Electronic commerce: Trends in Electronic Commerce
A number of trends are evident in relation to electronic commerce that will affect the world economy. First, the value and number of digital products (e.g., music, books, and videos delivered electronically rather than physically) is likely to continue to increase. Second, communications technologies are gradually converging. If this trend continues, previously separate technologies such as the telephone, television, and the Internet may eventually be considered part of a single communications network. This would result in traditional media companies (such as television broadcasters) being compelled to shift to a more interactive, Internet-based model, and online vendors would benefit from greater reach to mobile and entertainment devices. Third, the Internet is continuing to affect consumer behavior. For example, consumers are spending more time and money online, and the value of their online purchases is increasing as they gain experience with online shopping andmove to higher speed Internet. Fourth, transactions using notes and coins will continue to decline in favor of transactions using digital money. (Notes and coins make up only a small fraction of the total value of economic transactions, but they still comprise a significant proportion of the number of transactions.) Fifth, the growth in the business process outsourcing market has the potential to alter materially the structures and costs associated with many conventional businesses. Outsourcing specialized tasks to low-cost providers is becoming increasingly feasible, if not necessary, to compete on a global scale. This service, provided mainly by developing countries with cheaper labor, also has the potential to aid in integrating such countries into the global trading system.