Inclusive e-commerce as catalyst for future economic growth: Alibaba’s Jack Ma

Jack Ma, founder and Chairman of the Chinese e-commerce giant Alibaba – and the United Nations’ Special Advisor for Youth, Entrepreneurship and Small Business at UNCTAD — inspired audiences at UNCTAD’s E-Commerce Week on the theme of inclusive e-commerce.

As one of the most anticipated events of the week, the Digital Transformation for All: Empowering Entrepreneurs and Small Business high-level panel discussion on April 25 debated actions necessary for United Nations agencies, governments, international organizations, and businesses to ensure that e-commerce is inclusive and benefits all, especially those in developing counties.

Jack Ma, well-known for his successes in online trade and mobile payments said that e-commerce has enormous potential to unlock growth in emerging markets.

“What if globalization can support new businesses?” Mr Ma asked a packed crowd at the United Nations office in Geneva. “What if we can make globalization [work] by making it more inclusive for anyone with a mobile phone or a cell? Trade is still the solution to solve job creation in the next 20 years.”

Ma said e-commerce can boost growth in developing countries by supporting small and medium enterprises SMEs and entrepreneurs in the new digital economy.

“E-commerce is designed for developing countries. E-commerce is not designed for developed countries,” said Ma. “E-commerce is designed for those companies that are not able to compete with big companies.”

However, Mukhisa Kituyi, the Secretary-General of UNCTAD warned that globalization has not benefited all equally and that more efforts are needed to ensure everyone is included in the benefits of e-commerce and global trade. “Over the past 20 years we have witnessed the mistakes of … thinking that globalization will fix all problems; thinking when the tides rise, the boats will rise. This has not been the case” said Mr. Kituyi.

Much of the discussion on the inclusive potential of e-commerce boiled down to the conclusion that in order for e-commerce to be truly inclusive, we need inclusive information and communication technology (ICT) infrastructure that enables all people to access the online world.

Increased connectivity for inclusive growth

Although the Internet and other ICT infrastructures are fundamental to the facilitation of e-commerce activities and the development of flourishing e-marketplaces, the digital divide between developed and underdeveloped countries persists. Many developing regions still face infrastructure challenges such as low Internet penetration, high access costs and unstable connections.

Despite these challenges, the e-commerce sector in emerging markets remains strong and the outlook for future growth is promising. According to the Emerging Consumer Survey 2017 by Credit Suisse, online retail spending in emerging economies is around USD 1 trillion today and is projected to exceed USD 2.5 trillion by 2025. The rise of e-commerce however, will depend on increased connectivity for continued growth.

Related: G20 digital economy meeting highlights key role of ICTs       

As the e-commerce sector continues to grow, future development of e-commerce must include investments in infrastructure, participants agreed.

“We need ICT infrastructure,” said ITU Secretary-General Houlin Zhao. “Still today more than 55% of people are not connected online.”

E-commerce has great potential to boost labor markets by stimulating inclusive growth and creating job opportunities. China’s State Information Center estimates that the e-commerce sector has created 10 million jobs, in other words, about 1.3% of the country’s employment.

One of the world’s other massive and fast-growing emerging markets, India, is now poised for an e-commerce boom as well, thanks, in part, to the work of the government to create a digital, biometric ID infrastructure linking citizens to digital payment capabilities. (See our video below for more.)

SMEs as the engine for future growth

Entrepreneurs and SMEs are a significant contributor to emerging economies and provide most job opportunities in these markets.

As governments and regulators debate the best ways to foster e-commerce and to support small business, Jack Ma advised that regulation should not stifle innovation, “We cannot discipline the baby before it was born. We are experts on yesterday, not on tomorrow,” he warned.

Related: How Estonia became a leader in tech startups and entrepreneurship

As e-commerce is a winning solution for small businesses and SMEs, Ma argued that we need simple and harmonized rules and laws that will effectively support SMEs and cross-border trade and help countries to join the wave of e-commerce.

“Those countries that catch the wave are powerful, those countries that cannot catch the wave are disappearing. So for the next 30 years, let’s pay attention to this technology… Let’s pay attention to those companies with less than 30 people, the small businesses. Let’s pay attention to the people who are under 30 years old, because they will be the first driver.”

By: Theadora Mills (@theadoramills) ITU News

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