‘E-Selling’ Caricom

1. ‘E-Selling’ Caricom Annalee C. Babb annalee@murrow.org

2. Outline • Main Question/Central Arguments • ICT & Development • Ways of Thinking About Access • National Knowledge Infrastructure [NKI] for Growth • Innovating Technology Services • Conclusion: Knowledge-Driven Development • Recommendations

3. Main Question • Several Caricom member states moving to invest heavily and quickly in necessary ICT infrastructures to promote e-commerce • But, what products and services are they planning to sell in the high-value-added Internet marketplace?

4. Central Arguments • Real barrier to e-commerce growth and long-term development of islands of Caribbean Community: • Lack of enabling environment for creation, processing & diffusion of new knowledge, ideas & innovation • Solution: Creation of a National Knowledge Infrastructure (NKI) for development, built on • Operational access to new digital media within… • … an efficient National System of [services] Innovation

5. Link Between Telecoms & Development • Is there a correlation between investment in telecoms & development? • Causality runs both ways ICT investments Economic growth ICT investments Economic growth Heather Hudson, 1997

6. Product Cycles • ICT policy-making product cycle • From utopian pronouncements to more critical analyses • Today, many policy-makers still euphoric about ICT potential… • …Scholars are becoming more critical, but • Still strong belief that new digital media hold tremendous promise for development Ernest J. Wilson III, 1997

7. If You Have a Hammer… • To someone with a hammer, the whole world looks like a nail… • It is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail… -- Abraham Maslow

8. Making Room for Difference • Each society has its own strengths/weaknesses • Different levels of receptivity to technological innovation/change • Every developmental issue facing less advanced economies is not equivalent to Maslow’s nail • Nor is its solution necessarily to be found in the hammer of a specific technology or technological application • i.e., the new digital media/the e-commerce services/applications they make possible

9. Old Economy vs. New Economy • Strong correlation between ability to be competitive in the ‘old’ economy and ability to stay competitive in the Internet economy • Technology sectors crash beginning in 2000 • Structural problems in Asian economies • E-commerce penetration by region is closely linked to education and affluence (economic and social development)

10. The High Stakes Internet • E-commerce stats: • B2B transactions worldwide could top the US$1 trillion mark by 2006 • Corporations internationally could save more than US$1 trillion in 2002 doing business over the Internet • The $$ stakes are high – motivating countries & businesses to make huge investments to be part of the lucrative e-commerce space

11. Caricom’s ICT/E-Commerce Strategies • Barbados example • Telecoms liberalization/deregulation, sector competition • IPR protection • E-commerce legislation • Proposed bankruptcy bill • Edutech2000

12. Caricom’s Structural Challenges • Productivity/efficiency gains from domestic e-commerce activities too small to sustain economic growth • Also tiny local production base in manufacturing, agriculture… • Heavy dependence on a few foreign exchange earning sectors • Risk-averse private sectors not responsive to innovation/change • Public sector inertia & inefficiency • Absence of national systems/policies for services sector innovation • Little success moving to high-value-added tech products & services

13. The art of selling things well is useless to someone who has little or nothing to sell…

14. Solution • I propose creation/nurturing of National Knowledge Infrastructure (NKI) as central framework for development/economic growth • Places knowledge at center of development at every level of economy and society • Components of the NKI: • Operational access to new digital media in… • … an efficient National System of [services] Innovation

15. Understanding Access • Physical Access • Financial Access • Secure Access • Operational Access

16. Stepping up the Technology Ladder What is required for Barbados/ Caricom/ OECS to Move up the ICT/Knowledge Ladder? Operational Access (knowledge) Secure Access Barbados/ Caricom’s Target Position Financial Access Barbados’ Current Position? Physical Access OECS’ Current Position? OECS = Organization of Eastern Caribbean States Source: Adapted from Vongpivat, 2002

17. Elements of an NSI • Public • Private • Academia FrameworkComponents Sources Policy Government Production PrivateSector Research Academia Source: Vongpivat 2002 Macroenvironment

18. Innovation in Services • Pratana Vongpivat: In NSI, government policy plays crucial role in sparking competition, demand for and supply of new technologies • Her model, like NSI literature in general, explores mainly productive/ manufacturing sectors of an economy • My research argues it is vital for Caricom states to create national systems that foster innovation in high-value-added technology services sectors • OECD has just begun to look at this for its member states • More research necessary in general, and for Caricom

19. Conclusion Operational Access (to ICT) + NSI (in services) = NKI (knowledge creation)

20. Some Recommendations • National education curricula that focus on “absorption” of information as well as teaching of logic, creative thinking and critical analysis • Targeted regional partnerships between private sectors, academia and governments for diffusion of specified knowledge/technologies • Software and e-commerce institutes to foster student, teacher, knowledge exchange between region’s MDCs and LDCs • Attraction/effective utilization of high-tech financial, intellectual and physical capital of Caribbean Diaspora

21. More Recommendations • Fostering of risk-taking/innovative culture in Caricom private sectors • Example: Bankruptcy laws to encourage invention & originality, rather than penalizing actors for business failures • Creation of appropriate R&D environment • Would support efforts of inexperienced companies in developing, commercializing new high-technology products and services • Incentives to UWI to integrate new digital technologies & services across main and satellite campuses, and devote more capacity to R&D in support of private sector, general economic growth • Academia might work together with international organizations

22. My Research Network • Lee W. McKnight, Paul Vaaler, and Raul Katz, Mobile Nations. Creative Destruction in Emerging Markets, (under review by MIT Press), 2003. • Lee W. McKnight, Paul Vaaler, and Raul Katz, eds., Creative Destruction. Business Survival Strategies in the Global Internet Economy, MIT Press, 2001, 2002; Japanese translation Toyo Keizai, 2003. • Peter Cukor and Lee McKnight, “Knowledge Networks, the Internet, and Development,” The Fletcher Forum of World Affairs, Vol. 25, no. 1, March 2001, pp. 43-58. • Pratana Vongpivat, “A National Innovation System Model: Industrial Development in Thailand,” Unpublished doctoral dissertation, 2002, Medford, MA: The Fletcher School of Law and Diplomacy.