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Challenges of e-Business in GCC : Digital Divide & Economic Reform

Challenges of e-Business in GCC : Digital Divide & Economic Reform. Presented by:. Ihsan Ali Bu-Hulaiga, Ph.D. Member, Saudi Shoura Council Professor of IT, KFUPM, Dhahran Saudi Arabia. Buhulaiga, GCC Digital Divide & Economic Reform. 1. Overview. Question Answers Definition Access

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Challenges of e-Business in GCC : Digital Divide & Economic Reform

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  1. Challenges of e-Business in GCC: Digital Divide & Economic Reform Presented by: Ihsan Ali Bu-Hulaiga, Ph.D. Member, Saudi Shoura Council Professor of IT, KFUPM, Dhahran Saudi Arabia Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 1

  2. Overview • Question • Answers • Definition • Access • The disconnected • The GCC scene • Bridging the gap • GCC e-reform Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 2

  3. Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 3

  4. Question Is there a digital divide, or is the economic divide merely going digital? Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 4

  5. Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 5

  6. Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 6

  7. Overview • Question • Answers • Definition • Access • The disconnected • The GCC scene • Bridging the gap • GCC e-reform Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 7

  8. Answers “The revolution in information and communications technologies offers genuine potential, but also raises the risk that a significant portion of the world will lose out. We need to promote policies and develop institutions which will let everybody benefit..And it won't happen on its own." Juan Somavia, director-general of the labor organization, a UN agency. Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 8

  9. Answers “There is work to be done to reduce the so-called digital divide between the technology haves and have-nots. The newly formed Dot.force is therefore an important step.” Donald J. Johnston secretary-general of the OECD Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 9

  10. Answers • There is so much great stuff out there that my greatest fear is the digital divide," • Bill Gates, • chairman of Microsoft Corp Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 10

  11. Answers “The development .. created an opportunity to narrow the divide in coming years. The chance had to be seized quickly.. If we don't catch it now, I don't think we'll ever catch it in the next several hundred years.“ John Chambers, chairman and chief executive Cisco Systems Inc Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 11

  12. Answers We cannot close the digital divide without efforts to provide distance learning, to donate software and low-cost computers for villages, and to train people to use them. President Bill Clinton APEC Summit, November, 2000 Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 12

  13. Answers “Companies should seek to tackle the divide in their own self-interest rather than as philanthropy because today's poor countries are potential growth markets of tomorrow.” Carly Fiorina, chairman and chief executive Hewlett-Packard Co. Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 13

  14. Answers “E-commerce in Asia is expected to account for 25 percent of the world's total by the year 2003, promising huge business opportunities. If we don't want to let these opportunities slip away, we must seek a balanced development of the new economy and bridge the digital divide.” Tang Jiaxuan Foreign Minister of China Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 14

  15. Answers "The wealth gap between rich and poor nations is widening, and the digital divide is getting worse." Benjamin Mkapa, President of Tanzania Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 15

  16. Answers ‘‘We found that the digital divide is much more than building the basic physical infrastructure that you need to go online. Financial access to the Internet is just as important. Cognitive access is another barrier.” Earnest J. Wilson III, Global Information Infrastructure Commission Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 16

  17. Overview • Question • Answers • Definition • Access • The disconnected • The GCC scene • Bridging the gap • GCC e-reform Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 17

  18. Digital Divide: a definition “Digital divide refers to gab between individuals, households, businesses and geographic areas at different socio-economic levels with regard both to their opportunities to access information and communication technologies (ICT) and to their use of the Internet for a variety of activities.” OECD Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 18

  19. Overview • Question • Answers • Definition • Access • The disconnected • The GCC scene • Bridging the gap • GCC e-reform Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 19

  20. Access • “The Internet may allow equal economic opportunity and democratic communication, but it will do so only for those with access.” • Hoffman an Novak, • The Growing Digital Divide Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 20

  21. Access Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 21

  22. Access Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 22

  23. Access Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 23

  24. Overview • Question • Answers • Definition • Access • The disconnected • The GCC scene • Bridging the gap • GCC e-reform Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 24

  25. The disconnected • Only 5 percent to 6 percent of the worldwide population has accessed the Internet. • 90 percent of them are in the industrialized countries - 57 percent in the United States and Canada alone. • By contrast, Africa and the Middle East account for just 1 percent of Internet users. Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 25

  26. The disconnected • ICT, have so far reached less than 5 percent of the world's population. • The ratio of Internet use in the U.S. is one hundred to two hundred times the level in some developing countries. • It has been estimated that in numerous developing countries the percentage of the population online by 2005 will average just 4 percent, compared to an average of 72 percent in the top eight economies. • Electronic business is projected to amount to more than $7 trillion within the next five years. This opportunity will be a boon only for those with the skills, resources and infrastructure to invest in the information economy. Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 26

  27. The disconnected To India the"digital divide" is a grave handicap Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 27

  28. The disconnected • India • The stated goal is to be “an economic super power” by 2020. • Set 8 to 9 percent growth as the annual requirement to double per capita income in the next 10 years. • There are more than a million Indian high-tech experts in the advanced countries. • Half the population remains illiterate, many villages have no schools, 500 million Indians subsist on $1 a day or less. • Internet use currently stands at 0.4 percent of the adult population. • At 2.2 lines per 100 citizens, telephone penetration is extremely low. Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 28

  29. The disconnected The motive of e-ASEAN is to create a regional environment that complements global electronic norms. Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 29

  30. The disconnected • ASEAN • Fewer than two in ten thousand Cambodians and Vietnamese use the Internet, while nearly 3,000 out of every 10,000 Singaporeans do so. • More than 400 million people connected to the Web in the world today, less than 1 percent are in Southeast Asia. • An e-ASEAN Task Force was created in November 1999 to formulate a broad and comprehensive action plan, concerning issues, such as: improving connectivity, building a legal and regulatory environment, creating a seamless marketplace for ICT, developing human capacities, and sustained government e-leadership. • The ASEAN Leaders signed, in November 2000, an e-ASEAN Framework Agreement that commits them to take time-bound actions to put in place the hardware and software systems needed to access, process and share information, and promote the growth of e-commerce in the region. Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 30

  31. The disconnected The Arab world.. the last holdout! Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 31

  32. The disconnected • In Middle East homes, the PC penetration rate stood at about 15 percent of households against 50 percent in western Europe and 70 percent in the United States.  • Intel opened an office in the GCC Region, in 1996. Some 25 years ago, it had opened a chip manufacturing plant in Israel. • In October, Intel won government approval for a $500 million project to build a microchip plant in Egypt. Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 32

  33. The disconnected The language English   215.6 M (47.5)Non-English 237.8 M (52.5%)European Languages  131.2 M  (28.9%)  German     27.5 M  (6.1%)  Spanish    21.1 M  (5.2%)  French     16.6 M  (3.7%)  Italian    14.2 M  (3.1%)  Portuguese 11.5 M  (2.5%)  ... Asian Languages  106.6 M  (23.5%)Japanese  38.8 M  (8.6%)  Chinese   40.7 M  (9.0%)  Korean    19.8 M  (4.4%) Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 33

  34. The disconnected • The Arab World • There are now 3.54 million Internet users in the Arab world, up 1.5 million in the past year. (Ajeeb.com) • There will be over 5 million users in Arab countries by the end of this year, and 10 to 12 million by the end of 2002. • 49 percent of the Arab world’s Internet users live in the GCC. • GCC internet penetration rate is 5.6 percent, three-fold of the pan-Arabs’. Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 34

  35. The disconnected Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 35

  36. Overview • Question • Answers • Definition • Policies • Access • The disconnected • The GCC scene • Bridging the gap • GCC e-reform Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 36

  37. The GCC scene GCC e-STRATEGY: the individualistic approach Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 37

  38. The GCC scene Internet penetration Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 38

  39. The GCC scene Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 39

  40. The GCC scene Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 40

  41. The GCC scene Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 41

  42. The GCC scene Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 42

  43. The GCC scene Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 43

  44. The GCC scene • Joint Committee on E-Commerce (JCEC) • Established on September 2000 by the GCC Trade Cooperation Ministerial Committee (GTCMC) • JCEC held its first meeting on February 2001. • JCEC is an advisory committee to the GTCMC. • JCEC is a standing committee, and meets bi-monthly. Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 44

  45. Overview • Question • Answers • Definition • Policies • Access • The disconnected • The GCC scene • Bridging the gap • GCC e-reform Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 45

  46. Bridging the gap • The robustness and reliability of the network is consistently improving. • The intelligent network is fast becoming reality. • Demand is growing fast for e-services Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 46

  47. Bridging the gap • Network Infrastructure • Diffusion to individuals and households • Diffusion to business • Education and training • Government initiatives • Multilateral cooperation Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 47

  48. Bridging the gap • Synergy with ICT is vital to the GCC’s economic development. It requires devising an integrative approach to the region’s e-strategy, policy, and mechanisms. Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 48

  49. Bridging the gap • The focus is on dynamic collaboration -- a strategy of achieving mutual gain by sharing business activities across a network of allies. Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 49

  50. Bridging the gap • Dynamic collaboration is an opportunity for the GCC region (both government and business) to seize competitive advantage by optimizing the whole supply network -- not just a link in the chain. Buhulaiga, GCC Digital Divide & Economic Reform Buhulaiga, GCC Digital Divide & Economic Reform 50

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