Globalization and E-commerce

2. WHAT IS GLOBALIZATION?
• GLOBALIZATION IS A PROCESS OF INTERACTION AND
INTEGRATION AMONG THE PEOPLE, COMPANIES, AND
GOVERNMENTS OF DIFFERENT NATION.
• A PROCESS DRIVEN BY INTERNATIONAL TRADE AND
INVESTMENT AND AIDED BY INFORMATION TECHNOLOGY.

3. BUSINESS OF THE PAST
• FOR THOUSANDS OF YEARS, PEOPLE—AND, LATER,
CORPORATIONS—HAVE BEEN BUYING FROM AND
SELLING TO EACH OTHER IN LANDS AT GREAT
DISTANCES.
• E.G. FAMED SILK ROAD ACROSS CENTRAL ASIA THAT
CONNECTED CHINA AND EUROPE DURING THE MIDDLE
AGES.

4. BUSINESS TODAY
• • THOMAS FRIEDMAN HAS SAID THAT TODAY
GLOBALIZATION IS “FARTHER, FASTER, CHEAPER,
AND DEEPER.”
• • TIME-SPACE COMPRESSION

5. TIME-SPACE COMPRESSION
• INFORMATION TECHNOLOGIES HAVE GIVEN ALL
SORTS OF INDIVIDUAL ECONOMIC ACTORS—
CONSUMERS, INVESTORS, BUSINESSES—VALUABLE
NEW TOOLS FOR IDENTIFYING AND PURSUING
ECONOMIC OPPORTUNITIES

6. WHAT IS E-COMMERCE?
• E-COMMERCE IS THE SALE OF PRODUCTS AND
SERVICES OVER THE INTERNET, AND THE FASTEST
GROWING SEGMENT OF OUR ECONOMY.

7. WHAT IS E-COMMERCE?
• IT ALLOWS EVEN THE SMALLEST BUSINESS TO REACH
A GLOBAL AUDIENCE WITH ITS PRODUCT OR
MESSAGE WITH MINIMAL COST.

8. WHAT IS E-COMMERCE?
• BUYING AND SELLING OF GOODS AND SERVICES, THE TRANSFER
OF FUNDS, AND EVEN THE EXCHANGE OF IDEAS

9. E-COMMERCE FUNCTIONS
• EFFECTS OF GLOBALIZATION AND E-COMMERCE
• DIGITAL DIVIDE
• INTELLECTUAL PROPERTY RIGHTS
• TARIFFS AND TAXES

10. DIGITAL DIVIDE EFFECTS OF GLOBALIZATION
AND E-COMMERCE
• IN THE US.. • 180 MILLION PEOPLE IN THE US USE THE
INTERNET AT LEAST ONCE PER MONTH. • IN 2005
THERE WERE APPROXIMATELY 1.08 BILLION PEOPLE
WORLDWIDE WHO USED THE INTERNET AT LEAST ONCE
A MONTH. THIS GREW TO 1.6 BILLION IN 2010. • THE
ONLINE POPULATION HAS HIT 73% OF ALL U.S. ADULTS.
• THE AVERAGE INCOME OF INTERNET HOUSEHOLDS IS
OVER $72,744, MAKING THE INTERNET USER A VERY
ATTRACTIVE CUSTOMER FOR YOU TO TARGET.

11. IN DEVELOPING COUNTRIES…
• THERE IS RISK OF LEFT BEHIND IN THE INTERNET
ECONOMY

12. IN DEVELOPING COUNTRIES…
• • MANY PEOPLE DO NOT HAVE ACCESS TO THE
INTERNET. • E.G. EXCLUDING SOUTH AFRICA,
THERE IS ONE INTERNET HOST FOR EVERY
80,000 PEOPLE IN SUB-SAHARAN AFRICA WHILE
IN INDIA 55,000 PEOPLE.

13. INTELLECTUAL PROPERTY RIGHTSEFFECTS OF GLOBALIZATION AND E-COMMERCE
• COPYRIGHT IS A LEGAL TERM DESCRIBING RIGHTS
GIVEN TO CREATOR FOR THEIR LITERARY AND
ARTISTIC WORKS.
• BY GRANTING AUTHORS EXCLUSIVE RIGHTS, THE
PUBLIC RECEIVES THE BENEFIT OF LITERATURE AND
MUSIC AND OTHER CREATIVE WORKS THAT MIGHT
NOT OTHERWISE BE CREATED OR DISSEMINATED.

14. THE INTERNET AND COPYRIGHT ISSUES
• THE INTERNET POSSES A THREAT TO
COPYRIGHT LAW, ESPECIALLY IN THE AREA
OF ILLEGAL MUSIC COPYING AND
DISTRIBUTION.

15. COPYRIGHT ISSUES
• WHAT IS SCOPE OF PROTECTION IN DIGITAL
ENVIRONMENT INVOLVING HOW RIGHTS ARE DEFINED
AND WHAT EXCEPTIONS AND LIMITATIONS ARE
PERMITTED?
• WHAT IS JURISDICTION AND APPLICABLE LAWS?
• HOW RIGHTS ARE ENFORCED AND ADMINISTERED?

16. TARIFFS AND TAXES EFFECTS OF
GLOBALIZATION AND E-COMMERCE
• FORECAST: WORLDWIDE ONLINE TRADE
GROWTH, 2002 TO 2006 SOURCE: FORRESTER
RESEARCH INC.WWW.FORRESTER.COM HENCE,
THERE IS LEGITIMATE CONCERN BY
GOVERNMENTS, ESPECIALLY DEVELOPING
COUNTRIES, OVER POTENTIAL EROSION OF THEIR
TAX BASE RESULTING FROM E-COMMERCE.

17. HOW TO COLLECT TARIFFS AND TAXES ON
CROSS BORDER E-COMMERCE?
• SO FAR, NO NATIONAL OR INTERNATIONAL
LEGISLATION

18. IMPLICATIONS?
• ONE CONCERN IS THE POTENTIAL LOSS IN TAX AND
TARIFF REVENUES RESULTING FROM E-COMMERCE,
WHICH ACCOUNT FOR SIGNIFICANT SHARES OF
GOVERNMENT BUDGETS IN MOST COUNTRIES.
• •THIS IS OF PARTICULAR CONCERN TO DEVELOPING
COUNTRIES, WHERE IMPORT DUTIES COMPRISE HIGHER
SHARES OF GOVERNMENT REVENUE AND A SHIFT TO
OTHER REVENUE SOURCES IS ECONOMICALLY LESS
FEASIBLE.

19. ARE YOU PURCHASING GOOD OR SERVICE?
• GOODS IMPORTED TRADITIONALLY REGARDLESS
OF ORDER METHOD FALLS UNDER GATT WHICH
SUBJECT TO IMPORT DUTIES.
GOODS PURCHASED AND DOWNLOADED ONLINE IS
UNDER GATS WHICH BANNED FOR IMPORT DUTIES
BUT MIGHT CROSSED BORDER MANY TIMES

20. SYNTHESIS
• GLOBALIZATION WITH THE HELP OF INFORMATION TECHNOLOGY IS EVIDENTLY GROWING AND
INEVITABLE.
• THOUGH EFFECTS IS GREAT ON POSITIVE SIDE, THREATS AND IMPLICATIONS ARE MORE LIKELY TO
APPEAR AND IT OBVIOUSLY AFFECTS DEVELOPING COUNTRIES. DIGITAL DIVIDE, COPYRIGHT AND
COLLECTION OF TARIFFS AND TAXES ARE AMONG THEM.

21. DIGITAL DIVIDE TO FILL
• CURRENTLY, THERE IS HUGE GAP THAT HAS TO BE FILLED IN DIGITAL DIVIDE.
• THE NUMBER OF INTERNET USERS IS CONSTANTLY RISING BUT NOT ENOUGH TO CATCH UP WITH THE
NEW ECONOMY IMPOSED BY GLOBALIZATION.
• TO ADDRESS THE ISSUE ACCESS TO COMPUTERS AND THE OTHER HARDWARE AT WORLD PRICES –
REMOVE EXCESSIVE IMPORT DUTIES, EFFICIENT, LOW-COST TELECOMMUNICATIONS AND TRAINING ARE
NECESSARY.

22. TARIFFS AND TAXES
• THE ON-LINE TRADE IS BECOMING CLEARLY GROWING BIGGER AND THE HUGE MAJORITY OBVIOUSLY
INVOLVES TRADE IN SERVICES.
• THE ABSENCE OF POLICY ON COLLECTION OF TARIFFS AND TAXES ON E-COMMERCE TRANSACTIONS
COULD HURT THE GOVERNMENT REVENUES ESPECIALLY DEVELOPING COUNTRIES.
• ANOTHER ISSUE IS CLASSIFICATION OF ELECTRONIC PRODUCTS WHICH HAVE PHYSICAL COUNTERPART
WHEREIN THE LATTER IS DUTIABLE .

23. THANK YOU