The Internet revolution has been the driving force behind the expansion of electronic commerce (e-commerce, EC) beyond a handful of companies and national boundaries to embrace both domestic and international trade.
Business-to-business information s...
The Internet revolution has been the driving force behind the expansion of electronic commerce (e-commerce, EC) beyond a handful of companies and national boundaries to embrace both domestic and international trade.
Business-to-business information systems, such as Electronic Data Interchange (EDI), are a case in point. The world is witnessing the emergence of a new concept of "cyber trade(CyberTrade)", which refers to cross-border business-to-business (B2B) e-commerce. Studies and policy formulation exclusively related to CyberTrade are currently underway in Korea, as a means to complement Korea's heavy dependency on trade.
The general purpose of this study is three-fold: to review existing CyberTrade theories; to study CyberTrade empirically; and to suggest relevant policies, aimed at promoting trade and maintaining a sound balance of payments under the global free trade regime. The more specific purposes of this study are as fellows:
Firstly, define the meaning and specifies of "CyberTrade." Compare CyberTrade with e-commerce, and clarify the Korean position on international e-commerce issues.
Secondly, analyze existing theories on CyberTrade. Define where CyberTrade stands and shed light on its prospects. Assess and predict CyberTrade's effect on the overall economy.
Thirdly, study empirically how CyberTrade is linked with corporate management strategies, CyberTrade infrastructure, and CyberTrade experts.
Fourthly, suggest policies to promote CyberTrade, based on theory analysis and empirical studies.
This study largely consists of theory analysis and empirical studies. The former involves defining CyberTrade based on the assessment of preceding studies, comparing CyberTrade with e-commerce, and establishing a theoretical basis for case studies. The latter involves a survey on 500 companies and data analyses.
CyberTrade refers to "trading physical and digital goods over cyberspace by means of IT technology, such as the Internet or EDI, or digitalizing trade procedure"
The differences between CyberTrade and e-commerce are as follows:
Firstly, CyberTrade is a specific form of e-commerce, limited to B2B transactions across borders.
Secondly, e-commerce emphasizes the content of a transaction, while CyberTrade focuses on the procedure of trade, and aims at the enhancement of trade productivity by going digital.
Thirdly, e-commerce focuses on a microeconomic management strategy aimed at business innovation. By contrast, CyberTrade centers around macroeconomic policy aimed at sharpening the international competitiveness of trade.
The results of this study are as follows.
Firstly, the most essential factor for implementing CyberTrade is the leadership of the CEOs. Therefore, it is an imperative to conduct full-scale education and training programs designed to change the mind-set of CEOs.
Secondly, creating content is another important factor for CyberTrade. In this sense, effective government support is essential for SMEs to open their homepages and for portal trading sites to be installed.
Thirdly, government support is crucial in forging CyberTrade infrastructure and nurturing experts. Sharpening the international competitiveness of trade requires the swift implementation of CyberTrade. To this end, government support constitutes an integral element in establishing infrastructure and investing in human resources.
Fourthly, considering the supply of CyberTrade experts is very short, it is essential to amplify education programs for CyberTrade experts-supporting a refresher course of firm or reforming of formal school education, for instance.
Fifthly, those businesses well equipped with an EDI system have a competitive advantage in internet trade as well. Therefore, facilitating B2B e-commerce requires policies focused on supporting SMEs, which lack EDI systems.
Sixthly, the size of a company or the degree of competition need not be an obstacle to implementing CyberTrade. The ubiquity of the Internet and EDI has made CyberTrade a necessity for all businesses.
Seventhly, division of labor should not impede the introduction of CyberTrade. Digitalization is an enterprise-wide phenomenon, which transcends all boundaries between jobs.
Eighthly, the processing speed of a LAN does not hamper the implementation of CyberTrade, particularly in the initial stages.
Ninthly, Human Resource(HR) education and training in this area need to be highlighted. Korean companies still fail to view HR training as a productive investment.
Comparison between the existing theories and the results of this study suggests the fellowing.
Firstly, innovation of CEOs is shown to constitute an integral part for CyberTrade.
Secondly, price and quality competition turns out to be fiercer over the Internet.
Thirdly, information superhighway is rapidly spreading, and are boosted by the installation of IT infrastructure.
Fourthly, while the number of hompages are increasing, the pace is rather slow.
Fifthly, there is an ongoing shortage of experts in CyberTrade.
Sixthly, the use of EDI is rapidly gaining momentum. Based on the study results, the following policy measures are suggested.
Firstly, revise the Foreign Trade Act as the basic law to support CyberTrade. Ensure that support for CyberTrade is included in the trade-related legal framework by acknowledging that digital goods are traded over the cyberspace as normal trade product items and by stipulating rights and obligations regarding CyberTrade.
Sencondly, forge create a CyberTrade infrastructure. Install an information superhighway as early as possible. Establish a CyberTrade intermediary agency in charge of authentication, in order to reduce the risks associated with anonymity over cyberspace. Develop and publicize laws and regulations designed to facilitate trade automation.
Thirdly, enhance SMEs' capacity in CyberTrade. Aim to support SMEs' Internet marketing activities, assist SMEs to open homepages and establish portal trading sites. Provide information on overseas markets, by installing a portal site on export markets, while stationing personnel to communicate overseas market information. induce local businesses' digitalization by running education programs for SME managers, while implementing a pilot project designed to provide an integrated package-ware for CyberTrade.
Fouthly, upgrade training and education programs for CyberTrade experts. Formulate a HR education and management plan, based on on-site survey results. Create link between industries and universities by, for instance, supporting the CyberTrade incubator projects at universities. Provide a tole-education program over the Internet for SME employees. Introduce a CyberTrade expert certification system.
Fifthly, establish Korea's position on international e-commerce issues. The government should cope with e-commerce issues in a way that enhances Korean companies' competitiveness in international B2B e-commerce. CyberTrade is a part of e-commerce that requires both market-driven development and policy support that is designed to ensure a sound balance of payments and strong international competitiveness.
Sixthly, private and government systems should be improved to promote efficient CyberTrade. Because CyberTrade is a newly emerging sector in which various private interests are involved, it is needed to integrate networks in order to progress government policies. And, some problems such as discord among ministries are likely to happen, relevant ministries should be induced to participate in the Committee on establishment of trade infrastructure, which was set up based on the Act on establishment of trade infrastructure, and their coordinating functions should be strengthened.