Business Key to Internet Use in Poor Nations

Though internet use is rising rapidly in the developing world, electronic commerce will not take off without a flourishing business-to-business sector, the United Nations Conference on Trade and Development said on Monday.

In its annual e-commerce and development report, Unctad said B2B - which accounts for 95 per cent of all online transactions - was handicapped in poor countries by inadequate infrastructure and a shortage of skilled workers.

"The route to a prosperous B2B sector, and its attendant benefits for the economy at large, lies in joining regional and global supply chains," Unctad said. It cited forecasts suggesting more than a quarter of all sales in the US, mostly B2B, will be traded online by 2006. For Europe the proportion could be nearly 20 per cent.

Internet use worldwide soared 30 per cent last year, with a third of all new users in developing countries. In Asia and Africa the number jumped by 46 per cent, followed by Latin America with a 36 per cent rise.

This compared with growth of a third in European users and a 14 per cent increase in North America, where half the population now use the internet.

Unctad said Asian and Pacific countries were leading in deploying broadband technologies and providing a skilled, educated workforce to meet a growing demand for outsourcing by foreign companies. This region accounted for nearly half the world's digital subscriber lines and was adding 50m new internet users a year.

In Latin America multinational companies, especially in the car industry, were playing a big role in B2B e-commerce, and had made online car sales to consumers the biggest item in business-to-consumer deals.

However, in Africa, where less than 1 per cent of the population has internet access, e-commerce is struggling to take off.