Introduction to the course on digital commerce and emerging technologies

Event report

[Read more session reports from the UNCTAD E-Commerce Week 2018]

The session featured the launch of  the publication Digital Commerce Capacity Development: Preparing Trade Professionals for the Challenges of the Digital Economy.

The report was published by DiploFoundation, in collaboration with CUTS International Geneva, the International Trade Centre (ITC), the United Nations Conference on Trade and Development (UNCTAD), and the Geneva Internet Platform (GIP). Download your copy.

Prof. Jovan Kurbalija (Director, DiploFoundation and Head, Geneva Internet Platform) opened the session by stating that developing trainings on digital commerce is a very complicated task not only because such a topic bears a great degree of uncertainty and changes quickly, but also because it demands a twofold approach, considering core trade issues on the one hand and the broader digital issues on the other. He reminded the audience about the World Bank’s ‘Digital Dividends Report’ which has the merit of ‘waking us up from digital sleepwalking’ as it clearly addresses the mismatch between expectations and reality. In order to ground the discussion in evidence, Kurbalija explained that the Digital Commerce course has focused on two important flows in the delivery of digital services: the flow of data and the flow of money.

Dr Marion Jansen (Chief Economist, International Trade Centre (ITC)) pointed out that knowledge of a fast-changing topic and strict time limitations make the work of trade negotiators very difficult. She warned against the tendency for negotiators either to completely ignore complex subject matters or to jump on the hype of the discussion while understanding is still lacking. She advised the audience to strive to understand as much as possible complex matters such as those related to digital commerce in order to be able to make rational, evidence-based, and well-founded decisions.

Mr Rashid S. Kaukab (Executive Director, Consumer Unity & Trust Society (CUTS) International Geneva), thanked the ITC and the UK Foreign Commonwealth Office for their support in the realisation of the course. He explained that the course targeted specifically the knowledge gap arising from the fact that discussions regarding digital commerce tend to be restricted within the small community of experts that fully understands the issues at stake. In particular, he added that the course’s modules also focused on the understanding of e-commerce issues in trade agreements and considered that the applicable legal framework comprises those provisions related to the following:

1. Market access and customs duties
2. Intellectual property, protection of personal information, consumer protection
3. E-signatures and digital authentication

Dr Angel Gonzalez-Sanz (Chief, Science, Technology and Information and Communications Technology (ICT) Branch, Division on Technology and Logistics, United Nations Conference on Trade and Development (UNCTAD)) noted that the digital economy has existed for a few decades and some of the initial positive expectations are now grounded. The precious value added by this course lies in the fact that it offers a safe and free space for discussing the promises as well as the challenges of digital commerce.

Mr Julien Grollier (Programme Officer, CUTS International, Geneva) talked about the technical aspects of digital commerce. He first mentioned that data flows facilitate access to market information and reduce the costs of transactions thus connecting consumers and firms on the global scale. He explained that data flow comprises three layers:  the interface (i.e. content and applications such as the web browser), the transport layer (through protocols such as Transport Control Protocol/Internet Protocol (TCP/IP) or the Domain Name System (DNS)) and the physical layer namely telecommunication infrastructures. He then illustrated six different business models incorporating data flows:

1. Internet access through a subscription fee
2. Computer software and services
3. Cloud service model: fee demanded for storage space online
4. Digital products (e.g. books, themes, music): subscription fee
5. Internet data model (e.g. Facebook): collection through user data and use of advertisements
6. Platforms (e.g. Airbnb, Uber): demanding a transaction fee as intermediaries.

Mr Quan Zhao (Trade Policy Advisor, ITC) covered the policy aspect regarding digital commerce. He considered that competition on the market is mainly targeting consumers’ attention. In this regard, he noticed that some commentators refer to Gross Domestic Time (GDT) rather than Gross Domestic Product (GDP) while speaking of economics because in a market where production is increasingly being automated, the focus is not on production but rather on how time and money are spent.  Referring to ITC’s report on e-commerce, he then explained that e-commerce offers a possibility for more inclusive trade: the data suggests that 82% of the enterprises that engage solely in cross-border e-commerce are small and medium in size. Furthermore, e-commerce enables micro enterprises in Africa to trade as such enterprises are those that resort to e-commerce the most. Despite this positive outlook, he also described the current challenges hindering developing countries’ participation in global e-commerce. According to the phase of creation of an enterprise, he listed the following:

1. In the establishment phase, most of the difficulties for micro, small, and medium enterprises (MSMEs) lay in lack of online visibility and technical skills
2. International e-payment: the major challenge is the missing link between third party e-payment service providers and local banks
3. Cross-border delivery: costly postal and courier delivery (costs are almost twice as much as in developed countries)
4. Aftersales: high rate of merchandise return

Mrs Neema Manongi (First Secretary, Permanent Mission of Tanzania to the UN in Geneva) provided the participant’s point of view to the discussion. As a former student of the course, she appreciated the blended format, namely, the combination of online work and weekly in-situ sessions, as the best way to integrate flexibility into a course. She also valued the up-to-date insights provided by the course which ‘have equipped me to better understand parties’ positions at a negotiating table’.

Ms Marilia Maciel (Digital Policy Senior Researcher, DiploFoundation) explained the typical weekly cycle of the course. The small class is given readings and references at the beginning of each weekly module, covering a specific issue. During the online part, the class has time to read, annotate and comment on the given materials and exchange with other students and the faculty members. This online activity allows for flexibility and is the preparation for the weekly meeting. Once a week, after the online activity, the faculty and the students meet to deepen the exchange on the main trends that have emerged during the online part. In this course, the weekly modules cover e-commerce-related issues answering ‘what’ (data flow, internet architecture, data package routes, and establishment of jurisdiction), ‘why’ ( i.e. its relation to e-commerce and cross-border trade) and ‘how’ (especially vis-à-vis regulations). 

Ms Marie Sicat (Associate Economic Affairs Officer, ICT Policy Section, Division on Technology and Logistics, UNCTAD) referred to UNCTAD’s report and said that the digital economy is growing rapidly and is affected by the introduction of new technologies such as the Internet of Things (IoT), artificial intelligence (AI) and big data. She stated that the course covered precisely the definition of such technologies as well as their areas of application. In particular, the modules focused on the main policy questions that arise from such technologies and their interplay with development. For example, with big data, companies can better analyse competitors’ prices and price trends in real time, whilst AI can help in creating a more personalised customer experience and devise a more efficient sale process.

By Marco Lotti