Study: Taiwan, Estonia Good Places for E-Commerce

WASHINGTON (08/22/2000) - Taiwan and Estonia have emerged as leaders among developing countries in the ability to conduct e-commerce, while Russia and much of the Middle East and Africa are lagging badly, according to a report released today.

The study rated 42 developing countries on their "e-readiness," based on factors such as government support for e-commerce, availability of wireline and wireless communications services, worker skills and laws against cybercrime and software piracy.

The study's author is Bruce McConnell, a former White House official who led the International Y2k Cooperation Center, which rated the progress of various countries in making their computer systems ready for the year 2000 date rollover. He now runs a Washington-based consulting firm, McConnell International LLC,, and used his contacts throughout the world to compile the new study.

The report puts the developing countries in three color-coded categories: blue, for those that are mostly ready for e-commerce; amber, for countries that need improvement; and red, for countries that need much greater improvement in their e-commerce infrastructure.

Countries in the red zone for their poor e-commerce climate included Russia, Indonesia, Pakistan, Philippines, Thailand, Ecuador, Venezuela, Vietnam, Bulgaria, Romania, Ukraine, South Africa, Saudi Arabia, Egypt, Kenya, Nigeria and Tanzania.

"Economic growth is at risk unless these countries take prompt action," McConnell said at a press conference here. The report is based on public statistics and interviews with more than 300 contacts in the countries studied.

He said a big problem is that leaders of some of these countries are complacent and underestimate the work that needs to be done to get their countries ready for the new economy. They incorrectly figure that "if things are OK in the capital, then everything is fine in the whole country," McConnell said.

John Hamre, president of the Center for Strategic and International Studies, a Washington think tank, praised the study for going beyond slogans about the so-called "digital divide" and actually providing leaders of these nations with a roadmap for fixing it.

McConnell gave low ratings to 23 of the 42 countries in at least two areas. But there were pockets of good news. For example, Costa Rica is emerging as an e-commerce-friendly location in Latin America, Hungary has invested heavily in high-tech education and India has a comprehensive set of laws regarding information technology.

Taiwan, as well as Malaysia and South Korea, have taken a "build it and they will come" approach, with government-led investments in multimillion-dollar technology hubs, the report said.

Estonia may be the biggest surprise on the list. It has benefitted greatly from a close relationship with its Internet-savvy Scandinavian neighbors and has numerous government initiatives to promote Internet usage, the report said.

Today, 28% of Estonia's population is connected to the Internet and 90% of public employees have a computerized workplace. In February, the Estonian parliament approved a proposal to guarantee Internet access to every citizen.

McConnell and other experts emphasized that mobile phones and other wireless Internet access devices show the most promise for developing countries. "The PC in the home is the U.S. model, not the world model," McConnell said.

Carlos Primo Braga, manager of the IT development program at the World Bank in Washington said he agreed, noting that in the past two years, Brazil doubled its telephony penetration with wireless phones.

Should IT vendors do more to close the global digital divide? Harris Miller, president of the World Information Technology Services Alliance, said IT vendors are willing to help, but they lose interest in countries that won't dismantle telecommunications monopolies, won't fight software piracy and then heavily tax company profits.

But Miller predicted that these leaders will take action to make improvements when they see their ratings in the report.

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