ICT Policies & Global Supply Chain Penetration in Developing Countries
WSIS Facilitation Meeting on« E-Business and E-Employment »UNCTAD, ITC and ILOPalais des Nations , 24 May 2007
Claudine Bichara de OliveiraneTune, Executive Director (Brazil)
| Claudine Bichara de Oliveira | neTune Ltd, Brazil2
ICT Policies & GSC Penetration in Developing Countries
Plan
• Global Supply Chains in Developing Countries– How it Works?– Main Obstacles– ICT Requirements and Trends
• Policies & Practices in Latin America– Business Environment Policies– ICT related Policies and Practices– Innovation and IT Adoption by SMEs
• General Assessment
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ICT Policies & GSC Penetration in Developing Countries
Global Supply/Value Chains: What is it?
“Global Value Chains cover a full range of interrelated productive activities performed by firms in different geographical locations to bring out a product or a service from conception to complete production and delivery to final consumers”
Global Value chains for Building National Productive Capacities UNCTAD – TD/B/COM.3/79
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ICT Policies & GSC Penetration in Developing Countries
GSC: How it Works?
Competitiveness based on cost reduction through:
• Just-in-time manufacturing
• Cost of labour in developing countries
Manufacturerss Distributors Retailers Consumers Suppliers
Competition between chains Source: VOLLMANN, T.E., CORDON,C. Making supply chain relationships work . M2000 Business
Briefing, n.8, Lausanne , IMD, 1996.
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ICT Policies & GSC Penetration in Developing Countries
Attractive Factors to FDI
83%
54%
52%
43%
41%
30%
29%
28%
23%
23%Access to export market
Local Government Support
HR Cost & quality
Profit Repatriation
Quality of Infrastructure
Presence of Competitors
Macro-Economic Stability
Legal Environment
Political Stability
Market Share
Source: A. T. KEARNEY
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ICT Policies & GSC Penetration in Developing Countries
Global Competition Challenges
For TNCs
• Management• Real time data sharing• Delivery Delays• High demand on technology• Infrastructure
For SMEs
• Economic Globalisation /New Markets and Competitors
• New Products and Services• Speed of Change• Exponential Multiplication of
Information • Production Capability
ICT: Key Ingredient to Enhance Competitiveness
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ICT Policies & GSC Penetration in Developing Countries
Main Obstacles in Developing Countries
• Lack of strategic vision and/or concrete actions
• Red Tape and Informal economy
• Lack of Venture Capital
• Lack of technology infrastructure and logistics
• Human Resources Capabilities
• Legal Framework
- Taxes- Consumer rights- Intellectual property- Self-regulation
- Telecommunications- Security (payment, delivery…)- Electronic contracts and signatures- Internet crimes
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ICT Policies & GSC Penetration in Developing Countries
ICT Requirements & Trends
• Ubiquitous Communication– High Speed– Wireless Technology– IPv6
• Interoperability and Convergence– Multi-channel operation– XML language
• Management Support Applications– SCM applications– PLM (Product Life Cycle Management)
• Security, Confidence and Trust Aplications and Services
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ICT Policies & GSC Penetration in Developing Countries
ICT Trend - Example
• RFID - Radio Frequency Identification Technologyfor contactless identification of objects.– Barcode: product identification
– Tag: product description (what it is, where it has been, when it expires ..)
– Antenna: always turned on, wirelessly
– Biosensor chip: information on physical condition of materials in transit
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ICT Policies & GSC Penetration in Developing Countries
Business Environment Policies
• Infrastructure: Transport, Warehousing, Logistics
• Regional/Int’l Trade Agreements
• Free Trade Zone• Tax incentives• Financial system; Royalty
remittances & loans• Venture Capital and funds• Public Private partnership• SMEs competitiveness
• HR: Development of capabilities & educational system
• Entrepreneurship and entrepreneurial culture
• Simplification of bureaucracy• Intelectual property,
Trademarks• Industrial Clustering• International Standards
adoption • Arbitration system adoption
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ICT Policies & GSC Penetration in Developing Countries
ICT Related Practices and Policies
• Telecom privatisation• National Strategy for ICT &
Development• Technology clusters• FOSS• E-Gov Policies: online
services & e-procurement• Skill development
– Public Awareness– Technical support training– High level IT education
• E-Business enabling environment– PKI: data protection, digital
signatures & certification– Interoperability of PKI oper. – Acceptance of digital
transactions– Business data online
validation & verification– Transport & logistics – E-payment– Customs automation– Self regulation for high
quality of online services
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ICT Policies & GSC Penetration in Developing Countries
Innovation and IT Adoption among SMEs
• Tax incentives to stimulate IT adoption, purchase & production
• Funding for R&D and innovation• University - Enterprise cooperation• E-network / linkage to int’l iniciatives• Business Telecenters
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ICT Policies & GSC Penetration in Developing Countries
Mexico: “Innovation for Competitiveness” Programme
• Business Innovation Programme / CONACYT + World Bank– Consortia and research networks
– Venture capital fund
– Pre-competitive fund
– Sectoral funds
– Researchers and technologists in industry
• HR: Financing scholarships Programme / CONACYT
• Technology and innovation policy framework + international integration
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ICT Policies & GSC Penetration in Developing Countries
Chile: Customs Modernization / ISIDORA
• Integration of Customs procedures with those of other public and private participants of the international supply chain such as:– Other Government agencies (Single-Window)– Seaports– Warehouse administrators– Shippers– Transport agents– Consolidators
Internet-Integrated Systems for the Development of Customs Operations and Regulations
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ICT Policies & GSC Penetration in Developing Countries
What is Brazil doing ?
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ICT Policies & GSC Penetration in Developing Countries
Brazil : Governmental Programs
• Governmental Programs towards technological development and innovation adoption in the private sector (specially among SMEs)
– PAC: Program of Acceleration of Growth– PROGEX: Program of Technological Support to Exportation – PITCE: Industrial, Technological Policies & Foreign
Commerce – PROTEC: Brazilian Society Technological Pro-Innovation– Program for the Development of the national industry of Sw &
related services– Profarma: production, R,D&I for cies of National control
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ICT Policies & GSC Penetration in Developing Countries
Brazil : Financial support
– Fiscal exemption: Lei do Bem
– Wages: PDTI; PDTA,for R&D&Inovation, and University/enterprise cooperation: PAPPE, RBT
– Funding: Pró-Inovação (technology for supply chains); Juro Zero (inovation in SMEs)
– Private Equity and Venture Capital: Inovar, Bovespa Mais, Forum Brasil
– 16 sectoral funds
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ICT Policies & GSC Penetration in Developing Countries
Brazil : Enhancing Online Services
• ICP-Brasil / PKI• E-Ping / Interoperability• FOSS• SPB / Sistema de Pagamento Brasileiro• SISCOMEX – Sistema Integrado de Comercio Exterior + Export
Fácil Web• Sinmetro & ABNT (Certification) procedures via WEb• NF-e : Nota Fiscal Eletrônica• Procomex: customs modernization• BraziltradeNet• Business Telecenters into SMEs Clusters
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ICT Policies & GSC Penetration in Developing Countries
General Assessment
• Red tape and high taxation• Security concerns• Informal economy not integrated,
micro enterprises still lacking in everything
• Connectivity in remote rural areas • Underdeveloped transportation
infrastructure• Lack of a “go abroad” culture• Latin America: distinct trading
groups, not a single trading block• More emphasis on import
substitution than international market integration
• Segmented efforts
• High potencial local market
• New multinationals emerging from the developing countries
• New business areas: biotech, energy, environment, etc. in traditional sectors empowered by ICTs
• Successful associative initiatives
Still remaining obstacles Assets
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ICT Policies & GSC Penetration in Developing Countries
How is Brazil in the picture ?
Goods Services
Lo
cal
Head
Rem
ot
e
CSN
Embraer
SADIA
Grandene
SMEs Clusters
Petrobras Pão de Açucar
Mendes Junior
Monsanto (soy)
Automotive PIM-Manaus(Assembling electronics)
Unilever (food)
Telmex
Telefônica
Tata
Walmart
Petrobras
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ICT Policies & GSC Penetration in Developing Countries
Role of International Organizations
• Situation analysis and strategy definition for e-trade practices
• International standards and norms
• Research and information exchange with other regions
• Capacity building at all levels
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ICT Policies & GSC Penetration in Developing Countries
Is the World Flat ?
“Globalization has bound people, countries, markets closer than ever, rendering national borders relics of a bygone era – or so we’re told”“[But] In fact, more than 90% of all phone calls, web traffic, and investment is local”
“Why the world isn’t Flat”- Pankaj Ghemawat, Harvard Business School Foreign Policy, March-april 2007 pp.54-60
“Obviously, the world is not yet flat. ….This is about trend lines and a scale of change brought on by these “flattening” new technologies.
Answer from Thomas L. Friedman – “The World is Flat” authorForeign policy, May-June 2007 p.4 - Letters
| Claudine Bichara de Oliveira | neTune Ltd, Brazil23
ICT Policies & GSC Penetration in Developing Countries
THANK YOU !
Rio de Janeiro, BrazilTel/Fax: +55 21 2511-3129
www.netune.com.br