Mr. Frank McCosker Global Senior Director, EU, Multilateral Organisations & Bilaterals Microsoft

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

2. 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?

3. 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.

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

5. 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 • 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 • 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 • eLearning solutions to upgrade employee skills

6. 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 re-typed 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

7. UNeDocs: 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

8. Benefits of UNeDocs: 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

9. Benefits of UNeDocs: 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%

10. 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 e-commerce • 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.