Measuring the environment for e-commerce: A new tool

In order to promote e-commerce for development , policymakers and analysts increasingly want to know what the conditions are in their countries to support online business activity, and how their countries stack up against others. To this end, the multi-stakeholder eTrade for All initiative, an initiative launched in 2016 at the UNCTAD Ministerial Conference in Nairobi to improve the ability of developing countries and countries with economies in transition to engage in and benefit from e-commerce, has developed a new tool for assessing the e-trade environment at the country level. This tool was developed jointly by UNCTAD and the World Bank Group’s Trade & Competitiveness Global Practice and utilizes data from the International Telecommunications Union (ITU), UNCTAD, the U.N. Office on Drugs and Crime (UNODC), Universal Postal Union (UPU), World Economic Forum, and the World Bank Group.

These indicators can now be accessed on two Bank Group data portals: the Analytical Database section of WITS and TC360, the trade and competitiveness development data portal, with additional functionality including time series for many of the indicators.  

The e-Trade for All indicators contains over 30 indicators grouped in the following pillars of the e-commerce environment:

• ICT Infrastructure and Services. Do people have access to cell phones, broadband, and the Internet in general? How much does it cost?
• Payment Solutions. Who has access to debit and credit cards? If these are scarce, will it be necessary to look at newer “mobile money” solutions?  
• Trade Logistics and Trade Facilitation: What are the quality of logistics services for international delivery? Are customs procedures slow or burdensome? Do customers have access to postal services for last-mile delivery, and how reliable are they?
• E-Commerce Skills Development: To what extent do firms in the country make use of the ICT and Internet? How well do they absorb technology in general? What percent of firms use e-mail to interact with clients and suppliers?
• Legal and Regulatory Frameworks: Does the country have legal frameworks for electronic transactions and signatures? What about privacy and data protection? Consumer protection for online purchases? Preventing cybercrime?
• Access to Finance: Is access to finance a major constraint? Do most loans require collateral? Are banks willing to finance working capital?
• E-Commerce Readiness Assessment and Strategy Formulation: How does the country look on indexes already developed by UNCTAD (B2C e-commerce), the International Telecommunications Union (ICT development), and the World Economic Forum (networked readiness)?

Together, these indicators can give policymakers and others a view of the e-commerce environment in their countries and across regions. The aim is to leverage the substantial potential for e-commerce to promote inclusive trade-driven growth in developing countries, particularly in providing small and medium-sized enterprises (SMEs) access to global markets.