights the relevant issues dealing with the impact of e-commerce on trade and employment. Section IV, presents concluding remarks.