in Libya A thesis submitted to the University of Wales Institute, Cardiff for the degree of Doctor of Philosophy Cardiff School of Management
Abdalla Hamed April, 2009
II DECLARATION
I hereby declare that this dissertation, submitted in partial fulfilment of the requirements for the degree of Doctorate of Philosophy and entitled E-commerce and Economic Development in Libya represents my own work and that, to the best of my knowledge and belief, it contains no material previously published or written by another person.
Signed.(Candidate)
Date..
STATEMENT 1
This thesis has not already been accepted in substance for any degree and is not being concurrently submitted in candidature for any degree.
Signed.(Candidate)
Date..
STATEMENT 2
I hereby give consent for my thesis, if accepted, to be available for photocopying and for inter library-loan, and for the title and summary to be made available to outside organizations
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Date.. III Acknowledgment In the end of this research I would like to emphasize my appreciation to:
My parents who support me financially and provided me the confidence to finish this dissertation
My supervisory team for guiding me through my journey
People who agreed to be interviewed and who accepted to answer the research questionnaire.
Brother, sisters and friends who have been waiting for my work achievements
To all, thank you very much.
IV Contents
Abstract ................................ ................................ ................................ ................................ ..................... XII Abbreviations ................................ ................................ ................................ ................................ ...........XIII Research outcomes................................ ................................ ................................ ................................ ... XVI PhD Consortium................................ ................................ ................................ ................................ ........ XVI Conferences papers ................................ ................................ ................................ ................................ ... XVI Seminars................................ ................................ ................................ ................................ .................... XVI Business Seminar ................................ ................................ ................................ ................................ ...... XVI
Chapter one: Introduction 1.1 Background ................................ ................................ ................................ ................................ ............. 3 1.2 Economic development and e-commerce ................................ ................................ .............................. 3 1.3 Research problem................................ ................................ ................................ ................................ ... 5 1.4 Aim and objectives ................................ ................................ ................................ ................................ .. 5 1.5 Research method................................ ................................ ................................ ................................ ..... 6 1.6 Background of Libya ................................ ................................ ................................ .............................. 8 1.6.1 Geographical Location and Population ................................ ................................ ................................ . 8 1.6.2 History of Libya ................................ ................................ ................................ ................................ .... 9 1.7 Structure of the thesis ................................ ................................ ................................ ........................... 11
Chapter two: Economic development 2.1 Introduction................................ ................................ ................................ ................................ ........... 18 2.2 Background of Economic Development ................................ ................................ .............................. 18 2.3 Classification of Countries ................................ ................................ ................................ ................... 19 2.4 Economic Development Measurements ................................ ................................ .............................. 20 2.5 Theories of Economic Development ................................ ................................ ................................ .... 23 2.5.1 The Linear stages ................................ ................................ ................................ ................................ 24 2.5.2 Structural Change Theory ................................ ................................ ................................ ................... 26 2.5.3 The International-Dependence Revolution................................ ................................ .......................... 27 2.5.4 The Neo-Classical Counter-revolution................................ ................................ ................................ 28 2.6 Economic Development and Technology ................................ ................................ ............................ 29 2.7 Economic Development and ICT................................ ................................ ................................ ......... 32 2.8 Economic Overview of Libya ................................ ................................ ................................ ............... 37 V 2.8.1 Economy of the revolution:................................ ................................ ................................ ................. 37 2.8.2 The new economy approach................................ ................................ ................................ ................ 38 2.9 Summary................................ ................................ ................................ ................................ ................ 41
Chapter three: E-commerce 3.1 Introduction................................ ................................ ................................ ................................ ........... 47 3.2 Background ................................ ................................ ................................ ................................ ........... 47 3.2.1 Use of the Internet ................................ ................................ ................................ ............................... 47 3.2.2 Internet in developing countries ................................ ................................ ................................ .......... 48 3.2.3 Internet in Libya................................ ................................ ................................ ................................ .. 50 3.3 E-commerce................................ ................................ ................................ ................................ ........... 53 3.3.1 E-commerce categories ................................ ................................ ................................ ....................... 54 3.3.2 E-commerce in developing countries ................................ ................................ ................................ .. 57 3.3.3 E-commerce in Libya................................ ................................ ................................ .......................... 60 3.4 E-government ................................ ................................ ................................ ................................ ........ 62 3.4.1 E-Government in developing countries ................................ ................................ ............................... 65 3.5 M-commerce................................ ................................ ................................ ................................ ......... 66 3.5.1 Mobile commerce in developing countries ................................ ................................ ......................... 68 3.6 Payment Methods................................ ................................ ................................ ................................ .. 69 3.6.1 Payment in developing countries................................ ................................ ................................ ......... 71 3.7 Regulation and legislation ................................ ................................ ................................ .................... 73 3.8 E-commerce challenges................................ ................................ ................................ ......................... 74 3.9 Factors Influencing E-commerce Adoption................................ ................................ ........................ 77 3.10 Summary................................ ................................ ................................ ................................ .............. 81
Chapter four: Twoards a theoratical framework for E-commerce drivers and barriers 4.1 Introduction................................ ................................ ................................ ................................ ........... 87 4.2 Drivers and Barriers................................ ................................ ................................ ............................. 87 4.2.1 Cost ................................ ................................ ................................ ................................ ..................... 90 4.2.2 Payment Systems ................................ ................................ ................................ ................................ 92 4.2.3 Legislation and Regulation................................ ................................ ................................ .................. 93 4.2.4 Infrastructure................................ ................................ ................................ ................................ ....... 95 4.2.5 Culture and Religion ................................ ................................ ................................ ........................... 96 4.2.6 Government ................................ ................................ ................................ ................................ ......... 97 4.2.7 Employment ................................ ................................ ................................ ................................ ........ 99 4.2.8 Competition................................ ................................ ................................ ................................ ....... 100 4.2.9 Traditional business ................................ ................................ ................................ .......................... 101 4.2.10 Economic Activities ................................ ................................ ................................ ........................ 102 4.3 The E-commerce Drivers and Barriers Model (1) ................................ ................................ ........... 104 4.5 Summary................................ ................................ ................................ ................................ .............. 107 VI
Chapter seven: The three-quarter moon chapter 7.1 Introduction................................ ................................ ................................ ................................ ......... 233 VII 7.2 Drivers and barriers ................................ ................................ ................................ ........................... 233 7.3 The three-quarter moon model (specific to Libya) ................................ ................................ .......... 239 7.4 Action plan................................ ................................ ................................ ................................ ........... 242 7.4.1 Before e-commerce adoption ................................ ................................ ................................ ............ 242 7.4.2 During-adoption ................................ ................................ ................................ ................................ 246 7.4.3 After e-commerce adoption................................ ................................ ................................ ............... 249 7.5 The Three-Quarter Moon Model (General) ................................ ................................ ..................... 254 7.5.1 Capitalist approach................................ ................................ ................................ ............................ 255 7.5.2 Socialist approach ................................ ................................ ................................ ............................. 259 7.5.3 Technologically advanced countries ................................ ................................ ................................ . 259 7.5.4 Deploying the Three Quarter Moon Model ................................ ................................ ....................... 261 7.5 Summary................................ ................................ ................................ ................................ .............. 264
Chapter eight: Conclusion chapter 8.1 Introduction................................ ................................ ................................ ................................ ......... 270 8.2 Review of objectives ................................ ................................ ................................ ............................ 270 8.2.1 Reviewing the literature of Economic development ................................ ................................ ......... 270 8.2.2 Reviewing the literature of e-commerce ................................ ................................ ........................... 271 8.2.3Developing a theoretical framework to conceptualise e-commerce drivers and barriers ................... 272 8.2.4 Investigate practical drivers and barriers of E-Commerce and its impact on Libyas economy ....... 273 8.2.5 Develop an implementation plan for e-commerce adoption in Libya ................................ ............... 279 8.2.7 Develop a model to assist in E-Commerce adoption in Libya and consider how the model can be generalised for other developing countries ................................ ................................ ................................ 279 8.3 Contribution of the body of knowledge................................ ................................ ............................. 281 8.3.1 Contribution to theory ................................ ................................ ................................ ....................... 281 8.3.2 Contribution to Practice ................................ ................................ ................................ .................... 287 8.4 Limitations of the research................................ ................................ ................................ ................. 288 8.5 Recommendations ................................ ................................ ................................ ............................... 289 8.6 Future Research................................ ................................ ................................ ................................ .. 290
IX List of tables 2.1 Economic growth items ................................ ................................ ................................ ........................ 29 3.1 History of internet users ................................ ................................ ................................ ....................... 48 3.2 usage of internet in libya ................................ ................................ ................................ ...................... 51 3.3 charge of dial-up and ADSL in libya................................ ................................ ................................ ... 52 3.4 leasedline capacity and price................................ ................................ ................................ ................ 52 3.5 telephone line in libya ................................ ................................ ................................ ........................... 61 4.1 cost issues in literature................................ ................................ ................................ .......................... 90 4.2 payment issues in literature ................................ ................................ ................................ ................. 92 4.3 ligislation and regulation issues in literature ................................ ................................ ...................... 93 4.4 infrastructure issues in literature ................................ ................................ ................................ ........ 95 4.5 culture and religion issues in literature................................ ................................ ............................... 96 4.6 government issues in literature ................................ ................................ ................................ ............ 98 4.7 employment issues in literature ................................ ................................ ................................ ........... 99 4.8 competition issues in literature ................................ ................................ ................................ .......... 100 4.9 traditional business issues in literature ................................ ................................ ............................. 101 4.10 economic activities issues in literature ................................ ................................ ............................ 102 5.1 Research method techniques and outcomes................................ ................................ ...................... 118 5.2 Interview questions linked to e-commerce issues ................................ ................................ ............. 119 5.3 list of organisation interviewed................................ ................................ ................................ .......... 131 6.1 competition issues in Libya ................................ ................................ ................................ ................ 155 6.2 cost issues in Libya................................ ................................ ................................ .............................. 162 6.3 benefit of E-commerce................................ ................................ ................................ ........................ 167 6.4 culture issues in libya................................ ................................ ................................ .......................... 169 6.5 economic development issues in libya ................................ ................................ ............................... 175 6.6 employment issues in Libya ................................ ................................ ................................ ............... 179 6.7 goverment issues in libya................................ ................................ ................................ .................... 185 6.8 internet connection charges................................ ................................ ................................ ................ 188 6.9 comunications tools ................................ ................................ ................................ ............................. 190 6.10 infrastructure issues in libya................................ ................................ ................................ ............ 192 6.11 ligislation issues in libya ................................ ................................ ................................ ................... 198 6.12 payment issues in libya ................................ ................................ ................................ ..................... 206 6.13 traditional business issues in findings ................................ ................................ ............................. 210 X 6.14 Reasons of using E-commerce................................ ................................ ................................ .......... 220 7.1 before-adoption issues to libya................................ ................................ ................................ ........... 245 7.2 During-adoption issues to libya ................................ ................................ ................................ ......... 248 7.3 after-adoption issues to libya ................................ ................................ ................................ ............. 250 7.4 before-adoption issues (general) ................................ ................................ ................................ ........ 256 7.5 During-adoption issues (general) ................................ ................................ ................................ ....... 257 7.6 after-adoption issues (general) ................................ ................................ ................................ ........... 258 10.0 List of organisation interviewed ................................ ................................ ................................ ...... 317 10.1 competition issues in findings................................ ................................ ................................ ........... 321 10.2 cost issues in findings ................................ ................................ ................................ ........................ 325 10.3 culture issues in findings................................ ................................ ................................ ................... 328 10.4 economic activities issues in findings................................ ................................ ............................... 334 10.5 employment issues in findings................................ ................................ ................................ .......... 341 10.6 goverment issues in findings................................ ................................ ................................ ............. 344 10.7 infrastructure issues in findings................................ ................................ ................................ ....... 350 10.8 knowledge issues in findings................................ ................................ ................................ ............. 357 10.9 ligislation issues in findings ................................ ................................ ................................ .............. 361 10.10 payment issues in findings................................ ................................ ................................ .............. 364 10.11 securty issues in findings ................................ ................................ ................................ ................ 372 10.12 traditional business issues in findings ................................ ................................ ........................... 374 10.13 questionnaire questions and e-commerce issues................................ ................................ ........... 401
XI List of figures 2.1 economic development model based on it ................................ ................................ ........................... 36 3.1 internet usage 2007 ................................ ................................ ................................ ............................... 50 3.2 Factors of e-commerce adoption decision ................................ ................................ ........................... 79 4.1 e-commerce drivers and barriers (1)................................ ................................ ................................ . 105 6.1 reduction of adminstration work................................ ................................ ................................ ....... 179 6.2 Internet services providers ................................ ................................ ................................ ................. 190 6.3 E-commerce awarness ................................ ................................ ................................ ........................ 216 6.4 fear of securty................................ ................................ ................................ ................................ ...... 219 6.5 e-commerce drivers and barriers (2)................................ ................................ ................................ . 226 7.1 The four e-commerce actors................................ ................................ ................................ ............... 241 7.2 the adoption stages ................................ ................................ ................................ .............................. 252 7.3 the three-quarter moon model (specific to libya) ................................ ................................ ............. 254 7.4 the three-quarter moon model (general) ................................ ................................ ........................... 260 7.5 the classification model ................................ ................................ ................................ ....................... 263 XII Abstract This thesis develops a conceptual framework of the drivers and barriers to e-commerce adoption in developing countries such as Libya. One of the main drivers of economic development is technology. Technology adoption usually results in rapid economic growth, and rapid economic growth is usually accompanied by rapid structural change. It is now widely accepted by policy makers that e-commerce is at the centre of an economic and social transformation that is affecting all countries. E-commerce creates new economic and social landscapes. E-commerce enables producers in developing-country to overcome traditional business limitations.
The research process involves a mixed research approach. Firstly, 15 semi-structured interviews were conducted involving decision makers, government officials, managers and general employees regarding e-commerce and economic development in Libya. Secondly, a questionnaire was distributed across a population of 150 Libyan Internet users on a face- to-face basis.
There are many drivers and barriers to the adoption of e-commerce. Most issues (competition, cost, employment, economic development, government, infrastructure, legislation and regulation, payment system) could be drivers or barriers. These issues created the theoretical framework. All issues were examined in Libya, the research findings confirmed the effects of these issues on e-commerce adoption. Moreover, the research findings resulted in an amended theoretical framework by introducing two new issues (knowledge and security). Additionally, the literature on e-commerce drivers and barriers issues has been expanded.
The thesis concludes with a plan of action to assist Libyas government on e-commerce adoption. The plan of action is driven by four main actors (Government, technologically advanced countries, companies and e-commerce users). These four actors and the plan of action comprise the three-quarter moon model that encourages the fourth actor (e- commerce users) to complete the circle of adoption. The thesis concludes that the three- quarter moon model can be generalized to other developing countries and proposes a classification model for e-commerce adoption along with a formula of Internet involvement. The classification model classifies countries according to their technological advancement. The new classification groups countries into non-technologically advanced, less-technologically advanced and technologically advanced. XIII Abbreviations 3G Third Generation ADSL Asymmetric Digital Subscriber Line AR Al-Reiad Internet Caf ATM Automated Teller Machine AW Al-Wesam Internet Cafe B2B Business to Business B2C Business to Consumer BA Bader Al Hasse Group C2C Consumer to Consumer CBL Central Bank of Libya CI Concord Investment CPI Consumer Price Index DSL Digital Subscriber Line DVB-RCS Digital Video Podcasting- Return Channel by Satellite E-commerce Electronic commerce E-economy Electronic Economy E-government Electronic Government E-mail Electronic Mail E-procurement Electronic Procurement FDI Foreign Direct Investment XIV G2B/C Government to Business/ Consumer G-8 Group of eight industrial countries Gb Giga Bite GDP Gross Domestic Product GNI Gross National Income HDI Human Development Index ICT Information and communication technology ISP Internet Service Provider IT Information Technology Kb Kilo bite L.D Libyan Dinar LCB Libyan Commercial Bank LDCs Less Developed Countries LIB Libyanna LTT Libyan Telecommunication Technology M-commerce Mobile Commerce MEB Mobile Websites MIDS Matrix Information and Directory Services MOC Ministry of Commerce NGO Non-Governmental Organisations OC Oil Company OCC Oil and Construction Company XV OECD Organisation for Economic Cooperation and Development OLPC One Laptop Per Child OPEC Organisation of Petroleum Exporting Countries OPTC Organisation of postal and telecommunication Company PC Personal Computer PPP Purchasing Power Parity SMEs Small and Medium Enterprises TFP Total Factor Productivity TNC Transnational Corporation U.K United Kingdom U.S. United Sates of America UN United Nation UNCTAD United Nation Conference in Trade and Development UNDP United Nation Development Program WAP Wireless Application Protocol Wi-Fi Wireless Fidelity WIPO World Intellectual Property Organisation WTO World Trade Organisation XVI Research outcomes PhD Consortium Hamed, A, (2006) E-commerce in developing countries, the destiny of 21 st century, UK Academy of Information Systems, PhD Consortium, Cheltenham.
Conferences papers Hamed, A, Cleary, P, Berger and H, Ball, D (2008). E-commerce as a tool for economic development, IBIMA, Marrakech, Morocco.
Hamed, A, Berger, H, Cleary, P, Ball, D (2008) E-commerce and economic development, E-CASE, Bangkok, Thailand.
Hamed, A, Berger H, Cleary P, Ball, D (2008), E-commerce drivers and barriers, A new classification method in digital revolution, UKAIS, Bournemouth, UK
Hamed, A, Berger H, Cleary P, Ball, D (2008), The three-quarter moon. A new model for e-commerce adoption, IBIMA, Kuala Lumpur
Hamed, A, Berger H, Cleary P, Ball, D (2008), Can e-commerce measure globalisation?, IBIMA, Kuala Lumpur
Hamed, A, Berger, H, Cleary, P, Ball, D (2009), Globalisation and e-commerce issues. IBIMA, Cairo
Seminars E-commerce in Libya, (2007) Al-Aser University, Tripoli, Libya
E-commerce and Economy, (2006) CRM Research, UWIC
E-commerce in Developing Countries, (2007) UWIC research committee
Business Seminar Key-note Speaker (2008) Doing Business in Libya, IE Singapore, Singapore
Chapter one: Introduction 1
Chapter One Introduction Chapter one: Introduction 2
1.1 Background ................................ ................................ ................................ ................................ ............. 3 1.2 Economic development and e-commerce ................................ ................................ .............................. 3 1.3 Research problem................................ ................................ ................................ ................................ ... 5 1.4 Aim and objectives ................................ ................................ ................................ ................................ .. 5 1.5 Research method................................ ................................ ................................ ................................ ..... 6 1.6 Background of Libya ................................ ................................ ................................ .............................. 8 1.6.1 Geographical Location and Population ................................ ................................ ................................ . 8 1.6.2 History of Libya ................................ ................................ ................................ ................................ .... 9 1.7 Structure of the thesis ................................ ................................ ................................ ........................... 11
Chapter one: Introduction 3 1.1 Background This chapter summarises the research in this thesis and provides an overview of the adoption of Internet technology tools and e-commerce in the economy of developing countries, in particular Libya.
1.2 Economic development and e-commerce The study of economic development is one of the newest, most exciting, and most challenging branches of the broader disciplines of economics and political economies (Meier and Rauch, 2005). Economic development must deal with the economic, social, political and institutional mechanisms, both public and private, necessary to bring about rapid and large scale improvement in the standard of living for the masses of poverty- stricken, malnourished and illiterate people of Africa, Asia, and Latin America (Todaro, 1999).
One of the main drivers for economic development that has become apparent over recent years is technology. Technology is not something that just happens to economies, it is a process that countries need to consciously and actively promote and nurture (James. 1999; Todaro, 1999). It is now widely accepted that information and communications technologies (ICT) and e-commerce are at the centre of an economic and social transformation that is affecting all countries (Chan and Lee, 2001; Hammond, 2001; OECD, 2003). Chapter one: Introduction 4 The Third World has a well-recognised e-commerce and marketing potential. A significant proportion of the Third World is already partially developed and a significant proportion of the population has a demographic profile similar to that of the developed economies (Mann, 2000). It is generally believed that e-commerce enables developing country producers to overcome traditional limitations associated with restricted access to information, high market-entry costs, and isolation from potential markets (April and Cradock, 2000; Cohen, et al., 2000; Maitland 2001).
The majority of developing countries face limitations on the development of their electronic economy (e-economy) stemming largely from low income levels, low literacy rates, lack of payment systems that can support online transactions, and cultural resistance to online trade (UNCTAD, 2003). Developing countries need to take into consideration that building telecommunications infrastructure is costly. In many cases, countries will need inflows of Foreign Direct Investment (FDI) to improve domestic infrastructure (Jenkins and Thomas, 2002; UNCTAD, 2003). The revolution of e-commerce presents micro- and macro- economic challenges, not only for organisations, but also for governments (Callioni, 2004). Organisations that are going to adopt e-commerce need to consider restructuring their entire business and create new strategies. They also need to implement new management processes, change their business culture, follow different procedures for managing their employees and build a well-structured and secure payment system (Well, 2004). Chapter one: Introduction 5 1.3 Research problem Most developing consumer markets face severe limitations in terms of connectivity, ability to pay, deliveries, willingness to make purchases online, ownership of credit cards, access to other means of payment for online purchases and accessibility in terms of physical deliveries (Straub, 2003). Some countries have invested heavily in Internet infrastructure and have still failed to gain significant benefit, whereas other countries, such as India and China, have benefited significantly.
This research will attempt to investigate the reason for this lack of benefit by identifying the drivers and barriers for e-commerce adoption in developing countries, such as Libya. This study is significant in that previous studies have, to the best knowledge of the researcher, not yet been undertaken in Libya. Consequently, the study is important because it throws light on the difficulty of using e-commerce and establishes why e-commerce adoption is risky. Further, a model will be proposed that may help such countries to adopt e-commerce.
1.4 Aim and objectives This research will aim to answer the following questions: What are the drivers and barriers that developing countries, such as Libya, face when adopting e-commerce? Chapter one: Introduction 6 Can a plan of action and a model be developed the purpose of which would be to assist Libya in adopting e-commerce? Can the proposed plan of action and a model of adoption be generalised to be used by other developing countries?
In order to answer these questions, the following objectives are thus formulated: 1. Critically review the literature of economic development and other related subjects. 2. Critically review the literature of e-commerce in general and developing countries in particular and other related subjects. 3. Develop a theoretical framework to conceptualise e-commerce drivers and barriers. 4. Investigate practical drivers and barriers to e-commerce in Libya and the impact of e-commerce activities on the Libyan economy. 5. Develop an implementation plan for e-commerce adoption in Libya. 6. Develop a model to assist e-commerce adoption in Libya and consider how the model can be generalised for other developing countries. 1.5 Research method The generation of data and information relating to the research topic is explained and rationalised according to the research questions. The purpose behind this research is to Chapter one: Introduction 7 ascertain the effect of using e-commerce in the economic development of developing countries such as Libya, where very few or no earlier studies have been conducted. The research process is described in terms of a critical analysis of relevant research approaches.
The researcher assumed the role of an objective analyst, making a detached interpretation of those data that have been collected in an apparently value-free manner (Gill and Johnson, 1997). This was aimed at observing social reality in the context of examining the potential of e-commerce within the Libyan economy. The researcher adopted a mixed research approach (Saunders et al., 2003, Collis and Hussey, 2003; Johnson and Christensen, 2004). Firstly, 15 semi-structured interviews (Robson, 2000, Burms, 2000) were conducted involving decision makers, government officials, managers and general employees regarding e-commerce and economic development in Libya. A combination of tape recording and note taking was utilised during interview sessions to maximise the validity of data collected aimed at minimising the weaknesses of both methods (Stewart and Cash, 2006). Secondly, a questionnaire (Bell, 2001) was distributed across a population of 150 Libyan Internet users on a face-to-face basis. This was aimed at understanding the barriers experienced and anticipate future potential barriers. Pilot testing was carried out for both the interview and questionnaire designs in terms of their structure and substance. Lastly, the researcher undertook direct observation (Gill and Johnson, 1997) of Libyan Internet users in order to recognise the social and/or human difficulties experienced whilst engaging in basic e-commerce activities.
Chapter one: Introduction 8 Additionally, QSR NUD*IST Vivo (NVivo), a qualitative software product, was utilised to store and analyse the range of qualitative data collected (Myers 1997; Yin 2003). Data analysis concerned applying open coding that involved analysis of the content where data were analysed and categorised into themes. Further investigation was required to establish how the identified themes might inter-relate and link into sub-categories (Orlikowski 1993). This is commonly known as axial coding and was used to uncover the relationships within the categories until saturation occurred. Microsoft Excel was used to accommodate and analyse data collated for quantitative purposes.
1.6 Background of Libya 1.6.1 Geographical Location and Population Libya is the fourth largest country in Africa with an area of approximately 1,774,440 sq. km, three times the surface area of France, seven times the size of the United Kingdom and one-sixth larger than Alaska. The country is bounded by the Mediterranean Sea to the north, Egypt and Sudan to the east, by Niger, Chad and Sudan to the south and by Algeria and Tunisia to the west. However, over 90 percent of the land is desert or semi-desert, and the country climate is affected by the Mediterranean Sea to the north and the Sahara to the south (Terterov and Wallace. 2002; infoplease, 2005; The information department of the Great Jamahiriya, 2006).
According to Terterov and Wallace (2002), the Libyan population is estimated to be 5.5 million, including numerous foreign residents, and is said to be growing at a rate of 3.5 Chapter one: Introduction 9 percent, one of the highest population growth rates in the world. The population is young (almost 50 per cent are under 20 years old) and 86 per cent urban - one of the highest urbanisation rates in the world. Additionally, most of the population are educated and a number of highly-qualified people were counted in the country. According to the Information Department of Great Jamahiriya (2006), the country has now one of the highest literacy rates in Africa. Some 97 percent of the adult population is literate. Public education in Libya is free and compulsory for children ages 6 to 15. Arabic is the language of instruction.
1.6.2 History of Libya The roots of human settlement in Libya go back to the prehistoric period of the Stone Age. It starts around 10,000 BC to 2000 BC This period had left evidence of human settlement in Libya through a wealth of paintings and engravings left on stones inside mountain caves that are generally located in the southern part of Libya. For most of their history, the people of Libya have been subjected to varying degrees of foreign control, mostly from Mediterranean empires; Libya was first colonised in the 12th century BC. The Phoenicians, Carthaginians, Greeks, Romans, Spaniards, Vandals and Byzantines ruled all or parts of Libya. Although the Greeks and Romans left impressive ruins at Cyrene, Leptis Magna and Sabratha, little else remains today to testify to the presence of these ancient cultures.
Muslim Arabs conquered Libya in the seventh century AD as they proceeded to conquer all of North Africa and the Iberian Peninsula concurrent with the spread of Islam. In the Chapter one: Introduction 10 following centuries, most of the indigenous peoples adopted Islam and the Arabic language and culture. The Italo-Turkish War, which began in 1911, resulted in Italy's annexation of Libya. After years of resistance the country became an Italian colony. In 1934, Italy adopted the name "Libya" (used by the Greeks for all of North Africa, except Egypt) as the official name of the colony, which consisted of the provinces of Cyrenaica, Tripolitania, and Fezzan (Terterov and Wallace, 2002; Country Review, 2006; The General People Committee for Tourism, 2006; The information department for the Great Jamahiriya, 2006)).
Following World War II, British and French forces occupied the area. From 1943 to 1951, Tripolitania and Cyrenaica were under British administration, while the French controlled Fezzan. On Nov. 21, 1949, the United Nations General Assembly passed a resolution stating that Libya should become independent before January. 1, 1952. When Libya declared its independence on December 24, 1951, it was the first country to achieve independence through the United Nations. (Terterov and Wallace, 2002; The Library of Congress, 2006).
A new era in the history of Libya began on September 1, 1969, when a Colonel Qaddafi and a group of young army officers overthrew the royal government and established a republic under the name Libyan Arab Republic. In 1976, Libya's leader, Muammar al- Qaddafi, introduced a plan to reorganise the Libyan state. The plan essentially ensured that the country would be run by a new representative body called the General People's Chapter one: Introduction 11 Congress, or GPC (Terterov and Wallace, 2002; Country Review, 2007; The information department of the Great Jamahiriya, 2006).
1.7 Structure of the thesis This thesis consists of eight chapters. This chapter, an introductory chapter, outlines the significance of the study, the problem to be investigated, research questions and objectives, and background information about Libya and its history.
The literature consists of three chapters (Chapters two, three and four). The second chapter reviews literature on economic development and evaluates economic development theory and its effect on developing country economies. It analyses the effect of technology on economic activities and evaluates the use of technology as a tool for developing the economy.
The third chapter reviews and analyses the existing literature relevant to e-commerce and the Internet. It looks at the events which have made e-commerce possible, and the transformations it has undergone to date. It discusses briefly the latest technologies and the way other countries managed to gain benefit of these new technologies.
Chapter one: Introduction 12 The fourth chapter reviews literature on e-commerce drivers and barriers. It discusses the drivers and barriers of e-commerce and the Internet in more detail based on previous research conducted in other countries in the developed and developing world and critically summarises the main drivers and barriers for developing countries such as Libya, developing a theoretical framework to conceptualise e-commerce drivers and barriers
The fifth chapter discusses the research methodology utilised for the purposes of the present study as well as describing the research instrument employed to generate the data and information required. It shows the links between the theoretical framework and the survey instrument used for collecting data and provides an explanation of the interview structure.
The sixth chapter presents and analyses the findings of the primary data generated from research interviews and the questionnaire and modifies the theoretical framework developed in chapter four. The revised framework developed in this chapter confirms the relevance of the issues identified in the literature review in the Libyan context and adds two new issues previously unreported, i.e. knowledge and security.
The seventh chapter discusses the research findings and e-commerce development in the light of the literature review (chapters two, three and four). It proposes a plan of action and new model and strategy for Libya regarding the adoption of e-commerce. The proposed Chapter one: Introduction 13 model is generated from reviewing the literature of e-commerce, economic development and the findings of the research chapter. Additionally, the chapter introduces a generalised model for other developing countries along with a new measurement for the stage of e- commerce adoption.
Chapter eighth provides a summary of the conclusions which have been drawn using the available data and the analysis. It sets out the limitations of the research, recommendations for the adoption of e-commerce for governments and companies and provides suggestions for future research.
Chapter two: Economic development 14 Chapter two: Economic development 15
Chapter two Economic development Chapter two: Economic development 16
2.1 Introduction................................ ................................ ................................ ................................ ........... 18 2.2 Background of Economic Development ................................ ................................ .............................. 18 2.3 Classification of Countries ................................ ................................ ................................ ................... 19 2.4 Economic Development Measurements ................................ ................................ .............................. 20 2.5 Theories of Economic Development ................................ ................................ ................................ .... 23 2.5.1 The Linear stages ................................ ................................ ................................ ................................ 24 2.5.2 Structural Change Theory ................................ ................................ ................................ ................... 26 2.5.3 The International-Dependence Revolution................................ ................................ .......................... 27 2.5.4 The Neo-Classical Counter-revolution................................ ................................ ................................ 28 2.6 Economic Development and Technology ................................ ................................ ............................ 29 2.7 Economic Development and ICT................................ ................................ ................................ ......... 32 2.8 Economic Overview of Libya ................................ ................................ ................................ ............... 37 2.8.1 ECONOMY OF THE REVOLUTION: ................................ ................................ ................................ .......... 37 2.8.2 The new economy approach................................ ................................ ................................ ................ 38 2.9 Summary................................ ................................ ................................ ................................ ................ 41
Chapter two: Economic development 17 Chapter two: Economic development 18 2.1 Introduction A major goal for developing countries is economic development or economic growth. However, the two terms are not identical. Growth may be necessary but not sufficient for development. This chapter gives a brief background on economic development. It also explains different methods of classifying countries according to United Nations and World Bank criteria. Economic development is usually measured using Gross Domestic Product (GDP), Human Development Index (HDI) and Purchasing Power Parity (PPP). These methods are discussed in this chapter. This chapter discusses the different theories of economic development and critically evaluates each of these theories and how they are used. It also emphasises the use of technology and ICT in economics and explains how they contribute to economic development, and provides a summary of what developing countries should do in order to achieve economic development.
2.2 Background of Economic Development The study of economic development is one of the newest, most exciting, and most challenging branches of the broader disciplines of economics and political economy. Todaro (1999) argues that economic development is not the same as the economies of advanced capitalist nations (modern neoclassical economies). Nor is it similar to the economies of centralised socialist societies (Marxist or Command economies). He defined it as: It is nothing more or less than the economies of contemporary poor, underdeveloped Third World nations whith varying ideological orientations, Chapter two: Economic development 19 diverse cultural background, and very complex yet similar economic problems that usually demand new ideas and novel approaches (Todaro1999, p7).
Todaro (1999) and others (e.g. Kodakanchi et al., 2006; Dada, 2006; Furuholt and Kristiansen, 2007) stated that economic development must deal with social, political and institutional mechanisms, both public and private, necessary to bring about rapid and large scale improvements in the standard of living for the masses of poverty stricken malnourished and illiterate people of Africa, Asia, and Latin America. Furthermore, Meier and Rauch (2005) believe that the study of economic growth in less-developed countries is not as advanced as had been previously supposed. He stated that researchers are still trying to understand what causes the difference between a healthy less-developed country economy that is growing rapidly and an unhealthy less-developed country economy that is growing slowly or not at all.
2.3 Classification of Countries The classification of development used by the World Bank divides countries into four groups on the basis of income per capita according to countries Gross National Income (GNI). These categories were roughly: Low-income countries ($1,000 or less), Lower-middle-income countries ($1001-$3000), Upper-middle-income countries ($3.000-$9,000), High-income countries ($9,000 or more). Chapter two: Economic development 20 Sometimes high-income countries are designated as developed countries or the North, and the middle and low-income countries as developing, underdeveloped or less-developed countries or the South (World Bank Report, 2002). Moreover, the 134 Asian, African, and Latin American members of the UN Conference on Trade and Development (UNCTAD) often are referred to as the Third World (UNCTAD, 2002).
In 1971, the United Nations designated 25 countries with a low per capita income, low share of manufacturing in gross product, and low adult-literacy rates as least-developed. Since then, the United Nations has added other criteria to this list of marginalised economies, including low levels of human development, natural handicaps, and low economic diversification (Simonis, 1991; Blackwell, 1986). Yet there is still a concern as to how to categorise the following: The 26 economies in transition (East Central Europe and the former Soviet Union, all low and middle-income countries except high-income Slovenia); The eight members of the Organisation of Petroleum Exporting Countries, or OPEC; The 25 poorest countries, designated as least-developed countries; And 106 other developing countries (Nafziger, 2006).
2.4 Economic Development Measurements Until recent years a countrys aggregate output, or GDP, was used almost exclusively as the primary measure of economic development. Both comparative (i.e. between countries) and Chapter two: Economic development 21 over time, growth in GDP per capita was commonly used to describe changes in well-being (Ayres and Macey, 2005). Recognising the inadequacy of this measure of well-being, the United Nations began to devise and collect other macro-level quantitative measures of health, education, employment and housing in addition to real income data in the mid- 1950s. More explicit attempts at capturing the level of human well-being were made by Morris (1979) and more recently in the UNs HDI (DasGupta, 1993). Development indicators suggest pronounced regional differences. The countries of Latin America tend to be high up in the category medium human development. The countries of Asia also tend to be in the medium development classification but lower down the ranking than countries in Latin America. The category of low human development is almost entirely made up of countries from sub-Saharan Africa.
Measuring economic development is a difficult process. Existing attempts to assess national development are still suffering from conceptual and measurement challenges. This has led to a literature that is, in general, excessively focused on economic development without connection to the capabilities of those institutions to expedite economic development of citizens (Holmes and Gutirrez de Pieres, 2006). Overall growth rate is another economic development measurement. Growth rates being measured in PPP, HDI, and independent measures of inequality based on the preferences of decision and policymakers. These different measures always tell different stories (Todaro, 1999). To remedy the failure of GDP to capture purchasing power inequality and to allow cross- country comparisons, PPP equivalents were constructed. However, growth rates based on a constant American dollar (USD) values often mask the distribution of wealth. Growth rates Chapter two: Economic development 22 can increase dramatically but still fail to raise the overall well-being of the general population of a country or region (Holmes and Gutirrez de Pieres, 2006; Ayres and Macey, 2005). Other measures were constructed to address the fact that income alone is not a sufficient measure of development. The physical quality of life index is a composite score of life expectancy, infant mortality and literacy. The problem is that this measure reveals more about the quantity as opposed to the quality of life. Anand and Sen (2000) claim that it neglects other crucial factors, such as public care and social organisation, which also contribute to well-being and freedom of individuals. However, a new method to measure economic development and growth is necessary to overcome all the weaknesses identified by the existing methods to give a better understanding of the real situation in different countries in the world.
The global disparities in access to the Internet and other information and communication technologies have led to a digital divide between technological have and have-nots (United Nations, 2006; Furuholt and Kristiansen, 2007). The digital divide is a term often used to describe disparities in opportunities to access the Internet between wealthy and poor nations (Furuholt and Kristiansen, 2007) and can be categorised as global, regional or national. At the national level, there is an urban-rural digital divide (Rao, 2005). This division can be seen in developing countries, in particular those where a clear tendency of increased concentration on information is seen to flow to urban and central areas (Wong, and Seok Ling, 2001; Mwesige, 2004). Chapter two: Economic development 23 2.5 Theories of Economic Development The new development economics has a relationship with the old growth economics of classical economists (e.g. Smith, Malthus, Ricardo) a concern with the heavy variables of capital population, and the objective of what Adam Smith termed the progress of opulence in the progressive state. But the new development economists went beyond their classical and neoclassical predecessors to consider the kind of policies that an active state and international community could adopt to accelerate a countrys rate of development (Meier and Rauch, 2005).
The post-World War II literature on economic development has been dominated by four major and some times competing strands of thought; The linear stage of growth which included Rostows stages of development; Theories and patterns of structural change; The international dependence revolution and new classical, and free market counter-revolution (Meier and Rauch, 2005). In addition, Todaro (1999) stated that, the emergence of a fifth approach that has been witnessed - an approach called the new or endogenous theory of economic growth. It was primarily an economic theory of development in which the right quantity and mixture of saving, investment, and foreign aid were all that was necessary to enable Third World nations to proceed along an economic growth path that historically had been followed by the more developed countries (Meier and Rauch, 2005). Therefore major strands in economic development literature were now being reviewed.
Chapter two: Economic development 24 2.5.1 The Linear stages When interest in the poor nations of the world really began economists were caught off guard. They had the experience of the Marshall Plan under which a massive amount of U.S. financial and technical assistance enabled the war-torn countries of Europe to rebuild and modernise their economies in a matter of a few years (Todaro, 1999). The linear stage approach was largely replaced in the 1970s by two competing economic schools of thought. The first focused on theories and patterns of structural change, and used modern economic theory and statistical analysis in an attempt to portray the internal process of structural change that a typical developing country must undergo if it is to succeed in generating and sustaining a process of rapid economic growth (Sato, 2002). The second, the international dependence revolution, was more radical and political in orientation. It viewed underdevelopment in terms of international and domestic power relationships, institutional and structural economic rigidities, and the resulting proliferation of dual economies and dual societies both within and among the nations of the world (Todaro, 1999; Mookherjee, 1999)
In Stages of Economic Growth (1962), Walter W. Rostow has set forth a new historical synthesis about the beginning of modern economic growth (Nafziger, 2006). According to the Rostow doctrine cited in Todaro (1999), the transition from underdevelopment to development can be described in terms of a series of steps or stages through which all countries must proceed. He argued that: it is possible to identify all societies, in their economic dimensions, as lying within one of five categories: the traditional society, the pre-conditions for Chapter two: Economic development 25 take-off into self-sustaining growth, the take-off, the drive to maturity and the age of high mass consumption. (Todaro, 1999, P 174).
Rostows precondition stage for sustained industrialisation includes radical change in three non-industrial sectors: First, increased transport investment to enlarge the market and production specialisation; Then a revolution in agriculture, so that a growing urban population can be fed; Finally, an expansion of imports, including capital, financed perhaps by exporting some natural resources. In fact Rostow and others defined the take-off stage in a way that the more the country saves, the faster it could develop. Moreover this growth would then be self-sustaining. The main obstacle to, or constraint on, development according to this theory, was the relatively low level of new capital formation in most poor countries. If a country wanted to grow, and if it could not generate saving and investment of national income, it could seek to fill this saving gap through either foreign aid or private foreign investment (Thirwall, 1994; Todaro, 1999; Well, 2005). Thus the capital constraint stage approach to growth and development become rational and an opportunistic tool for justifying massive transfers of capital and technological assistance from the developed to the less-developed nations. Unfortunately, the tricks of development embodied in the theory of stages of growth did not always work. The Marshall Plan according to Miler et al., (2003), worked for Europe because the European countries receiving aid possessed the necessary structural, institutional, and attitudinal conditions to convert new capital effectively into higher level Chapter two: Economic development 26 of output. However, at an even more fundamental level, the stage theory failed to take into account the crucial fact that contemporary Third World nations are part of a highly integrated and complex international system in which even the best and most intelligent development strategies can be nullified by external forces beyond a countrys control. 2.5.2 Structural Change Theory Structural change theory focused on the mechanisms by which underdeveloped economies transform their domestic economic structures from a heavy emphasis on traditional subsistence agriculture to a more modern, urbanised and more industry-diverse manufacturing and service economy (Mookherjee, 1999; Todaro, 1999). There are two models, the Lewis Model and structure change and patterns theory. These will be presented in turn.
In the Lewis model, an underdeveloped economy consists of two sectors: a traditional overpopulated rural subsistence sector and a high productivity modern urban industrial sector into which labour from the subsistence sector is gradually transferred. Finally the level of wages in the urban industrial sector is assumed to be constant and determined as a given premium over a fixed average subsistence level of wages in the traditional agricultural sector (Todaro, 1999; Gregor and Johnston, 2001).
The other structural theory is the structural change and patterns theory (Gregor and Johnston, 2001). Structural change and patterns of development structural change involve virtually all economic functions, including the transformation of production and change in Chapter two: Economic development 27 the composition of consumer demand, international trade, and resource use as well as change in socioeconomic factors, such as urbanisation and the growth and distribution of a countrys population. Empirical structural-change analysis emphasises both domestic and international constraints on development. The optimistic analysts include economic constraints, such as a countrys resource endowment, and its physical and population size as well as institutional constraints such as government policies and objectives (Todaro, 1999; Gregor and Johnston, 2001). 2.5.3 The International-Dependence Revolution During the 1970s, international-dependence models gained increasing support, especially among Third World intellectuals, as a result of growing disenchantment with both Rostows stages and structural-change models. Essentially, the international-dependence model views Third World countries as beset by institutional, political, and economic rigidities, both domestic and international, and caught up in a dependence and dominance relationship with rich countries.
Achieving a better future will require a new development model, one that goes beyond the conventional focus on free-market capitalism, entrepreneurship, and global trade expansion. Traditional, top-down development directed by governments and financed by foreign aid be inadequate, since this approach has a very mixed track record and declining support (Todaro, 1999). The idea behind this new development model is that basic services should generally be provided by businesses - sometimes directly and sometimes in partnership with governments or networks of non-governmental organisations (NGOs). The right Chapter two: Economic development 28 strategies can enable the poor to become customers and pay for the services they receive, services that will improve their quality of life and increase their productivity (Hammond, 2001; Sato, 2002). 2.5.4 The Neo-Classical Counter-revolution Throughout much of the 1980s, a fourth approach prevailed, the neo-classical counter- revolution in economic thought which emphasised the beneficial role of free markets, the open economy and the privatisation of inefficient and wasteful public enterprises. Failure to develop, according to this theory, is not due to exploitative external and internal forces as expounded by dependency theories. Rather, it is primarily the result of government intervention and regulation of the economy (Todaro, 1999). The neo-classicists contend that slow or negative growth results from poor resource allocation from non-market prices and excessive Less-Developed Countries (LDCs) state intervention. They argue that there are items that effect economic growth such as promoting competitive free markets. Free markets will result in encouraging international traders to contribute in a country economy and will result in reducing production costs and lowering product prices. The following items in Table 2.1 will spur increased efficiency and economic growth. Chapter two: Economic development 29
Item 1 Promoting competitive free markets 2 Privatising public enterprises 3 Supporting exports and free international trade 4 Liberalising trade 5 Removing barriers to foreign investments 6 Rewarding domestic saving 7 Reducing government spending and monetary expansion 8 Removing regulations and price distortion in financial resource
Finally in the late 1980s and 1990s, a few neoclassical and institutional economists began to develop the new growth theory. It attempts to modify an external traditional growth theory in a way that helps explain why some countries develop rapidly while others stagnate and why, even in a neoclassical world of private markets, government may still have an important role to play in the development process (Todaro, 1999; Adelman, 1999).
2.6 Economic Development and Technology The adoption of technology is not something that just happens to economies, it is a process that countries need to consciously and actively promote and nurture, and for which certain socioeconomic preconditions must be met, if the potential benefits of technological knowledge are to be effectively achieved (James, 1999). Creating new technologies requires investment. In the case of capital creation, someone must use resources that could have been devoted to something else in order to create, refine and put into practice a productive idea (Well, 2005). James (1999) stated that a more rapidly the technology is able to be adopted and put to work in an economy, the more rapid will be the pace of economic Chapter two: Economic development 30 growth. Technology usually changes the way in which factors of production are combined to produce output, thus affecting the process of economic growth (Well, 2005).
Thirlwall (1994), as well as others (Keng and Ali, 2001; Meier and Rauch, 2003; Well, 2005), believes that the larger the gap between a countrys technology, productivity and per capita income on the one hand and the level of productivity in the advanced countries on the other, the greater the scope for a poor country to absorb existing technology and to catch up with richer countries as well as skipping over stages of domestic technological development. Many countries have attempted to follow this diffusion path, at least implicitly by hosting within their economies translational corporations, the major source of cutting-edge knowledge, and yet they still have failed to become more developed, or either their rates of economic growth and development have lagged behind other economies which have not followed this strategy. The reason, as James (1999) stated, was that many LDC economies to which Transnational Corporations (TNCs) have brought, sold, or licensed technology have yet to create the requisite initial domestic technological culture and the domestic capacity for technological autonomy that would permit them to capture the benefit of tool and machine diffusion through learning and spread effects at the point of production (James, 1999). Meier and Rauch (2005) argued that the actual technology in use is thus circumscribed, first by the nature of world technology and then by the availability to the country of known technology, and finally by the choice made among those available. If the technology in use is thought to be inappropriate, it may be inappropriate because world technology is inappropriate, or because an inappropriate subset is available to the country, Chapter two: Economic development 31 or because an inappropriate selection is made, or for some combination of those three reasons (Meier and Rauch, 2005).
The successful introduction of technology into a domestic production process in any country requires a domestic scientific establishment capable first of understanding, processing and adopting foreign-produced technological knowledge to local conditions and secondly recognising the potential and dangers of its own discoveries when applied to the domestic economy (James, 1999). The relative importance of different factors contributing to progress, and the speed of progress itself, will vary from country to country according to its stage of development and a whole complex of social and economic forces (Thirlwall, 1994).
Nafziger (2006) argued that developing economies do not have a mobile and highly educated labour force, commercial farmers, large numbers of responsive entrepreneurs, a favourable climate for enterprise. Neither do they have a high level of technical knowledge, local ownership of industry, heavy reliance on direct taxes for revenue, a large number of export commodities, an average income substantially above subsistence, a well-developed capital market, or a high saving rate. Therefore firms in developing countries have to think of adopting one or more of several alternatives for obtaining new technology that may yield a higher level of TFP (Total Factor Productivity). Meier and Rauch (2005) stated that these alternatives are: the purchase of new equipment; direct foreign investment; the purchase of technology licenses for domestic production of new products or the use of new processes; the use of non-proprietary technology, including that obtained from purchasers Chapter two: Economic development 32 of exports; the acquisition of knowledge from returning nationals who have been educated or have worked in industrial countries and from nationals who remain in industrial countries; domestic research and development and efforts in reverse engineering.
Countries at different levels of technical learning use the same technology at widely varying levels of efficiency. Technical knowledge is acquired only at a cost and is almost always incomplete. Less-developed areas can almost never acquire technical knowledge in its entirety, as blueprints, instructions, and technical assistance fail to include technologys implicit steps. Learning and acquiring technology does not result automatically from buying, producing, selling, and using but requires an active search to evaluate current routines for possible changes (Nafziger, 2006). The LCD firms and governments obtain technical knowledge through transfer from abroad as well as internal innovation, adoption, and modification.
2.7 Economic Development and ICT It is now widely accepted by policy makers, enterprises and society at large that ICT is at the centre of an economic and social transformation that is affecting all countries. ICT and globalisation have combined to create a new economic and social landscape. As stated in UNCTAD (2003), in the late 1990s the US economy was able to grow faster than at any time. This combination of strong economic growth and low inflation has been linked to the diffusion of new ICT (UNCTAD, 2003). The G-8 2000 report stated that ICT is fast becoming a vital engine of growth for the world economy. A recent study by the Chapter two: Economic development 33 Organisation for Economic Cooperation and Development (OECD) (OECD, 2003) analysed the contribution of ICT to economic growth, as well as the impact of ICT-using and -producing sectors compared with that of non-ICT sectors on economic growth and labour productivity. The result was fairly conclusive evidence that suggested that investment in ICT made a significant contribution to economic growth in a number of countries and also had a substantial positive impact on economic performance in other countries. Hammond (2001) argued that advances in information and communication technology did more than almost anything else to drive the last decades economic boom and the integration of markets around the planet. The money spent on the digital infrastructure that supports these burgeoning new services from the Internet servers to fibre-optic networks has itself become a major engine of economic growth. Chan and Lee (2001) add to the debate that the impact of investment in ICT on economic growth is commonly regarded as a main driver of the new economy. Hawkins et al., (1998) believe that ICT offers great benefits when ICT investment is combined with other organisational assets, such as new strategies, new business processes, new organisational structures and better worker skills.
There is now growing agreement about the positive contribution of ICT to productivity growth. Through the application of ICT firms will become more competitive, new markets will be accessed and new employment opportunities created. All of this will result in the generation of wealth and sustainable economic growth (UNCTAD, 2003). The contribution of ICT capital to output and labour productivity growth has been significant and rising in relative terms. Chapter two: Economic development 34
Even so, the majority of developing countries face limitations on the development of their economy stemming largely from low income levels, low literacy rates, lack of payment systems that can support online transactions, and cultural resistance to online trade. Developing countries need to take into consideration that building telecommunications infrastructure is costly. In many cases, countries will need inflows of foreign direct investment (FDI) to improve domestic infrastructure. This means that, in addition to establishing a well-regulated telecommunications market, they also need to put in place policies to ensure an appropriate investment climate for foreign service providers (UNCTAD. 2003).
Edwards (2001) adds that in order for ICT investment to be fully effective, it has to take advantage of network externalities. This requires a large enough number of people and organisations to make the investment and become connected to the network. But, he emphasises this is not enough. Network externalities are fully exploited only when those using ICT communicate among themselves effectively, rapidly and efficiently. This, in turn, requires that users share similar levels of technical, analytical, and problem solving skills.
With ICT established, many researchers were concerned about the possibility of developing countries catching up and gaining new solutions for rapid development. Sachs (2006), Director of Columbia Universitys Earth Institute as cited in the OECD report (OECD, 2002) contends: Chapter two: Economic development 35 Todays world is divided not by ideology but by technology The report explains that 15 percent of the worlds population are technological innovators; about 50 percent with at least 2 percent of GDP being high-tech exports are technological adopters. The rest of the world is technologically excluded. The report states that ICT, and the Internet in particular, have created a bigger gap between countries (Hammond, 2001). The Internet may be changing everything for those who use it, but it is doing nothing for the 19 out of 20 people who still lack access. (Thirlwall, 1994).
According to Hawkins et al., (1999), firm-level (as opposed to government-level) evidence confirms that ICT can have a strong impact on labour productivity. However, some macroeconomic and microeconomic evidence from the United States suggests that the role of ICT may have evolved and affected multi-factor productivity as well for three main reasons. First, the 1990s saw various regulatory reforms which led to further liberalisation of the telecommunication sector. This has helped to increase competition, reduce costs and enhance innovation. Second, technological innovations in the 1990s, e.g. fibre optics, high- capacity and high-speed hard disk drives, digital subscriber line (DSL) technologies and satellite technologies, greatly increased the volume and capacity of communications. Third, and probably most important, convergence of the ICT sectors accelerated in 1994-95 with the emergence of the Internets key infrastructure applications, the World Wide Web and the browser, which greatly expanded the potential of ICT. At relatively low cost, these technologies linked the existing capital stock of computers and communications systems in an open network that significantly increased their utility (Hawkins et al., 1998).
Chapter two: Economic development 36 Kodakanchi et al., (2006) summarised the above discussion by introducing an economic development model based on IT as shown in Figure 2.1 below. They argued that faster rates of economic growth can be achieved using IT as the driving factor in the economic policies of the world-wide economies. However, developing countries do not have enough infrastructures to support the development of IT. Most commonly some of the major concerns to the advent of IT in such countries are the inability to invest in the IT field due to poor financial infrastructure and inadequate human power with the knowledge of IT.
Kodakanchi et al., (2006) explained that many multinational companies have recently been investing their major capital in the IT field, especially in countries like India. A government should facilitate such investments by making policies favourable to foreign investments and inviting many foreign companies to invest in the IT field. But most of all a general awareness among the peoples of a nation regarding the importance of IT is crucial. Kodakanchi et al., (2006) stated that the knowledge of IT should be enforced at the educational institutes and various other steps can be taken by the governments to nourish Large foreign investment Government policies supporting IT Social awareness of IT importance
Information technology Higher productivity Investment Faster economic growth Figure 2.1 Economic development model based on IT Source: Kodakanchi et al., 2006 Chapter two: Economic development 37 the growth of IT awareness among the people. However, Kodakanchi et al., (2006) have not raised the important issues of culture and customs in the adoption of ICT in most developing countries. Neither have they raised many other aspects that deal with peoples willingness to adopt such technology and the effect of international markets and globalisation of that adoption.
2.8 Economic Overview of Libya 2.8.1 Economy of the revolution: When Libya gained its independence in 1951, the economy was based mainly on agriculture, which employed more than 70 percent of the labour force and contributed about 30 percent of the GDP. Before the discovery of oil and gas, Libya was one of the poorest countries in the world. However, by 1961, substantial qualities of oil had been discovered and greatly supported the country's social and economic development (Terterov and Wallace, 2002). Consistent with Arab.net (2002), the discovery of oil in 1959 has transformed Libya from a poor nation at the time of its independence, to a far more prosperous one, ranking 12th among petroleum producers. Therefore, Libya's economy is heavily dependent on the oil sector, which accounts for over 50 percent of GDP, about 95 percent of foreign exchange earnings, and 75 percent of government revenue. After the revolution in 1969, the 1969 constitutional declaration vested sovereignty in the people. The aim of the state was to realize socialism and to liberate the national economy from foreign dependency (Wanees and Karlberg, 2007). A socialist approach was adopted in Libya after Colonel Qadhafis revolution, a trinity of freedom, socialism, and unity, depicting socialism as the solution to the economic problems of humankind. Libyan socialism was doctrinal, as opposed to pragmatic, and highly nationalistic in a region where socialism and nationalism often have been found together (Russell and Mustafa, 1999).
Chapter two: Economic development 38 After the socialist approach was implemented, the public sector in Libya dominated activities. In the most radical of the measures, all private property rights were eliminated in March 1978 (Anderson, 1999). In later years, most private trading, retail and wholesale, was abolished. The only type of private sector activity that the government did not actively seek to eliminate was small service firms (mostly self employed), which were not viewed as inherently exploitative (Hochman, 2006). The central bank's credit policy was supporting the government's policy to minimize the effect of private business by limiting credit availabilities to the private sector and directed it instead to the state entities. However, private investment and ownership were encouraged in the agricultural sector. The last phase of the socialist period was characterised by an intensive effort to build industrial capacity targeting diversified processes. In 1988, Libya took some steps towards liberalisation with greater scope allowed to private enterprise, small scale industries and agricultural business. In September 1992, a privatization law was passed, but this initiative had no impact on the structure of the economys revenues and caused a serious decline in the economic activity (The economist, 2004). Now with a relatively small population, the substantial oil revenues gave Libya one of the highest per capita GDPs (US$6,800 in 2005) in Africa (Country Review, 2006). Libya has 100 billion barrels of proved oil reserves and around 40 trillion cubic feet of gas reserves. The cost of recovering the oil is low and the country is well located for exporting to Europe (National Oil Corporation, 2005). 2.8.2 The new economy approach Economic conditions in Libya started to deteriorate in the mid-1980s with the fall of world oil prices, and worsened in the 1990s as a result of United Nations-imposed economic Chapter two: Economic development 39 sanctions. Since the lifting of international sanctions in 2003 and 2004, Libya has decided to undertake comprehensive structural reforms and accelerate its transition to a market economy. However, the country still faces the formidable challenge of overcoming the long legacy of centralised economic management, excessive reliance on the public sector, and heavy dependence on oil (Country Review, 2006).
According to The Economist (2004), Libyas economy remains largely state-controlled and undiversified, with three-quarters of employment still in the public sector and private investment accounting for only 2 percent of GDP. However, in 2003 GDP grew by 9.1 percent, a sharp increase from 3.3 percent in 2002, reflecting substantial increase in oil production and oil export revenues (The Economist, 2004). Furthermore, in 2004, economic performance was satisfactory with real GDP growing 4.6 percent, mainly driven by higher oil prices and increased growth in the non-oil sector with strong performance in construction, utilities and mining, boosted by increased government spending (The Economist, 2004). In 2005, macroeconomic performance remained relatively strong with real GDP registering a growth of 3.5 percent. Contrary to previous years however, growth in 2005 was mainly driven by the non-oil sector growth, which increased from 4.1 percent in 2004 to 4.6 percent as a result of continued increase in government expenditure (Country Review, 2006). The International Monetary Fund (2005) stated that higher growth rates and diversification of the Libyan economy could only be achieved through deregulation, a significant scaling down of the dominant role of the public sector, and the development of the private sector. They expressed strong interest in these findings and, together with World Bank, will take a leading role in assisting Libya to reform the economy. Chapter two: Economic development 40
Libya is trying to attract international investors and develop non-oil businesses to drive towards a sustainable economy. In fact Libya's relationship with the international community has improved. To further integrate itself into the international society, Libya has taken measures in economic and structural reforms including trade liberalisation, allowing FDI in some sectors, the removal of customs duty exemptions enjoyed by public enterprises, and the reduction in import tariff rates (Country review, 2006). It can be argued that, Qaddafi's son, Saif al-Islam, was the driver of such changes. He played an important role to bring the long-isolated country into the world economy (Reed, 2007b). He came to an agreement with Professor Michael Porter (Harvard business school professor and the founder of Monitor Group), to develop methods to support Libya's private sector (Reed, 2007). The Monitor Group has poured over the Libyan economy and mapped out a strategy in a report for the next decade, focusing on energy, tourism, trade, and construction (Reed, 2007b). The report resulted in the establishment of the Libyan Economic Development Board (LEDB). The LEDB intends to diversify the economy away from oil by promoting private business and entrepreneurship (Reed, 2007). The LEDB's mandate is to clear away some of the obstacles to successful private businesses and thus diversify the Libyan economy away from the state-controlled energy sector (libyaninvestmnet.com, 2007). Additionally, the Emerging Markets Monitor report (2007) indicated that Libya has unveiled a plan to create a Green Mountain Sustainable Development Area. This encompasses a national park, eco-friendly hotels, organic farms and the restoration of Chapter two: Economic development 41 archaeological sites in the mountainous region of Djebal Al-Akhdhar and a drive towards attracting FDI into Libya and building up the tourist industry.
2.9 Summary The study of economic development is one of the newest, most exciting, and most challenging branches of the economics and political economy. Economic development deals with social, political and institutional mechanisms, both public and private, to bring rapid and large scale improvements in the standard of living for people of Africa, Asia, and Latin America.
Measuring economic development is a difficult process. Existing attempts to assess national development are still suffering from conceptual and measurement challenges. This has led to a literature that is, in general, excessively focused on economic development without connection to the capabilities of those institutions to expedite economic development of citizens. However, the global disparities in access to the Internet and other ICTs have led to a digital divide between wealthy and poor nations.
The post-World-War II literature on economic development has been dominated by four major and sometimes competing strands of thought; The linear stage of growth which includes Rostows Stages of Development; theories and patterns of structural change; the international dependence revolution and new classical, and free market counter-revolution. The emergence of a fifth approach (new or endogenous theory) has been witnessed. It was Chapter two: Economic development 42 primarily an economic theory of development in which the right quantity and mixture of savings, investment, and foreign aid were all that was necessary to enable Third World nations to proceed along an economic growth path that historically had been followed by the more developed countries.
Technology adoption is not something that just happens to economies, it is a process that countries need to consciously and actively promote and nurture. The more rapidly a technology is able to be adopted to work in an economy, the more rapid will be the pace of economic growth.
The successful introduction of technology into domestic production processes in any country requires a domestic scientific establishment capable first of understanding, processing and adopting foreign-produced technological knowledge to local conditions and secondly recognising the potential and dangers of its own discoveries when applied to the domestic economy. However, developing countries may face challenges in adopting technologies because of the shortage of economic drivers such as a mobile and highly educated labour force and a favourable climate for enterprise.
Kodakanchi et al., (2006) introduced an economic development model based on IT. They argued that faster rates of economic growth can be achieved using IT as the driving factor in the economic policies of the world-wide economies. However, developing countries do not have appropriate infrastructure to support the development of IT. Most commonly, some of the major concerns with the advent of IT in such countries are the inability to Chapter two: Economic development 43 invest in the IT field due to poor financial infrastructure and inadequate human power having a knowledge of IT. Chapter three: E-Commerce 44
Chapter three: E-Commerce 45
Chapter three E-commerce Chapter three: E-Commerce 46
3.1 Introduction................................ ................................ ................................ ................................ ........... 47 3.2 Background ................................ ................................ ................................ ................................ ........... 47 3.2.1 Use of the Internet ................................ ................................ ................................ ............................... 47 3.2.2 Internet in developing countries ................................ ................................ ................................ .......... 48 3.2.3 Internet in Libya................................ ................................ ................................ ................................ .. 50 3.3 E-commerce................................ ................................ ................................ ................................ ........... 53 3.3.1 E-commerce categories ................................ ................................ ................................ ....................... 54 3.3.2 E-commerce in developing countries ................................ ................................ ................................ .. 57 3.3.3 E-commerce in Libya................................ ................................ ................................ .......................... 60 3.4 E-government ................................ ................................ ................................ ................................ ........ 62 3.4.1 E-Government in developing countries ................................ ................................ ............................... 65 3.5 M-commerce................................ ................................ ................................ ................................ ......... 66 3.5.1 Mobile commerce in developing countries ................................ ................................ ......................... 68 3.6 Payment Methods................................ ................................ ................................ ................................ .. 69 3.6.1 Payment in developing countries................................ ................................ ................................ ......... 71 3.7 Regulation and legislation ................................ ................................ ................................ .................... 73 3.8 E-commerce challenges................................ ................................ ................................ ......................... 74 3.9 Factors Influencing E-commerce Adoption................................ ................................ ........................ 77 3.10 Summary................................ ................................ ................................ ................................ .............. 81
Chapter three: E-Commerce 47
3.1 Introduction This chapter discusses e-commerce in general and e-commerce in developing countries in particular giving the example of Libya. Developing countries have a long way to go in order to catch up with the developed countries, therefore the researcher critically evaluates some of the issues that Libya is facing while adopting e-commerce. The chapter also highlights the real situation of e-commerce-related issues in developing countries, such as Payment systems and e-commerce regulation and legislation. Additionally, the chapter summarizes internal and external factors that may affect e-commerce adoption in developing countries
3.2 Background In the developed world, the Internet has recently become a household domestic device and its uses are becoming increasingly widespread, especially after the recent introduction of broadband, which has greatly facilitated easy and fast access to the Internet. The Internet has become immensely popular and a major channel for business. E-commerce has become an important channel throughout the Internet community. 3.2.1 Use of the Internet Internet technology has developed into a communication channel so large and powerful that it cannot be ignored (Curtis and Cobham, 2008). Matrix Information and Directory Services (MIDS) (1999) reported that there were 102 million people accessing the Internet world- Chapter three: E-Commerce 48 wide. This number had increased from the estimate of 57 million in January 1997, representing a close-to 100 per cent increase in numbers of people accessing the Internet in just a year and a half (Skok, 2000). The number of Internet users around the world surpassed 340 million in 2002 (Tan and Ouyang, 2004). Reaching 591 million people at the end of 2002 (UNCTAD, 2003) and is estimated to reach over 1,200 million worldwide by the end of 2007 (Internet World State, 2007). The 2007 estimates are shown in Table 3.1. Table 3.1 History of Internet users Source: www.Internetworldstats.com, 2007
Population (2007) Est.) Internet Usage, latest data % Population (penetration Usage % of World Usage growth 2000-2007 Africa 933,448,292 43,995,700 4.7 % 3.5 % 874.6 % Asia 3,712,527,624 459,476,825 12.4 % 36.9 % 302.0 % Europe 809,624,686 337,878,613 41.7 % 27.2% 221.5 % Middle East 193,452,727 33,510,500 17.3 % 2.7 % 920.2 % North America 334,538,018 234,788,864 70.2 % 18.9% 117.2 % Latin America 556,606,627 115,759,709 20.8 % 9.3 % 540.7 % Oceania 34,468,443 19,039,390 55.2 % 1.5 % 149.9 % World total 6,574,666,417 1,244,449,601 18.9 % 100.0 % 244.7 %
3.2.2 Internet in developing countries Developing countries continue to experience faster growth in the number of Internet users. At the end of 2002, developing countries had 32 per cent of the worlds Internet users, up from 28 per cent in 2001. If current trends continue, Internet users in developing countries could soon constitute 50 per cent of the world total.
Chapter three: E-Commerce 49 However, it is in the concentration of Internet hosts for businesses relative to populations that the difference between the developed and the developing world is most dramatic. While in 2002 the number of Internet users per 10,000 people was 53 times larger in North America than in Africa, in the same year the proportion between the numbers of Internet hosts per 10,000 people living in those two regions was 984 to 1. In other words, the relatively few people who use the Internet in developing countries compete among themselves for access to a proportionally much smaller number of computers connected to the Internet, and they have access to little locally-hosted Internet content (UNCTAD, 2003). One could argue that one of the crucial issues relating to the poor use of the Internet in developing countries is the limitation of International bandwidth. International bandwidth availability is especially important for developing countries because, given the relative scarcity of locally-generated content, a large part of Internet traffic in developing countries (between 70 and 80 percent by most estimates) tends to be international (Kamel, 2006). Over the last three years, the average African Internet user still enjoys about 20 times less capacity than the average European user, and 8.4 times less than a North American one (UNCTAD, 2003).
3.2.3 Internet in Libya Internet access in Libya is becoming increasingly more popular, with the emergence of Internet cafes, which have become one of the favourite pastimes of young Libyans. Most companies now have accounts, and private access from home is becoming available. It is anticipated that Libya will see a similar growth in cyber technology as seen in other North- African markets (The Information Department of the Great Gamahiria, 2006; Doing business and investment in Libya, 2005).
Most of Internet services in the country are delivered by the Libya Telecom and Technology Company (LTT) - the only authorised Internet Service Provider in the country. LTT connected to Canada through a satellite connection with a bandwidth of 5 MB and Chapter three: E-Commerce 51 also connected to Italy by a fibre optic cable with a capacity of 150 MB and a bandwidth of 45 MB (The Information Department of the Great Jamahiriya, 2006; LTT, 2006).
Accessing the Internet through a dial-up connection is considered to be one of the cheapest and most popular means of connecting to the Internet (Young, 1999), the number of subscribers to this service in Libya in 2006 was around 55,000 according to LTT internal documents. This service is provided through access servers spread wide throughout most of Libya's main cities (Tripoli, Musratah, Zawia, Khoms, Zletin, Benghazi, Surt, Houn, Sabha, and Biniwaleed). In Tripoli the dial-up connection is good with rates of about 33 kbps, but end users have to endure some problems due to the line conditions, mainly humidity and cable disconnection. Large cities have adequate dial-up connection status, but in some small towns, the poor connection of landline and ICT infrastructure prevents users from using the Internet (Doing business and Investment in Libya, 2005; The Information Department of the Great Jamahiriya, 2006). Table 4 shows the number of Internet users between 1999 and 2001. Table 3.2 Usage of Internet in Libya Year Users 1999 7,000 2000 10,000 2001 20,000 Another service provided in the country is Asymmetric Digital Subscriber Line (ADSL). The charge for dial-up and ADSL services in Libya are high compared to other service providers. However, as summarised in Table 5.3, the cost of Internet connection is falling dramatically for all services along with providing better quality and higher capacity. As an Chapter three: E-Commerce 52 example of the above, the dial-up cost is 0.4 Libyan Dinar (L.D) (0.2) per hour in 2006 compared to 4 L.D (2) in 1999 (LTT, 2006). The charge for ADSL in 2006 was 50 L.D (25) per month along with a one-time installation fee of 150 L.D (75). Table 3.3 Charge of Dial-up and ADSL Source: LTT, 2006 Year Dial-up (L.D/ Hour) ADSL (L.D/ Month) 1999 4.0 - 2000 2.0 - 2001 1.5 - 2002 0.7 - 2003 0.7 - 2004 0.7 - 2005 0.7 50 2006 0.4 50
Furthermore, a leased-line service is also available in the country provided by LTT Company. LTT internal documents acknowledge that the service provided could be delivered using xDSL or ATM access. The LTT documents argued that using ATM could enable organisations to use Voice and Video conferencing. Leased-line services are available at different speeds ranging from 256 kbps up to 8Mbps see Table 3.4 Table 3.4 Leased Line Capacity and price, Source: LTT, 2006 Leased line Year 64 kbs 128 kbs 256 kb 512 kb 1m 2M 4M 8M 1999 45,000 58800 - - - - - - 2000 13,200 25650 - - - - - - 2001 13,200 25650 - - - - - - 2002 12,000 29000 55,000 85,600 112,700 134,300 - - 2003 - 29000 55,000 85,600 112,700 134,300 - - 2004 - 29000 55,000 85,600 112,700 134,300 - - 2005 - 29000 55,000 85,600 112,700 134,300 260,000 - 2006 - - 9,000 16,800 32,400 60,000 110,000 200,000 Chapter three: E-Commerce 53 The cost of leased-line, as with other costs, has fallen dramatically, e.g. 9000 L.D (4,500) in 2006 for 265 kb reduced from 55,000 L.D (27,500) in 2002 as shown in Table 3.4. In addition, Wireless Networking Services are available in the country from LTT. An LTT internal document stated that highly secure wireless broadband-products are deployed in Libya by public and private enterprises, government and educational institutions, and Internet Service Providers (ISPs). Adding to above, DVB-RCS, a broadband satellite solution, is available in the country provided by many companies offering one-way and two-way connection. However, the only authorised company to provide the service is LTT. Libyas biggest demand is for one-way (receiving) services. Two-way (receiving and sending) service requires a special usage permit. Only some government companies have the permit to use two-way services. Oil companies need it for their oil fields that are located in the desert to provide connectivity to their network. (The Information Department of the Great Jamahiriya, 2006; LTT, 2006).
3.3 E-commerce overview E-commerce is the concept of conducting trade and retail business online through the use of secure websites. It constitutes the exchange of products and services between businesses, groups and individuals (Davis, 2003). E-commerce technologies allow for instant access to more data and opportunities than ever before because they extend across the globe and reach people in almost every nation. With the immense networking and telecommunications capabilities of e-commerce, most companies can be very profitable Chapter three: E-Commerce 54 ventures. The ability to promote and sell products and services online allows even the smallest firms to profit with very little capital or overhead (Jasper, 2000).
With the latest computerisation and IT Internet technology, the future of international business for all personal or commercial investment companies involves e-commerce and all it has to offer. There are three main issues within e-commerce, including immediate access to unlimited information, upgrading of daily business activities due to computerisation technology and the opportunities provided by e-commerce that allow for personal or business involvement through the Internet (Young, 1999; Mujahid, 2000; Lawrence, 2001).
3.3.1 E-commerce categories There are many ways in which e-commerce transactions can be classified. One is by looking at the nature of the participants in the e-commerce transaction. The major e- commerce categories are business-to-consumer (B2C) e-commerce, business to business (B2B) e-commerce, consumer to consumer (C2C) e-commerce and Government to business/consumer (G2B/C) e-commerce.
UNCTAD (2003) argues that in 2001, annual B2B online sales in the United States amounted to $995 billion, or 93.3 percent of all United State e-commerce. Private-sector estimates of the value of B2B trade in the European Union put it at between nearly $185 billion and $200 billion for the year 2002. In the Asia-Pacific region, it grew from about $120 billion in 2002 to around $200 billion in 2003 and $300 billion by 2004. According to Chapter three: E-Commerce 55 UNCTAD (2003), African B2B e-commerce in 2002 was expected to amount to $0.5 billion in 2002 and $0.9 billion in 2003, with South Africa accounting for 80 to 85 percent of these amounts (UNCTAD, 2003; Laudon and Traver, 2003).
The North American online retail market was anticipated to grow 45 percent in 2001 to 65 billion for B2C, according to a joint study conducted by the industry group Shop.org and the Boston Consulting Group (cited in Patton, 2001). In the second quarter of 2004, eBay, the leader in online consumer auctions hosted 332 million listings, with 8.0 billion dollars of goods trading on the site. Some of the technologies developed by pioneers in this medium (e.g. eBay and Onsale.com) have already found interesting applications in the B2B space as well. The government market is strikingly similar to B2B. As Furth (2001) says: if the 20 percent cost saving claimed by B2B proponents can replicated in B2G, the implication for tax payers as well as market entrants will be enormous in this $1.5 trillion market.
E-commerce has the potential to radically alter existing economic and social structures and arrangements. Not surprisingly, it has become a major pre-occupation of policy makers and business over the last few years (Davis, 2003). The two main crucial driving forces behind the new economy are the Internet and e-commerce (Wong and Seok Ling, 2001).
E-commerce forms part of a broader process of social change, characterised by the globalisation of markets, the shift towards an economy based on knowledge and information, and the growing dominance of technology. In order to allow a smooth Chapter three: E-Commerce 56 transition to e-commerce, investments are required in the social infrastructure and skills to enable people to use the technology in a way that is compatible with the local circumstances, cultures and abilities of users in developing countries (Straub, 2003).
The Internet has also been at the heart of a further deepening of ICT investment, by making possible a sharp increase in the quality and functionality of existing ICT equipment. It creates an environment that substantially lowers the entry barriers for e-commerce, in part because it adheres to non-proprietary standards based on the existing communications infrastructure. It has been argued in the OECD report (2003) that earlier forms of e- commerce among firms required established relationships, expensive and complex custom software, and dedicated communication links and, in many cases, strictly compatible equipment.
Additionally, Hawkins et al., (1998) argued that e-commerce provides extra benefit to the agricultural sector by providing better information about market prices and has fostered the emergence of new online commodity markets. In construction, it reduces the need for blueprints and allows seamless communications between subcontractors. In manufacturing, it generates new efficiencies by reducing procurement costs and improving supply chain management. Its role in the services sector is linked to qualitative aspects of products, such as convenience and customisation, thereby reducing costs and delays and increasing reliability (Hawkins, et al., 1998)
Chapter three: E-Commerce 57 3.3.2 E-commerce in developing countries A significant amount of the Third World is already partially developed and a sustainable amount of the population has a demographic profile similar to that of the west (Goldstein and OConnor, 2000). The Third World is also a great reservoir of untapped talent, which if helped, would flourish rapidly, joining and contributing to the developed worlds economy (UNCTAD, 2003). The potential of e-commerce applications to enable access to global markets and to reduce barriers to market entry is a theme which is heavily emphasised in the burgeoning literature on the promise of e-commerce for developing countries (WTO 2001; OECD 1999; Goldstein and OConnor 2000; Mann 2000; UNCTAD 2000, 2001).
The WTO (2001) claimed that e-commerce would facilitate low cost access to international bidding and supply processes for developing country firms, and to market information such as import restrictions, customs regulations, and potential demand. Several authors have mentioned the potential of e-commerce for expanding the markets of developing countries firms, either through online intermediaries or directly through the use of corporate websites (Choi et al., 1997; WTO, 2001; OECD, 1998a; Panagariya, 2000; WIPO, 2000; UNCTAD, 2001). According to the WIPO (2000), e-commerce provides developing country producers with opportunities for accessing new international markets at low cost and minimal capital investment, for improving competitiveness and customer services, and for reducing transaction cost and overheads.
Chapter three: E-Commerce 58 It is generally believed that e-commerce enables developing country producers to overcome traditional limitations associated with restricted access to information, high market-entry costs, and isolation from potential markets (April and Cradock, 2000; Cohen et al., 2000; Maitland, 2001). It also is expected to provide opportunities for producer firms in developing countries to enhance their international profile and to develop direct one-to-one trading relationships with international buyers and sellers. It can also expedite the ability of developing country suppliers to obtain information about buyer requirements in industrialised countries (Daniel, 2002).
The use of computers and the Internet for business are not widely understood in many developing countries, let alone e-commerce. Being part of global e-commerce processes requires knowledge of many complex systems including online promotion, international payments, and shipping that are beyond the current limited capacity of most businesses (Cohen et al., 2000). Moreover, during the dot-com bubble, expectations of e-commerce were raised unrealistically high by reports in the mass media and, together with the lack of success of early adopters; many entrepreneurs are now sceptical of its relevance to developing countries (Pastore, 2001).
B2B e-commerce offers two important advantages for firms in developing countries. First, e-commerce-related transaction costs are less sensitive to distance than traditional marketing channels, so access to global markets is made easier. Second, by amplifying and making market channels more efficient, B2B e-commerce should enable developing Chapter three: E-Commerce 59 country firms to retain a larger share of the final consumer-price of products (Humphrey, 2002).
Since the late 1990s, an increasing number of developing countries have followed the example of developed countries and launched their own national ICT programmes and strategies. These cover a broad range of policy areas, such as awareness raising, infrastructure building, telecommunications deregulation, education and labour-force training, changes in legislation, and e-government (UNCTAD, 2003). The report stated that developing countries may be better to focus on shared-access models than on connecting all households, which would require large amounts of funding. For example, the use of ICT and the Internet can be broadened by setting up public access points or facilitating the provision of free Internet access in all public schools, universities and other public locations such as libraries, and by establishing tele-centres throughout the country (UNCTAD, 2003).
Therefore, enhancing awareness and public understanding about the benefits of ICT is often an important starting point in a developing countrys policy planning. Other priority areas for developing countries are basic access to ICT, low-cost hardware and software, and the use of local-language websites. Furthermore, in many developing countries a lack of local Internet content leads most people to purchase online from foreign sites (mainly in developed countries) rather than local or even regional sites (World Bank, 2004; UNCTAD, 2003).
Chapter three: E-Commerce 60 E-commerce is still in its infancy in many developing countries. Developing countries need to take into consideration that building telecommunications infrastructure is costly. In many cases, countries will need inflows of FDI to improve domestic infrastructure. This means that, in addition to establishing a well-regulated telecommunications market, they need to put in place policies to ensure an appropriate investment climate for Foreign Service providers (UNCTAD, 2003). Moodley et al., (2002) conducted an in-depth quantitative and qualitative analysis of the use of B2B e-commerce by manufacturing firms in South Africa. The study was based on 120 firm-level interviews and 31 interviews with industry experts. The evidence indicates that the incidence of use is fairly low. Although 87 percent of the firms had access to the Internet, only 49 percent had a corporate site and only 22 percent were using the Internet for order taking. 3.3.3 E-commerce in Libya E-commerce should increase the efficiency of Libyas economy to make their products higher quality and their customer-service more efficient. Additionally, it should also create artificial barriers that the Libyan society will have to find ways to solve by adjusting their business practices to accommodate them. E-government initiatives should enhance the effectiveness and efficiency of the Libyan government and improve its relationship with the public and private sectors of the local economy. E-commerce is rapidly changing the foundation of the Libyan government policies and improving their online communication strategies for expanding their economy. According to Business Middle East (2002), rising demand in fixed-line, mobile and Internet service, Libya has a long way to go to catch up with its poorer neighbours like Egypt and Chapter three: E-Commerce 61 Tunisia. The Libyan government owns and operates both the fixed-line and mobile network systems. The postal system is also nationalised with post-office boxes in all the large towns. According to The General Peoples Committee for Tourism (2006) international postal services to Libya can be slow. The average time for airmail is around 7 to 12 days. Surface mail can take considerably longer. There is no guarantee that mail will be delivered, therefore using a good courier service for delivery for business correspondence is recommended (The General People Committee for Tourism, 2006; eBiz Libya, 2007). The country has only around 605,000 fixed lines for a population of 6.3 million, and only 40,000 mobile users (a penetration rate of less than 1 percent) and 10000 Internet service subscribers. However Libya has developed significantly, as demonstrated in Table 3.5, the percentage of people having landlines in 1995 was 5.9 and it had doubled in 2002 by almost 10 percent. The same issue applies to mobile technology; the Libyanna Mobile Technology Company argued that the subscriber numbers to its service exceeded one million, where dial-up subscribers according to LTT internal documentation reached 55,000 in 2006. Generally growth and development are slow, but not because of any lack of demand. Internet cafs are spreading rapidly, with more than 50 in Tripoli alone. Table 3.5 Telephone lines in Libya, Source: UNDP, 2000 Year Telephone lines (per 100 people) 1959 0.7 1964 1.1 1969 - 1974 1.5 1980 2.4 1995 5.9
Chapter three: E-Commerce 62 Internet users are mainly young people and teenagers who surf the Internet mostly for leisure and entertainment rather than shopping around or hunting for bargains. Several factors could be summarised as a result which are: Consumers are not yet heavily involved in using the Internet and become e- commerce customers. E-commerce in Libya is still in its infancy stages of development. Traditional trade infrastructure is better established than e-commerce infrastructure. E-commerce is complementary to traditional trade activities. E-commerce is only a threat to traders who do not offer good services to their customers (Hamed, 2004).
Furthermore, the announcement of the lifting of Custom tariffs on more than 3,500 imported commodities could result is reducing the cost of products which will reduce the threat of e-commerce effects on traditional businesses. According to the Economist Intelligence Unit Limited (2005), the average tariff rate was almost 22 per cent, but this disguised an extremely complex system of tariffs, ranging from zero to 425 per cent. The latest move will undoubtedly contribute to lower prices, and help curb bureaucracy, reduce smuggling and increase trade volumes.
3.4 E-government Since the mid-1990s governments around the world have been executing major initiatives in order to tap the vast potential of the Internet for the distinct purpose of improving and Chapter three: E-Commerce 63 perfecting the government process. Like the personal computer, the Internet has become an indispensable tool in the day-to-day administration of government (cdt.org, 2006). E- government is the birth of a new market and the advert of a new form of government that is a powerful force in the Internet economy, bringing together citizens and businesses in a network of information, knowledge, and commerce. It also enables government to be more transparent to citizens and businesses by providing access to more of the information generated by government (UNCTAD, 2007; Laudon and Laudon, 2006). According to Daniel (2002), e-Procurement is among the E-government services that will allow transparency in the bidding process for projects and supply and give opportunities to smaller businesses, which otherwise are not able to bid on big government procurement projects. Also, once the e-government strategy of a country has been formulated, agencies, bureaucracies and public services will be aligned towards promoting those sectors which have been pinpointed for growth. Additionally, a working group (2002) stated that there are many possible reasons and goals for e-government which could be categorised as: Improving services to citizens; Improving the productivity (and efficiency) of government agencies; Strengthening the legal system and law enforcement; Promoting priority economic sectors; Improving the quality of life for disadvantaged communities; and Strengthening good governance and broadening public participation
Chapter three: E-Commerce 64 Federal and state government business is an institution in and of itself. E-commerce has emerged as governments look at moving procurement online. The government market is strikingly similar to B2B. Government-to-consumer business has done well. For example, paying for a speeding ticket and a renewing drivers licence online have paid dividends to governments agencies as well as customers (Awad, 2004).
E-government services are designed to increase the efficient flow of information between government institutions and businesses. It may include information exchange between government bodies of different nations. These services may utilize some of the components of G2C and G2B services but generally require more direct access to databases and applications (cdt.org, 2006).
There are several key factors that define the core areas of an enabling e-government environment. Yet because the visions, goals and policies that encompass e-government vary considerably among practitioners and users, comparative indicators may not always be precise. Several proven indicators, however, do exist that are representative of a countrys capacity to launch, sustain, perfect and promote an effective e-government program and can be used as dependable benchmarks. Telecommunication indicators like the numbers of PCs, Internet hosts, and telephone lines are indispensable, as without these technologies a countrys capacity to sustain online service delivery is nonexistent. Analysing website content, access patterns, online services and official information, give only a partial account of a countrys overall e-government environment (cdt.org, 2006; UNCTAD, 2003). E- government can serve a variety of different ends: better delivery of government services to Chapter three: E-Commerce 65 citizens, improved interactions with business and industry, citizen empowerment through access to information, or more efficient government management. The resulting benefits can be less corruption, increased transparency, greater convenience, revenue growth, and/or cost reductions. 3.4.1 E-Government in developing countries The government context for e-commerce affects businesses in three ways. First, in most countries, the government is one of the largest buyers of goods and services. Many governments also make sure they buy a share of their goods and services from domestic Small-to-Medium Enterprises (SMEs). Second, businesses turn to the government for a wide variety of services, from customs clearances to business licenses. Today the length of time needed to obtain these services and, in some cases, the lack of transparency in the process can and often does thwart SMEs efforts to compete internationally. To the extent that governments in developing countries can improve the efficiency and transparency of these business services, the better its SMEs will be able to compete internationally (Payne, 2002; Dada, 2006).
The UNCTAD (2003) report, recommends that governments in both developed and developing countries play an important role in promoting and facilitating the development of the information society and economy. Above all, governments should lead by example by adopting e-government practices. Experiences show that in many developed countries that have enjoyed fast growth in ICT, government has been closely involved in promoting ICT development. Governments play an important role as leaders, especially at the earliest Chapter three: E-Commerce 66 stages, by providing vision, raising awareness and making ICT development a national priority (UNCTAD, 2003). 3.5 M-commerce E-commerce is considered to be the buying and selling of information, products, and services via computer networks. Thus, a primary distinction between M-commerce and e- commerce lies in the differences between transactions and access. E-commerce is oriented toward supporting and realising transactions. However, the wireless protocol originally designed to facilitate mobile commerce transactions, Wireless Application Protocol (WAP), has not fulfilled its technological promise, so the most distinctive feature of M-commerce that has emerged in many of the larger mobile markets is the facilitation of enhanced information network access (Laoudon and Traver, 2003). M-commerce has two major characteristics that differentiate it from other forms of e-commerce. M-commerce is based on the fact that users carry a cell phone or other mobile device everywhere they go so that with M-commerce people can be reached at any time (Turban and King, 2003).
There are a variety of Internet-like applications available for todays mobile phones. WAP commercially launched by many operators in 2000 and allows mobile phones to browse the Internet. WAP technology provides an effective solution for accessing the web in the short term and realising Mobile Websites (MEB) in the long term. Through the use of WAP devices, such as WAP phones, people can keep in touch with the Internet world anywhere and any time. It is expected that this will lead to the development of many innovative M- Chapter three: E-Commerce 67 Commerce services. Users access websites specially adapted to fit the screen size of a mobile phone (Chan and Lee, 2001; Effy, 2002; Minges, 2007).
M-commerce should be recognised as a unique business opportunity with its own unique characteristics and functions, not just an extension of an organisation's Internet-based e- commerce channel (Minges, 2007). Most wireless companies will be charging their customers an extra fee for data-time instead of air-time, which means that users can have a dedicated connection to the Internet with cell phone and only be charged when data are sent. This allows a business people to stay online with their wireless devices connected to their payment terminals at all times, and only be charged when they key in a transaction (Effy, 2002).
Mobile finance applications are likely to be one of the most important components of M- commerce. These applications include mobile banking, bill payment services, M-brokerage services, mobile money transfers, and mobile micro payment. These services could turn a mobile device into a business tool, replacing banks, ATMs, and credit cards by letting a user conduct financial transactions with a mobile device (Turban and King, 2003). Wireless payment systems transform mobile phones into secure, self-contained purchasing tools capable of instantly authorising payments over the cellular network for goods and services consumed. In addition, micro-payment, which is electronic payment for small-purchase amounts, can be implemented in a variety of ways. One way is that the user could make a call to a certain number where per-minute charges equal the cost of the vending item; this method transfers money from the users telephone bill to the vending providers account. Chapter three: E-Commerce 68 Another way to perform micro-payment is by using prepaid cards purchased from a service provider, bank, or credit card company. Attaching a smart card with prepaid money on it to a mobile device is another option. Furthermore, in addition to paying bills with cheques or through online banking, one can pay bills, such as MasterCard or utility bill, directly from a cell phone. This can be done via bank, a credit card, or a prepaid arrangement (Chan and Lee, 2001; Effy, 2002).
3.5.1 Mobile commerce in developing countries M-commerce might be the solution for developing countries to overcome ICT and broadband problems that because the use of wireless device enables the user to receive information and conduct transactions anywhere, at anytime (Chan and Lee, 2001). Wi-Fi (Wireless Fidelity) hot spots (places where Wi-Fi enabled computers can connect to the Internet) are proliferating in airports, railway stations, hotels, cafes and other public spaces, mainly in the United States and Western Europe. Besides its applications for private users, the technology can be useful for people who work on the move and need to connect to their offices. In industries such as manufacturing, logistics and retailing, and thanks to electronic tags that can be attached to products or components and beam information about their location or functioning, Wi-Fi can be used to manage various aspects of production and distribution (King, et al., 2006).
While Wi-Fi technology clearly offers significant benefits to Internet users and strong growth in its use can safely be anticipated, specific business models for its commercial Chapter three: E-Commerce 69 exploitation are only starting to be developed. For developing countries, Wi-Fi technologies represent an opportunity to provide low-cost broadband access that is relatively simple to deploy, at least in urban areas. In the words of Kofi Annan, one time Secretary-General of the United Nations, We need to think of ways to bring wireless fidelity applications to the developing world, so as to make use of unlicensed radio spectrum to deliver cheap and fast Internet access. (UNCTAD, 2003, P35).
3.6 Payment Methods Payment systems constitute part of the basic structure of a countrys economy and financial markets (Dajankov, et al., 2003). Electronics and information technologies are rapidly changing the banking and financial services industry. Online banking and electronic payment systems are new, and the development and diffusion of these technologies by financial institutions is expected to result in a more efficient banking system (Awad, 2004). This technology offers institutions alternative and better delivery channels through which banking products and services can be provided to consumers (Panopoulou, 2001). The business of banking has been dramatically altered over the past twenty years, as exemplified by the rise of wholesale banking, multinational banking, Euro-banking, international banking facilities, multiple currency loans, collateralised mortgages, interest rate and currency options and swaps, and financial futures. Credit cards, debit cards, automated teller machines, cash management accounts, electronic fund transfers, point of sale terminals are also part of this world-wide process of change which began in the 1960s, Chapter three: E-Commerce 70 has been sustained over two decades, and continues to re-shape the nature of banking and financial markets (Panopoulou, 2001).
Very important long-term technical changes are beginning to affect the payment systems, especially the continuing decline in computing costs and the physical size of powerful computer chips, along with the associated spread of powerful telecommunications technologies. The widespread availability and acceptability of computers both at home and in the offices has accelerated the process. At the same time, the cost of communications has been falling dramatically, broadly opening up markets world-wide. These trends have a marked impact on the payment systems and they offer potentially significant avenues for improvement of the efficiency of existing arrangements and for the creation of new payment mechanisms (Chaffy, 2002).
Historically, payment system transactions were exclusively provided by the banks. However, the dominance of small payment systems by the banking industry is being challenged by a nascent industry reacting to consumer demands. Today many non-bank entities provide these services. In fact, the competition for the provision of payment system mechanisms has turned monetary value transfer into a commodity. The banking industry has trailed other industries in developing and offering electronic money payment systems for small-value transactions (Sifers, 1997). The Internet opportunities have attracted a wide range of players, from big and established organisations such as MasterCard, Visa, Microsoft, and the major banks, to newcomers such as Digi-Cash, Cyber-Cash and First Virtual (OMahony et al., 1997; Awad, 2004). Chapter three: E-Commerce 71
Electronic payment systems developed for transferring bank payments between the banks are becoming increasingly common in all industrialised countries. They speed up payments transfer and improve the quality of payment transmission. Compared with traditional methods of transmitting payments, the new systems involve significant economies of scale and rationalisation gains. It would hardly be possible to increase the volume and value of payments at the present pace without corresponding advances in payment technology. At the same time, the implementation of new payment systems is helping to enhance the planning and monitoring of bank liquidity. As the systems require large investments, they also call for co-operation between banks and participation by the central bank (Llewellyn, 1999). In case of payment systems, the banking sector has succeeded well by coming up to expectations set by the fast developing market needs and other areas of society. Globalisation and faster communication have caused some changes in payment methods. Credit cards and travel cheques, as well as Internet payments, have been some solutions from the banking side to secure its position in financial markets in previous years (Saarinen, 2000; Panopoulou, 2001).
3.6.1 Payment in developing countries Only the upper classes in developing countries use credit and debit cards to pay for their shopping as a way of showing their class (UNCTAD, 2003). Similarly in the some other parts of the world, especially in Asia and Latin America, credit cards are not a widespread common feature in society (Ocampo, 2001). Therefore, to expect many sales on the Internet Chapter three: E-Commerce 72 would be disappointing for a Western company that hopes to do tremendous business on the Internet in a foreign country that does not use credit card as payment method (Pons et al., 2003).
According to Humphrey et al., (2003), in developing countries, the underdeveloped electronic payments system is a serious impediment to the growth of e-commerce. In these countries, entrepreneurs are not able to accept credit card payments over the Internet due to legal and business concerns. The primary issue is transaction security. The absence or inadequacy of legal infrastructures governing the operation of e-payments is also a concern. Hence, banks with e-banking operations employ service agreements between themselves and their clients (Humphrey et al., 2003). Innovations affecting consumers include credit and debit cards, automated teller machines (ATMs), stored value cards, and e-banking. Innovations enabling online commerce are e-cash, e-checks, smart cards, and encrypted credit cards. These payment methods are not popular in developing countries. They are employed by a few large companies in specific secured channels on a transaction basis. Innovations affecting companies pertain to payment mechanisms that banks provide for their clients, including inter-bank transfers through automated clearing houses allowing payment by direct deposit (Andam, 2003). The payment schemes available for online transactions in developing countries are cash-on-delivery; many online transactions only involve submitting purchase orders online. Payment is by cash upon the delivery of the physical goods and bank transfer payments; after ordering goods online, payment is made by depositing cash into the bank account of the company from which the goods were ordered (Andam, 2003; Awad, 2004). Chapter three: E-Commerce 73 3.7 Regulation and legislation One of the most controversial sides to the increase of e-commerce on the Internet is that there is no regulation of goods, allowing pornography, piracy of products, and other illegal actions to create security and legal issues that may never have total solutions (Davis, 2003). Much of the concern to date on the civil side has resolved around threat to privacy, intellectual property rights, the prospect of universal defamation and the implication for national tax collection. On the criminal side, there are concern about the security of network systems and unauthorised access and denial of service attacks, concerns about the availability of indecent, obscene and racist content, concerns about the use of computer technologies for traditional property offences such as theft, and fraud, and concern about publishing hate speech and online talking (Beynon-Davies, 2002; Akdeniz, 2000; Reed, 2004). Governments have been involved primarily in finding ways to put some regulation into the security issues of the Internet. Recently, many United Staes congressmen and other political officials have increased their concern over the amount of unsolicited products like pornography that are constantly being sent to global emails through direct marketing (Fredricks, 2001).
Even though, copyright laws are carried over to e-commerce products and sales; there will be many changes in the online marketplace for information goods. Since people cannot make copies of material available on their own and sell them without the permission and copyright agreement in retail outlets, they should not be able to do that with videos, movies and books or other products sold online through e-commerce (Vernon, 2000). However, Chapter three: E-Commerce 74 regulation and prevention of these problems is very difficult for individual governments to do. The Internet may make it necessary for world governments to regulate its usage and protect the rights of manufacturers whose products have been pirated and sold for profit (Brinson et al., 2001; Reed, 2004). The same rights that apply to the real business world must also apply to the virtual and digital world of e-commerce, by using a combination of cryptographic techniques and laws guaranteeing that unauthorised copies of digital products cannot be made. The ease of transactions on the Internet would then force major changes (Fredricks, 2001).
Much has already been done in the non electronic environment to protect individuals against organisations holding information on them, the most notable of these being the Data Protection Act 1998 which deals with what information can be held by an organisation on an individual (Turban et al., 2002). Currently many organisations, such as AltaVista, America Online and Microsoft, are operating under the TRUSTe seal (they call it a trustmark) which appears at the bottom of an e-tailers website. Its members hope that customers will use the TRUSTe seal as an assurance of their privacy policy, credit card security, fulfilment process integrity etc. (truste.org, 2006). 3.8 E-commerce challenges The Internet does not only deal with money, but also with large databases, full of vital and sometimes top secret information that companies, organisations and governments have within their own environment. Also, the Internet can be easily characterised as an FDI (Foreign Direct Investment) tool. Companies apply different strategies of how to enter a Chapter three: E-Commerce 75 foreign market, expand their operations and become multinationals. Companies do that in order to create a competitive advantage over other companies. Such firms gain competitive advantage by exploiting new resource; low labour-costs, cheap raw materials, the countrys infrastructure, communication channels, legislation, etc.
The revolution of e-commerce brings along some challenges, not only for the firms, but for governments as well. These challenges can influence at a microeconomic and macroeconomic environment level. E-commerce and e-business require a complete change of the business structure. Firms going digital need to consider restructuring their entire business or even creating a new one. They need to implement new management processes, changes in their business culture and follow different procedures for managing their employees. Also, they need to create a new structure for information systems, networked processing functions and most importantly, they will need to change their entire business strategy (Chaffy, 2002; Laudon and Traver, 2003).
All E-businesses, in order to co-ordinate their online transactions and business activities as well as the potential linkage with other firms within its industry, need to build a very strong IT infrastructure. IT infrastructure has the power to connect the firm with infrastructures of other organisations while bringing down barriers and creating a new business global village (Chaffy, 2002). However, digital firms have to select the most suitable Internet technology that is compatible with their business processes and data structures. There are different kinds of hardware and software tools that can be used for different business applications. Therefore, the firm must choose the right set of technologies for its IT Chapter three: E-Commerce 76 infrastructure (Laudon and Laudon , 2002). Moreover, technology is constantly upgrading and introduces new systems, applications and hardware. A company has to keep up with the technology pace in order to create well functioning business processes among customers and suppliers via the Internet. This requires the reconstruction of information architectures and IT infrastructures. According to Mitchell et al., (2004) there are five basic problems that stand in the way of implementing these new changes.
Loss of management control: The end users are becoming more independent, capable of collecting, storing and handle software. This occurs due to the lack of a single, central point where the need of management can occur.
Connectivity and application integration: A company needs to upgrade its IT infrastructure in order to have compatible networks and standards and eliminate connectivity problems.
Organisational change requirements: The old organisation structure has to be changed to be compatible with the new IT infrastructure in order to be more effective and uniform.
Hidden costs of enterprise computing: Some unexpected costs and expected savings that did not occur are generating problems. These costs are generated from hardware and software installations, maintenance costs, labour costs etc. Chapter three: E-Commerce 77
Scalability, reliability, and security: The increased load of data transactions and storage as well as the traffic of applications such as audio, streaming video and graphics, drive managers to develop strategies to manage those issues.
This is done to primarily take advantage of lower labour and raw material costs (Brinson et al., 2001). Therefore, Governments must bring down the different barriers that impact on e- commerce, such as taxation, extensive regulation and censorship; and allow e-commerce to grow up in an environment driven by markets. Also, governments should support the creation of a legal framework for doing business on the Internet (United States Government, 2004). Additionally, e-commerce will open the market for highly skilled workers. From the expansion of e-commerce this demand will increase and it will significantly change the labour market. All the skilled workers that are living in countries that cannot comply with the salary and technology requirements will migrate to more developed countries that can easily accommodate their needs and demands (United States Government, 2004).
3.9 Factors Influencing E-commerce Adoption Radaideh and Salim (2004) introduced factors of e-commerce adoption decision in a case of developing countries as shown in Figure 3.2 below. They argue that there are critical factors affecting the adoption of e-commerce by firms which are classified into two main Chapter three: E-Commerce 78 categories; internal and external factors. Internal factors are within the firm and external factors are environmental in nature.
Internal factors are IT readiness which refers to the level of IT usage within the firm. This category includes information and networking security, system interrelation, data conversion, hardware and software compatibility, adequacy of the firms IT infrastructure and migration from legacy system (Graham and Cobham, 2006). The second internal factor category refers to the firms financial readiness. Graham and Cobham (2006) argued that financial readiness is reflected by the top managements willingness to fund an e-commerce adoption project. The major cost of e-commerce adoption is the cost of educating and training management and employees to use e-commerce (Graham and Cobham, 2006). Another concern of the top management is the losses of productivity due to abuse by IT staff readiness factor category refer to the IT and e-commerce literacy level inside the firm. Chapter three: E-Commerce 79
Management support is another important internal factor category. Graham and Cobham (2006) state that this category represents the extent to which the top management recognises the importance of e-commerce adoption. The recognition is reflected in the support and leadership of top management executives in e-commerce adoption process (Grover, 1993; Thong, 1999; Godenhielm, 1999; Tabor, 2003). The firms internal culture refers to the collaboration level and style among the different managerial levels and team spirit and dedication to the business processes. Firm size is one of the main reasons for not adopting e-commerce. Large firms have more resources and infrastructure to facilitate implementation of e-commerce adoption projects. The anticipated financial and managerial benefits are important factors affecting the adoption decision. IT readiness Financial readiness Staff readiness Management support Firm strategy Firm culture Firm size Anticipated benefits Internal factors Global completion Local completion Customer pressure Trust & Culture Law & regulations IT infrastructure Industry Nature Government Nature External factors E-commerce adoption Figure 3.2 Factors relating to E-commerce adoption decision by a firm Source: Radaideh and Salim, 2004 Chapter three: E-Commerce 80
There are several external factor categories to be considered. The first two categories include pressure exerted by competitors on a firm. Tabor (2003) argues that competitive intensity increases the need for e-commerce adoption by firms. The competition leads to environmental uncertainty and increases the need and rate of adoption. Allen (2000) emphasised the importance of trust in maintaining productive adoption of e-commerce. Culture has been considered as a critical factor affecting e-commerce adoption (Ranganathan, 2003). Furthermore, customer pressure on firms to adopt e-commerce is also considered an important category. They stated that the industry to which the firm belongs affects the adoption decision. The nature of government is among the most important factor groups affecting e-commerce adoption. Ranganathan, (2003) argues that government needs to build knowledge and set standards. Policies and regulations are also important factors at the local and global stages.
Radaideh and Salim (2004) explained the main factors affecting e-commerce adoption in developing countries but did not develop a solution for e-commerce adoption. Another matter to be addressed is that they separated the external and internal factors as different issues where in reality these two factors are interrelated, for example IT readiness depends on the external and internal factors together and can not benefit the organisation if one is used without the other.
Chapter three: E-Commerce 81 3.10 Summary E-commerce forms part of a broader process of social change, characterised by the globalisation of markets, the shift towards an economy based on knowledge and information, and the growing dominance of technology. In order to allow a smooth transition to e-commerce, investments are required in the social infrastructure and skills to allow the use of the technology in a way that is compatible with the local circumstances, cultures and abilities of users in developing countries. E-commerce provides developing country producers with opportunities for accessing new international markets at low cost and minimal capital investment, for improving competitiveness and customer services, and for reducing transaction costs and overheads. It also enables producers to overcome traditional limitations associated with restricted access to information, high market-entry costs, and isolation from potential markets.
Being part of global e-commerce processes requires knowledge of many complex systems including online promotion, international payments and shipping that are beyond the current limited capacity of most businesses. An increasing number of developing countries have followed the example of developed countries and launched their own national ICT programmes and strategies. These cover a broad range of policy areas, such as awareness raising, infrastructure building, telecommunications deregulation, education and labour force training, changes in legislation, and e-government, yet they have failed to adopt it successfully. Developing countries need to take into consideration that building telecommunications infrastructure is costly. Chapter three: E-Commerce 82
For Libya, e-commerce is rapidly changing the foundation of the Libyan government policies and improving their online communication strategies for expanding their economy. Even though, Libya has a long way to go to catch up with its poorer neighbours like Egypt and Tunisia. The government owns and operates both the fixed line and mobile network systems. The postal system is also nationalised. International postal services to Libya can be slow and there is no guarantee of delivery. The country with a population of 6.3 million has only around 605,000 fixed lines, one million mobile users, 55,000 dial-up subscribers in 2006. Most of the Internet services in the country are delivered by the Libya Telecom and Technology Company (LTT) the only authorised Internet service provider in the country. The charge of the service in Libya is high compared to other service providers. However, the cost of Internet connection is falling dramatically. Internet users are mainly young people and teenagers who surf the Internet mostly for leisure and entertainment.
Payment systems and regulations for e-commerce are important issues in developing countries; only economically advantaged people use credit and debit cards to pay for their shopping as a way of showing their class. The payment schemes available for online transactions in developing countries are cash-on-delivery; many online transactions only involve submitting purchase orders online. Payment is by cash upon the delivery of the physical goods and bank transfer payments. In Libya, cards and electronic payments had not been introduced at the time of writing this thesis. To expect many sales on the Internet would be disappointing for a Western company that hoped to do tremendous business on the Internet in a foreign country that does not use credit cards as a payment method. Also, Chapter three: E-Commerce 83 there is no transitional regulation of goods, allowing pornography, piracy of products, and other illegal actions to create security and legal issues that may never have total solutions. Chapter four: Toward a theoretical framework 84
Chapter four: Toward a theoretical framework 85
Chapter four Towards a theoretical framework for e-commerce Drivers and Barriers Chapter four: Toward a theoretical framework 86
Chapter four: Toward a theoretical framework 87 4.1 Introduction E-commerce forms part of a broader process of social change, characterised by the globalisation of markets, the shift towards an economy based on knowledge and information, and the growing dominance of technology in everyday life. This chapter examines the drivers, benefits and barriers of e-commerce taking extracts from the literature review chapters (chapters two, three and four) and developing a theoretical framework to conceptualise e-commerce drivers and barriers.
4.2 Drivers and Barriers It has been argued in chapter three, that the Internet has the ability to lower some of the entry barriers to global trading, e.g. geographical location and differing time zones. E- commerce is expanding rapidly and has facilitated changes by significantly reducing the costs of outsourcing and co-operation with external entities. E-commerce has helped to break down the natural monopoly characteristic of services such as telecommunications. E- commerce is a key technology for speeding up the innovation process, reducing time scales, fostering greater networking in the economy and making faster diffusion of knowledge and ideas possible. New Economy (2002) argues that e-commerce has played an important role in making science more efficient and linking it more closely to business. Using the Internet to lower communication costs and reduce time-to-market for goods and services exports makes it a very valuable medium for firms engaged in international trade. The ability of e- commerce to deliver information of almost any sort in digital format at low cost offers significant efficiencies that firms can pass on to customers in the form of lower prices. It Chapter four: Toward a theoretical framework 88 can also help manage supply chains for goods and services in cross-border trade, cutting overheads associated with marketing, transport and distribution. In agriculture, the Internet is providing better information about market prices and has fostered the emergence of new online commodity markets. In construction, it reduces the need for blueprints and allows seamless communications between subcontractors. In manufacturing, it is generating new efficiencies by reducing procurement costs and improving supply chain management. Its role in the services sector is linked to qualitative aspects of products, such as convenience and customisation, thereby reducing costs and delays and increasing reliability (Gallagher, 1999; Mehrtens et al., 2001; Kendall et al., 2001; Art-am, 2002; OECD, 2003)
Given that the underlying technology of the Internet is inherently global, accessible and based on open standards, e-commerce applications are optimistically being promoted in the developing world as relatively cheap to set up and operate and flexible to configure (Kalakota and Drew, 1996; Chan and Lee, 2001). The optimists argue that the impact of reducing co-ordination costs will significantly influence global trading relationships (Malone et al., 1987) and encourage firms to find the best producers regardless of location (Davidow and Malone, 1992; Wigand, 1997).
One could argue that e-commerce drivers vary from one country to another. Some drivers that are seen in some developed countries are not yet evident in many developing countries and in some cases those drivers in a developed country could be barriers in other countries. Some additional drivers were realised for the first time in this research according to the researchers best knowledge. There are a number of barriers to the adoption e-commerce Chapter four: Toward a theoretical framework 89 such as security, cost and taxation or even in some circumstances, too much business for a company to cope with. Furthermore, one of the traditional barriers cited by many organisations to the growth of e-commerce is the relatively high telephone charges for Internet access, the tariffs payable and the cost of connection. Other costs, such as hardware and web-design, remain beyond the reach of many peoples ability to pay for the service. Also, Reed (1999) argued that broad-level support for the technology is lacking, both in the initiation of e-commerce projects and in the allocation of targeted budgets.
There are further barriers specifically related to developing countries. Accessing the Web is possible only when telephone lines and computers are available, but these technologies are still in very scarce supply in many developing countries. In addition to this problem, Internet access is still very costly - both in absolute terms and relative to per-capita income in most developing countries. While computer prices have fallen dramatically over the last decade, they are still too expensive in developing countries (UNDP, 2003). Add to this the human capital cost of installing, operating, maintaining, training and support and the costs often become beyond the means of many enterprises in developing countries. Moreover, skilled personnel are often lacking, the transport facilities are poor, and secure payment facilities non-existent in many countries (Straub, 2003).
Users in developing countries are likely to be engaged in making improvements to their operations, often focusing on production management, financing and accounting, product development and marketing rather then paying attention to e-commerce and e-business strategies. Additionally, many Internet users in developing countries do not speak or write Chapter four: Toward a theoretical framework 90 good English as well as displaying poor English on web-sites or in emails. Slow responses generally have the effect of pushing away potential customers (The Asian Foundation Report, 2002).
There are many issues that could count as drivers and barriers to e-commerce and economic development at the same time. This is analysed and discussed in the e-commerce chapters. These issues are cost, payment systems, legislation and regulation, infrastructure, culture and religion, government, employment, competition, traditional business, economic activities, knowledge of e-commerce, time and information.
4.2.1 Cost Cost is one of the main drivers of e-commerce and Internet activities. It is an important factor for the worlds e-commerce in general and for developing countries in particular. Using the Internet is a valuable medium for firms and governments engaged in international trade to reduce and lower costs. E-commerce could help to lower the cost of communication, time-to-market for goods and services exports (Chaffey, 2002). It also gives the ability to deliver information of almost any sort in digital format at low cost and helps to reduce the cost of managing supply chains for goods and services in cross-border trade (Gallagher, 1999). Reducing selling, buying and procurement cost (WTO, 2001) and providing the opportunities to sellers and producers to demonstrate their products online without a need to have an actual shop (Kehoe, 1998) and reducing the cost of customer service and after-sales service (Hawkins et al., 1998) are other cost reductions resulting from e-commerce adoption. However, the implementation and maintenance cost could be Chapter four: Toward a theoretical framework 91 argued to be a barrier to e-commerce. For example, shipping costs can increase the cost of many products purchased via e-commerce and add substantially to the final price. Additionally, cost in term of hardware and software remains out of reach in cost terms for many people and organisations in developing countries (Straub, 2003). Furthermore, the cost of Internet connection and telephone charges in developing countries is moderately high compared to developed countries (UNCTAD, 2003). Additionally, the cost of implementing ICT infrastructure and delivery infrastructure in a country could be high (Hammond, 2001). Table 4.1 summarises the cost issues that were mentioned in the literature. Table 4.1: Cost issues in the literature Item No Drivers and barriers Reduces costs 1 Driver Reduce communication cost 2 Driver Deliver information in digital format 3 Driver Reduce the cost of supply chains 4 Driver Reducing selling cost 5 Driver Reduce buying cost 6 Driver Providing opportunities to sell 7 Driver Reducing the cost of customer service and after-sales service 8 Driver Implementation cost 9 Barrier Maintenance cost 10 Barrier shipping costs 11 Barrier Cost in term of hardware and software 12 Barrier Cost of Internet connection and telephone charge 13 Barrier Cost of implementing ICT infrastructure 14 Barrier Delivery infrastructure 15 Barrier Increase saving 16 Driver Chapter four: Toward a theoretical framework 92
4.2.2 Payment Systems Payment systems are another main factor for e-commerce adoption and economic development. Payment systems, as some other factors, could be drivers or barriers. Having a payment system will encourage people to do business all over the world and speed up transactions and other banking activities as well as providing new opportunities to businesses to provide online services. Djankov et al., (2003) argued that payment systems constitute part of the basic structure of a countrys economy and financial markets. For e- commerce to be used successfully in a country, electronic payment has to be installed and ready. It speeds up payments, transfers and improves the quality of payment transmission (Lipis et al., 1985) and offers institutions alternative and better delivery channels through which banking products and services can be provided to consumers. Compared with traditional methods of transmitting payments, the new systems involve significant economies of scale and rationalisation gains (Llewellyn, 1999) and are helping to enhance the planning and monitoring of bank liquidity (Djankov , et al., 2003). Additionally, a network of ATMs offers a new method in daily banking affairs. It adds value for consumers through its ability to increase time and place convenience for the routine banking functions of obtaining cash and making deposits (Llewellyn, 1999). ATMs offer a more cost-effective means of delivering these routine functions and frees branch personnel for selling extra services. (Lipis et al., 1995). On the other hand, adopting such a system requires large investments that many developing countries will not be able to provide. It also calls for co- operation between banks and participation by the central bank (Llewellyn, 1999) which needs government involvement. Additionally, social and technical factors need to be Chapter four: Toward a theoretical framework 93 considered while adopting such technology (Utterback, 1994). In the world of banking, interesting new technology in the form of automatic services is strongly limited, so long as the old familiar services are easily available (Llewellyn, 1999). Today, many electronic payment activities are carried out by other companies other then banks which will result in higher charges in developing countries if no competition exists. Other issues such as securing payment systems in a country would need significant investment. Table 4.2 summarises payment issues that were mentioned in the literature. Table 4.2: Payment issues in the literature Item No Driver or barrier Payment system will encourage people to do business 1 Driver Payment system will speed up transactions and other banking activities 2 Driver Payment system provides new opportunities for online services. 3 Driver Payment systems constitute part of the basic structure of a countrys economy 4 Driver For E-commerce to be used, E-payment has to be installed and ready. 5 Driver Adopting payment system requires large investments 6 Barrier Payment system needs co-operation between banks and participation by the central bank 7 Barrier Social and technical factors need to be considered while adopting Payment system 8 Barrier In the world of banking interest new technology in form of automatic services is strongly limited so long as the old familiar services are easily available 9 Barrier Electronic payment activities are carried out by other companies which will result in higher charges 10 Barrier Securing payment systems in a country would need significant investment. 11 Barrier Payment in developing countries is cash or cheques 12 Barrier 4.2.3 Legislation and Regulation Legislation and regulation are barriers and drivers to e-commerce. It was been argued that e-commerce needs legislations and regulation to control of the flow of business over the Chapter four: Toward a theoretical framework 94 Internet (Awad, 2004). There is a large number of goods and commodities that can be bought and sold illegally online. Piracy of products is also a major problem. The absence of legislation and regulation has led to difficulty in finding a total solution. One of the most controversial aspects of the increase of e-commerce on the Internet is that there is no regulation of goods, allowing pornography, piracy of products, and other illegal activities to create security and legal issues that may never have total solutions (Mark 2003; Hamed, 2004). Furthermore, online viruses are also becoming a serious matter that is under scrutiny, since many major corporations have had their computer mainframes broken into by hackers (Vernon, 2000). In addition, the full range of pirated software available in the market at low or no cost requires copyright and other issues to be considered (Fredricks, 2001). The regulation of e-commerce will build customers trust and show the possible way forward to deal with technology and international suppliers and customers. However, regulation and prevention of these problems is very difficult for individual governments. E- commerce regulation could conflict with other legislation and regulation in a country. Table 4.3 summarises the legislation and regulation issues that were mentioned in the literature. Table 4.3: Legislation and regulation issues in the literature Item No Drivers and barriers Needs legislations and regulation to control the flow of business 1 Driver Goods and commodities can be bought and sold illegally online. 2 Barrier Piracy of products 3 Barrier The absence of legislation leads to difficulty in finding a total solution. 4 Barrier Lack of regulation leads to pornography sales 5 Barrier Chapter four: Toward a theoretical framework 95 Online viruses becoming a serious matter 6 Barrier The regulation of e-commerce will build customer trust 7 Driver Regulation and prevention is very difficult for individual governments. 8 Barrier E-commerce regulation could conflict with other legislation and regulation in a country. 9 Barrier Concern about the security of network systems 10 Barrier Concerns about the use of computer technologies for traditional property offences such as theft, and fraud, 11 Barrier Concern regarding publishing inflammatory speech and online racial hatred 12 Barrier 4.2.4 Infrastructure Infrastructure refers to ICT infrastructure, postal infrastructure and any other infrastructure needed in a country to support e-commerce. If the infrastructure is in a poor condition then the expectation to see an improvement in the e-commerce adoption is significantly low. Additionally, the potential for e-commerce is low because of the control of networks by monopolies or dominant firms in many developing countries (Thorbjornsen & Decamps, 1997). These monopoly companies limit competition by blocking lower prices and improvement the quality of the services. The infrastructure of a country could be a main driver to attract international companies and foreign direct investors to do business in that particular country. For example, international companies could establish branches and warehouses in Libya to provide services and products not only to Libya but to the whole of Africa, Arab countries and other Mediterranean countries. However, infrastructure costs are significant and need new strategies, planning and management which will drive many developing countries to seek FDI and other assistance from wealthier nations. FDI will result in moving regulation and control of a countrys infrastructure from the government to Chapter four: Toward a theoretical framework 96 the international investors. For wealthier developing countries such as Libya, the government of a country may have other strategic projects to be finished before beginning new projects. Table 4.4 summarises the infrastructure issues that were mentioned in the literature. Table 4.4: Infrastructure issues in the literature Item No Drivers and barriers If the infrastructure is in a poor condition then the expectation to see an improvement in the e-commerce adoption is significantly low. 1 Barrier The potential for e-commerce is law because of the control of networks by monopolies or dominant firms in many developing countries 2 Barrier The Infrastructure of a country could be a main driver to attract international companies and foreign direct investors to do business in that particular country. 3 Driver Infrastructure cost is significant 4 Barrier Infrastructure needs new strategies, planning and management 5 Driver 4.2.5 Culture and Religion If e-commerce conflicts with a countrys culture and religion then certain barriers may be created, e.g. intervention to ban the sale of certain items that violate such culture, traditions and values (Laudon and Traver, 2003). Culture is the broadcast factor in consumer behaviour because it shapes basic human values, wants, perceptions and behaviours (Kotler, 2000). For example, selling alcohol in a Muslim country or offering credit-card services with interest rate could possibly result in driving people away from using that part of technology. There are many items on sale which contain materials which are obscene or offensive to a countrys traditions and values, and hence intervention by the system to ban their sale might be perceived by some as a barrier, and their purchase should be left to Chapter four: Toward a theoretical framework 97 individuals. There is some consensus that such materials should not be sold online, and certain barriers to get access to them should be in place to protect young people and children from moral corruption. Culture and religion could be a driver for e-commerce, e.g. in Arab countries such as Libya where women are not encouraged to work with men, e- commerce could help in providing paid work from home for the women. Such action could be seen as being in keeping with culture, tradition and values. Table 4.5 summarises the culture and religion issues that were mentioned in the literature. Table 4.5: Culture and religion issues in the literature Item No Drivers and barriers E-Commerce conflicts with culture and religion 1 Barrier Intervention to ban the sale of certain items that violate culture 2 Barrier offering credit card services with interest rate 3 Barrier Children protection 4 Barrier Religion issues 5 Barrier E-Commerce helps to maintain culture 6 Driver Change in business culture 7 Driver
4.2.6 Government Governments always play an important role in economic development (Todaro, 1999). Governments are usually the main customer of small businesses and will support all investments and improvements in a countrys infrastructure as well as being responsible for setting legislation and regulation for trade and securing the sustainability of economic growth (Well, 2005). Therefore, governments should think carefully about e-commerce Chapter four: Toward a theoretical framework 98 adoption and put strategies for the adoption in place before hand. Thus e-government strategies would provide citizens, other government departments and companies with significant advantages and efficiency. E-government is a significant factor for e-commerce as it delivers services to businesses and the public. According to Daniel (2002), e- procurement (one of the e-government services) and an online supplier exchange are among the services included in G2G and G2B services. This allows transparency in the bidding process and gives opportunities to smaller businesses which otherwise are not able to bid on big government procurement projects. Also, once the e-government strategy of a country has been formulated, agencies, bureaucracies and public services may be aligned towards promoting those sectors which have been pinpointed for growth. Additionally, there are many possible reasons and goals for e-government, such as improving services to citizens, improving the productivity and efficiency of government agencies, strengthening the legal system and law enforcement, promoting priority economic sectors, improving the quality of life for disadvantaged communities, and strengthening good governance and broadening public participation. However, e-commerce could affect any economy and its activities. E- commerce will work with capitalism and globalisation, therefore countries which have adopted the communist and socialist approaches should be aware that e-commerce may change the economic approach adopted into capitalism. Additionally, governments tend to support monopoly organisations and limit the opportunities for private companies which could affect the adoption of e-commerce. Thus local private companies would not have the support and experience to compete with large international organisations. Table 4.6 summarises the government issues that were mentioned in the literature. Chapter four: Toward a theoretical framework 99 Table 4.6: Government issues in the literature Item No Drivers and barriers Governments always play an important role in economic development 1 Driver The government is usually the main customer of small businesses 2 Driver Government will support all investments and improvements in a countrys infrastructure 3 Driver Government is responsible for setting legislation and regulation for trade 4 Driver Government should think carefully about e-commerce adoption 5 Driver E-government strategies would provide significant advantages and efficiency. 6 Driver E-government will create new jobs for other private and public organization 7 Driver E-government improving services to citizens, 8 Driver Improving the productivity and efficiency of government agencies, 9 Driver Strengthening the legal system and law enforcement, 10 Driver Improving the quality of life for disadvantaged communities, 11 Driver Governments tend to support monopoly organisations and limit the opportunities for private companies which could effect the adoption of e-commerce. 12 Barrier
4.2.7 Employment Employment is an important factor in any economy. It has been argued that e-commerce may result in job cuts. However, adopting e-commerce technology may result in creating new job opportunities and encourage employment education and gaining new skills (UNCTAD, 2003). Hawkins, et al., (1998) argued that ICT seems to offer the greatest benefits when ICT investment is combined with other organisational assets, such as new strategies, new business processes, new organisational structures and better workers skills. Chapter four: Toward a theoretical framework 100 He argued that the contribution of ICT capital to output and labour productivity growth has been significant and rising in relative terms. Therefore for a country to maximise the benefit of e-commerce adoption training and education should take place before-adoption. Table 4.7 summarises the employment issues that were mentioned in the literature. Table 4.7: Employment issues in the literature Item No Drivers and barriers Employment is an important factor in any economy. 1 Driver E-commerce may result in job cuts. 2 Barrier E-commerce may result in creating new job opportunities and encourage employment education and gaining new skills 3 Driver 4.2.8 Competition Competition could drive the economic development of a country by providing cheaper products and services which could result in many savings that could be reinvested in the economy and speeding up economic development (Todaro, 1999). According to Hagel and Armstrong (1997), lower production costs will encourage the entry of new businesses and thus increase competition and pressure to pass lower costs on to consumers as lower prices. In addition, consumers will be able to search among thousands of merchants for the lowest prices, thereby increasing the downward pressure on prices and leading to a shift in market power from producer to consumer (Hawkins, et al., 1998). On the other hand competition could destroy small local businesses. These businesses could go elsewhere or cease to exist. In either case this will affect economic activities, such as taxation and employment. Table 4.8 summarised the competition issues that were mentioned in the literature. Chapter four: Toward a theoretical framework 101
Table 4.8: Competition issuers in the literature Item No Drivers and barriers Competition could drive the economic development of a country by providing cheaper products and services
1 Driver Lower production costs should encourage the entry of new businesses and thus increase competition and pressure to pass lower costs on to consumers as lower prices.
2 Driver Consumers should be able to search among thousands of merchants for the lowest prices, thereby increasing the downward pressure on prices and leading to a shift in market power from producer to consumer
3 Driver Competition could destroy small local businesses. These businesses could go elsewhere or cease to exist. In either case this will affect economic activities such as taxation and employment.
4 Barrier 4.2.9 Traditional business Traditional businesses in most developing countries were established long before e- commerce. These companies are the main economic contributors in the economy. Therefore government and companies have to work together in monitoring technological and strategic development in the use of e-commerce in order for these companies to maintain their place in international competition and restructure their organisations. A failure to involve traditional businesses could work against e-commerce adoption and against economic development. Traditional businesses and e-commerce businesses could work together. Table 4.9 summarises the traditional business issues that were mentioned in the literature.
Chapter four: Toward a theoretical framework 102 Table 4.9: Traditional business issues in the literature Item No Drivers and barriers Traditional businesses in developing countries were established long before e-commerce. 1 Barrier Traditional companies are the main economic contributors in the economy. 2 Barrier Government and companies have to work together in monitoring technological and strategic development in the use of e-commerce in order for these companies to maintain their place in international competition and restructure their organisations. 3 Barrier A failure to involve traditional businesses would work against e-commerce adoption and against economic development. 4 Barrier Traditional businesses and e-commerce businesses could work together. 5 Driver
4.2.10 Economic Activities Gurstein (2000) argued that a free market and the cost of adopting e-commerce technology could result in delays to e-economic development. He also suggested that a result of adopting e-commerce technology could be the shift of economic activities away from marginal or disadvantaged regions towards advantaged regions. The success of e-commerce can be at the expense of local enterprises in direct competition with international suppliers. Additionally, the range of goods available on the Internet is very large and cannot be matched by any one supplier let alone smaller local suppliers thus putting these local enterprises at a significant disadvantage in certain sectors. Furthermore, Kenny (2002) argues that government returns (e.g. taxation) might be even lower than company-level returns because of two negative externalities linked to e-commerce sites. First, the Internet allows online businesses to gain new customers from traditional businesses. Second, and Chapter four: Toward a theoretical framework 103 perhaps of greater concern to developing countries companies with less access to the new technologies, Internet investment involves defending market share, so that social returns to this investment are lower than private returns. Therefore a government should encourage the use of a countrys resources to provide cheaper prices than anywhere else in the world. On the other hand the adoption of e-commerce will result in a significant reduction of costs and providing a variety of products from all over the world. For countries such as Libya who are importing more than exporting, e-commerce could develop the economic activities and allow users to enjoy the reduction of costs which could be reinvested in the economy and help development (Todaro, 1999). Table 4.10 summarises the economic activities issues that were mentioned in the literature Table 4.10: Economic activities issues in the literature Item No Drivers and barriers The cost of adopting e-commerce technology could result in delays to e-economic development. 1 Barrier Adopting e-commerce technology could shift economic activities away from marginal or disadvantage regions towards advantaged regions. 2 Barrier The success of e-commerce can be at the expense of local enterprises in direct competition with international suppliers. 3 Barrier The range of goods available on the Internet is very large and cannot be matched by any one supplier let alone smaller local suppliers thus putting these local enterprises at a significant disadvantage in certain sectors. 4 Barrier Government returns (e.g. taxation) might be even lower than company-level returns 5 Barrier The Internet allows online businesses to gain new customers from traditional businesses. 6 Barrier Companies with less access to the new technologies, Internet investment involves defending market share, 7 Barrier Chapter four: Toward a theoretical framework 104 so that social returns to this investment are lower than private returns. Government should encourage the use of a countrys resources to provide cheaper prices than anywhere else in the world. 8 Driver Adoption of e-commerce will result in a significant reduction of costs 9 Driver E-commerce will provide a variety of products from all over the world. 10 Driver E-commerce could develop the economic activities and allow users to enjoy the reduction of costs which could be reinvested in the economy and help development 12 Driver
4.3 The E-commerce Drivers and Barriers Model (1) From the above discussion, one could argue that, there are many drivers and barriers for e- commerce. E-commerce issues (e.g. payment, cost, etc) can be a driver or a barrier for a countrys economy. Therefore, each and every issue has to be adopted to work nicely with a country in order to contribute positively in the development of the economy. For example, removing international trade barriers can be consider as a driver for e-commerce, however, such action may result in destroying the local companies who are not able to compete with large and multinational corporations.
The e-commerce Drivers and Barriers Model lists all major e-commerce issues. It is divided into two sections, one section for barriers and another section for drivers. If the issue is a barrier for e-commerce in general or in a particular country then the issue should be located in the barrier section. And the issue will be located in the drivers if it is a driver for e- commerce. However, from the literature reviewed, all the discussed issues can be drivers Chapter four: Toward a theoretical framework 105 and/or barriers for e-commerce in developing countries, therefore, the researcher has located all issues in the middle of the model (see Figure 4.1). This tentative model is novel and has already been published (Hamed, 2008a, 2008b, 2009)
Cost Payment system Legislation & Regulation Infrastructure Government Employment Competition Traditional business Barriers Drivers Culture & Religion Economic activities Figure 4.1 E-Commerce drivers and barriers (1)
Chapter four: Toward a theoretical framework 106 The Drivers and Barriers Model is designed to help the reader to understand the drivers and barriers issues in a country. The model was mainly designed to list the drivers and barriers and it is not in any way an attempt to calculate the effect of the issue on the economy. In a country such as Libya, many issues mentioned in the literature can be found. These issues are listed in this model and will be investigated in this research. Tables in this chapter give detailed information of each issue. The research will present a modified version of the Drivers and Barriers Model at the end of the Chapter Six.
E-Commerce adoption is complicated, its adoption involves economic, social and political issues, and therefore the issues mentioned in this chapter will be different from one country to another. A country can be advanced in its level of cost management which can be a benefit for e-commerce adoption. However, other issues can be dis-benefit for them such as employment, salaries they pay for the local workers to deliver business, etc. Therefore, this model consists of two parts, barriers and drivers, If an issue is listed as a barrier for a particular country, then that issue will effect the adoption of e-commerce. On the other hand, if the issue is listed as a driver, then the issue can help the adoption of technology in that country. For example, the cost infrastructure in a developing country will cost an amount of money; this amount will have to come from the government of that country or by FDIs. In each case, the amount will affect the spending of that country and probably minimise other development spends because of this infrastructure project. That will put cost as a barrier for that country. On the other hand, the reduction of cost which will be achieved by the adoption of e-commerce can be a driver for that country. However, this model is not aiming to provide any quantitative assessments. It is used as a map for the research and a Chapter four: Toward a theoretical framework 107 guide for examining the main drivers and barriers issues. Arrows on the model explain that the issue can move from one side to the other. 4.5 Summary There are many e-commerce issues that can count as drivers or barriers in a country. These issues are cost, payment, legislation and regulation, culture and religion, government, employment, competition, traditional business, economic activities, knowledge of e- commerce, infrastructure and security. Each of these issues can have its effect on a countrys economy. For the country to guarantee a success of e-commerce adoption, its government has to make sure that it has dealt with all barriers and benefits of the drivers of each issue. These issues will be examined in Libya and discussed in the next chapter. Chapter five: Research methods 108 Chapter five: Research methods 109
Chapter five Research methods Chapter five: Research methods 110
5.1 Introduction This chapter describes the research methodology employed in this research study. The generation of data and information relating to the research topic is explained and rationalised according to the research aim and objectives. The purpose behind this research was to ascertain the effect of using e-commerce in the economic development of developing countries such as Libya, where very few or no earlier studies have been conducted.
The research process is described in terms of a critical analysis of relevant research approaches. A multi-method paradigm was selected to observe social reality and to develop knowledge through the testing of the data generated. The research design and methods are described aligned to the research aims and objectives. Primary and secondary data collection methods were explored, and the interview and questionnaire approaches are clarified. This chapter also defines the interview sample and data analysis which involved the use of computerized software packages (NVivo7, Excel) to store and organise the data gathered.
Chapter five: Research methods 112 5.2 Research Purpose Literature evidences the many approaches appropriate for research studies. Saunders et al., (2003) described the research purpose as being exploratory, descriptive, analytical or predictive. Collis and Hussey (2003) explained that exploratory research is conducted into a research problem or issue when there are very few or no earlier studies to which information can be referred. Robson (2002) defined exploratory research as a valuable means of finding out what is happening to seek new insights; to ask questions and to assess phenomena in a new light. The aim of this type of study, according to Collis and Hussey (2003), is to look for patterns, ideas or hypotheses, rather then testing or confirming hypothesis.
Saunders et al., (2003) described descriptive research as phenomena because it is used to identify and obtain information on the characteristics of a particular problem or issue. Robson (2002) states that the objective of descriptive research is to portray an accurate profile of person, events, or situations, however Saunders et al., (2003) argued that this may either be an extension of, or a forerunner to, a piece of exploratory research. He suggests that it is necessary to have a clear picture of the phenomena on which the researcher wishes to collect data prior to the collection of the data. The data collected, according to Collis and Hussey (2003), is often quantitative using statistical techniques that go further in examining a problem than exploratory research.
Analytical or explanatory research, as a continuation of descriptive research, goes beyond merely describing the characteristics, to analysing and explaining why or how it is Chapter five: Research methods 113 happening (Collis and Hussey, 2003). The emphasis here is on studying a situation or a problem in order to explain the relationship between variables (Saunders et al., 2003). Predictive research goes even further than explanatory research. The latter establishes an explanation for what is happening in a particular situation, whereas the former forecasts the likelihood of a similar situation occurring elsewhere. Predictive research attempts to generalise from the analysis by predicting certain phenomena on the basis of hypothesised, general relationships. Thus the situation to a problem in a particular study will be applicable to similar problems elsewhere, if the predictive research can provide a valid, robust solution based on a clear understanding of the relevant causes (Collis and Hussey, 2003).
E-commerce in Libya is still in its early stages as, to the researchers best knowledge, there are no earlier studies in this area. Therefore a study would investigate the e-commerce situation in Libya and explore what, if any, steps the country should take to adopt such technology (Saunders et al., 2003). As a consequence, the findings may be significant to other developing countries with a similar e-commerce situation (Collis and Hussey, 2003).
5.3 Research Design The literature identifies a number of interpretations of research design. Set out below are the most significant and recognised views. Research design is the science of planning procedures for conducting studies so as to get the most valid findings (Vogt, 1993). Saunders et al., (2003) referred to this stage as the general plan that determines how a researcher will attempt to achieve the research aim. In other words, the research design is the plan or strategy adopted for linking the theoretical research problem to relevant and Chapter five: Research methods 114 practicable empirical research that is conducted to achieve the research aim. In a similar vein Oppenheim (1992) defines research design as:
The basic plan or strategy of the research, and the logic behind it, which will make it possible and valid to draw more general conclusions from it (P 212).
Thus, the research design should tell how the sample will be drawn, what sub-groups it must contain, what comparisons need to be measured, and how these measures will be related to external events. Research design is concerned with enabling a problem to be researchable by setting up a study in a way that will produce specific answers to specific questions. Researchers need to assess their specific research design before they start their research. However, it is argued that researchers often fail to give adequate attention to research design issues, possibly because of their inability to identify design as their first, or as their most important, step in developing a research proposal (Hakim, 1987). Collis and Hussey, (2003) suggest that the first step in research design is to identify a research problem or issue. Identifying the research problem is always an exploratory and iterative phase in the research.
There are two significant research methods that need to be distinguished, the deductive method and the inductive method. Deductive research is a study in which a conceptual and theoretical structure is developed and then tested by empirical observation; thus particular instances are deduced from general inferences. For this reason, the deductive method is referred to as moving from the general to the particular (Johnson and Christensen, 2004). Inductive research is a study in which theory is developed from the observation of empirical reality; thus general inferences are induced from particular instances, which is the Chapter five: Research methods 115 reverse of the deductive method. Since it involves moving from individual observation to statement of general patterns or laws, it is referred to as moving from the specific to general (Collis and Hussey, 2003). More specifically Ghauri and Gronhaug (2002) argue that the deductive approach as a method is based on logic, whereas induction is based on empirical evidence. They further explain the difference between these two approaches. Deduction is drawing the conclusion out of logical steps and reasons regardless whether it is true in reality or not. Induction on the other hand does the opposite, it moves from assumptions to a conclusion.
5.3.1 Qualitative and Quantitative Methods The literature demonstrates the diversity of methodologies and research instruments available that can help with the generation of data and information relating to particular research topics. Patton (1990) indicated that the first undertaking is to decide which approach best identifies most appropriate solutions from which to draw suitable conclusions relating to the issues under investigation.
The quantitative approach may be defined as an interdisciplinary field that uses a multi- method approach to research. It refers to the understanding of human experience using numbers and statistics, examples, experiments, correlation studies by surveys and standardised observational protocols, simulations, supportive materials (Janesick, 1998; Corbetta, 2003). Johnson and Christensen (2004) argue that the quantitative research approach focuses on the deductive component of the scientific method by focusing generally on hypothesis testing and theory testing. Quantitative data are not usually Chapter five: Research methods 116 abstract, but hard and reliable; they measure tangible, countable, sensate features of the world (Bouma and Atkinson, 1999; Naoum, 1999). This can be compared to qualitative research that Creswell (1994) argued is an inquiry process of understanding a social or human problem, based on building a complex, holistic picture formed with words, reporting detailed views of informants, and conducted in a natural setting. Qualitative research is described as subjective in nature, emphasising the meanings, experiences, description, and so on (Naoum, 1999). The differences between qualitative and quantitative research have been explained by number of authors (Maxwell, 1998; Thomas, 2003; Corbetta, 2003). Corbetta (2003) demonstrated that qualitative research is open and interactive and observation precedes theory whereas quantitative research is structured and theory precedes observation. Corbetta (2003) has identified different issues between the qualitative and quantitative research in the nature of data. He argued that, in quantitative research the data it is hard, objective and standardized, on the other hand, in qualitative research the data it is soft, rich and deep. More recently, however, the competing paradigms of quantitative and qualitative research become almost working partners in some social research. Many researchers advocate a pragmatic position as it is recognised that both quantitative and qualitative research are very important and can often be mixed in single research studies (Patton, 1990; Naoum, 1999). The exact mixture that is considered appropriate will depend on the research questions and the situational and practical issues facing a researcher (Johnson and Christensen, 2004). Thus this research study aims to collect multiple sets of data using Chapter five: Research methods 117 different research methods in such a way that the resulting mixture or combination has complementary strengths and non-overlapping weaknesses (Brewer and Hunter, 1989; Johnson and Turner, 2002).
5.4 The Adopted Research Methodology There is neither a fast rule to selecting research methods nor best research method as the use of each research method depends on the form of research question, the research objectives and contextual situation (Yin, 2003). The selection of the most suitable research method depends largely on the intention of the research objectives and the type of data needed for the research. Combining both quantitative and qualitative research methods has proven to be more powerful than a single approach (Stewart and Cash, 2006) and very effective (Saunders et al., 2003). A mixed approach is a process of using more than one form of research method to test a hypothesis (Thomas, 2003). However due to the context of the research study this approach offers researchers a great deal of flexibility; whereby theories can be developed qualitatively and tested quantitatively or vice versa. The main aim of using a mixed method is to improve the reliability and validity of the research outcomes. Due to the broad scope of this study and the commercial context of the research, a wide range of research techniques was adopted to achieve the research aim and objectives.
For this research study a mixed research approach was adopted to achieve the studys aim and objectives and to maximise the benefit of both methods. From a qualitative stand point the research conducted semi-structured interviews and a closed questionnaire from a Chapter five: Research methods 118 quantitative aspect. In other words, a qualitative research study and a quantitative research study were conducted either concurrently or sequentially.
Both of these methods require data collection involving primary and secondary data collection methods. Primary sources include questionnaires, observation and interviews. Secondary sources include books, journals, government publications and survey, world statistics and so on (Chisnall, 1997; Saunders et al., 2003). All sources are examined more fully in Sections 5.6 and 5.7.
Table 5.1 summarises the research methods used in this study along with each objective. It explains the technique(s) used for collecting the information and the activities the researcher undertook and shows the outcome of each activity. For example, for developing the implementation plan for e-commerce (objective 5), the researcher used a mixed qualitative and quantitative approach. This objective was achieved by collecting secondary data (from books, journals, reports, CDs and websites) and primary data (from interviews and questionnaire). The outcome of objective 5 was the plan of action for e-commerce adoption which is demonstrated in Chapter seven.
Chapter five: Research methods 119 Table 5.1 research method techniques and outcomes Aim and objectives Research method Techniques Activities Outcomes 1. Review economic development literature Mixed approach Secondary data Books, Journals, Reports, CDs, website Chapter two 2. Review e-commerce literature Mixed approach Secondary data Books, Journals, Reports, CDs, website Chapter three 3. Develop theoretical framework Mixed approach Secondary data Books, Journals, Reports, CDs, website Chapter four 4. Investigate drivers and barriers in Libya Mixed approach Primary data Interview, Questionnair e Chapter six 5. Develop implementation plan for E-Commerce Mixed approach Secondary/ primary data Books, Journals, Reports, CDs, website, interview, questionnaire Chapter seven 6. Develop model to assist E- Commerce Mixed approach Secondary/ primary data Books, Journals, Reports, CDs, website, interview, questionnaire Chapter seven
The interview and questionnaire questions were linked directly to the theoretical framework developed in chapter four (more details on questionnaire and interview design can be seen in 5.6.1 and 5.6.2). Chapter five: Research methods 120
Tables 5.2 and 10.13 list all questions and link them with the theoretical framework. For example in table 5.2 all interview issues and questions are listed. Interviewees were asked the question do you know the term e-commerce? The idea behind this question is to demonstrate the interviewees understanding of the term e-commerce and to ascertain whether local businesses are aware of the threat of e-commerce. Therefore, in the same table (table 5.2) the mark will be found under the columns headed Knowledge and Traditional business issues. The same method applies for all questionnaire and interview question. Questionnaire questions linked to e-commerce issues can be found in table 10.13 (appendices 10.5). Table 5.2 , Interview questions linked to E-Commerce issues Interview questions c o m p e t i t i o n
c o s t
c u l t u r e
e c o n o m i c
e m p l o y m e n t
g o v e r n m e n t
i n f r a s t r u c t u r e
K n o w l e d g e
l e g i s l a t i o n s
p a y m e n t
s e c u r i t y
T r a d - b u s i n e s s
Do you know the term e- commerce?
Does your company have a strategy for electronic commerce?
Which communication do you use?
Does your business engaged in electronic commerce ? If you implementing e- commerce, what is the advantages / reasons of implementing e-commerce? What is the main befit to your business?
Chapter five: Research methods 121 If you are not implementing e-commerce, what is the disadvantages/reason of not implementing? Why you are not involved?
If you dont have a clear strategy for e-commerce at present, is it likely to become important in 2-3 years?
How many products and services does your business offer?
How do you deliver your products and services to consumer/client
What type of payment do you accept
Do you update your web if you have one, or does the third party doing for you?
What is the barriers of e- commerce in Libya
What is the drivers of e- commerce in Libya
What is the threat to the traditional commerce
What are the pioneers to e- commerce in Libya Any other comments
5.5 Secondary Data According to Saunders et al., (2003), secondary data is information that has been previously gathered for some purpose other than the current research project. Saunders et al., (2003) stated that few researchers consider the possibility of re-analysing data that have already been collected for some other purpose. He explained that secondary data includes both raw data and unpublished summaries. For example, government departments Chapter five: Research methods 122 undertake surveys and publish official statistics covering social, demographic and economic topics. There are two types of secondary data: internal and external. As regards internal secondary data, Chisnall (1997) maintained that the answers to many problems lie within organisational documents; he added that many companies do not make full enough use of the information that it regularly generates. External sources of data include statistics and reports issued by governments, trade associations, and other reputable organisations. Additionally, information is frequently circulated from other sources, such as trade directories to provide further information. Chisnall (1997) further states that electronic access to data has revolutionised secondary sourcing, for example online services and CD- ROMs provide practically instant access to sophisticated information from across the world.
Malhotra (2004) and Wilson (2003) argued that the main advantages of using secondary data are the cost and time economies they offer the researcher. The collection of secondary data enables researchers to interpret primary data with more insight that might lead to other discoveries, and provide a source of comparative data to check on the reliability of data gathered from primary research. However, Saunders et al., (2003) pointed out there are disadvantages to secondary data collection. Data collected may not match the needs of the phenomena under investigation and there may be difficulty in obtaining or collecting relevant data that is specifically related to issues involved.
Chapter five: Research methods 123 For this research study secondary research represented a critical review of existing literature on the subject area. Textbooks from libraries were used for this purpose. As the subject area was one of the e-commerce, technology, and economic development the researcher recognised the need to look at the most recent literature available. For this reason journals and e-journals were used to gain knowledge of the current views and developments. Further research was conducted through Internet access for up-to-date information. The researcher acknowledged that consideration must be given to ascertaining the validity and source of knowledge. Secondary research enabled the researcher to compare the already existing theories and views on e-commerce, and place these in relation to the content of the interviews and questionnaires. Bell (2001) states that secondary research assists the researcher in developing questions to be answered as part of a project. Through analysis of the acquired literature, the researcher was able to develop particular questions where clarification would be required and through which answers would be sought through primary research.
5.6 Primary Data According to Collis and Hussey (2003) original or primary data can be obtained and collected through a variety of ways. These may include observation, interviews and questionnaires, conversation and discourse relative to a specific research study. Ghauri and Gronhaug (2002) maintained that a significant advantage of primary data being collected is that it enables a focus on the specific requirements of the research. For example through questions requiring particular responses, such as opinions and attitudes, or observed behaviours, questions should be answered by the chosen sample of people who are actually Chapter five: Research methods 124 involved in the issue that the researcher is working on. For this research study, the chosen sample of people will reflect Internet users. However, other authors (Corbetta, 2003; Yin, 2004) have mentioned some disadvantages of primary data. Such as the time required for collecting the data, and the difficulty of access in terms of finding a target group who are willing to cooperate. It is often the case that more time is needed than was expected, the response rate may be lower than anticipated (Collis and Hussey, 2003; Malhotra, 2004). They are totally dependent on the willingness and ability of the respondents. The chances of obtaining data from a target group are likely to be very low in most cases, especially if there are issues of high sensitivity. It is important that the researcher selects suitable methods and procedures for data analysis to avoid risking the reliability and applicability of the research.
Ghauri and Gronhaug, (2002) described interviews and questionnaires as effective tools to gather opinions, attitudes and descriptions. Additionally, they generate real reaction and/or cause-and-effect relationships. Such research methods are discussed next.
5.6.1 Interview
There are several advantages of using the interview approach. One advantage is that interviews are flexible; the interviewer can adapt the situation to each subject. Another advantage is the interview may also result in more accurate and honest responses since the interviewer can explain and clarify both the purpose of the research and individual questions. A third advantage is that the interviewer can follow up on incomplete or unclear Chapter five: Research methods 125 responses by asking additional probing questions (Robson, 2002; Miller and Brewer, 2003; Gillham, 2005). A further advantage is high response rate. Most people will agree to be interviewed. People are often more confident of their speaking ability than their writing ability (Burns, 2000).
Three styles of conducting interviews that were considered are: un-structured interviews, semi-structured interviews and structured interviews. Formats of interviews vary, from the highly-structured type where questions are presented and asked in a fixed form and sequence, to the open or non-directed interview (Whipp, 1998; Saunders et al., 2003). These approaches are discussed below.
Unstructured interviews are a form of interview that uses open-ended or open questions so that the researcher can see in what direction the interviewees take things in their response (Naoum, 1999). Stewart and Cash (2006) suggests that an unstructured interview is most appropriate when the information area is extremely broad. This means that an unstructured interview gives the interviewer unlimited freedom to probe into answers and to adapt to different interviewees and situations. However unstructured interviews require considerable interviewer skill and are difficult to replicate from one interview to another. The highly-scheduled structured interview is the most thoroughly planned and structured. All questions and answer options are stated in identical words to each interviewee who then picks answers from those provided. There is no straying from the schedule by either party. Highly-scheduled structured interviews are the easiest to conduct, record, tabulate, and Chapter five: Research methods 126 replicate, however respondents have no chance to explain, amplify, qualify, or question answer options (Stewart and Cash, 2006).
A semi-structured interview is more formal than an unstructured interview in that there are a number of specific topics around which to build the interview (Naoum, 1999). Semi- structured interviews, or focused interviews, as Merton and Kendal (1946) named them, have four distinguishing characteristics: They take place with respondents known to have been involved in a particular experience. They refer to situations that have been analysed prior to the interview. They proceed on the basis of an interview guide specifying topics related to the research hypothesis. They are focused on the respondents experience regarding the situations under study.
In this study a semi-structured interview approach that consisted of both structured and unstructured techniques (Saunders et al., 2003) was employed. Interviews were conducted to gather valid and reliable data that are relevant to research questions and objectives. A researcher develops a list of themes and questions to be covered, although this may vary from interview to interview. Thus a researcher may omit some questions in particular Chapter five: Research methods 127 interviews, given the specific organisational context, which is encountered in relation to the research topic. Robson (2000) summarised the process as: The interviewer has worked out in advance the main areas he/she wishes to cover, but is free to vary the exact wording of questions as well as their ordering. So, if an interviewee starts to cover a new area in response to a question, then the interviewer keeps the flow going by asking relevant questions from his/her list of topics. Any missing topics are returned to at the end of the interview (p90).
The researcher prepared fifteen questions on e-commerce and economic development. These questions were presented to all interviewees. However, because of the different backgrounds of the interviewees, follow-up questions were focused on the specific contexts of individual interviewees. For example, during the interview with the Economic Ministry Under-secretary, the researcher focused more on the effect of e-commerce in Libyas economic activities rather than paying attention to the payment system or other technical issues that are not the economic ministrys responsibilities. However, interviewees were encouraged to add their opinions on other issues that were not related to their core responsibilities.
5.6.1.1 Interview Recording and Transcription Note-taking increases the interviewers attention to what is being said. Taking notes reduces concerns the interviewer may have about any technical problems with recording equipment at a critical moment (Stewart and Cash, 2006). However note-taking has some disadvantages. The interviewer can rarely take notes fast enough to record exactly what was said, there also can be difficulties concentrating on questions and answers. Note-taking may hamper the flow of information because interviewees may become fearful or curious about Chapter five: Research methods 128 what the interviewer is writing (Saunders et al., 2003). Such problems did not occur during this research because the researcher paid attention more to the interviewees comments and relied more on the tape recording.
Additionally, the recording of interviews provides a permanent record and also allows the interviewer to concentrate on the interview. This enables the interviewer and interviewee to relax and focus on what is being said and implied. Furthermore a tape recorder may pick up answers that were inaudible at the time (Robson, 2003; Stewart and Cash, 2006). However, tapes provide permanent, undeniable records that threaten many people with unknown future consequences. It also takes a great deal of time to review a lengthy tape to locate facts, reactions, and ideal quotes while it may take only seconds to locate the same material in written notes (Stewart and Cash, 2006).
The researcher has used a combination of tape recording and note-taking to maximise the validity of data collection and minimise the weaknesses of both methods. A digital audio recorder was used through all interviews and note-taking was used to collect observable and nonverbal information. The interviewer experienced none of the problems mentioned above because the researcher checked the tape recorder before each interview and a mobile phone with a recording facility was used along with the tape recorder. 5.6.1.2 Interview Sample Although the research question and objectives are about e-commerce and economic development in Libya, difficulties were experienced in terms of time and cost due to the duality of the research activities between Libya and the UK. To overcome this problem a Chapter five: Research methods 129 sample of Libyan managers, decision-makers and employees with different work experiences acted as representatives of the Libyan context. The number of the sample is relatively small (15 interviewees), and this is considered as one of the limitations. A major advantage to be obtained from this sample is that the participants are key decision-makers in e-commerce from different areas of the government and commerce.
The key decision-makers for e-commerce in Libya were identified. The researcher reviewed the literature of e-commerce and economic development in order to be able to make such identifications. By reviewing literature, the researcher was able to identify a number of issues that are drivers and barriers for e-commerce (see Section 4.2). Therefore the researcher approached the responsible authority for each issue and requested permission for the interview. Each interviewees position, organisation, and the reason why they were interviewed are listed below: Economic Ministry: The Economic Ministry is the responsible government body for controlling all economic activities in Libya. The Economic Ministry has also been asked by the Libyan government to be responsible for designing and putting in place the regulation for e-commerce and its activities in order to avoid and/or control shifting economic activities outside Libyas economy. A two-hour interview with the Economic Ministry Undersecretary was undertaken. Central Bank of Libya: Central Bank of the Libya is the highest authority for banking and payment systems in the country. The bank is responsible for all payment activities and controlling bank interest rates and money transfers including Chapter five: Research methods 130 international payments. The bank has launched a National Payment System which is aiming to provide an electronic payment system to all banks operating in Libya as well as providing a point-of-sale system for businesses and organisations. An interview was held with a National Payment System technical department manager. The interviewee was suggested by the Central Bank of Libya and claimed to be the most suitable person to discuss and provide details of the project. Libyan Postal and Telecommunication Company (LPTC): The Libyan Postal and Telecommunication Company is the only telecommunications infrastructure company in the country, the company is responsible for all fixed-line operation in the country as well as postal services. LPTC is the only responsible organisation for ICT infrastructure in the country. An interview was held with the Chairman of the Automation Committee. The interviewee is responsible for automating the LPTC services and improving the countrys telecommunications infrastructure. Libyan Telecommunication Technology (LTT): 100 percent of LTT shares are owned by the LPTC. It is the only authorised Internet service provider in the country. The company provides Internet connections, hosting, Libyan domain names (LY) registration and database centre for government bodies. An interview was held with a department-manager. The interviewee was appointed by the company to be the most suitable person to provide information about the company and its services. Libyanna: Libyanna is 100 percent owned by LPTC. It is one of the two mobile phone companies in Libya; Libyanna is the only company that provides Internet Chapter five: Research methods 131 connection over a mobile phone network in the country. An interview was held with a department manager, the interviewee was introduced by the companys management board and claimed to be the most suitable person to provide information about the organisation. Libyan Commercial Bank. Libyan Commercial Bank is the oldest operating bank in Libya, the bank provides banking services to private and public organisations. Also, it is one of the banks that the Central Bank of Libya is aiming to link within the National Payment System. An interview was held with the operations department manager. The interviewee was introduced by the bank and claimed to be the most suitable person to provide information about the bank activities and its involvement with the National Payment System.
Other interviews were held within the private sector in order to understand the real situation regarding Internet use in the country and in their organisations. The researcher interviewed people from different backgrounds and at different managerial levels, for example: An interview was held with the Chairman of BA Group. BA Group is a group of four companies providing services in oil, technical, constructions and financial services in Libya. The company uses the Internet in its day to day business. Interviews were held with three different Internet caf managers. Internet cafs are the main places for using the Internet in Libya. Chapter five: Research methods 132 Managers of Tourism Companies, the companies provide tourism services to non- Libyan tourists. A project manager in a non-Libyan oil company. The company is a branch of an international company and provides services in the oil sector in Libya. A Business Development Manager of a financial company. The company is a branch of an international company and provides financial services over the Internet to its clients. Table 5.3 lists all interviewees and contains each organisations name. The abbreviations used as follows:
Table 5.3: List of organisation interviewed Name of the organisation MOC Ministry of Economy, Libyan government OPTC Organisation of postal and telecommunication company, Libyan government company LTT Libyan telecommunication technology, Libyan government company LIB Libyanna Mobile company, Libyan government company LCB Libyan Commercial bank, CBL Central Bank of Libya, BA BA Group, a group of companies in construction, financial and oil companies CI Concord investment OCC Oil and construction company AW Al Wesam Internet Caf AR Al Reiad Internet Caf AL Al-Mukhtar Internet Caf OC Oil Company
Chapter five: Research methods 133 Interviews were held in person rather than by telephone, allowing more flexibility for both interviewer and interviewees as well as for better observation of the body language for certain expressions and attitudes. The format of the questions involved in the interviews were open-ended, since they allowed for the opportunity to explore, to obtain more detailed answers, freedom and spontaneity of answers. Moreover, open-ended questions have a much less biased influence on response than close questions (Malhotra, 2004). Interviewees were given a brief outline and explanation of the research and its purpose. In this way interviewees sensed their importance for the purposes of the study and this helped to achieve more interaction. Interviewees gave informed consent. Permission was obtained for using tape-recording devices before the interviews took place. The length of interviews varied according to availability and content but generally they were of one hours duration. All interviewees were assured of the anonymity and confidentiality of the data gathered.
5.6.2 Questionnaire A questionnaire is a self-reporting data collection instrument that each research respondent fills out as part of a research study. Researchers use questionnaires so that they can obtain information about the thoughts, feelings, attitudes, beliefs, values, perceptions, personality, and behavioural intentions of research participants (Johnson and Christensen, 2004). In other words, the researcher attempts to measure many different kinds of characteristic using questionnaires (Bell, 2001).
Chapter five: Research methods 134 Collis and Hussey (2003) stated that a questionnaire is a list of carefully structured questions, chosen after considerable pilot testing, with a view to eliciting reliable responses from a chosen sample. Most questions are either open or closed. Oppenheim (2001) stated that a closed question is one in which the respondents are offered a choice of alternative replies. They may be asked to tick or underline their chosen answer(s) in a written questionnaire. Open- or free- response questions are not followed by any kind of choice, and the answers have to be recorded in full. Free-response questions are often easy to ask, difficult to answer, and still more difficult to analyse. Closed questions are easier and quicker to answer; they require no writing, and quantification is straight forward. This often means that more questions can be asked within a given length of time and that more can be accomplished with a given sum of money. Disadvantages of closed questions are the loss of spontaneity and expansiveness (Oppenheim, 2001; Robson, 2002). Oppenheim (2001) added that a questionnaire may also contain check lists, attitudinal scales, projective techniques, rating scales and a variety of other research methods. In this study, the researcher has adopted a questionnaire comprising closed questions. However, in order to overcome some of the disadvantages, the questionnaire format has allowed candidates to add their views and opinions if these were not listed in the questionnaire questions.
Collis and Hussey (2003) emphasised a number of advantages that can be obtained by utilising a questionnaire compared to interviews for collecting primary data. For example they are less time-consuming, a larger sample can be involved, and they are less costly. Saunders et al., (2003) argued that if a questionnaire is correctly worded, it normally does not require a highly-skilled researcher to administer it, unlike interviewing. Other Chapter five: Research methods 135 advantages put forward by Babbie (2001) suggested that using questionnaires allows the production of descriptive statistics that are representative of the whole study population. In addition, it facilitated replications and comparative studies.
However, a questionnaire is completely dependent on the respondents responses (Ghauri and Gronhaug, 2002). Also answers may not provide suitable responses that reflect the research focus. The reason could be that it is a set of specific questions, mostly with limited answers. In other words if the questions are likely to be understood differently by different respondents it could be argued that a questionnaire has failed to collect primary data required for the research.
5.6.2.1 Questionnaire Design Saunders et al., (2003) attributed the validity and reliability of data collected to the rate of response, to the design of the questionnaire, its structure and the rigour of the pilot testing. Malhotra (2004) argued that the great weakness of questionnaire design is lack of theory, because there are no specific or strict steps to follow for designing a questionnaire, or scientific principles that guarantee a perfect and ideal questionnaire. The questionnaire design adopted consisted of a number of steps starting with defining the research objectives, selection of an appropriate format and design layout, pilot testing and then implementing the questionnaire (Wilson, 2003; Saunders et al., 2003).
Questionnaire design should not be taken lightly, as improper design can lead to inaccurate information, incomplete data and may result in research moneys being wasted (Wilson, 2003, P173). Chapter five: Research methods 136
The design format adopted involved open and closed questions using simple language that enabled the questionnaire to be completed in a short time. Additionally, from the researchers point of view closed questions were easy to process and analyse. Questions were designed according to the types suggested by Saunders et al., (2003) and included list questions, category questions, closed questions, scale questions and open-ended questions with sufficient space for respondents to add additional data. The questionnaire was designed in sub-sections to be easy for answering. For example, one section includes all Internet technical issues, another covers e-commerce issues.
The questionnaire was designed and distributed after the interviews and observations took place. Analysis of the interview data and observation issues identified the main issues. These were compared to the issues discussed in the literature review. Once these issues were investigated and explored, the researcher then designed the questionnaire. 5.6.2.2 Pilot Testing A pilot test of the research questionnaire was conducted in order to refine it and clarify that respondents had no problems answering the questions, and also to ascertain that the right data was being collected. Moreover, piloting offers a good assessment for some important issues the researcher may be concerned about such as level of difficulty, willingness to answer sensitive questions and the time it takes to answer all questions (Brace, 2004; Ghauri and Gronhaug, 2002; Saunders et al., 2003).
Chapter five: Research methods 137 The questionnaire was piloted among a small but similar group of the respondents, in both Arabic and English. The aim was to double check the issues discussed above had been addressed, and to confirm the data collected was appropriate to the research questions. This pilot test resulted in many important positive points and comments which led to the revision of the questionnaire. For example the questionnaires were restructured into categories in line with the research objectives. Additionally, two questions were rephrased for greater clarity and to remove ambiguity. 5.6.2.3 Questionnaire Administration and Survey Sample
Saunders et al., (2003) explained that after a questionnaire is designed and pilot tested it is ready to be used for data collection by distributing it among the target sample when problems of access should be taken into consideration. This stage is called `questionnaire administration` the main purpose of which is to guarantee the greatest number of respondents, in other words to maximise the response rate. Saunders et al., (2003) referred to a number of methods of questionnaire distribution, which may be adopted in a research study, online questionnaire, postal questionnaire, telephone questionnaire and personal delivery and collection questionnaire or some times called face-to-face questionnaire. For this research study the researcher adopted face-to-face questionnaire because it guaranteed the highest rate of response (83.3 percent response rate in this research) (Collis and Hussey, 2003).
Saunders et al., (2003) identified several factors that should be taken into consideration in order to get the best results. A population is a set of persons or objectives that possess at Chapter five: Research methods 138 least one common characteristic (Bailey, 1994). Neuman (1997) argued that a population is an abstract concept because one can never truly freeze a population to measure it. This research targeted a sample of one hundred and fifty respondents. These candidates were Internet users from different backgrounds (managers, employees, self-employed and others). The respondents were selected randomly from Internet Cafs across Tripoli. First the researcher selected Internet cafs from a list, three Internet cafes were selected from 25 Internet cafs listed. Then the researcher approached the Internet Caf managers to seek permission to do the questionnaire. Once the permission was given the researcher visited the cafs a number of times such that users of the Internet Cafs could complete the questionnaire in the researchers presence. Each questionnaire respondent spent between 15 to 20 minutes completing the questionnaire with the researcher on hand to answer queries. However, as expected, most of the questionnaire respondents were students because Libyas younger generation account for 50 to 60 percent of the total population (Country Review, 2007).
5.7 Method of Data Analysis The data analysis method depends on whether the data collected is quantitative or qualitative. Data need to be analysed to achieve the research results (Ghauri and Gronhaug, 2002; Collies and Hussey, 2003). The literature acknowledged that the research approach referred to the systematic, focused and orderly collection of data for the purpose of obtaining information from them, to answer research problems or questions. In this study, therefore, the methods of data analysis involved both quantitative and qualitative approaches. For analysing the quantitative data, this approach involved collecting and Chapter five: Research methods 139 analysing numerical data and applying statistical tests, which concentrates on measuring phenomena using computerised quantitative software, such as Microsoft Excel. However, the qualitative approach is more subjective in nature and focuses on interpreting and examining perceptions and behaviours in order to gain a deeper understanding of social and human activities. Analysis of the qualitative data involved transcription of audio-taped interviews as recommended (Johnson and Christensen, 2004). NVivo, a qualitative software package, was used to segment, code and develop categories of the data analysed (Berger, 2006). The analysis of the two methods is explained below
5.7.1 Qualitative Data Analysis
According to Marshall and Rossman (1989)
Qualitative data analysis is a search for general statements about relationships among categories of data. (P112)
Coffy and Atkinson (1996) mentioned that there are a variety of suitable analytical approaches to qualitative research and many of them can be aided with computer software. On the other hand it would be wrong for qualitative research to allow the available software to drive the general research strategy (Berger, 2006). At the core of the process of qualitative data analysis is the decision to analyse data manually or with the aid of a software computer package (e.g. QSR NVivo 7).
NVivo was selected to collate the range of qualitative data collected. It is suitable for dealing with large volumes of non-numerical data such as interviews, documents and transcripts and helps to manage and analyse data gathered (Berger, 2006). Myers (1997) Chapter five: Research methods 140 emphasises that qualitative analysis software packages are useful for organising the indexing, coding and categorising of data, but it is the researcher who must apply a development strategy to formulate the analysis. Its rationale can be extended to the mapping of the software facilities and characteristics against the research approach, methods used and type of data that the research is generating. The important issue is that the software can not perform data analysis, this is driven by the researcher. For example, the researcher will define what analytical issues are to be explored, and which ideas are important and the most appropriate mode of representation.
Seale (2000) pointed out there are advantages and disadvantages of using software packages in qualitative analysis. Advantages included speed of handling the large volumes of data, facilitating iterative enquiries and help with sampling. An early criticism of such software management methods suggests that they can be influenced by grounded theory, and as such may push analysis in one direction with the result that some aspects of analysis might be a product of the technology used. However, the sophistication of Nvivo software means that it is not connected to any one analytical approach (Richard, 2002). Additionally software management tools are able to provide speed and flexibility, and the researcher was aware that they also have the potential to restrict and constrain the handling of different data types through their coding, and linking processes (Berger, 2006). Additionally, NVivo enables the researcher to return to, retrieve and maintain the contextual integrity of the data, whilst facilitating editing activities without disturbing or invalidating existing coding and linking (Berger, 2006). Thus it offers both loose and creative structures that are unaffected Chapter five: Research methods 141 by editing the research to apply perceptions, interpretations and theory development appropriate to the research study.
All interview data were imported into the NVivo software after it had been translated from Arabic into English and transcribed. The researcher used a free node technique to analyse the qualitative data of the research. For example for a question Do you use E-Commerce in your organisation? a free node called E-Commerce use was created. As the researcher used a semi-structured interview, a second level of nodes was created according to the sub- questions that were asked in the interview. A third level of node was created in association of two issues that were collected in the interview. For example, a free node called E- commerce drivers was created from number of different free nodes (payment, law, type of connection, etc.
5.7.2 Quantitative Data Analysis
Quantitative analysis methods for the questionnaire data are largely widespread, probably because their standardization makes the collection and analysis of data more efficient (especially when using dedicated software tools) and because the subsequent possibility to conduct statistical analyses on large samples allows conclusions to be drawn with a well defined level of certainty and confidence. The researcher used Excel spreadsheets for this research project to present and analyse the data gathered from the questionnaires. In this way the use of tables and diagrams was effective to present this data in the most appropriate way such as presenting the data in numerical form e.g. percentages. Chapter five: Research methods 142
5.8 Ethical Considerations Research ethics refers to the appropriateness of research behaviour in relation to the rights of those who become the subject of research work or are affected by the work. Ethical issues are likely to appear in all the research stages and more particularly appear in the first stages of the research. This is especially relevant with qualitative research rather than quantitative research of primary data collection, which involve questionnaires and interviews as collection methods. In this case there will be a relationship between a researcher and respondents. The task a researcher faces in this stage is to convince participants to answer as many as possible of the questions or interviews questions willingly, and at the same time respecting her or his refusal to answer (Ghauri and Gronhaug, 2002; Saunders et al., 2003). That is, a participant must not be forced or led to what she or he considers as embarrassing answer which could harm a respondent as a result of revealing the information (The researcher took into consideration the above discussed issues). For example, if the interviewee avoided answering a question, the researcher would ask the question in a different format, once the interviewee persisted in not answering, the researcher moved into another question. Additionally, all interviewees were given the opportunity to not answer any question that they felt uncomfortable with.
In this study the major ethical issue the researcher has dealt with in relation to participants is privacy. Saunders, et al., (2003) stated that privacy may be seen as the cornerstone of the ethical issues that confront those who undertake research. Consent, confidentiality, participants reaction and the effect of the way in which researchers use, analyse and report data may all have the capacity to, or are related to, the privacy of participants. Participants Chapter five: Research methods 143 asked for their names not to be on any published materials but to use their job positions instead. The participants right of privacy and right to refuse to answer certain questions were respected. In the data analysis and reporting results stage, anonymity and confidentiality are maintained to gain the participants satisfaction regarding their privacy rights. Transparency has been considered as a significant factor which may affect the validity of data collected from participants, thus, the research purpose and objectives were clearly explained to the participants enabling them to make their decisions whether they do or do not want to participate.
5.9 Summary This chapter has set out and described the research purpose design and approach, and the analytical techniques adopted. It has detailed the multi-approach of qualitative and quantitative research and describes the presentation of the data analysed. The chosen sample was defined and the interview and questionnaire techniques have been described. The software analysis tools have been examined and justified and consideration has been given to ethical issues. Chapter six: Findings 144 Chapter six: Findings 145
6.1 Introduction This chapter presents the findings of the study conducted in Libya to establish the requirements of e-commerce adoption in the country. Interviewees covered all Internet and economic development areas including decision makers, Internet users and service providers in the country.
One hundred and fifty responses to the questionnaire were received, a response rate of 83.3 percent. These questionnaire results are summarised in appendices 10.3 Questionnaire respondents were from different backgrounds holding different positions in their organisations. 54 percent of the respondents were either self-employed or employees in different sized organisations, 46 percent were university students.
6.2 E-commerce drivers and barriers There are certain barriers and drivers to e-commerce in Libya. Interviewees were asked about e-commerce barriers. All agreed there many barriers to e-commerce in Libya and all argued that it was time for the government to get involved and to help to set up the requisite infrastructure. Other barriers, such as legislation, culture and economic development effect were argued. On the other hand cost and economic development were claimed as the main drivers for e-commerce. In this section each issue of e-commerce driver and barrier will be Chapter six: Findings 148 discussed individually to provide a deeper understanding of the real situation of e- commerce in the country and its effect on the national economy.
6.2.1 Competition Competition can be considered as a driver and barrier for e-commerce in Libya. In relation to this study, the researcher compares the issues mentioned in the literature review with the findings of this research study as it is listed below.
6.2.1.1 Competition as a driver for economic development The literature argues that competition could drive the economic development of a country by providing cheaper products and services. The findings of this study confirm the above statement. All interviewees agreed that competition will have a positive effect on the countrys economy
The undersecretary of MOC argued that e-commerce in developing countries, and in Libya in particular, may sharpen competition. However, he argued that competition will have a positive effect on the countrys economy. He stated: It is probably right that e-commerce in developing countries will sharpen the competition, even in Libyan markets, but we dont always look at it from this point of view, it could help developing the Libyan economy.
He explained that e-commerce may help Libyan consumers to save money by comparing different prices in the market. He stated: Chapter six: Findings 149 As a consumer in Libya rather than paying x billions for importing something from outside which already has many added up cost e.g. travel, commission, customs etc., that amount could be reduced by using e-commerce and cut the cost.
The chairman of OPTC argued that businesses in Libyan markets will have to shift their activities into the web in order to survive. This will create competition between traditional businesses and Internet businesses. He stated: With the popularity of Internet websites and increasing numbers of Internet users, many people will shift there activity into e-commerce. An example of e-payment system will help many people to get cheaper and faster products over the net if they can use e-payment systems instead of cash.
The marketing manager of LTT confirms the same statements of OPTC chairman. He argued that an alternative payment system (see Section 6.2.9) will create competition between those businesses adopting alternative payment systems and traditional businesses.
The marketing manager of LIB argued that Internet service providers in Libya are complementing each other rather than competing against each other, which may be the reason for not seeing a comprehensive reduction in the charges for Internet connection.
The operations manager of LCB argued that the absence of electronic payment systems minimises the competition between banks and drives banks in Libya to deal with only one international bank for all their international activities. However, the IT manager of CBL argued that the national payment system will create the opportunity for banks and companies to support business online nationally and internationally as well as giving the Libyan banks the opportunity to compete with international banks.
Chapter six: Findings 150 Competition between telephone service providers in Libya already exists, according to the BA Chairman, for example, the competition between traditional telephone services and voice-over-internet-protocol (VOIP). Such competition does result in reduction on telephone charges. He stated:
I dont know the exact price in my mind but using VOIP could reduce the cost of making the same phone call using fixed line by 90 percent
The chairman of BA Group added that e-commerce will create competition between traditional and electronic businesses especially for buying products and availability of different type of products. He argued that competition is strong between electronic businesses, and stronger between electronic and traditional business. He stated:
You can see offers on something, from small to large companies, this huge amount of competitors selling same thing you wont be able to find it in a traditional trade or offline trade. Secondly, you have the opportunity to compare prices for different products or even for the same products, and as we all know Internet prices are much lower than the high street prices.
He also added that by adopting e-commerce, Libyas agricultural products will be exposed to the international market. These products, he claimed, are known for their low price and good quality which will result in increasing the business activities in this field. Additionally, the Internet caf manager argued that e-commerce will help the development of the economy by introducing new companies and will force the traditional ones to change their way of doing business. Additionally, the Internet caf manager of AR argued that the absence of competition between Internet service providers kept the Internet connection charge high.
Chapter six: Findings 151 6.2.1.2 Lower production cost will encourage the entry of new business
Lower production costs will encourage the entry of new businesses and thus increase competition and pressure to pass lower costs on to consumers as lower prices. This was confirmed by the undersecretary of MOC, who agued that e-commerce will create more competition and the Internet will drive many travel agencies to close. He gave an example by stating:
Last night, I was by the central bank of Libya in Benghazi. I saw an agent advertising a Haje trip for 625 L.D. In the future, by using the Internet I wouldnt see these agents, I will go to the travel company itself and reduce the price.
Additionally, he argued that reduction on customs and taxation resulted in increasing competition between traditional traders and electronic traders.
The chairman of OPTC argued that e-commerce will speed up the way of doing business in his organisation and it will reduce cost. He gave an example of receiving payment in cash. He stated:
As an example, because the cashiers deal only in cash, security is costing us a huge amount of money. Also, having things done electronically would help to speed up doing the job and having things on the system right away the moment they have been entered, rather than the manual way that we are doing now.
The same opportunity for new services and businesses will be offered to the commercial banks in Libya. The IT manager of CBL argued that the national payment system will Chapter six: Findings 152 provide these banks with opportunities to provide services and improve their services quality. He stated:
This system aims to develop technologies and techniques for banking activities of national banks in a way that qualify them to benefit mostly from the huge technologies provided by the project of National Payment System, and to strengthen the competitiveness with international banks.
For private businesses, the feeling was the same as others. The Chairman of BA Group agreed that Libyan consumers will save money and gain better services by using e- commerce. 6.2.1.3 E-commerce will shift market power from producer to consumers Consumers will be able to search among thousands of merchants for lower prices, thereby increasing the downward pressure on prices which will lead to a shift in market power from producer to consumer. The undersecretary of MOC agreed that people will buy direct from the source rather than go to a physical shop. The wide variety of Internet websites provides consumers with the opportunity to buy when and where they please. Such actions, he argued, will drive local suppliers and producers to provide better services and quality to face the competition. The same view was agreed by a number of interviewees (AW Internet Caf manager, AR Internet Caf manager, BA Chairman and LCB operation manager) that the Internet gives the opportunities of searching among large numbers of stores and providers to gain the best price offered. The BA group chairman confirmed this view of the Chapter six: Findings 153 MOC undersecretary, arguing that the Internet gives users the opportunity to choose and compare what they want to buy. He said:
E-Commerce gives me the opportunities of choosing your product or services from huge varieties of selections rather than the typical way of choosing using the traditional way.
6.2.1.4 The effect of competition on small businesses Competition could destroy small local businesses. These businesses could go elsewhere or cease to exist. In either case this will affect economic activities such as taxation and employment. Such issues can be seen in Libya. The undersecretary of MOC argued that the introduction of e-commerce will affect Libyan local businesses. He argued that international companies know about e-commerce and its related issues whereas Libyan businesses are still in the early stages of e-commerce knowledge. Also, he mentioned that using the Internet will drive many businesses such as travel agencies to close; he explained that people are looking to save money, therefore they will be looking to buy from the source of the services rather than local agencies. He advocates that if local suppliers are going to survive, they will have to compete and provide better services for lower prices. The LCB operations manager argued that competition between electronic business and traditional business may result in the disappearance of the traditional businesses from the market.
However, the chairman of the BA Group claimed that Libyan markets are consumer markets. He argued that the markets will not be affected much by e-commerce stating that Chapter six: Findings 154 enabling e-commerce services would benefit the consumer by being able to buy the same product at reduced prices. He explained that e-commerce may affect traditional businesses but will benefit consumers. The undersecretary agreed that competition in the commercial market will get sharper. He stated that Libyan producers are always complaining that many international products have entered the country through Libyan importers or traders.
Additionally, the chairman of the BA Group argued that products in the market are either external or internal. Stating that:
Many of the products in the market are imported from outside and if we take out agricultural products then we could say yes e-commerce would pose some threat to traditional commerce.
He explained that many of the consumers would just go to the source and buy what they are looking for at a competitive price. This will enable them to save money and reduce the cost of buying which will create competition. He further added that agricultural products will not be affected by e-commerce because of the already low prices and high quality of these products. Additionally, the undersecretary of MOC argued that competition in the commercial market already exists. He stated that:
The ministry was afraid that e-commerce in developing countries will effect competition. This didnt happen in many countries and this fear has dissipated.
Chapter six: Findings 155 6.2.1.5 Other issues In the case of Libya, where few, if any, studies have taken place related to the subject of e- commerce, this study clarifies that competition in the commercial market already exists, i.e., before the introduction of e-commerce. Therefore, competition is a result of the economic development cycle rather than e-commerce alone.
It is been stated by the undersecretary of MOC that Libyan producers are complaining that many international products have entered the market via Libyan importers and traders. He stated that competition from e-commerce has not occurred in many developing countries.
Additionally, the chairman of OPTC and the marketing manager of LTT argued that competition from e-commerce will not occur until the countrys infrastructure is ready. Another reason mentioned by the business development manager of CI is that most Internet users are young which will delay the arrival of competition in the country. He stated that:
A higher proportion of Internet users in the country are teenagers. Middle-aged and older people dont really bother to learn any new technology because of the time-consuming and difficulty of catching up. Most middle-aged and older people still prefer using a traditional way of doing business. Most of it is done face-to-face. So there is no threat in a short term.
Chapter six: Findings 156 Table 6.1 below summarises the above competition issues and introduces three new issues. Table 6.1: Competition issues in Libya
Item No Driver or barrier Competition could drive the economic development of a country by providing cheaper products and services
1 Driver Lower production costs will encourage the entry of new businesses and thus increase competition and pressure to pass lower costs on to consumers as lower prices.
2 Driver Consumers will be able to search among thousands of merchants for the lowest prices, thereby increasing the downward pressure on prices and leading to a shift in market power from producer to consumer
3 Driver Competition could destroy small local businesses. These businesses could go elsewhere or cease to exist. In either case this will affect economic activities such as taxation and employment.
4 Barrier The lack of e-commerce infrastructure in Libya has delayed the effect of e-commerce competition New Barrier Older and middle age people in Libya prefer using the traditional method of business which reduces competition in the market New Driver Competition is a result of the economic development cycle and not e-commerce New Driver 6.2.2 Cost 6.2.2.1 E-commerce reduces costs All interviewees stated that cost is a major issue for e-commerce. The undersecretary of the MOC claimed that the introduction of credit cards in the country will encourage people to Chapter six: Findings 157 use e-commerce. He also claimed that competition between service providers will drive down costs, benefiting consumers.
The committee chairman of OPTC agreed that e-commerce will save money for his organisations and will speed up the way of doing business. Additionally, according to the chairman of BA, e-commerce results in reducing general expenses especially for private companies as well as giving buyers a variety of product selections. He explained that e- commerce benefits his organisation in many different ways stating that benefits differ from one field to another. Giving an example in the accounting field, he argued that the company provides some services online such as consultation, auditing and book-keeping. Without e- commerce he said the company will not have the opportunity to provide these services to customers from different countries. Clarifying that before using the Internet as a service platform the company used to spend a large amount of money travelling to visit clients. Another example given was the consultation field; he explained that using a traditional method, the company usually sent a consultant to the clients office to resolve problems but using the Internet he stated the company could provide better services as the company consultants could work together on one project without leaving the office. He summarised: If everybody started using e-commerce, our quality of life will improve, and time and money will be saved. Almost everything in business can be done via the Internet especially in our fields. E-commerce is a great tool, if we can use it in the appropriate way.
The operations manager of CBL argued that e-commerce reduces the cost of operations. He stated that: Chapter six: Findings 158 As soon as the project is finished, our next step is to start thinking of adopting an electronic banking system for our customers that will reduce costs and staff headcount.
Thirty three percent of the questionnaire respondents strongly agreed that e-commerce helps to reduce costs, where only 8 percent strongly disagreed with the statement. Additionally 31 percent of the candidates stated that in order for the Internet to be successful in Libya, a reduction of connection costs has to be implemented. 6.2.2.2 E-commerce reduces communication cost According to the Chairman of the BA Group and the general manager of OCC, email and VOIP reduce communication costs. The BA Group chairman argued that his organisation managed to save up to 90 percent of communication costs by using VOIP, whereas the general manager of OCC stated that most of his organisations business activities take place on the Internet. He stated: We usually do our market research on a particular project, sending all documentation by email to our Athens branch, get information back with project requirements and price estimations and then finally submit our proposals. When we get a contract we usually contact our supplier and sub-contractor by email. Most of the negotiation takes place over the Internet.
Other interviewees such as the Business development manager of CI argued that e- commerce and the Internet helped the company to reduce the cost of communications and employment. He argued: For our business, e-commerce reduces the cost of employment as many customers can complete transactions online, This brings in more customers, especially the VIP self-trading system, reduces the cost of printing and communication, making it easer to communicate with Chapter six: Findings 159 customers, and finally reducing marketing costs. Cost reduction is the main driver for e-commerce. 6.2.2.3 E-commerce reduces selling costs Reducing selling costs is one of the main drivers of e-commerce. The Chairman of BA and the Internet caf manager claim that e-commerce reduces the trading cost for importers and reduces selling cost. 6.2.2.4 E-commerce reduces cost of customer service and after-sales service The marketing manager of LIB argued that e-commerce helps in reducing the cost of customer services. Giving an example of Electricity Company, he stated:
Why does the electricity company have to employ someone whose entire job is standing at a cashier window collecting money, when they can do it electronically and avoid people wasting their time in queuing as well as destroying the employees life by doing nothing but collecting money?
6.2.2.5 E-commerce implementation cost The cost of implementation is one of the major e-commerce barriers. The LTT marketing manager argued that the high charge of Internet connection was due to the cost of implementing ATM technology in the server of LTT. He argued the company has to make sure that such expenses are covered in order to reduce the price. Additionally, the operations manager argued that implementing the payment system in Libya has cost the Central Bank of Libya 40 million Dinar. Similarly, two Internet caf managers (AW, AR) stated that the cost of PCs, network, hosting and domain names is also a barrier for e- commerce in Libya. Chapter six: Findings 160 6.2.2.6 Cost of hardware and software The cost of hardware and software remains out of the reach of many people. However, the Libyan government has taken action to overcome such barriers, for example by providing One Laptop Per Child (see Section 6.2.11) and reducing the customs duty on electrical equipment (see Section 6.2.4). Additionally, the MOC undersecretary claimed that 25 percent of Libyas citizens have PCs in their homes. 6.2.2.7 Cost of Internet connection and telephone charges The cost of Internet connection is high and needs to be reduced this statement was argued by all interviewees. The general manager of OCC and the undersecretary of MOC maintain that the misunderstanding of e-commerce and the poor communication infrastructure with a high cost of Internet connection are a barrier for e-commerce use. The general manager added: The main barrier is the infrastructure. The government has to pay attention to infrastructure, and has to take e-commerce issues very seriously if they want to develop and catch up quickly.
The undersecretary of MOC explained:
E-commerce is dependent on the telecommunication infrastructure; our land lines still lack good infrastructure as well as high charges for connecting to the Internet and making phone calls.
Others argued that the Internet does not cover the whole area of the country - it is only available in cities. Access to the Internet according to some interviewees (OC, AR) cost around 250 a month for a peed of 128kb, 25 for ADSL services of 64kb and at least 350 a mouth for 512kb using satellite technology. In addition to above, according to three managers, a charge of 3500 has to be added for installation (AW, AR, and OCC). Another Chapter six: Findings 161 manager (OCC) explained that his company pays around 750 a month for 1mb as well as 75 a month a cable rental using a lease-line technology. The marketing manager (LIB) stated that Internet mobile technology costs 1 Sterling penny for 1kb. He admitted that the prices are slightly high compared to other Internet providers such as LTT, arguing that the reason was the service is aimed a businessmen who want to access their email on the move.
Justifying the high charges, the marketing manager of LTT stated that ADSL needs ATM technology in landline digital servers, and that recently this service has been put in place. Prices remain high in order to cope with the high demand. As he stated:
Economy rules supply and demand, we have put the price higher in order to reduce the demand, with time the price will be decreased gradually.
He argued that 256kb service which cost now 9000 L.D (4500) a year was reduced from 55000 L.D (27500) a year admitting that the price of Internet connection is extremity high compared with other international ISPs explaining the reason of that:
New technology costs a large amount of money to put in place. Reduction in costs is our priority, we have reduced the price by huge percentages, some times exceeding 70 percent, it all depends on the infrastructure.
In agreement with LTT marketing manager, the manager of AR stated that the cost of connecting to the Internet has fallen gradually through the years citing the reduction of Internet charge per hour from 6 to 50p. Chapter six: Findings 162 6.2.2.8 E-commerce Increases saving Interviewees argued that e-commerce helps consumers to increase their savings by purchasing at lower prices from the competing providers. The LIB Marketing manager stated that people are looking to save money and they adopt the e-commerce to do so. Additionally, the BA Chairman argued that the main driver of e-commerce is saving money. He argued that consumers can buy from the Internet at competitive prices and save money which can be re-invested in the economy (see Section 6.2.4).
There are some issues related to cost that were mentioned in the literature review but have yet to been seen in Libya. For example, the cost of implementing ICT infrastructure is still not yet an issue in the country. Libya is building an ICT infrastructure, however, at the time this research was taking place, the country was still in the negotiation process with international companies and the amount of investment by then was not an issue.
Delivery infrastructure (postal services) does not exist in Libya. Therefore, international companies cannot deliver physical products to customers premises. However, the need for such infrastructure is still not the priority in the country so there are no e-commerce activities in the country for the time being. But in the near future the issue will be a necessity for business environments. Chapter six: Findings 163 6.2.2.9 Other new issues The Internet caf manager of AW and the operations manager of LCB argued that implementing e-commerce will create a training need for the use of new systems and hence a cost. The operation manager argued that: The central bank of Libya is sending employees from all Libyan public banks outside the country for training from time to time to learn English and get some training in banking electronic systems. Other workshops and training courses are taking place inside the country.
He added that e-commerce reduces the cost of transactions in the banking system rather then the traditional methods. He argued: It is even more important that it will help banks to complete their transaction quickly and easily. As an example, to clear a cheque to your account from someone else in a different bank will take from a week up to 40 days for the time being, When the system is in place and working, that type of transaction will take seconds. This will save time and money.
Table 6.2 lists issues that were mentioned in the research findings. Table 6.2: Cost issues in Libya Item No Drivers and barriers Reduces costs 1 Driver Reduce communication cost 2 Driver Deliver information in digital format 3 Driver Reduce the cost of supply chains 4 Driver Reducing selling cost 5 Driver Reduce buying cost 6 Driver Providing opportunities to sell 7 Driver (Not yet) Reducing the cost of customer service and after-sales service 8 Driver Implementation cost 9 Barrier (Not yet) Maintenance cost 10 Barrier (Not yet) Shipping costs 11 Barrier (Not yet) Cost in term of hardware and software 12 Barrier Cost of Internet connection and telephone charge 13 Barrier Cost of implementing ICT infrastructure 14 Barrier Chapter six: Findings 164 Delivery infrastructure 15 Barrier (Not yet) Increase saving 16 Driver Cost for training in using the new system New Barrier E-commerce reduce the cost of banks transactions New Driver
6.2.3 Culture Interviewees were asked if culture can affect the adoption of e-commerce. 6.2.3.1 E-commerce conflict with culture and religion The marketing manager of LIB argued that e-commerce gives citizens the freedom to express different opinions and thought, which can be seen as a barrier for e-commerce adoption in a Muslim country such as Libya. The undersecretary of MOC argued that Libyans are resistant to culture change. He explained that job changes are not accepted by many Libyans. He stated that Libyans generally benefit from an easy life as a result of government policies. The chairman of OPTC claimed that culture can be a barrier for adopting a new system. He stated:
Persuading people to adopt and accept electronic payment will be a barrier. Everyone has to have cash, personal cheques are not accepted in many places, people still dont have a culture of writing a cheque. How can we expect them just to accept e-commerce easily?
The LCB operating manager argued that people will not accept new technology easily which will affect the adoption of e-commerce. However, he explained that e-commerce is still in its early stages and therefore resistance is not yet apparent. Additionally, the marketing manager of LTT emphasised that Libyans who do not have payment cards will resist the adoption of e-commerce He explained: Chapter six: Findings 165
People who have the opportunity to travel abroad and use the internet and manage to get credit or debit cards know what e-commerce and Internet are about. But those who havent had the chance to go abroad know nothing about e-commerce and will face difficulty in getting into the new technology, and will not accept easily the changes in their lives.
However, and according to the chairman of BA, culture will not be a barrier for e- commerce adoption Libya. He explained that e-commerce brings a new way of doing business and shopping. He argued: People like change and new methods of living their lives which could count as a driver.
He argued that Libyans are change adopters, giving as an example the move from living in tents towards living in high buildings and towers. He then mentioned that e-commerce could bring the right structure and help drive economic development.
6.2.3.2 Intervention to ban the sale of certain items that violate culture The manager of AR said that Libyan culture, traditions and values may intervene against this type of economy and create certain barriers, e.g. selling certain goods and products that conflict with such culture, traditions and values. The marketing manager of LTT argued that people will fight not to adopt e-commerce if they believe that their culture will be affected.
Chapter six: Findings 166 6.2.3.3 Offering credit card services with interest rate Credit cards are expected to become common in Libya. However, interviewees opinion on the adoption of the credit cards varies. The undersecretary of MOC argued people will not wait for legislation to use the cards. They are waiting for the moment cards are issued and ready to use, he explained:
We are expecting the spread of credit cards in Libya by next year according to the plan of Central Bank of Libya. People will start trading if they have the opportunity; they wont wait for legislation.
The marketing manager of LIB emphasised that paying interest on credit cards is not allowed in the Islamic religion. However, the Central of Bank of Libya has announced the introduction of payment cards in Libya, the IT manager of CBL explained that the National Payment System will enable businessmen and companies to accept payments electronically.
6.2.3.4 Child protection The Internet and e-commerce are still in the early stages, therefore, there were no comments on child protection and related issues. However, such issues will arise in the future, especially because the majority of Internet users in the country are teenagers. The undersecretary of MOC claimed that the younger generation will grow up using the Internet and e-commerce.
Chapter six: Findings 167 6.2.3.5 E-commerce helps to maintain culture The Internet caf manager of AW argued that e-commerce could help to keep the culture and customs of a country, giving an example of the convenience of e-commerce to Libyan women. He explained: For Libyan women who are not usually allowed to go outside of their house according to the customs and tradition or who are busy with house-keeping and have no time to go shopping, the Internet will be a very useful tool for them.
Additionally, he argued that it should benefit men as well in that they do not have to wait for their wives while they do the shopping. Such a culture exists in most Arab countries where women are not encouraged to work or be involved in any way with men who are not related to them.
6.2.3.6 Change in business culture Seven interviewees agreed that e-commerce will change the business culture. The undersecretary of MOC argued that the uptake of credit cards will drive many businesses to change their culture and business models. The OPTC chairman explained that his organisation is already changing its business culture by introducing new electronic services. He stated: E-commerce will be a good thing with convenience and the ease of use; changing business culture will be good for the business and customers.
The marketing manager of LIB and LTT explained that e-commerce will change the way of living, speed up the way doing business and save time in social life. The same comments were made by the operation manager of LCB who argued that the Central Bank of Libya Chapter six: Findings 168 will help other banks to change their traditional business methods. He also mentioned that Internet banking will be the next step for Libyan banks after the adoption of the National Payment System. Evidence of business culture changes were confirmed by the chairman of the BA group and the general manager of OCC. Both organisations are using e-mail and VOIP for their communications and business activities.
Table 6.3 below indicates that many Libyan organisations and users have already started using the Internet for e-mail purposes, and believed that e-commerce can provide organisations with more advantages. For example 85 participants believe that e-commerce speeds communications and at least 74 of the respondents argued that E-Mail was useful for communication. Table 6.3: Benefits of e-commerce
Strongl y agree Agree Not sure Disagre e Strongly disagree Internal e-commerce speeds communications 53 32 31 13 12 Make organization more effective 25 37 48 13 19 E-mail is useful for communication 55 19 30 13 18 E-commerce provide efficiency 53 13 32 13 11 Increase storage methods 54 24 25 17 19 Lower cost 49 17 37 18 13 Retained/gained customers 48 19 39 7 5 Better relationship with partners 42 19 37 17 19 Less paper handling 49 1 43 3 7 Better control over information 54 20 49 17 7 Reduction of admin tasks 36 25 55 13 6
Additionally, 53 percent of respondents indicated that they already have a website, which suggests that the Internet is already having an effect on peoples lives. Thus it would appear Chapter six: Findings 169 that e-commerce may not conflict with the culture of the country. However, it is difficult to know what the full effect of e-commerce will be on Libyas culture at this stage.
6.2.3.7 Other issues Another issue mentioned was the mistrust of service providers; the marketing manager of LTT stated that mistrust that has built up over the years has affected users. He argued that it is extremely difficult to change peoples beliefs and reaction against the Internet and its lack of ability to keep information and payment details private. He stated:
Some people dont really believe they can trust websites. The problem is that it will be difficult to convince people that something is real or not through website advertising.
Others argued (OPTC, BA):
If we dont move quickly, people will feel scared to use the Internet and some of them may never use IT.
However, one interviewee (LIB operation manager) stated that e-commerce in Libya is still in its infancy in terms of knowing its disadvantages. He argued that time is needed to clarify the disadvantages in the country.
Another issue was mentioned by the MOC undersecretary and five other interviewees: education and reduction on customs duties on imported electronic equipment may help to change the culture of Libyas citizens. Additionally, they explained that changes in business culture will create money and help the countrys economy, referring to the saving from Chapter six: Findings 170 using the e-commerce. The OPTC chairman stated that reducing costs can help people to change the culture.
The OPTC argued that people need to be encouraged to use e-commerce for the first time. He said:
If we provide incentives for people to use electronic payment and they are encouraged to use it for the first time, then they might realise the benefits. I think adopting things now is important, there should be a nationwide strategy to push new technology, once its used and accepted people will get used to it.
In a summary, all issues mentioned in the literature review were confirmed in the research findings. Additionally, a number of new issues were mentioned. The previous and new issues are listed in Table 6.4 Table 6.4: Culture issues in Libya Item No Drivers and barriers E-Commerce conflicts with culture and religion 1 Barrier Intervention to ban the sale of certain items that violate culture 2 Barrier Offering credit-card services with interest rate 3 Barrier Child protection 4 Barrier Religion issues 5 Barrier E-commerce helps to maintain culture 6 Driver Change in business culture 7 Driver E-commerce maintains Arab culture for women New Driver Mistrust of website is a barrier for culture change New Barrier Training and education can change the culture regards e-commerce New Driver For culture change, people may need to be forced to use the technology New Driver
Chapter six: Findings 171 6.2.4 Economic development e-commerce will have a significant effect on developing the economy of Libya. All interviewees were asked if e-commerce will effect the development of the economy. Most interviewees (MOC, OPTC, LIB, LTT, BA, AW, OCC, LCB and CBL) agreed that e- commerce will help developing the economy. The undersecretary of MOC argued:
I dont think e-commerce would have any bad effect on the Libyan market.
The undersecretary of MOC agreed that e-commerce will increase competition, but he also argued that competition will help to develop the economy. He added:
We have no choice but to adopt e-commerce; we can see the successful trail in Tunisia. E-commerce could help developing the Libyan economy, as a consumer in Libya rather then paying x billions for importing something from outside, which already has many added cost e.g. travel, commission, customs etc. These costs could be reduced significantly by using e-commerce.
He ended saying:
If we start providing services in Libya using e-commerce we would help developing our economy and be in a better economic position.
He explained the importance of Libyas location and tourists attractions in the country, such as the Mesrata FreeZone. Believing that e-commerce would help the country to advertise its attractions and help to develop the tourism industry, he said:
Many people dont know what Libya has to offer. If we put things on the web and provide services over the Internet, we can expect to see a significant increase in business. For tourism as an example, travel agents could advertise Libyan historical places using flash technology that will definitely bring more business to the whole country.
Chapter six: Findings 172 He argued that if tourism companies and government ministries introduce these attractions to the world electronically in professional form then that on its own will be enough to help develop the economy.
6.2.4.1 The cost of adopting e-commerce could result in delay to economic development The cost of e-commerce adoption varies from one country to another. The infrastructure of Libya is still in the early stages of development. The operation manager of LCB argued that developing the infrastructure of Libya will delay the adoption of the banking system. He explained that there is no connection between the bank branches. The same comments were supported by the IT manager of CBL. However, not one of the interviewees mentioned the delays of economic development of e-commerce. The reason may very well be the good financial situation in Libya and its surplus of oil. Additionally the chairman of BA argued that if the technological infrastructure is improved and used as an economic tool then e- commerce will make a big difference in the economy. He said:
I have no doubt about the power of e-commerce on economic development.
6.2.4.2 E-commerce could shift economic activities away towards advanced regions It is argued in the literature that adopting e-commerce technology could shift economic activities away from marginal or disadvantaged regions towards advanced regions. Such Chapter six: Findings 173 concerns were not expressed by the interviewees. The operation manager of LCB stated that e-commerce may create threats to business in Libya, but such threats may be seen in the future, not in the short term. The chairmen of the BA group said that the Libyan market is more a consuming market than a producing market. Therefore, e-commerce will create no threat (see Section 6.2.10). One interviewee (the undersecretary of MOC) said that there is a need for coordination within Libyas markets. He referred to the expansion in e- commerce activities which is anticipated to result in an increase in the volume of the Libyas exports, given the future of Libyas distinctive position as a trade centre and a major financial market in the region for re-export. He contends that there is an urgent need for coordination among African countries in order to provide a joint information infrastructure that can contribute to the development of information and its applications. For example, e-government and the importance of human resources development to meet the likely need for information technology (IT) professionals.
6.2.4.3 The success of e-commerce can be at the expense of local enterprises The success of e-commerce can be at the expense of enterprises in direct competition with international suppliers. The undersecretary of MOC and the Chairman of OPTC argued that e-commerce will cause many businesses in the market to fail (see section 6.2.10) and many others will shift there activities onto the Internet. The Internet caf manager of AW argued that many new e-commerce companies will be created and if traditional businesses are to survive, they will have to catch up with the technology. However, the undersecretary of Chapter six: Findings 174 MOC argued that competition between Libyan and international importers and traders is already exists in Libya (see section 6.2.1).
6.2.4.4 E-commerce allows online businesses to gain traditional business customers The internet allows online businesses to gain new customers from the traditional businesses. The undersecretary of MOC argued that as soon as e-commerce is available in the market many businesses will be involved and the potential of Business to Business activities will be significant. The Internet caf manager of AR argued that the internet market is bigger than local markets of any country and has no limit.
6.2.4.5 Adoption of e-commerce will result in reduction of costs The BA group chairman argued that reducing costs and increasing the possibility of opening new market places will help to increase production which will provide competitive advantage aiding the development of the economy. Furthermore, he added, the Libyan market is a consumer market. He maintained that 70-80 percent of consumer products are imported. By using e-commerce consumers will save money which will contribute positively to the economy of the country. The undersecretary of MOC argued that e- commerce can help consumers to save money by buying cheaper products (see Section 6.2.1). Additionally, the reduction of costs in employment, travel, shipping and many other Chapter six: Findings 175 aspects will result in money saving which can be reinvested in the countrys economy (see Section 6.2.2).
6.2.4.6 Issues not mentioned There were some issues that were mentioned in the literature review but were not in this study. The reason, according to the researchers best knowledge, is because of the early stage of e-commerce adoption in Libya at the time of the study. For example, interviewees could not comment on the benefits to Libyas society or economic development. The same case applies to companies who have less access to technology and Internet market share.
6.2.4.7 Other issues The Undersecretary of MOC argued that there will be some contraction of the economy and reduction in government income (e.g. taxation) at the beginning of e-commerce adoption. He stated that there is no way back, it is only forward with the e-commerce issue. He said:
You cant clean your blood without losing some of it
He meant that even if some problems appear in the beginning that will not stop the government, everybody will be happy with the final result. He stated that time wasted will cost the country in money and time to catch up with other countries.
Additionally, the IT manager of CBL mentioned that training and education are needed, in order to provide a human resources which will contribute to the development of the new economy. Chapter six: Findings 176
In summary, Table 6.5 lists all issues that were mentioned related to economic activities.
Table 6.5: Economic development issues in Libya Item No Drivers and barriers The cost of adopting e-commerce technology could result in delays to e-economic development. 1 Barrier (Driver) Adopting e-commerce technology could shift economic activities away from marginal or disadvantage regions towards advantaged regions. 2 Barrier The success of e-commerce can be at the expense of local enterprises in direct competition with international suppliers. 3 Barrier Government returns (e.g. taxation) might be even lower than company-level returns 5 Barrier The Internet allows online businesses to gain new customers from traditional businesses. 6 Barrier Companies with less access to the new technologies, Internet investment involves defending market share, so that social returns to this investment are lower than private returns. 7 Barrier (Not seen) Government should encourage the use of a country resource to provide cheaper prices than anywhere else in the world. 8 Driver (not seen) E-commerce will provide a variety of products from all over the world. 10 Driver Training and education are needed to create HR for Economic development New Driver 6.2.5 Employment 6.2.5.1 E-commerce may result in job cuts Employment and job losses were other barriers mentioned by interviewees. One interviewee (OPTC committee chairman) argued that:
Chapter six: Findings 177 188The main problem of e-commerce and e-commerce in general is its effect on employment. We are struggling with the high percentage of unemployment.
However, the undersecretary of MOC argued that unemployment in Libya was not because there are no available jobs to applicants but is rather having the right people in the right place. He explained:
We have 1,000,000 foreign employees in Libya, but we have 300,000 unemployed Libyan citizens.
He explained that the mentality of the Libyan people, will not accept just any type of job or fit in any positions that become vacant in developing nations. He gave as an example the opposite: Europeans and their ability to adapt a new job in a new place. The reason for giving this example was that European citizens need money to pay for rent and living expenses, whereas in Libya this pressure is absent because food, drink and living expenses are provided by the government at exceptionally low prices. Furthermore, he claims that e- commerce is not to blame for unemployment. He explained:
It is because of the economic cycle. There are many studies showing the percentage of unemployment is almost the same in all decades, and that confirms e-commerce is not the reason for unemployment but the development of the economy.
Reduction in administrative work is another driver that was mentioned. The marketing manager of LIB argued that:
The most important driver is helping in administrative work. The official number of employees in Libya, according to Saif Aleslam, might be higher than the population.
Chapter six: Findings 178 He explained that this is probably due to many employees of the government still being paid even though they have left the job or may even have died! The current administration systems are so poor that they have yet to catch up. He also explained that many low grade jobs can be eliminated by adopting new technologies. He added:
Our traditional way of doing business is time consuming, people have to leave their job just to pay some bills because they have to go to the premises of their creditors, and that affects the efficiency of business and delays production.
An additional driver he pointed out was self-organisation. He argued:
E-commerce will drive people to be more organised with their jobs and payments.
6.2.5.2 E-commerce may result in creating new job opportunities The belief that e-commerce can create new jobs was seen in many of the interviewees statements. The undersecretary of MOC argued that e-commerce will force people to learn, improve and educate themselves to be redeployed in another position. The same view was shared with the LIB marketing manager who argued:
People will think that e-commerce will affect the employment rate in the country and will slow the wheel of economic development. They are wrong. The people who are made redundant could be redeployed in other positions and help in different ways.
The IT manager of CBL argued that the National Payment System training programme will contribute in providing human resources that are needed for the banking sector and in creating new job opportunities. Additionally, the Internet Caf manager of AW argued that e-commerce can provide opportunities for unemployed people. He gave as an example Chapter six: Findings 179 creating websites for car sales companies. Additionally, the BA Group chairman argued that e-commerce can create new job opportunities by providing services internationally. These opportunities, he explained, can be for Libyans or non-Libyans to participate in delivering international services.
Questionnaire respondents were asked if e-commerce will help to reduce administrative tasks. Thirty six participants strongly agreed, only 6 participants strongly disagreed. See Figure 6.1 Figure 6.1: Reduction of administration work
All respondents who currently have a website update them themselves which can be an indication of job opportunities being created by e-commerce adoption.
Chapter six: Findings 180 6.2.5.3 Other issues It has been argued by the MOC undersecretary that the unemployment is a result of economic cycle rather then e-commerce. He explained that all studies show that the percentage of unemployment over the years is constant.
The IT manager of CBL, MOC undersecretary, LIB marketing manager and operation manager of LCB all argued that training and education are needed for Libyan employees. Such training and education will create new job opportunities and help in developing the countrys economy.
In summary, all issues mentioned in the literature review are confirmed in these research findings. However, some new issues arose. All issues are listed in Table 6.6 Table 6.6: Employment issues in Libya Item No Drivers and barriers Employment is an important factor in any economy. 1 Driver E-commerce may result in job cuts. 2 Barrier E-commerce may result in creating new job opportunities and encouraging employment education and gaining new skills 3 Driver Unemployment is a result of economic activities and not e-commerce alone New Driver Training and education are needed to create new job opportunities New Driver Chapter six: Findings 181
6.2.6. Government Interviewees were asked about e-commerce barriers. All agreed there are many barriers to e-commerce in Libya and all argued that it is time for government to get involved and help setting up the infrastructure.
The interviewees also indicated that some barriers are created through governmental intervention, such as banning import and advertisement of goods and products manufactured in certain countries, or actions of other governments through creating barriers relating to copyright and patent laws.
6.2.6.1 Government always plays a role in economic development Government always plays an important role in economic development. The undersecretary of MOC stated that the Libyan government realises the benefits of e-commerce and has made the decision for adoption. He explained that the successful adoption of e-commerce in Tunisia encouraged the government to go ahead. He stated providing services using e- commerce can help the countrys economy. Another important role that can be identified by the Central Bank of Libyas IT is that the bank is working on increasing the benefits of the large development of information technologies and improving the environment for banking activities.
Chapter six: Findings 182 6.2.6.2 Government support of investments in countrys infrastructure The Libyan government is supporting all the infrastructure investment in the country using its different agencies. The MOC Undersecretary explained that the development of e- commerce legislation is underway (see Section 6.2.8) and the Central Bank of Libya is developing the National Payment System (see Section 6.2.9). OPTC is developing the ICT infrastructure (see Section 6.2.7) and LTT is developing the internet connection in the country (see Section 6.2.7) . However, all interviewees stated that the cost of Internet connection is high and needs to be reduced (see Section 6.2.2). Some argued that the Internet does not cover the whole area of the country and that it is only available in cities. The committee chairman of OPTC argued that there is no one organisation responsible for e-commerce barriers, explaining that the telecom service company is responsible for the infrastructure, banks responsible for payments systems and the Ministries of Justice and Economy are responsible for legal issues, admitting that all government organisations should work together to have the right infrastructure for e-commerce. He stated that his companys responsibility is last on the list as a priority for using e-commerce. Further more the marketing manager of LTT stated that ADSL needs ATM technology in landline digital servers, recently this service was put in place which delays the introduction of the services to the citizens.
On the other hand, the BA chairman argued that e-government adoption and payment systems implementation are the major drivers of e-commerce in the country. The undersecretary stated that e-government applications, such as new company registration, Chapter six: Findings 183 have already been implemented and that there has been an e-government adoption policy since 1984 when the Libyan Prime Minister was thinking of using fax for all government work. He argued that the government is working on developing full e-government covering all government departments in order to centralise information.
As regards payment system adoption, the LTT marketing manager agreed with three other interviewees (OPTC, BA and LIB) that a National Payment System is a big driver for e- commerce. The undersecretary of MOC stated that the spread of credit cards across Libya is expected shortly referring to the plan of the (CBL). He explained:
If the credit card system is distributed across the country then that will build a very good infrastructure for e-commerce in the country.
In addition to that the operation manager of LCB stated that CBL is working on increasing the benefits from information development by improving the banking activity environment and introducing the National Payment System. He adds that CBL and other Libyan banks are implementing a programme of technological developments in banking systems. The IT manager of CEL argued that this programme is part of a strategy to ensure efficiency and effectiveness of payment systems in the country.
The marketing manager of LIB explained that another payment system has been developed by the company to enable customers to pay for activities over the mobile phone network. He explained: As a company we are trying to help to develop the countrys infrastructure. We have to be up-to-date with rapidly developing technology. We believe in the rapid change of our daily life, people Chapter six: Findings 184 wont have enough time to spend in dealing with many issues such as paying bills etc that is why we came up with this solution.
Another driver mentioned by the undersecretary of MOC, was the aim to provide one million portable computers to young people (One Laptop Per Child, OPLC). He said:
that would help catching up and educating our kids in order not to have later on the problem of getting into technology.
He continued:
We are expecting to see a PC in each house; it will be like having a radio or television.
Furthermore he said that the Economic Ministry has reduced the cost of importing technology equipment in order to encourage citizens to benefit from the cheaper new technology. He said:
What we are doing now is trying to help people to be educated. As an example, we set up a plan to help people using new technology and devices and we reduced the customs rates to be only 5 percent for all electrical equipment.
6.2.6.3 Government is responsible for setting legislation and regulation e-commerce law and regulation is one the drivers taking place in the country. The undersecretary of MOC argued that the e-commerce law implementation is in process and should be ready by 2008. He stated:
We are developing legislation for e-commerce. The decision was made by the Minister of Economy and Commerce to start the process of establishing a committee for this purpose.
Admitting that there are some barriers to adopting e-commerce law, he said:
Chapter six: Findings 185 What matters is can we make a regulation that will satisfy both parties - customers and service providers?
Additionally the lack of regulation has created computer crime in Libya. The Internet caf manager of AW argued that there is no legislation to control computer crime which encourages younger people to use pirated software (see Section 6.2.8).
6.2.6.4 Governments support monopoly organisations and limit the opportunities for private companies The Libyan government tends to support monopoly organisations and limit opportunities for private companies. The Undersecretary of MOC stated that e-commerce infrastructure of telecommunication is poor in the country (see Section 6.2.7). The Chairman of OPTC advocates that his organisation is the only organisation responsible for the landline and postal services in the country. Additionally, he explained, OPTC owns LTT (the only Internet services provider), Libyanna and Al-Madar (The only mobile companies in the country) (see Section 6.2.7). However, the chairman of OPTC claimed that the government is thinking of privatising the two mobile companies in the country.
6.2.6.5 Other issues The undersecretary of MOC indicated that people will not wait for government action and regulation to start using the Internet and e-commerce. He explained that the country has to move quickly to establish the legislation.
Chapter six: Findings 186 The marketing manager of LIB, the Business development manager of CI and the general manager of OCC argued that the government and other private organisations should pay attention to conferences, training sessions and workshops.
In summary, most of the literature review issues in government were mentioned in the interviews, however, there are some issues that were not mentioned. The reason was the early stages of e-commerce adoption in Libya. All issues are all listed in Table 6.7 Table 6.7: Government issues in Libya Item No Drivers and barriers Governments always play an important role in economic development 1 Driver The government is usually the main customer of small businesses 2 Driver Government will support all investments and improvements in countrys infrastructure 3 Driver Government is responsible for setting legislation and regulation for trade 4 Driver Government should think carefully about e-commerce adoption 6 Driver E-government strategies would provide significant advantages and efficiency. 7 Driver E-government will create new jobs for other private and public organization 8 Driver E-government improving services to citizens, 9 Driver Improving the productivity and efficiency of government agencies, 10 Driver Strengthening the legal system and law enforcement, 11 Driver Improving the quality of life for disadvantaged communities, 12 Driver Governments tend to support monopoly organisations and limit the opportunities for private companies which could effect the adoption of e-commerce. 13 Barrier People are not waiting for legislation to use e- commerce and Internet New Barrier Training and education is needed for decision makers New Driver Chapter six: Findings 187 6.2.7 Infrastructure 6.2.7.1 Organisational infrastructure All interviewees were asked about the type of software and hardware used in their organisations in order for the researcher to observe the level of computer engagement in their organisation. They all stated that Microsoft operating systems were in use along with other Microsoft software and business applications, such as Microsoft Office, SharePoint and server. Other software from different companies is used. According to one interviewee (the BA chairman), some accounting software such as Sage Line 50 is used by his company. Other interviewees stated that some software is developed in house.
All organisations have a network infrastructure and hardware at different levels. One interviewee (the BA chairman) stated that his company had a full network installed and is running Microsoft server 2003 linking all PCs and laptops to printers, FAX and scanners as well as DNS Directories and email servers.
Interviewees and questionnaire respondents were asked if they have a website in their organisations. Most had at least one website (the engineering manager of OC indicated that his company has three different websites). Most websites however are designed in-house and updated by company staff. One interviewee (the AW manager) stated that his company had no website. Two managers (AW, LTT) and the chairman of BA argued that websites are very important for businesses. The BA chairman stated that:
Chapter six: Findings 188 A website is a necessity for any business nowadays and it has to be seen as a business model not just an advertisement on the web.
He argued that having a website may help to reduce the cost of face-to-face communication and attract new customers. However, the engineering manager of OC believed that a website would just give background information about the company and its services, therefore there is no need for it to be updated often. One Internet caf manager (AR) stated that having a website is worthless arguing that a website would bring no benefit to small businesses. His argument was about comparing the benefit of having website and the cost of designing and hosting. Moreover he said that for his business all customers were local and knew where the caf was based. However, he explained that having a dynamic website with free membership may provide a financial benefit, saying that such websites have to provide social networking and should host discussion rooms, uploading and downloading media files. An LTT marketing manager said that extra services, such as weather and market watch, are important in websites as they kept visitors coming back. He argued that the website should be updated regularly to keep customers interested.
6.2.7.2 Poor infrastructure limits e-commerce adoption Additionally all interviewees agreed that infrastructure is one of the big barriers therefore the country should take the right steps to develop its communications infrastructure. The general manager of OCC added:
The main barrier is the infrastructure. Government has to pay attention to infrastructure and has to take e-commerce issues very seriously if they want to develop and catch up quickly.
Chapter six: Findings 189 The undersecretary of MOC stated that e-commerce infrastructure of ICT was not yet ready. He argued that the network did not cover all the countrys regions. He explained: E-commerce is dependent on the telecommunication infrastructure; our land lines still lack good infrastructure as well as high charges for connecting to the Internet and making phone calls.
Additionally, the operation manager of LCB argued that National Payment System success is dependant on the improvement of the ICT infrastructure. He claimed that the banks branches cannot be linked because of the poor infrastructure (see Section 6.2.9). The same comments were made by the IT manager of CBL. The BA Group chairman argued that the infrastructure is the main barrier for e-commerce in Libya, and insisted that the government has to pay attention to ICT infrastructure in order for e-commerce to be successful.
Interviewees were asked about the Internet in their organisation and the type of communication used to connect to the Internet. All interviewees were connected to the Internet using different Internet Service Providers. Most interviewees were connected using ADSL provided by LTT. Companies were paying one-off fees of 150 L.D (75) for installation and 50 L.D (25) per month for 5 gigabyte (gb). Some were connected using satellite technology paying around 7000 L.D (3500) for installation and 750 L.D (375) a month for 256 kilobytes (kb). Others combine the use of ADSL and satellite technology to maximise the speed and reduce the cost. The results are summarised in Table 7.10. Table 6.8: Internet connection charge Type of service Installation Monthly fees ISPs Dail up - 0.40 L.D OPTC ADSL (5gb) 150 L.D 50 L.D LTT Lease Line 256kb 1000 L.D 1000 L.D LTT Lease line 512kb 1000 L.D 1500 L.D LTT Chapter six: Findings 190 Satellite (256 kb) 7000 L.D 750 L.D Others
The Business Development Manager of CI complained that the failure of connecting to the Internet that was provided by LTT was one of the main barriers to e-commerce for his business, whereas the AR Internet Caf manager stated that people are walking away from the Internet because of the bad connection.
Figure 6.2 also shows the type of connection used. 33 percent are connected using satellite technology, 17 percent using dial up technology provided by the general post service company where 50 percent stated that their Internet was provided by LTT. Figure 6.2: Internet service providers
An Internet caf manager (AW) said that connecting through satellite is more convenient for many reasons, he then explained that connection rarely fails and when it does fail, there is usually a quick response from the satellite service providers.
Table 6.9 indicates which communication tools respondents used. Most people use e-mail and telephone over the Internet rather more than other tools. Other tools, such as Trade LTT 50% OPTC 17% Satellite 33% Chapter six: Findings 191 Data Interchange and voice mail, are rarely used. Only 7 percent are using electronic forms, 5 percent using electronic funds transfer and telex.
Table 6.9: Communications tools Communication tools No. % Electronic mail 116 23% Telephone over the Internet 98 19% Document image processing 59 12% Automatic Data Collection 42 8% E-Catalogue 41 8% Electronic form 36 7% Fax 32 6% Electronic funds transfer 25 5% Telex 23 5% Video Conferencing 18 4% Trade data interchange 9 2% Voice mail 7 1%
It is clear that e-mail is the most favoured Internet tool. E-mail does not need any sort of payment regulation to be used in the country. Other tools, such as electronic funds transfer and video conferencing, are rarely used because of the poor infrastructure of e-commerce and lack of a payment system in the country. Additionally, 20 percent of respondents strongly agreed that they are willing to be involved in e-commerce but they cannot use it. Whereas 23 percent argued that the speed of Internet connection is the barrier.
Chapter six: Findings 192 6.2.7.4 The significant barrier for e-commerce is the control of networks by monopolies The only legal service provider in the country is owned by OPTC, argued the LTT marketing manager and OPTC chairman. They claimed that no company is allowed to provide Internet services in the country. The chairman of OPTC stated:
They are owned by GPTC. But there is a restructuring and re-organising of telecom sector. All these companies will be sister companies and owned by a holding company, the holding company by law still owned by the government of Libya.
However, as the AW Internet caf manager and the OCC General Manager said, many organisations use other service providers from different countries (see Sections 6.2.8).
6.2.7.5 Infrastructure cost is significant The cost of establishing the e-commerce infrastructure is significant. The OPTC chairman claimed that his organisation invested a significant amount of money to develop the ICT infrastructure and establish the two mobile companies and the Internet service providing company (see Section 6.2.2). Additionally, the operation manager of LCB stated that for establishing the National Payment System the Central Bank of Libya has to invest around 40 million Libyan dinar (see Section 6.2.9).
Chapter six: Findings 193 6.2.7.6 The Infrastructure of a country could be a main driver to attract international companies
The undersecretary of MOC, the operation manager of CBL and IT manager of CBL agreed that the National Payment System was developed by three international companies to provide a payment system environment in the country. 6.2.7.7 Other issues The lack of infrastructure drives companies to break the law to get an Internet connection. The Internet Caf manager of AW and the OCC general manager stated that their organisations are connected to the Internet using the satellite connection to overcome the infrastructure barriers in the country.
In a summary, most of the issues mentioned in the literature review were confirmed in the research findings. Table 6.10 lists all the issues. Table 6.10: Infrastructure issues in Libya Item No Drivers and barriers If the infrastructure is in a poor condition then the expectation to see an improvement in the e-commerce adoption is significantly low. 1 Barrier The main barrier for e-commerce is the law because of the control of networks by monopolies or dominant firms in many developing countries 2 Barrier The infrastructure of a country could be a main driver to attract international companies and foreign direct investors to do business in that particular country. 4 Driver Infrastructure cost is significant 5 Barrier Infrastructure needs new strategies, planning and 6 Driver (Not mentioned) Chapter six: Findings 194 management Lack of infrastructure drives organisation to break the law New Barrier
6.2.8 Legislation 6.2.8.1 Legislation and regulation are required to control of the flow of business e-commerce law and regulation was one the drivers that was taking place in the country. The undersecretary of MOC argued that the e-commerce law implementation is underway and should be ready by 2008. He stated:
We are developing legislation for e-commerce. The decision was made by the Minister of Economy and Commerce to start the process of establishing a committee for this purpose.
Nine interviewees (the undersecretary of MOC, OPTC chairman, LTT marketing manager, LIB marketing manager, BA Group chairman, LCB operation manager, CI business development manager, AW Internet caf manager and OC engineering manager) stated that the lack of payment legislation is considered a barrier. They suggested that such legislation will provide a good infrastructure for e-commerce in Libya. However, the IT manager of CBL argued that the legislation for payment systems and credit card use was considered before the National Payment System was implemented. He explained:
We have updated laws and regulations with which banking institutions are working to reflect the effects of technological developments, and to allow for the electronic transactions.
Chapter six: Findings 195
Additionally, the OPTC argue that other issues such as electronic signatures are still not available in Libya. He explained that such signatures will ease the way of doing business and encourage businesses to deal electronically. The BA Group chairman argued that the absence of regulation has resulted in the delay of e-commerce adoption. The MOC undersecretary explained that there are some barriers to adopting e-commerce law such as ensuring that both parties have equal rights. 6.2.8.2 Piracy of products According to some interviewees, many young people were interested in hacking and cracking techniques rather than getting information from the Internet. An Internet caf manager (AW) explained that the lack of e-commerce and Internet knowledge drives many people to take this hacking path. He said that many people use Internet cafes to crack software keys and hack websites rather than to gain other benefits from the Internet. He explained that this was because of the lack of payment systems and security as well as the unawareness of computer crime in the country. He stated:
As a result of not having the ability to buy online, many young Libyans are driven to finding alternative solutions to get what they want from the Internet.
He added that they usually share hacking and pirating knowledge and techniques with other users on the web.
Chapter six: Findings 196 6.2.8.3 The absence of legislation leads to difficulty in finding a total solution The undersecretary of MOC argued that the absence of regulation may effect badly the Libyan users. He explained that many Libyans do not have the experience of using e- commerce and its related activities which may lead them to breach the law. The OPTC chairman advocated that his organisation has developed applications which are not in use due to the absence of regulations (e.g. e-signature). In the same way, the marketing manager of LTT argued that the lack of regulations and payment systems were the reason for stopping his organisation getting involved with e-commerce. He explained:
For LTT, it is been a while since we were thinking of getting involved in e-commerce because of the barriers such as payment systems, transactions and government departments, we could not manage to move forward too much.
The OPTC chairman explained that the absence of regulation has led to the difficulty of adopting e-commerce. He explained that his organisation may be responsible for the infrastructure issues, but there are no regulations to map the way forward for adopting e- commerce.
The Operation manager of CBL stated that businesses using the Internet have to use LTT, the only authorised ISP in the country rather than any other provider such as satellite technology. The reason is that most satellite services providers have no licence to operate in the country and are classified as illegal. However, some interviewees said that the LTT Chapter six: Findings 197 service is improving and the company had reduced the cost of Internet connection by more than 70percent.
6.2.8.4 Online viruses are becoming a serious matter All interviewees argued that hackers and security are barriers for e-commerce (see Section 6.2.12). However, the AW Internet caf manager stated that the interest in developing viruses and hacking systems is result of the absence of regulation in the country.
6.2.8.5 The regulation of e-commerce will build customer trust A number of interviewees ( BA Chairman, AW Internet Caf manager and CI Business development manager) argued that viruses and hackers had created a miss-trust of e- commerce. Regulations and legislation can drive people to develop a trust in the electronic services and use e-commerce for their activities. The chairman of BA Group explained:
The main disadvantage of e-commerce in Libya is the security,.In order for the people not to feel scared to use the internet.
6.2.8.6 Issues not mentioned Some issues found in the literature search were not mentioned in this research. For example, the literature indicates that some goods and commodities can be bought and sold illegally online. Such issues were still not obvious in Libya because there is no payment system in place. Chapter six: Findings 198
Additionally, the issue of the difficulty of setting up e-commerce regulation by one government on its own was also not observed in Libya, especially since the Libyan government had just start thinking of adopting e-commerce regulation. The same issue would lead to the difficulty of understanding the conflict between the legislations of e- commerce and other legislation.
6.2.8.7 Other issues According to undersecretary of MOC, people will not wait for government action to set up regulations. He explained:
If the credit card system was distributed in the whole country then that will build a very good infrastructure for e-commerce in the country. People will start trading if they have a possibility - they wont wait for law to be issued.
Such issues can be seen as a driver for e-commerce adoption. If citizens start using e- commerce in the country, then that will drive the government to issue the legislation and regulation to cope with development.
According to the chairman of the BA group, that absence of regulation can affect economic development. He explained that users will use other countries for their electronic activities which will affect badly the economy of the country.
Chapter six: Findings 199 Four interviewees (LTT marketing manager, BA Group chairman, AW Internet caf manager and OC engineering manager) argued that education and training are needed to provide an understanding of e-commerce and Internet technology and to prepare people in the correct use of e-commerce applications and activities.
In summary, this research confirms most of the issues mentioned in the literature review and adds some other new issues. These issues are listed in Table 6.11
Table 6.11: Legislation issues in Libya Item No Drivers and barriers Needs legislations and regulation to control the flow of business 1 Driver Goods and commodities can be bought and sold illegally online. 2 Barrier Piracy of products 3 Barrier The absence of legislation leads to difficulty in finding a total solution. 4 Barrier No regulation leads to the possibility of pornography 5 Barrier (see Section 6.2.12) Online viruses are a serious matter 6 Barrier The regulation of e-commerce will build customer trust 8 Driver Regulation and prevention is very difficult for individual governments. 9 Barrier (not seen) E-commerce regulation could conflict with other legislation and regulation in a country. 10 Barrier (Not seen) Concern about the security of network systems 11 Barrier (see Section 6.2.12) Concerns about the use of computer technologies for traditional property offences such as theft and fraud, 12 Barriers (see Section 6.2.12) Concern about publishing hate speech and online 13 Barrier (Not seen) Chapter six: Findings 200 talking People will not wait for regulation to use e- commerce New Barrier E-commerce users can force government to adopt regulations New Driver Absence of regulation drives business away from the local economy New Barrier Training and education is needed for e-commerce regulations New Driver
6.2.9 Payment
7.2.9.1 Payment system will encourage people to do business The chairman of OPTC and the LTT marketing manager argued that a payment system will enable customers to pay for their billing online. He explained that this online payment system will save the cost and speed the time of transactions. The LIB marketing manager argued that the National Payment System will be a driver for e-commerce in Libya (see Section 6.2.2). The operation manager of LCB argued that his bank is expecting to see an increase in business activities from his customers after the introduction of the electronic payment system. However, the BA Group chairman argued that his organisation is already working on introducing an electronic payment system for its customers (see Section 6.2.7).
The Chairman of OPTC argued that a payment system will reduce the cost of employment and time of operating. Additionally, he explained that a payment system will reduce the cost of securing cash, arguing that his organisation was paying a significant amount of money for securing the cash and delivering it to other banks.
Chapter six: Findings 201 6.2.9.2 A payment system will speed up transactions and other banking activities It is argued that a payment system would speed up transactions and increase activities between banks. The LTT marketing manager explained that the National Payment System would allow immediate transactions between banks and organisations. The same view was confirmed by the LCB operation manager, that the system would enable banks to save time in transactions. He explained:
For banks, it is even more important because it will help them to complete their transactions quickly and easily. As an example, to clear a check in your account from someone else in different bank will take from a week up to 40 days at present. When the system is in place and operational, that type of transaction will be completed in seconds.
The CBL operation manager explained that the next step for his bank is to provide Internet banking services. The IT manager of CBL argued that the new system would help to monitor banks liquidities. 6.2.9.3 Payment systems constitute part of the basic structure of a countrys economy All interviewees agreed that payment systems are the main driver of e-commerce and are the basic structure of the countrys economy (see Sections 6.2.2; 6.2.7 and Section 6.2.8). The absence of a payment system has driven users to adopt illegal techniques to enjoy the benefit of shopping online (see Section 6.2.12). Additionally, the lack of payment systems in the country has driven many businesses to operate in other countries which can affect the economic development of the country (see Section 6.2.4). The LTT marketing manager Chapter six: Findings 202 argued that the lack of a payment system has limited the development of the country. The LIB marketing manager argued that the National Payment System would positively affect the economic development of the country, explaining that people need to realise time is money and therefore the payment system can save time.
6.2.9.4 For e-commerce to be used, E-payment has to be installed and ready Four managers (AW, BA, LTT and LIB) and the undersecretary of MOC stated that the spread of credit cards and ATMs in Libya is expected shortly referring to the plan of CBL. The undersecretary of MOC explained:
If the credit card-system is distributed in the whole country then that will build a very good infrastructure for e-commerce in the country.
In addition to that the operation manager of LCB stated that CBL is working on increasing the benefits from information systems development by improving the banking activity environment and introducing the National Payment System. He argued that:
For the time being, we are doing most of our international business through the Arab Foreign bank.
The IT manager of CBL explained that the programme will have five phases. Each of the phases will be installed separately. He then discussed the Automated Cheque Processing (ACP) system which will enable electronic cheque clearing. Automatic Telling Machines and Point of Sales (POS) devices will provide a fundamental environment for the national Chapter six: Findings 203 automated teller distributor that will provide access to all customer accounts with participating banks and execute cash drawing transactions through ATM machines by national and international networks. He argued that:
It also enables businessmen, their clients and companies that provide these services to accomplish the payments for transaction charges electronically using point of sale.
The operation manager of LCB argued that the biggest challenge of the National Payment System is the infrastructure. He explained:
We cannot get good connections between our branches right now.
It was stated that other challenges and issues such as education, training and languages are being dealt with. He added that the next step for Libyan banks is to adopt online banking systems. He explained:
As soon as the project is finished, our next step is to adopt electronic banking for our customers that would enable customers to login to their account through a website and do some activities, which we believe will reduce cost and employment headcount.
The marketing manager of LIB explained that another payment system has been developed by the company. The system enables customers to pay their utility bills and any other services using their phone top ups. He explained:
As a company we are trying to help to develop the countrys infrastructure. We have to be up to date with rapidly developing technology. We believe in the rapid change of our daily lives, people wont have enough time to spend in dealing with many issues such as paying bills etc. That is why we came up with this solution.
Chapter six: Findings 204 Furthermore, the marketing manager of LTT explained that his company strategy is to reduce Internet connection costs and implement alternative payment methods in line with the mobile company. He explained:
We are in discussion with a shopping centre to introduce one of the new services which will enable customers to pay upfront for recharging cards.
In addition, the committee chairman of OPTC that controls the telecommunication companies including LTT and the postal services stated that his organisation will introduce electronic billing and payment systems for his customers to pay online.
6.2.9.5 Adopting payment systems requires heavy investment However, adopting payment systems requires large investment. The operation manager of LCB argued that the National Payment System will cost the CBL around 40 million Libyan diner. Additionally, he stated that once the system is ready to use, his bank will introduce Internet banking to customers. Additionally, the LCB operation manger and IT manager of CBL explained that the project will be delivered by three international companies and is focusing on providing human resources for the Libyan banking sector (see section 6.2.11). The LCB operation manager explained:
The central bank of Libya is sending employees from all Libyan public banks outside the country for training from time to time to learn English and get some training in banking electronic systems. Other workshops and training courses are taking place inside the country.
Chapter six: Findings 205 6.2.9.6 Securing payment systems in a country would need significant investment All interviewees agreed that there is a need for secure payment systems (see Section 6.2.12). However, the IT manager of CBL argued that the developer of National Payment System will have taken into consideration the important of security in payment transactions security. He explained:
The system will be provided with coding and protection software in order to ensure safe and protected structure for data transmission between banks, the currently-under-construction data centres and all electronic financial services channels.
6.2.9.7 Payment in developing countries is cash or cheques Interviewees were asked about the type of payment systems they use in their organisations. Most agreed that cash is the commonly-used method. Others mentioned the use of money transfer, bank transfer and approved cheques. None of interviewees were using credit or debit cards in business. The chairman of BA stated that credit-card systems are not available in the country at present. However, he stated that a development for accepting credit and debit cards via his company website is taking place to be ready for use as soon as it is available in the country. It is worth mentioning that some interviewees were using credit cards issued overseas for personal use to buy from the Internet.
Payment systems are a barrier of e-commerce in Libya. The manager of AW argued that money transfer and payment system was the main barriers: Chapter six: Findings 206
The Internet has been introduced in order for people to get connected; they sell, buy or exchange things; well in Libya we cannot.
He carried on explaining that transferring money is very difficult and expensive, there are no cards to be used, and no ATMs, not even a third party to help customers to buy over the Internet. Another manager (OCC) added, the inability to accept payment online is one of the biggest e-commerce disadvantages in Libya, the payment schemes available for online transactions are traditional payment methods which are cash-on-delivery and bank payment. Additionally, the committee chairman of OPTC argued that people will not accept easily electronic payment systems as they used to carrying cash and paying by cheque. 6.2.9.8 Other issues According to the LIB marketing manager, his organisation has introduced an alternative payment method. The reason according to the interviewee is that users want to use the system and they will not wait for government action. The same view was supported the undersecretary of MOC and LTT marketing manager.
In summary, all payment issues that were mentioned in the literature review were confirmed in these research findings. Additionally a new issue arose. All issues are listed in Table 6.12 Table 6.12: Payment issues in Libya Item No Driver or barrier Payment systems will encourage people to do business 1 Driver Payment systems speed up transactions and other banking activities 2 Driver Chapter six: Findings 207 Payment systems provide new opportunities for online services. 3 Driver Payment systems constitute part of the basic structure of a countrys economy 4 Driver For e-commerce to be used, e-payment has to be installed and ready. 5 Driver Adopting payment systems requires large investments 11 Barrier Securing payment systems in a country would need significant investment. 16 Barrier Payment in developing countries is via cash or cheques 17 Barrier Alternative methods of payment will be introduced to fill the gap of payment systems in Libya New Driver
6.2.10 Traditional business Traditional trade in Libya might be threatened by e-commerce. E-commerce is changing the way of doing business all over the world. All interviewees were asked if e-commerce would pose any threat to traditional commerce. Some argued (CI, OC) that e-commerce may pose some threats. A manager (AR) added that e-commerce will create many new companies which will pose threats to the older ones. He explained that older companies will have to adopt e-commerce along with the traditional way in order to survive.
6.2.10.1 Traditional businesses in developing countries were established long before e-commerce However, others argued that e-commerce does not pose threat to traditional businesses, it is rather a new method for traditional businesses. One argued (OC engineering manager) that the two business methods are identical, especially in a market like Libya; he argued that Chapter six: Findings 208 many traditional businesses are using the Internet and the result being a perfect combination in both sides. Furthermore, two interviewees (LCB, IC) agreed that they will be not be a threat in the near future. A caf manger maintained that traditional trade will not be threatened, provided that traders can cope with the transformation and changed operations, and the modern applications of techniques in the field of information technology. The development manager of IC stated that the financial sector will not experience any threat arguing that in this sector manual and personal work is always needed. Explaining his view, he stated that one of the reasons was the difficulty of correcting a mistake electronically then manually in his organisation. He added that the other reason is that most of the Internet users in the country are young; middle-aged and older people do not really bother to learn any new technology because of the time and find difficulty in catching up.
An Internet caf manager (AW) explained that clothing items, cosmetics, and other merchandise belonging to this category are unlikely to benefit in the near future in a wide and accelerated manner from e-commerce, particularly since these depend upon the buyers sense of fashion and culture. One manager (AR) maintained that the traditional trade infrastructure has been well established in Libya over the last thirty years, whereas the e- commerce infrastructure is still in its early years of existence. Furthermore, two managers (OCC, AW) maintained that the level of e-commerce consciousness that has spread through Libya and other Arab countries is still considered as the least developed with regard to communications and information at the global level, and the least competitive and the least free from government and private sector control. One argued: Chapter six: Findings 209
Our people have still a mile or so to go this way until they are used to using the Internet and become e-commerce customers. Nonetheless, indications reveal that we are going that way with big strides. From now, one can say that traditional trade is not threatened whatsoever by e-commerce; the latter is still in its childhood, if not in its infancy.
6.2.10.2 Traditional companies are the main economic contributors to the economy The undersecretary of MOC argued that traditional companies are the main contributor to the countrys economy. However, he explained that Libyan producers are complaining that many international products have entered the market. He explained that the competition will be higher once e-commerce is adopted in Libya (see Section 6.2.1). He argued that local producers have to improve their production quality in order to cope with e-commerce competition. The LTT marketing manager argued that even though his organisation is an Internet services provider, most of the organisations activities are still done in the traditional way of business. He said:
We provide no service over the Internet. For most of our services you would have to walk in and apply.
6.2.10.3 Government and companies have to monitor e-commerce development The undersecretary of MOC argued that governments have been monitoring the development of e-commerce and its effect on traditional businesses in a number of countries such as Tunisia. He explained that this fear of e-commerce affecting the Chapter six: Findings 210 traditional businesses starts to disappear with experience (see Section 6.2.1). Additionally, the chairman of the BA group argued that most of the products in Libya are imported from overseas. He explained that there is no threat on traditional business. He stated:
70-80 percent of consumer products have been imported from outside, so by allowing e-commerce services, that would benefit more the consumer by buying the same product at lower prices.
He explained that e-commerce will not effect the agricultural products in Libya because Libyan fruit and vegetables have a reputation of high quality and low price. Additionally, he added, the amount of production is not enough to satisfy the local market (see Section 6.2.1 and Section 6.2.4).
The MOC undersecretary argued that the reduction of customs and taxes on electronic equipment may be beneficial to traditional businesses. He explained that traditional importers can save money on shipping and other costs of the imported equipment to the Libyan market than the cost of buying such equipment from e-commerce website.
6.2.10.4 A failure to involve traditional businesses would work against e-commerce adoption The Business development manager of CI argued that the older generation in Libya do not use e-commerce and Internet but these people are the main spenders in the market. The OPTC chairman agreed with the CI manager explaining that in order for e-commerce to be adopted, the government must encourage the use of e-commerce. Chapter six: Findings 211
6.2.10.5 Other issues The CI business development manager and the AW Internet caf manager argued that most of the Internet users in the country are teenagers. Older people are not commonly using the Internet. The CI business development manager explained that older people do not have time to learn about e-commerce.
Reduction on customs and taxes can drive traditional businesses to save more money than e-commerce websites.
In summary, all the literature issues mentioned are confirmed by these research findings. Table 6.12 lists all the issues. Table 6.13: Traditional business issues in Libya Item No Drivers and barriers Traditional businesses in developing countries were established long before e-commerce. 1 Barrier Traditional companies are the main economic contributors in the economy. 2 Barrier Government and companies have to work together in monitoring technological and strategic development in the use of e-commerce in order for these companies to maintain their place in international competition and restructure their organisations. 3 Barrier A failure to involve traditional businesses would work against e-commerce adoption and against economic development. 4 Barrier Traditional businesses and e-commerce businesses could work together. 5 Driver Chapter six: Findings 212 Traditional business will be effective as long as the majority of users are teenagers New Driver Reduction of customs and taxes can help traditional businesses to save more money than e- commerce websites. New Driver
6.2.11 Knowledge 6.2.11.1 Knowledge of e-commerce Interviewees were asked if they had heard of the term e-commerce. Seventy three percent of interviewees agreed that the term means commercial activities on the web including selling, buying and some other commercial activities; it is the future of traditional business with less difficulty and saving time and money. Moreover, the chairman of BA added that:
E-commerce is trading on all human needs through electronic sites, paying for these needs using different payment methods in informatics networks.
Additionally, the general manager of OCC argued that term of e-commerce had been taken notice of but a clear explanation was needed.
This lack of awareness of companies electronic activities was notable from many respondents and interviewees. Employees are not aware of their organisations engagement in electronic services and have no willingness to be notified. The reason could be a failure of managers to engage employees in their organisations activities.
Chapter six: Findings 213 6.2.11.2 Education and training The lack of e-commerce and information systems courses and training in the country may be one of the main issues arising from this low result of e-commerce engagement. It was noticed that many people use some Internet and e-commerce tools but they do not know that these tools are linked to the subject investigated.
The BA chairman stated that one of the main barriers for e-commerce in Libya is electronic illiteracy. He said:
Electronic illiteracy is the other main barrier but this barrier can be dealt with in a short time if the government and people are willing to learn.
Another manager (LIB) argued that knowledge is an important issue and it is a barrier for e- commerce in Libya. There are no schools or colleges interested in the area or to provide courses in e-commerce. He said:
Probably around 1 or 2 percent of the population know about and are interested in e-commerce.
Some interviewees (BA, AW, LCB and LTT) admitted that lack of knowledge and shortage of expertise in the field is a major barrier arguing that international expertise will not easily meet the needs of the Libyan market. One Internet caf manager (AR) argued:
There are no available courses for e-commerce or even modules in courses.
Chapter six: Findings 214 Additionally, the marketing manager of LIB argued that lack of knowledge could cause the delay of the adoption of e-commerce, giving as example the introduction of 3G services in the country. he explained:
We are facing a huge problem with 3G services. People do not know about it at all, and do not want to try it.
On the other hand, the government is trying to deal with technology issues by taking some action, for example the undersecretary of MOC talked about providing one million portable computers to young people (One Laptop Per Child, OPLC) (see Section 6.2.11). Additionally, according to the operation manager of CBL, the company is sending employees from all Libyan public banks outside the country for training, language courses, and work experience. Other workshops and training courses are taking place inside the country.
All interviewees argued that the lack of knowledge in e-commerce and its related activities have created some barriers for e-commerce adoption. The undersecretary of MOC explained that international companies know about e-commerce but Libyan companies do not. However, most of interviewees organisations are encouraging in-house development of applications which can be seen as a driver for adopting e-commerce knowledge. The OPTC chairman and LTT marketing manager argued that it is not just the technology of e- commence that is needed for e-commerce adoption, it is also the willingness of people to learn and gain knowledge about e-commerce. The LTT marketing manager explained that prepaid cards for shopping can help people to learn more about e-commerce without taking Chapter six: Findings 215 the risk of electronic payment. He added that people who had the opportunity to travel abroad gained knowledge about new technology. He said:
People who had the opportunity to travel abroad use the Internet and manage to get credit or debit cards. Then they know what e-commerce and the Internet are about, but those who havent had the chance to go abroad know nothing about e-commerce and will face difficulty in getting into the new technology, and will not accept easily the change in their lives.
The marketing manager of LIB argued that the resistance of users to gain knowledge is one of the barriers in the country. He explained that his organisations faced significant barriers to educate people on using third generation mobile technology. He stated:
We are facing a huge problem with 3G services. 3G is a new technology, people dont know about it at all. What we have thought is to provide some services over 3G so people would get involved. And I think the same way should work with e-commerce.
The LIB marketing manager argued that it is the responsibility of the Libyan government and other private organisations to educate and train people on e-commerce. The same view was confirmed by the chairman of the BA group who stated that his organisations employees have the benefit of having overseas training and workshops in the country that are run by international expertise. Additionally the lack of highly qualified personnel is a barrier for e-commerce adoption. The LCB operation manager argued that most of the specialised employees are not Libyan or are Libyan but living outside the country. The lack of those people, he explained, may result in delaying the payment system implementation.
The reason for the high percentage of young people is that Libya has a high proportion of young people in the population as explained in Chapter 5. The Internet caf manager of Chapter six: Findings 216 AW argued that younger generation users are sharing information with other Internet users specially in the area of hacking and viruses (see Section 6.2.12).
Questionnaire respondents were much less positive regarding the term e-commerce. Figure 6.3 indicate that 35 respondents out of 150 had never heard of the term e-commerce before, while 43 stated that the term was heard of but had never been used, 37 had heard of e- commerce but used it minimally and 31 had heard of the term in seminars. However, one could argue only 35 candidates are using or are involved in e-commerce.
Figure 6.3: E-commerce awareness "Have you ever heard the term E-commerce" 35 43 37 31 17 18 12 7 5 0 5 10 15 20 25 30 35 40 45 50 never heard of term before Have heared but not use in any way I have heard and useed in Have visited seminars have prepared strategy for e- commerce planning for using e- commerce Undertaking e- commerce development we are extensive user of e-commerce we are extensive user of other technology Level of engagment F r e q u e n c y
The lack of e-commerce and information systems courses and training in the country may be one of the main issues arising from this low result of e-commerce engagement. It was noticed that many people use some Internet and e-commerce tools but they do not know that these tools are linked to the subject investigated.
Chapter six: Findings 217 6.2.12 Security
6.2.12.1 The need for security companies in Libya Two managers (LTT, AW) agreed that there is a necessity of having security companies entering the country. The chairman of BA stated:
Security companies should have representatives in the country and define the countrys needs. What works for the whole world may not work for Libya.
6.2.12.2 Viruses create mis-trust Viruses, spam, copyright and security are other e-commerce barriers, as the general manager of OCC stated describing hackers:
As long as these people exist in the market dont expect to see anyone trading online. People feel no security on the Internet.
Additionally, e-commerce regulation is another barrier that was mentioned by interviewees. The BA chairman argued that there are many Libyans interested in exploring the new world of e-commerce, all that stops these people is the fear of losing their money. The marketing manager of LTT explained that:
For international companies the case is different. They know what they should do and how to keep their rights, but for Libyans who dont know what e-commerce is all about, they may be abused by other companies through not knowing their rights.
It has been stated by the interviewees that most of the software in Libya is not legally acquired but is pirated in one way or another. One Internet Caf manager (AW) said that nobody pays for software in Libya; he has, he said, been using computers for more then Chapter six: Findings 218 fifteen years and has never paid for software. He further explained that the software can be downloaded and activated using a stolen key. Surprisingly, even security software such as Kasper Sky and Norton antivirus are installed with stolen activation keys.
Another Internet caf manager (AR) admitted that even though he downloads software illegally, he knows it is not right. He explained that the lack of payment systems and other e-commerce barriers mean that there is no legal way of acquiring software in Libya. He said:
I know we should not do it this way, but what else can we do? We have no alternative way of getting the software, this is the only way to be up- to-date with technology and software.
However, the OPTC chairman argues that e-commerce provides security for his organisations; he explained that paying security companies to provide guards to secure the cash and guarantee the delivery to the bank costs his organisation a significant amount of money. He explained:
As an example, we are paying a huge amount of money on security because we deal in cash. Conducting transactions electronically would help to speed up the process and having things on the system right away, the moment the transaction is completed.
Additionally, the LIB marketing manager argued that by using e-commerce, people do not have to carry cash and can feel safer. As for the security of the payment system, the IT manager of CBL argued that the National Payment System provides a secure platform for transactions (see Section 6.2.9)
Chapter six: Findings 219 Forty three percent of questionnaire respondents stated that security is the biggest Internet disadvantage. Such a high percentage in a country which has not yet adopted e-commerce creates concern about the willingness of people to be involved in using the technology. As shown in Figure 6.4 below, when people are asked if their fear of security is the reason for not adopting e-commerce, the majority were not sure.
Figure 6.4: Fear of security
6.3 Pioneer Initiatives Libya has started thinking seriously about e-commerce as an important issue to catch up on the Internet revolution. One of the interviewees (OPTC committee chairman) indicated that such pioneering initiatives are attributable to the decision-makers belief that the only alternative, given the massive developments and progress in ICT at the global level, is to participate in e-commerce, and to use all resources available to strengthen the infrastructure Chapter six: Findings 220 base in preparation for the new modern economic order. Another interviewee (undersecretary of MOC) referred to another initiative, the announcement of switching the Libyan Government to e-government, and working on developing new e-commerce legislation which stipulates that Libyan government departments must put into action an active programme to transform and transfer all governmental transactions into digital deals run on the Internet. The remaining interviewees also referred to this initiative, maintaining that it will offer an appropriate background for interaction between the government, the public and the business sector.
6.4 Benefits of e-commerce to Libya Enterprises in both the public and the private sectors have recognised the concept and benefits of e-commerce through the Internet. Most of the companies in Libya in particular, and in the Arab World and Africa, in general, have shown huge interest and enthusiasm in venturing into this field. The general manager of OCC explained that e-commerce will bring great benefits to Libyas markets and will help to improve the countrys economy mentioning that Libya as one of the developing countries trying to re-establish their economies and to start being in the world market. He maintains that the increasing move towards e-commerce will promote the international position of Libyas businesses. This in turn will increase business trading opportunities. Other interviewees (MOC, BA, LTT, LIB, LCB, and AW) maintained that the Internet and websites will benefit Libya a great deal in terms of offering high-quality goods, commodities, products and services in a record time Chapter six: Findings 221 and at affordable prices compared to those offered by stores and firms operating in shopping malls. A manager adds that e-commerce will affect the way of tradition, custom, and living. Life will be changed and speeded up, people will realise the meaning of time is money and they will pay money for Internet connection to save time. He adds:
It might even affect social life, people wont waste anymore extra time in sitting and chatting.
Another benefit for Libyan state companies is reducing the cost of employing security guards to secure cash. The committee chairman of OPTC stated that e-commerce will be effective; it will speed up the way of doing work in the company. He stated that:
We are paying a huge amount of money on security to secure cash that will be avoided when we have an e-commerce transaction system in place.
Questionnaire respondents justify the benefit of using e-commerce in the country. Seventy five percent expressed their feelings on the benefits of enabling chatting systems. Seventy three percent of the respondents stated that surfing the web and using telephone calls are major benefits, where 80 percent stated that the main benefit of e-commerce is to acquire information. However, only 34 percent were convinced that it could bring benefits for selling, marketing and purchasing. The questionnaire results are summarised in Table 6.14. Table 6.14: Reasons for Using e-commerce Reasons No. % To get information 109 80 For chatting 97 75 For internal calls 58 73 For web site visiting 58 73 Self improvement 54 68 File transfer 72 65 For External call 50 63 Trade 54 56 Upload files 42 54 Purchases 31 38 Sell and marketing 26 34 Chapter six: Findings 222
6.5 Other Comments One interviewee (undersecretary of MOC) said that there is a need for coordination within Libyas market. He referred to the expansion in e-commerce activities which is anticipated to result in an increase in the volume of the Libyas exports, given the future of Libyas distinctive position as a trade centre and a major financial market in the region for re- export. He contended that there is an urgent need for coordination among African countries in order to provide a joint information infrastructure that can contribute to the development of information and its applications, for example, e-government, and the importance of human resources development to meet the likely need for IT professionals. The chairman of the BA group stated that e-commerce would provide good opportunities for SMEs in Libya especially in the private sector. These companies would be able to deal internationally rapidly and with reduced costs. 6.6 Summary E-commerce drivers vary from one country to another. Some drivers apparent in some developed countries have not yet appeared in many developing countries and in some cases these drivers in developed countries could be barriers in developing countries. It is significant to note that some additional drivers were identified for the first time (according to the researchers best knowledge) as a result of this research project.
Chapter six: Findings 223 Technology adoption is usually combined with rapid economic growth and accompanied by rapid structural change. E-commerce is expected to facilitate low-cost access to international bidding and supply processes for companies in Libya. Moreover, Libya faces challenges as the Internet technologies can pose a danger of economic marginalisation to countries that cannot access it effectively. There are many barriers to e-commerce in Libya; the misunderstanding of e-commerce by some of the population; the poor communication with a high cost of Internet connection; lack of payment systems; viruses; copyright and security matters. The Libyan government has begun to think seriously about adopting e- commerce as an important tool to catch up with the Internet revolution. Enterprises in both the public and private sectors have recognised the concept and benefits of e-commerce through the Internet. E-commerce should have an effect on developing the economy, if it gets the right infrastructure and is adopted as an economic tool.
There are a number of barriers to the adoption of e-commerce such as security, taxation or even in some circumstances, too much business for a company to cope with. One of the traditional barriers cited by many organisations to the growth of e-commerce is the relatively high charge for Internet access, the tariffs payable and cost of connection. Other costs such as hardware and web-design remain out of many peoples ability to pay for the service. There are further barriers specifically related to developing countries. Users are likely to be engaged in making improvements to their operations, often focusing on production management, financing and accounting, product development and marketing rather then paying attention to e-commerce and e-business strategies. There are many issues that could count as drivers and barriers to e-commerce and economic development at the Chapter six: Findings 224 same time. These issues are cost, payment systems, legislation and regulation, infrastructure, culture and religion, government, employment, competition, traditional business, economic activities, knowledge of e-commerce.
All driver and barrier issues listed in the literature review model (1) (see Section 4.3) were examined in the interviews and the questionnaire. The results show that all driver and barrier issues are apparent in Libya. However, some of the barriers, such as competition and culture, have not been experienced in Libya because Libya was in the early stages of e- commerce adoption. In order for the government to adopt e-commerce and close the gap between Libya and advanced countries, the government will have to think seriously about each and every one of the issues discussed above. For example, the government will have to pay attention to the fundamental issues in the economy, such as infrastructure, payment systems, and most importantly education before other issues of e-commerce.
Additionally, the e-commerce literature considers that the security issue is a result of the lack of legislation and regulation. Results show that in Libya security was an issue on its own, having connections, but not depending upon, other issues including legislation and regulation. For example, the lack of Internet security in Libya was created because of the absence of a payment system rather than the absence of legislation and regulation alone.
Knowledge of e-commerce, or lack of it, was seen as a fundamental issue for e-commerce adoption in Libya, not only as knowledge of understanding but also as a tool for changing culture and beliefs. The researcher believes that many countries have adopted the Chapter six: Findings 225 knowledge of technology in stages by involving people in those stages of development of that technology. e.g. people in other countries started using computers and the internet before wireless technology appeared, however, the case in Libya is different, many people need to be educated and trained in using technology and to see the benefits before-adoption, otherwise those people will resist the introduction of this technology.
These findings confirm the e-commerce driver and barrier issues found in the literature and identify two additional issues in security and knowledge.
The figure below shows the modified model of e-commerce drivers and barriers (e- commerce drivers and barriers (2). Each and every issue could count a driver and/or a barrier to e-commerce. The more benefit the issue is to economic development, the more the issue counted as a driver. Chapter six: Findings 226
For e-commerce adoption to be successful, the government will have to ensure that the cost of implementing and establishing the e-commerce is not higher than the investment returns. To achieve this, the government of Libya has to choose the right organisation to deliver good quality services at competitive prices. Most of these organisations will be Cost Payment system Legislation & Regulation Infrastructure Government Employment Competition Traditional business Barriers Drivers Culture & Religion Economic activities Knowledge of e- commerce Security Figure 4.1 E-Commerce drivers and barriers (2)
Chapter six: Findings 227 international companies. The returns on the investment of e-commerce in the Libyan market will enable companies to save money and cut travel and shipping costs thus expanding the economy. If cost reduction is greater than the adoption cost of e-commerce then one could argue that the countrys economy is developing and that growth is starting to take place. Economists should pay attention to the period of adoption as in the first couple of years the cost of adoption could be higher than the cost reduction. Therefore a calculation of spreading this cost over some appropriate period could be a solution. However, how to measure the cost reduction in a countrys economy is a problem. Clearly, it will be necessary to keep comprehensive records.
The culture of the country may be seriously affected by e-commerce. Therefore, government has to ensure that the adopted technology can fit with the countrys culture and tradition. Changing business culture can also be a driver for e-commerce adoption. Changes in business culture could drive the whole country to see e-commerce as a useful tool. Additionally, the government should support some cultural ideas and issues that e- commerce may help to retain, such as encouraging Libyan women to work from home.
Competition in Libya will increase, and it may very well increase sharply for traditional business providers. However, such competition could result in increasing economic activities and create new jobs and enterprises which may result in developing the economy of the country. If the government is able to support SMEs to adopt e-commerce, then a better market for Libyan businesses could be created. The government could remove Chapter six: Findings 228 barriers to international trade and develop the market for Libyan products brands internationally.
Government has to play an important role in all activities for e-commerce adoption. The companies can be the main drivers; therefore the government should do its part by introducing credit and debit cards, legislation and help in education. The absence of government action may result in delays or even the death of e-commerce in Libya.
From the above, it can be seen that e-commerce can benefit the Libyan market and help Libyan companies to provide better services in an international market. However, the Libyan government has tried to adopt e-commerce since 1984 and has still not achieved it. This begs the question as to what strategy the government should now adopt for successful adoption. The government can not play the role by itself. The government needs the help of international companies to build the ICT infrastructure and the payment system. Also the government needs to encourage users to get involve in e-commerce. Such involvement of users will need the support of Libyan local businesses to create job opportunities. The method of adopting e-commerce in Libya will be discussed in the following chapter.
Chapter seven: The three-quarter moon model 229 Chapter seven: The three-quarter moon model 230 Chapter seven: The three-quarter moon model 231
Chapter seven
The three-quarter moon model Chapter seven: The three-quarter moon model 232
7.1 Introduction................................ ................................ ................................ ................................ ......... 233 7.2 Drivers and barriers ................................ ................................ ................................ ........................... 233 7.3 The three-quarter moon model (specific to Libya) ................................ ................................ .......... 239 7.4 Action plan................................ ................................ ................................ ................................ ........... 242 7.4.1 Before e-commerce adoption ................................ ................................ ................................ ............ 242 7.4.2 During-adoption ................................ ................................ ................................ ................................ 246 7.4.3 After e-commerce adoption................................ ................................ ................................ ............... 249 7.5 The Three-Quarter Moon Model (General) ................................ ................................ ..................... 254 7.5.1 Capitalist approach................................ ................................ ................................ ............................ 255 7.5.2 Socialist approach ................................ ................................ ................................ ............................. 259 7.5.3 Technologically advanced countries ................................ ................................ ................................ . 259 7.5.4 Deploying the Three Quarter Moon Model ................................ ................................ ....................... 261 7.5 Summary................................ ................................ ................................ ................................ .............. 264
Chapter seven: The three-quarter moon model 233 7.1 Introduction This chapter examines the drivers and barriers of E-Commerce taking extracts from the literature review and findings chapters to create a new model to help countries such as Libya to adopt e-commerce. The chapter identifies the main actors for e-commerce adoption and introduces a plan of action that Libya will need to adopt for successful e- commerce adoption. If the Libyan government, Libyan companies and technologically advanced countries (the three-quarter-moon) work together through set procedures to involve the fourth part (Libyan e-commerce users) to complete the moon, then one could argue that the adoption of e-commerce in Libyan has been successful. However, to allow a smooth transition to e-commerce, investments are required in the social infrastructure and employee skills to enable the use of the technology in a way that is compatible with the local circumstances, cultures and abilities of users in Libya. The three-quarter moon is designed to fit the situation in Libya, however a generalisation of the model will also be introduced. The generalisation will enable the model to be applied to other developing countries. In order for classifying the level of involvement in a country a formula of Internet involvement is introduced and a classification for countries to point the level of adoption is also explained.
7.2 Drivers and barriers The findings and literature review chapters have indicated that there are many issues which can be drivers and barriers for e-commerce in Libya. Chapter seven: The three-quarter moon model 234
Competition could drive the economic development of the country by providing cheaper products and services. Additionally, the lower production costs will encourage the entry of new businesses and will increase competition in the market which may result in reduction of costs. However, competition could destroy the small local businesses. These businesses will not have the ability to compete with well-structured, multinational corporations. The demise of these local companies will effect the economic development in the country and shift the economic activities away from the market. In any case, it is still too early to predict the effect of e-commerce competition in Libya, as the infrastructure of the country is yet appropriate for e-commerce and most of the Internet users are young.
Cost reduction is one of the main drivers of e-commerce. E-commerce will reduce communication costs, supply chain costs, postal costs, storage costs and many other costs. It can reduce the costs related to buying and selling and save a significant amounts of money that can be re-invested in the market. However, adoption of e-commerce will have its implementation costs as well as the cost of hardware and software that is needed for the end users. Therefore, the Libyan government and companies in the market have to study the issue of cost carefully to calculate the benefits to the Libyan economy.
Culture is another issue; it was argued that e-commerce conflicts with culture and religion. In Libya, e-commerce is still in early stage of adoption, so such conflicts have not yet been seen. E-commerce can help to maintain the Libyan culture to provide work for Libyan women from home. However, other people in Libya see e-commerce as a tool that may Chapter seven: The three-quarter moon model 235 affect their culture. A number of Libyan organisations have recognised the need to change business culture and processes. For e-commerce to be successful, the Libyan government, local and international companies have to encourage people to use e-commerce. Education and training may clarify the benefits of using such technology and will minimise users fear and encourage trust.
E-commerce and economic development are closely linked. The cost of adopting e- commerce technology could delay other economic development in the country, especially as many infrastructure issues need to be dealt with before the adoption can take place. Therefore, the Libyan government must prioritise these issues in order to overcome the delays of the development. Additionally, the government should encourage local sourcing and support local business to achieve the economic development. Enabling e-commerce may force existing SMEs to modernise or move elsewhere to survive.
Employment is an important factor in any economy. E-commerce may result in cutting jobs in the market by introducing technological applications and using the Internet. At the same time, e-commerce will create new job opportunities for IT literate and other unemployed people. Therefore, there may be a need for education and training for Libyan employees to cope with the challenges of technology and being able to adapt to new job opportunities. Additionally, it was argued that unemployment in any economy is a result of economic activities rather than technology alone.
Chapter seven: The three-quarter moon model 236 The Libyan government is playing an important role in the countrys economic development. The government has supported all the investment in the country and is working in improving the infrastructure. Additionally, the Economic Ministry is working to establish e-commerce legislation which should support e-commerce in the country. Also, the Central Bank of Libya, with the help of international companies, is working to introduce the Electronic Payment System. However, the government still controls most of the active companies in the market and supports monopolies which have minimised competition in the market.
If the infrastructure of the country is in a poor condition, then the chances of e-commerce adoption is low. The Libyan government, as argued in Section 6.2.7, needs to improve the infrastructure of e-commerce in the country (e.g., postal delivery, payment system, legislation, etc) and to support private sector organisations to compete with other companies to achieve cost reduction (e.g. Internet providers).
Legislation for e-commerce and electronic activities is needed in the country. Goods and commodities can be sold illegally in Libya and pirated software is available in the market at low prices. The absence of legislation has resulted in delays to e-commerce adoption and lack of confidence in using the Internet for business activities. However, even though the Libyan government has started working to introduce new legislation for e-commerce and electronic activities, it must pay attention to the conflict between new e-commerce regulations and other regulations in the country.
Chapter seven: The three-quarter moon model 237 A payment system may encourage people to do business online and gain new customers. It may speed up transactions and activities between banks and provide opportunities for online services. The Central Bank of Libya has started the adoption of the National Payment System to introduce electronic cards, point of sales, ATMs, etc. However, the system has come at significant cost and it will take time before people start seeing the benefits of the system, because of the absence of other issues, e.g. infrastructure, legislations, etc.
Traditional businesses in Libya were established long before e-commerce. It was argued that traditional commerce is the main economic contributor in the economy. Because of the absence of regulation, a payment system and other e-commerce issues, traditional businesses still have not experienced any threat from e-commerce. Introducing e-commerce in the country may affect the traditional business. Therefore, government and companies have to work together to minimise the effect of e-commerce on other business and maximise the benefit of the local economy.
The findings of this research have pointed to the importance of knowledge within the population of e-commerce adoption. The absence of knowledge of e-commerce and its related issues has discouraged many people from using it. People see e-commerce and the Internet in general as a tool that may affect badly the culture of the country and may result in significant problems via hackers and lack of security. Additionally, there is a lack of experienced workers in the country who are able to help in the adoption. Therefore, training Chapter seven: The three-quarter moon model 238 and educations are important issues. Training and education are required for every e- commerce driver and barrier.
This research has confirmed that security is an important issue. Previous studies have associated the security problem with technical and legal issues. However, the researcher believes that security is an issue on its own and has links to all other issues of e-commerce. For example, security is an important factor in payment systems.
In summary, each e-commerce issue can be a driver and barrier in Libya. It was clear from each interview that there is no one organisation that is responsible in Libya for setting the e- commerce strategies and planning. Also, the Libyan government does not have a clear strategy for e-commerce adoption. Drivers and Barriers Model (2) of drivers and barriers explains the issues identified in Libya. However, a question to be asked is how can a country such as Libya adopt e-commerce? To answer this question, the researcher will need to develop a strategy for e-commerce adoption in Libya. For example, the research findings confirm that there is a lack of infrastructure in Libya. This infrastructure issue is a necessity for e-commerce adoption success. However, developing the infrastructure is likely to require a large amount of investment and is likely to require the government to decide either to develop the infrastructure of e-commerce or develop other aspect of the economy. Therefore, a strategy of adoption and a plan of action is needed. Therefore, the following section will introduce a plan for e-commerce adoption and list what the country will have to do to achieve successful adoption.
Chapter seven: The three-quarter moon model 239 7.3 The three-quarter moon model (specific to Libya) From this examination of the drivers and barriers for e-commerce, it appears that the main actors in e-commerce development are government, technologically advanced countries, companies and e-commerce users. Government helps to build the right foundation and infrastructure for e-commerce adoption. In economic theory, government always plays an important role whatever economic approach the country adopts (Todaro, 1999; Well, 2005). Governments role in economic development varies from one country to another. In a country such as Libya, there will be more government involvement than in capitalist countries. Therefore the Libyan government needs to establish an improved telecommunication infrastructure, establish a payment system, remove international barriers and build a postal services infrastructure.
However, in order to establish an e-commerce environment in Libya, the need to install and maintain advanced technology will be a challenge. These new technologies will have to be provided by more advanced countries. Once the two parties (Government and technologically advanced partner countries) agree on the type of technology to be adopted, then the two parties can work closely together to provide the technology and train government employees to use and maintain the adopted technology. However, the government needs to bear in mind that technology is developing rapidly, therefore research and development and educational programmes are required in order to keep up to date.
Chapter seven: The three-quarter moon model 240 The third main actor in e-commerce development consists of companies (private or public) operating in Libya. These companies clearly play an important role in increasing the number of e-commerce users by providing online services and lower prices. They also can provide services such as recruitment and leisure activities. Government and companies have to work closely together in order to achieve these objectives.
A fourth main actor is the e-commerce user, without whom government and companies would gain no benefit from their investment in technology. E-commerce users are the fourth quarter of the moon and the involvement of these users is very much dependent on the actions of the other three actors. For example, attracting users to a companys website to buy products or use the companys services by offering better prices or giving awards via the website. Another example is e-government services: citizens should experience the ease of use and the saving of time and money by using government services via the government websites.
Chapter seven: The three-quarter moon model 241
Figure 7.1: The four e-commerce actors
These four actors have different roles to play to complete the adoption of e-commerce in Libya. Even though the e-commerce users are the result of other actors actions, they still have roles to play in e-commerce adoption such as culture and religion. If an e-commerce service in Libya conflicts with the culture or religion then e-commerce adoption may be prejudiced and a bad image of the technology created which will be difficult to overcome. Therefore all four actors have roles to play in the adoption of e-commerce. This theory suggests that in order for e-commerce to work smoothly within Libyas economy, three adoption processes have to be undertaken: before, during and after. The three adoption processes are the action plan and they are discussed below.
E - C o m m e r c e
u s e r s
i n
d e v e l o p i n g
c o u n t r i e s
Technological advanced countries A government for a particular developing country Companies in a particular developing country Chapter seven: The three-quarter moon model 242 7.4 Action plan The plan of action attempts to plan the adoption of e-commerce in Libya. For successful adoption, the adopters should go through three stages or an adoption life cycle. The three stages should involve all four actors. Prioritizing action of plans varies from one country to another depends upon different issues and abilities. For Libya, a rich oil-producing country, priority in relation to financial constraints is not an issue specially that (as explained in the research findings) the country is willing to develop and support the adoption of e- commerce and ICT technology. However, in this research, issues were prioritized according the interviewees opinions of the relative importance of each of the issues. For example, interviewees stated that having legislation and regulation were the most important issues to be dealt with for successful e-commerce adoption. Other countries would have to re- prioritize the plan of actions according to their ability to deliver and implement similar actions as determined by financial and other constraints. For actions, such as infrastructure and payment system, these other countries may seek FDI to speed the adoption process.
7.4.1 Before e-commerce adoption Before e-commerce is adopted the following issues should be addressed:
Legislation and Regulation: regulation should control and manage the way that electronic transactions and activities are carried out in the country. E-commerce legislation needs to consider globalisation and the involvement of other countries as Chapter seven: The three-quarter moon model 243 well as all economic activities in the country. Removal of import and export barriers is vital to the success of e-commerce. For example the Libyan government restricts the purchase of products from Israel and even from companies having business activities in Israel. Such restrictions limit the ability of e-commerce activities to expand. Telecommunications infrastructure: an infrastructure should be built for providing citizens with telephone lines and Internet connection. Digital technology could be used to provide landlines and/or wireless technology especially for rural areas. Postal Infrastructure: in order for non-electronic products to be delivered to consumers who may have bought them from the Internet, a postal and transportation services infrastructure must be established. This development could be carried out by government or by private delivery services. In either case the government has to think carefully about the way to develop postal services especially for countries such as Libya where there is no Post Code or delivery address. International Trade: the infrastructure of international trade has to be established that would include many of the above mentioned factors, in order to enable buyers and sellers to trade fairly and without any restrictions. Establishing E-commerce Department: one of the main issues of e-commerce adoption is creating a responsible committee or a department responsible for e- commerce activities and regulation. This department or committee could be representative of different ministries and departments of government, or a new Chapter seven: The three-quarter moon model 244 department which will work closely with all ministries. It has been argued in Libya that the main issue effecting e-commerce adoption is a lack of a responsible government department. Payment System: this is an essential part of the infrastructure for economic activities and e-commerce. The payment system must be established and put in place before e-commerce adoption to enable users to transfer, receive and pay money without the need to visit a bank. Other related payment system issues such as Point of Sale and ATMs have to be considered. Removing Barriers to Foreign Investment: e-commerce adoption may bring more new businesses, create new strategies and platforms to do business. Many international companies will have to have branches, representatives, resellers, and after-sales support for their customers. These international companies will help to develop the Libyan economy. In order for these investors to enter Libya, they will have to make sure that there are no barriers to export or import, as well as other issues such as taxation, regulation and skilled employees. E-government Strategies: e-government strategies are additional factors that have to be thought through carefully before the adoption of e-commerce. E-government will be one of the main drivers of e-commerce and will encourage users and others to participate. Low Cost Hardware and Software: this needs to be provided to users before the adoption in order for people to get used to using computers and understand the nature of computer software. Even though hardware and software costs have fallen Chapter seven: The three-quarter moon model 245 dramatically over the years, the prices are still out of the reach of many people in Libya. Therefore, the government, companies and other technologically advanced countries have to find ways of providing hardware and software. An example of this is the OLPC supported by the United Nations to provide cheap laptops to children in developing countries. Education and Labour Training: education and training could be delivered in Libya by companies from technological advanced countries or by sending citizens to these technologically advanced countries. This will enable the country to keep up to date with technologies and the best ways of using that technology. Additionally, research and development on e-commerce and related subjects should take place before, while and after the adoption, which will help the country to find the best possible way of adopting new technology and keep the development of the economy sustainable. Lowering Taxation: lowering taxation on imported and exported products and services would solve the problem of double-charge taxation between countries and encourage e-commerce users and others, which will benefit the government by increasing the activities relating to e-commerce. Removing taxation barriers will encourage many investors to trade with Libya, which will help in reducing unemployment and create new business opportunities. Culture, Religion and Values: these have to be thought through carefully before adopting e-commerce. Libya has to make sure that e-commerce will not conflict with its culture and values. E-commerce actors (government and companies) have to Chapter seven: The three-quarter moon model 246 be very careful not to challenge the religion or the culture of Libya. As an example, selling pornography magazines or alcohol will drive many shoppers away from that particular business. Even more, a picture of that particular business could be applied to e-commerce as whole which will affect users incentive to use the Internet for shopping in the future. Table 7.1: Before-adoption issues in Libya Before-adoption G o v e r n m e n t
C o m p a n i e s
T e c h n o l o g i c a l
a d v a n c e d
c o u n t r i e s
E - c o m m e r c e
u s e r s
Legislation and regulations Y Y Y Telecommunication infrastructure Y Y Postal infrastructure Y International trade Y Y Establish an e-commerce department Y Payment system Y Y Removing barriers for foreign investments Y E-government strategy Y Y Low cost hardware and software Y Y Y Education and labour training Y Y Y Lowering taxations Y Culture, religion and values Y Y Y
Y: Means Yes (every actor with Y means that actor is responsible for this activity)
7.4.2 During-adoption Once the before-adoption issues are completed and dealt with, one could argue that the fundamental infrastructure and enabling environment for e-commerce is ready. However, Libya does not have to wait for full completion of all infrastructure projects. Once a Chapter seven: The three-quarter moon model 247 payment system, legislation and regulation are established, and access to the Internet is provided to citizens, government should start the second stage of the adoption process and should think carefully about the following issues that will develop through the adoption of e-commerce. This could be summarised as: New strategies: e-commerce is a new way of doing business; it is not just having a website for business. New strategies have to be developed and put in place at all organisational levels. Many businesses in Libya would face the challenge of preparing new strategies; therefore the Libyan government and other businesses should help by providing the services of designing e-commerce strategies. Most traditional businesses, should ensure that e-commerce works smoothly with their traditional activities. Change business culture: government and companies will have to change business culture; e-commerce has its own organisational culture, a culture that deals with the skills of computers and quick response to emails and customers enquiries. Change in the strategies of management, marketing, promotion, accounting and finance has to take place. Need to use local language on websites: many users and potential users in Libya do not speak English. If a website is in English then that would limit the involvement of users which will result in poor adoption. Local languages would encourage people to use the Internet and create self-confidence. People are likely to feel that their language, culture and traditions remain safe and are not adversely influenced. Chapter seven: The three-quarter moon model 248 Encouraging expatriate workers to return from overseas: adoption of e- commerce would need more than establishing infrastructure and putting security systems and a payment system in place. It needs new skilled employees and expertise to help design and manage strategies for e-activities. Training and education of employees overseas or in-house would help but not fulfil the needs of experience. Therefore attracting expatriates to return from overseas and work in the country would result in improving the services. If Libya fails to attract back their expatriate workers, they could fill this gap by employing experienced and skilled workers from other countries who are cheaper and have similar culture, traditions and values. Accept credit cards and international payment: services providers and consumers would need to be able to pay for international services and products over the Internet. Such a payment system is likely to be provided by an international services provider. This would risk reducing local income to government and local providers. Transaction security: security is one of the main challenges with e-commerce, many users do not feel confident that their information would remain safe over the Internet. Therefore government, companies and technological advanced countries would need to work hard to secure transaction between buyers and by providing secure platforms and convincing users to trust service providers. Culture, religion and value: culture will be affected over the years from the adoption of e-commerce. Technology adoption usually combines with culture Chapter seven: The three-quarter moon model 249 change. The government e-commerce department will have to monitor closely the changing culture and address the changes needed in management and strategies to fit with the new culture. Training and Education: government and companies should work in developing ideas and training employees in using technologies as well as encouraging research and development to keep up to date. Table 8.2: During-adoption in Libya During-adoption g o v e r n m e n t
C o m p a n i e s
T e c h n o l o g i c a l
a d v a n c e d
c o u n t r i e s
E - c o m m e r c e
u s e r s
New strategies for government and businesses Y Y Change business culture Y Y The use of local languages in website Y Y Encouraging expatriate workers to return from overseas Y Y Accept credit card and international payments Y Y Transaction security Y Y Y Security Y Y Y Culture, religion and value Y Y Y Training and education Y Y Y
Y: Means Yes (every actor with Y means that actor is responsible for this activity)
7.4.3 After e-commerce adoption Once e-commerce is in place, government, businesses and users are involved in e- commerce activities. The four e-commerce adoption actors will now have to pay Chapter seven: The three-quarter moon model 250 attention to other factors that will arise after the adoption of e-commerce. These factors need to be checked and monitored carefully and could be summarised as: Security: as mentioned above security is a constant challenge to Internet and e- commerce. Government, businesses and technologically advanced countries must work closely to overcome the threats to security that are created from the use of e-commerce. Monitoring and updating: monitoring and updating is different from one actor to another. For example, government has to monitor the use of the Internet, generate statistics for the use of e-commerce and activities, and provide these data to researchers and companies enabling them to redesign and restructure their business activities. Additionally, government needs to update infrastructure, strategies and other related issues according to new challenges and changes in technologies. Companies should monitor their business activities, website visitors and their interest and new technology and develop an understanding of their users behaviour and be technologically up-to-date. Thus companies need to update their websites with information to keep customers coming back and using the services. Furthermore, technologically advanced countries could help Libya to monitor the use of the bought or licensed technology and advise on ways to maximise the use of that technology as well as helping Libya to keep up-to-date. Chapter seven: The three-quarter moon model 251 Online promotion: companies have to pay attention to online promotions and marketing issues to attract customers to their websites. These customers could be from Libya or from any other part of the world. Customer satisfaction and customer trust: government and companies should satisfy their customers with the services provided. This may generate more use of the service and help in promoting e-commerce services to other citizens. Additionally, satisfied customers should trust the service provider which will create a special relationship between the provider and the consumer. Thus this relationship should result in more involvement in e-activities. Culture, religion and value (see Section 7.4.1, 7.4.2) Training and education: (see Section 7.4.1, 7.4.2)
Table 8.3: After-adoption issues to Libya
After-adoption G o v e r n m e n t s
C o m p a n i e s
T e c h n o l o g i c a l
a d v a n c e d
c o u n t r i e s
E - c o m m e r c e
u s e r
Security Y Y Y Monitoring and updating Y Y Y Online promotions Y Customer satisfaction and customer trust Y Y Culture, tradition and value Y Y Y Y Training and education Y Y Y Y
Y: Means Yes (every actor with Y means that actor is responsible for this activity)
Chapter seven: The three-quarter moon model 252 The three stages of adoption are illustrated in the Figure 8.2 below. The adoption will depend on the amount Libya is willing to invest in the technology as well as the stage of development for infrastructure. The quicker Libya acts to deal with the adoption stages, the faster the adoption of e-commerce should be and the faster the economy should develop.
The three stages of adoption (before, during and after) are driven by the four e-commerce adoption actors (Government, Technologically-advanced countries, companies, and e- commerce users). The adoption actors and stages together complete the digital economic activities in Libya and create the complete moon. Each of the four actors has a different role to play. However, the importance of each actor is different from one country to another. The government in Libya plays an important role as it controls most of the organisations, banks and service providers (see 8.3 below).
The result of the three actors activities (Government, technologically-advanced countries and companies) affects the involvement of e-commerce users and completes the moon circle. For example, if government manages to encourage users to use e-government services by providing most services online or reducing the cost of service charges online Before-adoption During-adoption After-adoption Infrastructure Payment system Legislation and regulation New business strategies and models Establishing e-commerce department Customs and free markets Education and training Culture and religion Security International payment Encouraging expatriates to return Change in business culture Culture, religion and customs Training and education
Training Monitoring and Updating Security Culture, religion and values Training and education Figure 7.2: The adoption stages Chapter seven: The three-quarter moon model 253 rather than the traditional way, then one could argue that users could be positively influenced to engage in e-commerce activities. The three-quarter moon model describes the whole adoption of e-commerce in Libya. It is called a three-quarter moon model to illustrate the way that the three main actors (Government, technologically-advanced countries and companies) encourage the fourth player (e-commerce users) to get involved and complete the adoption.
The three players should pay attention to culture, religion and value, and training and education over all the adoption stages. The conflict of e-commerce with Libyas culture or religion may drive users away of using the technology. Therefore companies and government should monitor culture and values over all adoption stages. Further, culture would be affected by e-commerce activities, so companies and government should work closely to monitor the change in the countrys culture and meet the new needs or help restoring some of the culture aspects that may have been affected by e-commerce.
Additionally, training and education is the responsibility of government, companies, and technologically-advanced countries. Libyan people should be encouraged to be trained and educated and to carry out research and development to meet the rapid development in the world and keep the economic growth of the country sustainable. Chapter seven: The three-quarter moon model 254
7.5 The Three-Quarter Moon Model (General) The three quarter moon model was designed specially for Libya, however, the model can be more generalised to be used by other countries. For countries that have adopted a capitalist approach for their economy, the effect of government will be much less than countries that have adopted a socialist approach. The argument here is, whatever the type of approach the Before During After Companies Culture and religion Training and Education E-Commerce Adoption EC department Infrastructure Payment system New strategies Remove restriction Import technology Change organisation Culture Training and education International payment Security Monitoring and updates Online promotion Security Customer satisfaction Fit with culture change E - c o m m e r c e
u s e r
Technologically advanced countries G o v e r n m e n t
o f
a
c o u n t r y
Figure 7.3: The Three-Quarter Moon Model (specific to Libya) Chapter seven: The three-quarter moon model 255 country is using, the same issues of e-commerce drivers and barriers have to be dealt with in order for the adoption to be successful. Of course, the method of adoption and role of actors will be different in each country.
This section introduces the use of the three-quarter moon model in these different countries, and describes the deployment formula which can be used to indicate the level of development needed to progress to full e-commerce adoption.
7.5.1 Capitalist approach Capitalist countries will encourage private companies to be more involved in economic development and infrastructure investment. Therefore, local companies and/or international companies in the local market will have more power in that countrys economy and will be the organisations responsible for the development. Even so, the government will still have a major role to play. For countries that are technologically strong, the effect of international companies will be limited. These countries will have their own technologically advanced companies who will be able to help in implementing the technology. In the plan of actions the roles of actors (government, international companies, local companies and Internet users) will change. The change of the plan of action is discussed as follow: 7.5.1.1 Before-adoption In the before-adoption stage, most of the issues will remain the same. However, a change in the role of the actors may be required. The level of change will depend on the level of the countrys development and the effect of the capitalist approach in that particular country. Chapter seven: The three-quarter moon model 256 The investment in a capitalist countrys infrastructure will very likely be controlled by private companies (national or international). Private companies can help the development and increase the competition in the market which may result in reduction of costs and being up-to-date with technology. However, private companies will very much consider the economic benefit and profit more than other infrastructural and social benefits of that country, therefore a government has to consider such involvement and encourage the private companies to invest in the market. The same situation will apply to the postal infrastructure, payment system and other issues. For example, postal investor companies may not wish to consider distribution to small villages in the middle of the dessert of Chad to serve a small group of people. Additionally, the barriers of setting the legislation and regulation in a country will be affected by the involvement of investors in that market, which may result in shifting the activities and considering the benefit of the companies in the market without paying attention to the citizens of that country. Other issues such as low cost of equipment and removing barriers for foreign investments would have been dealt with once the country has a capitalist approach. Table 8.4 below lists the issues and shows the actors involvement in each issue.
Chapter seven: The three-quarter moon model 257 Table 7.4: Before-adoption issues (general) Before-adoption G o v e r n m e n t s
C o m p a n i e s
T e c h n o l o g i c a l
a d v a n c e d
c o u n t r i e s
E - c o m m e r c e
u s e r s
Telecommunication infrastructure Y Y Postal infrastructure Y Y Payment system Y Y Legislation and regulations Y Y Y Education and labour training Y Y E-government strategy Y Y Y Low cost hardware and software Y Y International trade Y Y Y Removing barriers for foreign investments Y Y Establish an e-commerce department Y Y Y Lowering taxations Culture, religion and values Y Y Y Y
Y: Means Yes (every actor with Y means that actor is responsible for this activity)
7.5.1.2 During-adoption Once the before-adoption issues are dealt with, and a country is in the during-adoption stage, a countrys actors would have to deal with other issues such as local languages, credit cards, international payments and changes in the business culture. The government of a country will have a very limited involvement in such issues. Companies in the market will be involved in the during-adoption stages and will design the new changes in the country to their organisations benefit. For example, companies who are based in a country using an international and a local language (such as South Africa where English and other local languages are used) would not bother to develop the system to retain the use of the Chapter seven: The three-quarter moon model 258 local language, whereas a governments of other countries may well considered such change. Table 8.5 below shows the change in actors roles during the adoption stages. Table 7.5: During-adoption issues (General) During-adoption G o v e r n m e n t s
C o m p a n i e s
T e c h n o l o g i c a l
a d v a n c e d
c o u n t r i e s
E - c o m m e r c e
u s e r s
The use of local languages in website Y Y Y Accept credit card and international payments Y Y Transaction security Y Y Encouraging expatriate workers to return from overseas Y Y New strategies for government and businesses Y Y Y Change business culture Y Y Security Y Y Culture, religion and value Y Y Y Training and education Y Y
Y: Means Yes (every actor with Y means that actor is responsible for this activity)
7.5.1.3 After-adoption In the after-adoption stage, companies would work closely to maintain a growth in e- commerce and increase the number of users and value of sales. The after-adoption issues would have to be dealt with in order to secure a smooth development of growth of e- commerce. Government will have to keep a close eye on the development and guarantee the positive effect on that countrys economy. Table 8.6 lists the change of the actors role in the after-adoption stages.
Chapter seven: The three-quarter moon model 259 Table 7.6: After-adoption issues (general) After-adoption G o v e r n m e n t s
C o m p a n i e s
T e c h n o l o g i c a l
a d v a n c e d
c o u n t r i e s
E - c o m m e r c e
u s e r s
Security Y Y Monitoring and updating Y Y Y Online promotions Y Customer satisfactions and customer trust Y Culture, tradition and value Y Y Y Y Training and education Y Y Y
Y: Means Yes (every actor with Y means that actor is responsible for this activity)
7.5.2 Socialist approach For developing countries similar to Libya, the Three-Quarter Moon Model may be successful for e-commerce adoption. The reason is that such countries may share most of the economic tools and activities with Libya. However, a country needs to be careful because what will work for one country may not work perfectly for others. Therefore, the government of a country has to examine all adoption proposed issues and test them in their economy before-adoption. 7.5.3 Technologically advanced countries For technologically advanced countries such as India, the use of international technological companies would be limited. Such companies exist in the market and can provide services at competitive prices, therefore the effect of the international advanced companies in that country will be limited. However, there will always be a need for sharing and transforming Chapter seven: The three-quarter moon model 260 experience and knowledge. Therefore, the generic Three-Quarter Moon Model can be as in Figure 7.4
The arrow in the three quarter moon model can be moved according to the involvement of each actor in a countrys economy. The question to be raised here is how can a country know which stage of the adoption they have reached? Therefore deploying the Three Quarter Moon Model formula and diagram are introduced next. Before During After Companies Culture and religion Training and Education E-commerce Adoption EC department Infrastructure Payment system New strategies Remove restriction Import technology Change organisation Culture Training and education International payment Security Monitoring and updates Online promotion Security Customer satisfaction Fit with culture change E - C o m m e r c e
u s e r
Technologically advanced countries G o v e r n m e n t
o f
a
c o u n t r y
Figure 7.4: The Three-Quarter Moon Model (General) Chapter seven: The three-quarter moon model 261 7.5.4 Deploying the Three Quarter Moon Model The Internet involvement formula is the place to start. 7.5.4.1 Understanding the Internet involvement formula The level of Internet involvement in a countrys economy can be a measure of the level of engagement with e-commerce. The reason of developing the e-commerce involvement formula is that all e-commerce activities have to be carried out over the Internet regardless to the type of service. This involvement can be calculated by dividing the number of Internet users in the country by the over-six population of the country (assuming that children under six years of age will not be using e-commerce). Further, the OLPC project to provide children in developing countries with laptops will result in more involvement from the younger generation who enter school at the age of six. Hamed (2008) explained that the reason for using the number of Internet users in a country is that the number of Internet users is a result of all government and company economic and infrastructure activities. This Internet involvement metric could be used to indicate the digital development of a country as shown below (Hamed, 2008).
This metric can now be used in a classification model that attempts to indicate where a country currently is on a scale of technological development. Number of Internet users in the country x 100
Countrys Population Number of children under 6 years Internet involvement = Chapter seven: The three-quarter moon model 262 7.5.4.2 The classification model The classification model examines the e-commerce drivers and barriers of a country which will depend upon the level of technological involvement with e-commerce and its effect on a particular economy. This classification could be, based on three basic milestones: non- technologically advanced, less technologically-advanced and technologically-advanced countries.
Hamed (2008) argued that there are many issues that could count as drivers or barriers to e- commerce. Once these issues play a greater driver role than barrier role, then one could argue that the country is less-technologically advanced or technologically advanced. The reason for the classification is that if a country is managing to adopt e-commerce such that it is affecting economic activities, the government will have dealt with all infrastructure issues, payments system issues, regulation etc. e.g. if a country has adopted e-commerce and managed to reduce costs by more than the cost of establishing e-commerce then the economy would be more developed than previously (Rostow, 1984). The non- technologically advanced countries are those countries in which the infrastructure issues, payment system issues, regulations, etc. are not yet implemented. Chapter seven: The three-quarter moon model 263
7.5.4.3 Deploying the formula in the classification model If the result places a country in the non-technologically advanced category, then the country will have to start at the before-adoption stage. This means that a country has no infrastructure to support e-commerce, or there are some complications for different infrastructures to work together and with other issues such as regulation, payment, etc. Therefore these countries have to re-examine all before-adoption aspects and adopt the new strategies for e-commerce activities.
If the result of the Internet involvement formula places a country in the less-technologically advanced category, then the country could start the adoption from during-adoption stage. This means that a government has managed to establish the basic infrastructure for e- commerce which has resulted in a reasonable involvement of Internet users. The government should pay attention to international payment and other aspects mentioned in Less-Technologically Advanced Barriers Drivers Non-Technolgically Advanced Technologically Advanced 0 25 50 75 100 Figure 7.5: The classification model Chapter seven: The three-quarter moon model 264 the during-adoption stage to keep user-involvement and attract new users to electronic activities.
Finally, if the formula resulted in placing a country in a technologically advanced category, then the country has managed to establish all the necessary aspects for e-commerce use, and therefore the country should work carefully with the after-adoption stage, satisfying customers as well as other issues such as privacy, intellectual property, etc.
7.5 Summary There are many drivers and barriers to e-commerce. However, most of these issues (cost, infrastructure, time, information, legislation and regulation, etc) could be drivers or barriers. If a country has managed to achieve cost reduction greater than the investment made in adopting the new technology then one could say that the cost factor is a driver rather than a barrier. The same philosophy could work with other aspects of e-commerce drivers and barriers.
In order for a country to successfully adopt e-commerce, a government will have to think of e-commerce issues and their effect on their economy. For a successful e-commerce adoption, the government will have to implement the action plan. The action plan consists of three stages of implementation (before-adoption, during-adoption and after-adoption). Each stage has a number of issues to be dealt with. For example, a government will have to deal with telecommunication infrastructure issues before the adoption of e-commerce. Chapter seven: The three-quarter moon model 265 Failure of the adoption may be a result of a failure of one issue or a failure of a number of issues together. Therefore the Internet involvement formula should help to indicate where the problem lies. For example, by applying the number of internet users, population of a country and children under 6 years of age to the formula, the result will give us an indication of where the country lies in the diagram (figure 7.5). If a country lies in the non- technologically advanced level, then a country have to review Before-adoption action of plan issues that are listed in Table 7.1.
The action plan is driven by the four main actors (government, technologically advanced, companies and e-commerce users). The involvement of the fourth actor is the result of the other three actors actions on the economy. The action plan and the e-commerce adoption actors together create the Three-Quarter Moon Model.
The model was designed specifically for Libya. A generalisation of the model was introduced and a table of actions for the action plan was introduced for other developing countries. Additionally, a formula for measuring the e-commerce level of involvement in a country was introduced. The calculation attempts to specify the stage of adoption the country is at. After applying the formula, the result will be applied to the classification model which classifies a country according to its advancement in technology (non- technologically advanced, less-technologically advanced and technologically advanced).
The action plan, the Three-Quarter Moon Model, the formula and classification diagram are proposed but not yet implemented in any country. Chapter eight: Conclusions 266 Chapter eight: Conclusions 267
Chapter eight
Conclusion Chapter eight: Conclusions 268
8.1 Introduction................................ ................................ ................................ ................................ ......... 270 8.2 Review of objectives ................................ ................................ ................................ ............................ 270 8.2.1 Reviewing the literature of Economic development ................................ ................................ ......... 270 8.2.2 Reviewing the literature of e-commerce ................................ ................................ ........................... 271 8.2.3Developing a theoretical framework to conceptualise e-commerce drivers and barriers ................... 272 8.2.4 Investigate practical drivers and barriers of E-Commerce and its impact on Libyas economy ....... 273 8.2.5 Develop an implementation plan for e-commerce adoption in Libya ................................ ............... 279 8.2.7 Develop a model to assist in E-Commerce adoption in Libya and consider how the model can be generalised for other developing countries ................................ ................................ ................................ 279 8.3 Contribution of the body of knowledge................................ ................................ ............................. 281 8.3.1 Contribution to theory ................................ ................................ ................................ ....................... 281 8.3.2 Contribution to Practice ................................ ................................ ................................ .................... 287 8.4 Limitations of the research................................ ................................ ................................ ................. 288 8.5 Recommendations ................................ ................................ ................................ ............................... 289 8.6 Future Research................................ ................................ ................................ ................................ .. 290 Chapter eight: Conclusions 269 Chapter eight: Conclusions 270 8.1 Introduction This chapter summarises the thesis and draws conclusions from thesis objectives, literature review, findings and model chapters. Recommendations are made to the Libyan government regarding e-commerce and Internet adoption. Recommendations are also made for e-commerce and Internet adoption in developing countries generally. Finally, recommendations are made for further studies to be made on the subject of e-commerce and developing countries.
8.2 Review of objectives 8.2.1 Reviewing the literature of Economic development It is now widely accepted by policy makers and society that e-commerce is an economic and social transformation method that is affecting all countries. E-commerce has created a new economic and social landscape.
The more rapidly the technology is adopted and put to work in an economy, the more likely it is that the pace of economic growth will be rapid. The successful introduction of technology into the domestic production process in any country requires a domestic scientific establishment capable, first, of understanding, processing and adopting foreign- produced technological knowledge to local conditions and recognising the potential and dangers of its own discoveries when applied to the domestic economy.
Chapter eight: Conclusions 271 Advances in information technology have done more than almost anything else to drive the last decades economic boom and the integration of markets around the planet. The investment in the digital infrastructure that supports these burgeoning new services from the Internet servers to fibre-optic networks has itself become a major engine of economic growth. The impact of investment in ICT on economic growth is commonly regarded as a major driver of the new economy. However, ICT offers great benefits when ICT investment is combined with other organisational assets, such as new strategies, new business processes, new organisational structures and better educated and trained workers.
Even so, the majority of developing countries face limitations on the development of their economy stemming largely from low income levels, low literacy rates, lack of payment systems that can support online transactions, and cultural resistance to online trade.
8.2.2 Reviewing the literature of e-commerce Electronic commerce is the practice of conducting trade and retail business online through the use of secure websites. With the latest computerization and Internet technology, the future of international business for all personal or commercial investment companies involves e-commerce and all it has to offer.
The Third World has huge and well-recognised e-commerce and marketing potential. The potential of e-commerce applications to enable access to global markets and to reduce barriers to market entry is a theme which is heavily emphasised in the burgeoning literature Chapter eight: Conclusions 272 on e-commerce for developing countries. E-commerce enables producers in the developing world to overcome traditional limitations associated with restricted access to information, high market-entry costs, and isolation from potential markets.
8.2. Developing a theoretical framework to conceptualise e- commerce drivers and barriers E-commerce is expanding rapidly and has facilitated changes by significantly reducing the costs of outsourcing and co-operation with external entities. E-commerce has helped to break down the natural monopoly characteristic of services such as telecommunications. E- commerce is a key technology for speeding up the innovation process, reducing time scales, fostering greater networking in the economy and making faster diffusion of knowledge and ideas possible.
E-commerce drivers vary from one country to another. Some drivers that are seen in some developed countries are not yet evident in many developing countries and in some cases those drivers in a developed country could be barriers in other countries. There are a number of barriers to the adoption e-commerce (see Section 4.3) such as security, taxation or even in some circumstances, too much business for a company to cope with. Users in developing countries are likely to be engaged in making improvements to their operations, often focusing on production management, financing and accounting, product development and marketing rather then paying attention to e-commerce strategies.
Chapter eight: Conclusions 273 Reviewing the literature resulted in developing a framework to conceptualise e-commerce drivers and barriers. This framework consists of number of issues that can be drivers and barriers for e-commerce adoption. These issues are cost, payment systems, legislation and regulation, infrastructure, culture and religion, government, employment, competition, traditional business and economic activities. Each of these issues can have its effect on the countrys economy. For the country to guarantee a success of e-commerce adoption, the government has to make sure that they have dealt with barriers and sustain the drivers of each issue.
8.2.4 Investigate practical drivers and barriers of E-Commerce and its impact on Libyas economy
E-commerce should increase the efficiency of Libyas economy by making products higher quality and customer service more efficient. The Libyan economy will gain many advantages from e-commerce that will totally change the way that businesses operate. E- commerce is rapidly changing the foundation of Libyan government policies and improving their online communication strategies for expanding their economy.
8.2.4.1 E-commerce drivers and barriers in Libya There are many drivers and barriers to e-commerce. Most issues (cost, infrastructure, time, information, legislation and regulation, etc) could be drivers or barriers. If a country has Chapter eight: Conclusions 274 managed to achieve a cost reduction greater than the investment made in adopting the new technology then one could say that the cost factor is a driver rather than a barrier. The same philosophy could work with other aspects of e-commerce drivers and barriers. The government has to bear in mind the effect of issues on social, political and other aspects in the country.
Cost is an important factor for the worlds e-commerce in general and for Libya in particular. Reduction of costs using Internet technology is one of the main drivers for e- commerce in Libya. The results of this research show that e-commerce reduces the cost of communication and delivery in Libya as elsewhere. However, the cost of Internet connection in developing countries, and Libya in particular, is moderately high compared to developed countries.
The absence of e-government is another barrier for e-commerce in Libya. E-government is significant factor for e-commerce as it delivers services to businesses and the public. Even though e-government services are still at a very basic level, the Libyan government has started to think seriously about e-government as an important tool for economic development.
Libya has no electronic payment system in place as yet. Most international payment transactions are carried out by a third bank located outside the country. The lack of an electronic payment system has delayed the adoption of e-commerce as well as encouraging Chapter eight: Conclusions 275 Internet users to adopt hacking approaches in order to use some Internet services. However, Libyan organisations are pushing the government to adopt an alternative electronic payment system. Moreover, the pressure of private sector companies has encouraged the Central Bank of Libya to adopt an electronic payment system which will link banks in Libya, which will be a driver for e-commerce.
The Libyan infrastructure for the Internet and e-commerce needs to be developed for the benefit of e-commerce and other advanced technologies. The introduction of wireless technology in rural areas and desert locations will help people to engage with e-commerce. Furthermore, e-commerce legislation and regulation needs to put in place.
One of the most controversial aspects of e-commerce in countries like Libya is the availability of pornography, pirated products, and other illegal activities. These create security and legal issues that may never have total solutions. Security can affect organisations in a number of ways including the security of information.
Traditional businesses and user behaviour needs to be developed to cope with the new technology. One could argue that e-commerce may not pose a threat to traditional business as a result of the low involvement of the older generation in e-commerce and the low custom charges on the imported products. However, traditional businesses may face sharp competition with e-commerce businesses in the future.
Chapter eight: Conclusions 276 The research also indicated that a societys culture, traditions and values may be barriers to e-commerce in terms of intervention to ban the sale of certain items that violate such culture, traditions and values.
Electronic illiteracy and lack of e-commerce knowledge is another important barrier, as is the fact that most Internet content is English, which limits the involvement of non-English speakers. However, the OLPC project is considered as a potential driver for e-commerce in Libya. The OLPC project will encourage the younger generation and their families to be involved with e-commerce and Internet.
Libyan companies need to change their business structure. Information systems infrastructures require restructuring and business strategies will need to be reformulated. Firms need to carefully consider and create a business model that will be applicable to the Internet and will need to ensure that the Internet matches their organisations business objectives. Governments must bring down the different barriers that impose constraints on e-commerce, such as taxation, extensive regulation and censorship, and let e-commerce mature in an environment driven by markets. Also, governments should support the creation of a legal framework for doing business on the Internet. Additionally the cost of connection is a challenge. Add to this the human capital cost of installing, operating, maintaining, training and supporting that is beyond the means of many enterprises in developing countries.
Chapter eight: Conclusions 277 8.2.4.2 The impact of e-commerce drivers and barriers on Libyas economy The two main driving forces behind the new economy are the Internet and e-commerce. E- commerce has had a significant effect on economic development. This research shows that e-commerce will help to develop Libyas economy. Libya is a consumer-market, relying on imported products; therefore consumers would save money by paying less for goods and services. This money could be reinvested and contribute positively to the economy of the country. E-commerce may result in job cuts. However, adopting e-commerce technology will not reduce employment in Libya. Rather, it could result in creating new job opportunities and force employees to gain new skills.
The importance of Libyas location and its tourism potential will create new economic activities in the country. E-commerce would certainly help to develop the tourism industry in Libya as tourists and tour organisers were among the first to use the Internet and this has now become standard practice. Libya has many potentially attractive historical sites that could form the bases of a lucrative tourist industry.
Agriculture could also benefit from e-commerce. Libyan agriculture is well established and known for its low prices and fine quality. E-commerce will enable farmers in Libya to export their products and increase their production which will lead to significant economic activity in the country. The increase in production will result in greater savings and investment and hence in developing the economy. Chapter eight: Conclusions 278
E-commerce in Libya should not pose any threat to traditional businesses (off-line and importing businesses). Libyan markets could be described as consumer-markets rather than productive markets. Most of products in Libya are imported from overseas and sold at good prices to end consumers. Therefore e-commerce could not compete with traditional business methods. Rather, traditional businesses in developed countries have demonstrated that adoption of e-commerce has been successful in improving their services. The traditional trade infrastructure is well established whereas the e-commerce infrastructure, particularly that of order fulfilment, hardly exists. However, with the increase of e- commerce popularity and infrastructure improvement, one could argue that E-commerce may pose some threat in the future as new, advanced technology equipped companies are established and put pressure on traditional businesses.
Although e-commerce may disrupt a countrys economy at first, the country should adopt the technology in order not to be left behind. The longer the delay to e-commerce adoption, the bigger the gap may be between that countrys economy and the economy of advanced nations. As a result of the research findings, it was clear that a strategy is needed in order for the government of Libya to assure the successful adoption of e-commerce.
Chapter eight: Conclusions 279 8.2.5 Develop an implementation plan for e-commerce adoption in Libya A plan of action was introduced for e-commerce adoption in Libya. Because of complication of e-commerce issues and the links between each and every one of the issues, there is a need to put a plan of action in place that the government will have to undertake to guarantee the adoption. The plan of action consists of three stages consisting of issues that must be dealt with before, while and after-adoption. The failure of adoption may be a result of a failure of one issue or a failure of a number of issues together. The plan of action will be delivered by a number of e-commerce actors. Actors are different from one country to another. For example, in Libya most of the issues are the Libyan governments responsibility whereas in other countries the same issues may be the responsibility of the national or international companies in the market. The plan of action and the e-commerce actors create the Three-Quarter Moon Model. 8.2.7 Develop a model to assist in E-Commerce adoption in Libya and consider how the model can be generalised for other developing countries
The Three-Quarter Moon Model proposes a solution for e-commerce adoption in Libya. The Three-Quarter Moon Model consists of the plan of action and e-commerce actors. All action plan issues are driven by four main actors (government, technologically advanced countries, companies and e-commerce users). The involvement of the fourth actor (e- Chapter eight: Conclusions 280 commerce users) is the result of the other three actors actions on the economy. These three actors comprise the Three-Quarter Moon that encourages the fourth actor to complete the circle of adoption. The Three-Quarter Moon Model was designed specifically for Libya. A generalisation for the model was suggested for other developing countries.
The Three-Quarter Moon Model can be generalised to work with other developing countries. The generalisation proposes a solution for countries according to their economic approaches (capitalist or socialist). The generalised model consists of the same issues and plan of action as Libya with a change in the role of e-commerce actors. In capitalist countries, most of roles will be played by the national and international companies rather than the government. However, the government still has important roles to play.
Additionally, it introduces a new classification model in order for countries to examine the level of adoption they have already achieved. The new classification uses drivers and barriers. The classification model divides countries according to their technological advancement. The new classification groups countries into non-technologically advanced, less-technologically advanced and technologically advanced. The classification model introduced a formula for Internet involvement. Applying the formula to a specific country results in a measure of Internet involvement in that country, which can then be applied to the classification model to identify the countrys level of adoption.
Chapter eight: Conclusions 281 8.3 Contribution of the body of knowledge The research described in this thesis has led to the following achievements and novel contributions: the research provides an understanding of the e-commerce situation in Libya; this has led to a contribution to e-commerce theory by establishing the drivers and barriers to e-commerce adoption in Libya. Additionally, a new model for e-commerce adoption the Three-Quarter Moon was developed to help countries like Libya to adopt e-commerce, avoiding adverse effects on the economy and following prescribed stages to complete the adoption. 8.3.1 Contribution to theory 8.3.1.1 New knowledge about literature of e-commerce and economic development E-commerce drivers and barriers issues were established from reviewing the literature of e- commerce and economic development and then examined in a Libyan context. As a result of the examination, most of the issues were confirmed, some were not, some new sub- issues and two new issues were identified.
For the competition issue, all the issues identified in the literature were examined and confirmed by the interviewees comments. However, the research adds to this literature:
- the lack of e-commerce infrastructure in Libya was the result of the delays of e- commerce competition in the country. Chapter eight: Conclusions 282
- the lack of competition in the market is because of the low level of involvement of the older generation who prefer using traditional business methods for their activities.
For the cost issue, some problems identified in the literature were not evident in Libya due to the early stages of adoption in Libya. For example implementation and maintenance costs were identified in the literature and therefore expected (especially for the private organisations) but was not encountered. The research also indicated that e-commerce in Libya should help in reducing the cost of bank transactions.
For the culture issue, the research findings confirmed the effect of culture on the adoption of e-commerce. However, the research findings also indicated that e-commerce may help to maintain Arab culture by providing opportunities for Arab women to work and shop from home. It also suggested that training and education may help to change the cultural prejudices against e-commerce and that pressure from government on citizens to use e- commerce may result in significant engagement in e-commerce.
The economic development literature indicated that the cost of adopting e-commerce technology was expected to be a barrier as it may affect other development in the country. This research indicated that e-commerce adoption should work as a driver for Libya. E- commerce adoption should also encourage the opening of the markets and the involvement of international investors as well as creating opportunities for business in the country. E- Chapter eight: Conclusions 283 commerce adoption is expected to work positively with the market. The research findings stated that training and education is an important issue for economic development.
Unemployment in Libya is a result of economic activities and not e-commerce alone. It was argued that the employment rate did not change much over the last decade in other countries from before the introduction of e-commerce. Additionally, training and education for employment is essential to be able to find new jobs and gain new knowledge.
Government is still playing an important role of e-commerce adoption, especially in Libya. However, people will not wait for the government to formulate legislation; they will start to use e-commerce once it is ready in the market. Therefore countries have to work towards introduce legislation and regulation to control e-commerce activities. Training and education for government staff and people are needed to understand safe methods of using e-commerce and how to sustain citizens rights.
The lack of infrastructure drives organisations and businesses to break the law to use e- commerce. For example, companies using satellite technology to connect to the Internet. The need for new strategies and management for the infrastructure was not considered important by the government which may result in serious delays in the adoption of e- commerce.
The difficulty of establishing legislation by one government alone and the conflict with other regulations in the country was identified. As the legislation development has yet to be Chapter eight: Conclusions 284 completed, the issues will remain unconfirmed. The new regulations are a result of e- commerce users in the country which gives the government no option but to begin e- commerce regulation. Additionally, the absence of regulation drives businesses away from the market to somewhere else where business can operate. Also, there is a need for training and education of users as regards e-commerce regulation: their rights and how they can protect themselves while using the Internet and e-commerce.
Because of the absence of an electronic payment system in the country, many organisations (public and private) started planning to introduce alternative payment methods for e- commerce use in the country. For example, the top-up cards for shopping by LIB.
Traditional businesses in Libya will not be affected seriously by e-commerce because the the majority of users in Libya are teenagers. Additionally, the reduction in customs and taxes will help traditional businesses to be competitive with e-commerce traders by providing cheaper overall prices for imported products.
Examining e-commerce driver and barrier issues in Libya resulted in the identification of new issues. It was advocated that the need of education and training is necessary for each and every issue of e-commerce drivers and barrier. This research has introduced knowledge of e-commerce as a separate issue. Knowledge can be a driver for developing the economy, training employees and creating new jobs. However, it also can be a barrier for poorer countries that have to send trainees overseas to be educated and trained.
Chapter eight: Conclusions 285 Another issue identified as a result of this research is security. Security is an issue related to lack of regulation and legislation. However, the researcher identified security as an issue on its own. Security has relationships with each and every issue of e-commerce drivers and barriers. Adopting security in the market will be a driver for e-commerce adoption and will encourage people to start using the e-commerce. Thus a security market will create opportunities for national and international companies to be involved in and provide opportunities for employment in the market. However, security can be a barrier for e- commerce adoption. Providing security by international companies may result in spying on government activities and information. Also, systems security may be to complicated to use which may discourage people from using e-commerce.
8.3.1.2 The Three-Quarter Moon Model The research findings and discussion has resulted in introducing the Three-Quarter Moon Model. The Three-Quarter Moon model is designed specifically to assist Libyas adoption of e-commerce. The model consists of a plan of action (a to-do list of issues) and the e- commerce actors (government, local companies, international companies and Internet users). The plan of action divides the adoption into three stages: before-adoption of e- commerce, during-adoption and after-adoption. In each stage there are issues to be dealt with. A failure of e-commerce adoption according to the Three-Quarter Moon Model may be the result of one or more issue.
Chapter eight: Conclusions 286 8.3.1.3 Generalisation of the Three-Quarter Moon Model for other developing countries The Three-Quarter Moon Model was designed for Libya; however, a generalisation of the model was introduced to be used for other developing countries. The generalisation of the model suggests a possible change of roles for the e-commerce actors and introduces a modified plan of action for other developing countries according to their economic approach (capitalist or socialist). Also it provides a classification for other technologically developed countries. Countries will be different in their level of e-commerce adoption and involvement; therefore a classification model was also introduced 8.3.1.4 New classification model and Internet involvement formula The classification model was introduced to calculate the level of e-commerce adoption. Countries will work differently with e-commerce, therefore, the classification model has divided countries according to their level of technological involvement into three categories (non-technologically advanced, less-technologically advanced and technologically advanced). If a country is classified as non-technologically advanced, then the infrastructure and other issues in the before-adoption plan of action have to be addressed. If classified as less-technologically advanced, then the during-adoption issues need consideration. If the country is classified as technologically advanced, then the countrys adoption of e-commerce was successful but now the country should pay attention to other issues in the after-adoption plan of action.
Chapter eight: Conclusions 287 The Internet involvement formula helps to classify countries in the model. The formula measures Internet involvement in a country. It divides the number of Internet users in the particular country by the population excluding those under six years. The result of the formula classifies the country in the classification model.
8.3.2 Contribution to Practice 8.3.2.1 Plan of action for e-commerce adoption The plan of action is a set of actions a country has to take in order to guarantee the successful adoption of e-commerce. The plan of action consists of three stages: before-, while- and after-adoption. In the before-adoption stage, the country has to pay attention to a number of issues such as the infrastructure of the country, implementing a payment system and finding a government department to be responsible for e-commerce adoption. Once the before-adoption issues are dealt with and e-commerce is beginning to be used, the government enters the during-adoption stage. The during-adopting stage consists of a number of actions that e-commerce actors have to deal with while in the process of adopting e-commerce. For example, government, international companies and national companies have to start implementing an international payment system to allow international transactions between a countrys users and other businesses. The third level is after-adoption issues. When a country comes to after-adoption issues, one could argue the adoption of e-commerce has been successfully implemented in the country, therefore e- commerce actors have to pay attention to other ongoing issues such as training, monitoring, Chapter eight: Conclusions 288 auditing, etc. The plan of action can be modified to work with any country. The issue remains the actors of e-commerce adoption changing according the type of economic approach adopted in the country. For example, in capitalist countries, private companies will have more involvement in the development and implementation than the government. In socialist economies the reverse is true.
8.4 Limitations of the research The study was conducted in Libya. The rationale for choosing Libya was because Libya was one of the developing countries that has attempted but failed to adopt e-commerce. However, there are certain factors that researchers should take into consideration when methods and techniques appropriate for study are being selected. For example, The research is a small-scale evaluation study, in which the research was undertaken for a period of four years, this period was insufficient to indicate the real effects of e-commerce. Interviewing candidates requires permission and consent from individuals or their organisations. This issue drove the researcher to use some personal connections in government departments and organisations in order for these interviews to be conducted. Hence the potential for some bias was unavoidable. The study aims to propose a model for developing countries, but because of the research timescale only one country (Libya) was investigated. The model and plan of action were not implemented and therefore have not been validated. Chapter eight: Conclusions 289 The generalisation of the Three-Quarter Moon Model was introduced but not implemented in other countries. Therefore, the Three-Quarter Moon Model will need to be implemented and validated in other developing countries.
8.5 Recommendations The following recommendations are made to the Libyan government in particular and the governments of other developing countries who are seeking the e-commerce adoption.
1. A country has to build an infrastructure for e-commerce. This infrastructure must include ICT and delivery fulfilment. 2. A government department responsible for e-commerce has to be established. 3. The effect of e-commerce on the countrys culture and religion has to be investigated to ensure that the adoption of e-commerce does not conflict with the culture of a country in a way which would affect the adoption. 4. The topic of e-commerce must be introduced as a subject in schools and universities and employees must be given appropriate training. 5. A country should encourage expatriate workers to return from overseas. The return of these workers would result in reducing the cost of employment and attracting other employees to follow the path of these workers. 6. A country should monitor e-commerce activities and their effects on economic development. Chapter eight: Conclusions 290
8.6 Future Research Further research could be carried out in the following areas: E-commerce in Libya still in its infancy, therefore a further study of the same subject may result in different drivers and barriers of e-commerce resulting from the rapid change in technology and other issues that may not have been observed in this study The Three-Quarter Moon Model has been proposed to help developing countries to adopt e-commerce. However, the model has not been validated. Therefore a study deploying and evaluating this model would be appropriate. The Three-Quarter Moon Model has many factors and issues (e.g. cost, culture, training, etc.) that the researcher could not investigate in detail through time limitations. Therefore, future studies could examine these factors and issues and provide a deeper understanding of each. M-commerce has been proposed as a solution for developing countries in adopting e-commerce. A future study could investigate the opportunities for adopting M- commerce in developing countries and African countries in particular, especially after the launch of the African Telecommunication Satellite. References 291
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Appendices 318 10.1 Interviewees comments tables: 10.1.1 Data gathered: Use of tables All E-Commerce drivers and barriers issues in the e-commerce Drivers and Barriers Model (1) (see section 4.3) were examined across interviews. The original information was gathered and listed. Each issue has its own table in the appendixes of this thesis. Each table includes the interviewees organisation name, the interviewee position and his comments related to a particular issue. Additionally, all original data were summarised and fit into tables which present the research finding in this chapter. Each issue of the E-Commerce drivers and barriers has its own section and its data presented in a separate table.
Each table consists of 6 columns stating the position of the interviewee, his organisations, and his comments. Each of the comments has been directly related to the literature review and the findings presented in each issue section. Below is a detailed explanation of these six columns: 1. The first column contains the interviewees job title. 2. The second column contains the organisations name. the abbreviations used are follows: Table 10.1: list of organisation interviewed Name of the organisation MOC Ministry of Economy, Libyan government OPTC Organisation of postal and telecommunication company, Libyan government company LTT Libyan telecommunication technology, Libyan government company LIB Libyanna Mobile company, Libyan government company Appendices 319 LCB Libyan Commercial bank, CBL Central bank of Libya, BA BA Group, a group of companies in construction, financial and oil companies CI Concord investment OCC Oil and construction company AW Al Wesam Internet Caf AR Al Reiad Internet Caf AL Al Mukhtar OC Oil Company
3. The third column is for the interviewee statements. Their original statement (as in the CD) were summarised to focus the interviewee point of view to the reader and to enable researcher to link the statement to the literature review tables of each section 4. The fourth column indicates whether the issue discussed is a driver (D) or a barrier (B). The (F) indicates that the driver or barrier has been mentioned in this Finding chapter 5. The fifth column indicates whether the issue discussed is a driver (D) or a barrier (B). The (L) indicates that the driver or barrier has been mentioned in the Literature review chapter 6. The sixth column. At the end of each issue section in the literature review, there is a table summarising the arguments relevant to that issue, each argument being numbered. Arguments are cross-referenced to comments in this column. In some cases the comments can not be cross-referenced, in which case (-) is entered.
Appendices 320 10.1.2 Important: example of use of tables In order for the reader to be able to use the table below, an example is demonstrated here. For understanding the first statement mentioned in the competition table (table 12.2), the comment sate International companies know about E-Commerce but Libyan companies do not. This statement in the table stated by the undersecretary of the Libyan government ministry of economy (MOE), the statement above resulted in this research finding as a barrier in that the lack of Libyan companys knowledge about electronic commerce can be a barrier for Libyan company to compete against the International companies who have the experience and knowledge of using E-Commerce and its activities. The same view is confirmed in the literature, By reviewing table 4.8 in section 4.2.8 Which related to the competition, statement number 4 states that competition could destroy small businesses. These businesses could go elsewhere or cease to exist which will affect the economy badly. The original statement can be seen in the competition appendices in the CD in the competition table.
Another example could be giving is the second statement of the same table (table 12.2). The comment in the table state The competition in the commercial market is already exists. This statement confirm that the competition in the Libyan market was not because of E-Commerce, it may even be that E-Commerce can be a solution for those traditional businesses who do not have the time or the ability to travel somewhere to compete with the importation. Such statement was not mentioned in the literature review, therefore (-) was used to confirm that can be a contribution to the E-Commerce literature for Libya. The Appendices 321 original statement can be seen in the competition appendices, in the CD, in the competition table. The same example can apply to the other drivers and barriers issues in this section Appendices 322
10.1.3 Competition:
Table 10.1: Competition issues in findings Job title Org comments D/B F D/B L No. International companies know about E-Commerce but Libyan companies do not. B B 4 The competition in the commercial market is already existed. D - - Libyan producers are complaining that many international products have interred the country through Libyan importers or trader D, B - - E-Commerce will create more competition in the market D, B D 2 Using the internet will drive many travel agencies to close D, B D, B 2, 4 People will use the source rather then a physical shop D, B D, B 1, 3, 4 E-commerce in developing countries will sharp the competition D, B D 1 Competition could help developing the Libyan economy D D 1, 2 Consumers can save money by using E-Commerce and buying from source D D 3 Competition on employment will increase because of E-Commerce B B 4 Reduction on customs and taxation increases the competitions between traditional traders and electronic traders D, B D 2 E-commerce in developing countries will effect the competition. D,B D, B 1, 4 Undersecretary M O E Local suppliers and producers will have to provide a better services and quality to face competition D D 3, 4 Appendices 323 Competition did not really happen in many country and this fear start to be disappeared. D -
- Electronic competition in Libya still not seeing D, B - - E-Commerce will fast up the way of doing work in the company. It will reduce the expense of doing things in a manual way. D D 2 Competition in employment D, B B 4 The readiness of countrys infrastructure will delay the competition B - - There is no competitions of Internet services providers in Libya as all owned by the same company which owned by the government B - - The Internet providers in Libya going to be privatised D, B - - Business will shift their activities into the web D, B D, B 1, 4 Chairman OPTC Payment system delays the adoption of electronic business B - - Alternative payment system start creating competitions between their adopter and other traditional business providers D D 1 Other companies start thinking of adopting alternative payment system D - - Payment system delays the competitions and electronic business B - - There is no domain registration competition in Libya as all provided by one company B - - Marketing manager LTT To coupe with demand LTT increase the charge of services B - -
Marketing manager LIB E-Commerce will create competition in employment D, B B 4 Appendices 324 Learning of other companies mistakes can be the way out of the problem D - - Internet services providers in Libya are completing each others rather then competing with each other B B 1
Absence of Electronic payment system drove all banks in Libya to deal with one International bank in all their international activities B B 1 National payment system will create a competition in employment D, B B 4 Bank will ask other technical companies to provide electronic services such as web designing and database links which will create competition between IT companies D - - Internet is legally provided by only one company in Libya B B 1 Competition between electronic and traditional business may result in disappearing the traditional businesses from the market B B 4 Operations manager LCB Competition between electronic and traditional business will need time to be seen in Libya -
- - National payment system will create an opportunity for Libyan companies to provide business online D D 1 National payment system gives the opportunity to Libyan local bank to operate and compete with international banks D D 1, 2 IT Manager CBL National payment system will create competition in employments D, B B 4 Chairman BA Competition between traditional telephone services and VOIP is existed D D 1 Appendices 325 E-Commerce will create a competition between traditional way and electronic businesses specially for buying products and availability of different type of products. D, B D, B 1,3, 4 Competition is stronger between electronic businesses and more stronger for traditional businesses D, B D, B 1, 4 You have the opportunity to compare prices for different products or even for the same products, and as we all know that Internet services are too much lower then the high street prices D D 3 Libyan Market is consuming market, it will not get effected from e- commerce. D D 3 Libyan consumers will save more money and get better quality by using E-Commerce D D 2, 3 Libyas agriculture products will not be competed because of its quality and low price D D 1, 2 Competition for employment will rise B B 4 Competition between the same services providers D D 1 Old generation do not care to use the E-Commerce B - - Business development manager CI
Competition between mail services provider will sharp D D 1 E-Commerce will create a benefit to all companies rather then competition D - - General Manager OCC
E-commerce will bring many new companies D D 1 Internet Caf manager AW For older companies to survive they have to take the same bath along with the traditional way. D D 1 Appendices 326 The reason of high Internet charge is because of there is no completion. B B 1 E-Commerce is much easy way of doing business then a traditional way D - - E-commerce has a big market, it a business around the glob. D - - Breaking the low to get a cheaper Internet connection B - - No competition between Internet service providers kept the internet connection charge high B B 1 Internet Caf manager AR
In a market like Libya E-commerce and traditional business are barrel D - - Many traditional business are using the internet , it works perfect in both sides. The future more likely to be just e-commerce D - - Engineering manager OC
10.1.4 Cost:
Table 10.2: cost issues in findings Job title Org comments D/B F D/B L No. Increase importation D - - Reduce the cost of products D D 6 Increase people saving D D 16 Reduce the cost of establishing new companies D - - Undersecretary M O E
Reduce the expense of doing things in a manual D - - Reduction on fixed line charge D B 13 Chairman OPTC Reduction on Internet connection D B 13 Appendices 327 High charge for Internet connection B B 13 Charge for ATM technology for ADSL B B 14, 9 High charge to control high demand B - - Reduction in cost by %70 D B 14 Marketing manager LTT
Cost saving for paying bills and children school registrations D - - The cost of Internet per 1KB is 2 Dirham, B B 13 M-commerce save money for building the infrastructure D B 14 Reduces the employment D - - Increase saving D D 16 Reduce the cost of travailing D - - Reduce the cost of getting job done. D - - Reduce the amount of money for printing top up cards. D - - Reduce the charge of service D - - Marketing manager LIB
Reduce cost D D 1 Reduce employment. D - - Cost of training for new system and language B - - Reduce the cost of transactions in banking businesses D - - Cost of connection B B 13 The cost of infrastructure (40M for NPS). B B 9,14 cost of having website B - - Operation manager LCB
Saving resources D - - Reduce employment D - - IT Manager CBL
Reduce huge cost. D D 1 Chairman BA Reducing general expenses D D 1 Appendices 328 Emails and VoIP reduce communication cost (90%) D D 2 Reduce the cost of buying products D D 6 Reduce trading cost for importers D D 5,6 Reduce travailing cost D - - Reduce cost and provide a better services. D D 1,8 increasing production by saving the cost D - - reduce buying price D D 6 increase the saving D D 16 cost of connection B B 13
Reduce the cost of employments D - - Reduce the cost of printing D - - Reduce the cost of communication, D D 2 Reduce marketing cost. D - - Cost of connection B B 13 Business development manager CI
Reduce communication D D 2 Reduce supplier communication D D 2,4 Cost of the internet connection is too high B B 13 General Manager OCC
Cost of connection is high B B 13 Cost of implementation is high for privet business B B 9,14 Cost of PCs and Networks B B 9 Reduce buying cost D D 6 Reduce selling cost and increase revenue D D 5 Reduce the cost of money transfer D - - Internet Caf manager AW
Save money D D 16 Cost of web design B B -,9 Cost of hosting B B -,9 Cost of domain name B B -,9 Internet Caf manager AR Cost of submission to search engine B - - Appendices 329 Cost of connection is high B B 13 Cost of computer literate employees B - - Cost of computer and network maintenance B B 9 Cost of training B - -
OC No comments
10.1.5 Culture and Religion:
Table 10.3: culture and religion issues in findings Job Title Org comments D/B F D/B L No. Spread of Credit cards in Libya D D, B 3, 7 Needs for business culture change D, B D 7 Libyan are resistance for culture change B B 1 E-Commerce will change business culture D D 7 Young generations will grow up with E-Commerce D D - Providing every house with PC may will change the culture D D - Education and reducing customs on technical equipment may help to change the culture D - - Changes in the business culture will create money and help the economy D - - Undersecretary M O E Change the business culture in the Ministry of Economy D D - Chairman OPTC OPTC start changing the business culture D D 7 Appendices 330 Electronic way is much better than traditional way D - - There are also a culture barrier, B B 1 people needs to change the culture of caring cash or cheques into cards and electronic payment B B 1, 2 People still dont have a culture of writing a check how we expect them just to accept e-commerce. B B 1 People needs to be forced to use for a first time, - - - Government and companies should help for changing the culture D - - Reduction cost can help in changing the culture D - - E-Commerce will change the business culture, many people will shift there activity into e-commerce , D, B D 7 E-Commerce will be good for business and customers if you manage to change our business culture. D D 7 Its not only the technology will do the job, but also the willing of the people themselves. D - - Its important to push for new technology. D D - E-government is actually a challenge to be adopted D - - Changes in payment culture needed D D 7 Banks and shopping centres start providing alternative payment methods to change the business culture D D 7 Foreign travellers are culturally ready to use E-Commerce D - - Marketing manager LTT Locals will have difficulty to use E- Commerce B B 1 Appendices 331 Locals will flight not to adopt E- Commerce B B 1, 2 LTT enables Wireless Internet in the desert D D 7 LTT enabled wireless services in exhibitions D D 7 Educations and training needed to change the culture B - - E-Commerce will help people for their activities rather then wasting time D D 7 Customer can pay their bills by mobile D - - People need to save time for their daily activities D - - E-Commerce will help in change the culture of carrying cash and cheques D D 7 In order to change business culture, organisations needs to provide services over the Internet D D 7 Education and training is needed to change the understanding of technology and its benefit B - - Paying money for time services is not allowed by Islamic religion B B 1, 2, 3 Technology give the freedom to different opinions and thought D, B B 1 Tradition and custom will affect E- commerce B B 1 E-commerce will change the way of living , D, B D, B 1 E-Commerce will speed up the way doing business, D D 7 E-Commerce makes people believe Time is money. D - - Marketing manager LIB E-Commerce may effect the social life, D, B D, B 1 Appendices 332 E-Commerce helps in administration work. D - - People believe that E-commerce will affect the employment rate in the country and will slow the wheel of economy development B - - E-Commerce create a new way of thinking to do new job and develop knowledge. D D 7 Traditional business is a time consuming, D - - E-commerce drive people to be more organised with there jobs and payments. D -
- Central Bank of Libya help other banks to change their traditional business methods. D D 7 Electronic services and cards will be introduces to all customers. D D 3, 7 Next step is to adopt Internet Banking D D 7 Central bank of Libya is sending employees overseas for training D - - E-commerce bring the whole world together, D - - E-Commerce make communication and business easer. D - - E-Commerce helps banks to do there transaction quickly and easily. D D 7 English language is a barrier for E- Commerce B - - People acceptance of new technology is a barrier B B 1 E-Commerce still in its infancy to know its effect on culture B - - Operation manager LCB E-Commerce May effect traditional business B - - Appendices 333 Central Bank of Libya improving the banking activity environment, D D 7 The new system settles the accounts of banks and public institutions with the CBL at every working day-end. D D 7 This system relates to electronic inter- banks clearing of checks according to scanning technique, paper files and net-transaction posting to the clearing Automated Clearing House System D D 7 ATM provides a fundamental environment for the national automated teller distributor D D 7 IT Manager CBL It also enables businessmen and companies to accept payments electronically Training programs are offered to all banks staff aimed at qualifying national professionals capable to mange and function all parts of the project.
D D 3, 7 E-Commerce strategy has to fit with culture religion and custom of the country. D D 1 BA business culture has adopted the email and VOIP D D 7 E-Commerce provide a better services and safe time and money D - - Culture and customs wont make a huge barriers to e-commerce D D 1 Religion will not make a barrier to E- Commerce D D 1, 5 Human like to develop there skills, D D 1 Chairman BA Libyan are willing to change their culture D D 1 Appendices 334 if e-commerce will get the right structure in the country the result will be encouraging D D 7 70-80% from consuming product has been imported from out side D D - E-Commerce makes customers trade themseles D - - The higher population of internet user in the country are teenagers, D, B - 4 Older people do not bother to learn new technology B - - Most of older and middle age people prefer the traditional methods of doing business. B B 1 Education and training is needed to change the culture of business B - -
Business development manager CI
Using email as a main tool for business D D 7 Email is a low cost tool comparing to telephone D D 7 Tradition and customs are one of the big barriers, B B 1 E-commerce needs to be seen as a new method for business D D 7 General Manager OCC
Software are downloaded from the Internet for free B - - E-Commerce provide an easy tool for shopping D - - E-Commerce helps to maintain the culture for Libyan Women D D 6 Men dont have to wait for their women while shopping D D 6 Internet Caf manager AW Lack of payment system create a bad effect on E-Commerce B B - Appendices 335 Younger and old people using the Internet D D - Customer comes to check there mails or chatting online, D - - Few people using E-commerce, only travellers B - - People come to cafe net to know about web design, chatting and games - - - Lack of payment system drive users to adopt hacking methods B - - E-Commerce create a share knowledge culture between users. D D -
Website is not beneficial unless provide dynamic services B - - Traffic in dynamic site is increasing D D 1 Libyans customer were using the Internet since 1994 and they were paying 12 L.D per hour - - - Only 10% of the internet user who use for a good reason B - - Internet Caf manager AR
E-Commerce helps in doing business D - - Many traditional business are using the internet D - - Engineering manager OC The future more likely to be just e- commerce D, B - -
10.1.6 Economic Development:
Table 10.4: Economic activities issues in findings Job Title Org comments D/B F D/B L No. Appendices 336 B2B will work very well as soon as E-Commerce is ready. D D 6 E-Commerce activities help people to make and save money D D 9, 10 E-commerce will not have any bad effect on the Libyan market. D D 12
The competition in the commercial market is already existed. D - - Competition between Libyan producers and international importers or trader is sharp D, B D, B 7, 9 E-Commerce will create more competition D, B D 4 E-commerce in developing countries will sharp the competition D, B - - Economic ministry do think competition could help developing the Libyan economy D - - E-Commerce can help consumers to buy products cheaper (e.g, removing travel expenses, accommodations, air tickets, shipping, etc) D D 8, 10 E-commerce may effect the employments, however, unemployment in Libya was because not having the right people in the right place, B - - Ministry of economy do not think using E-Commerce will affect the economy badly. D D 12 The worries of E-commerce in developing countries will effect the competition start to disappear D - - Undersecretary M O E The unemployment in the whole world is because of the economic cycle but not e-commerce, D - - Appendices 337 The percentage of unemployment is almost the same in all decades, and that confirm e-commerce is not the only reason for unemployment but the development of the economy. D - - International travel has gone too high in the whole world because of e- commerce D D 10 If we start providing services in Libya using e-commerce we would help developing the economy and being in a better place. D D 12 Providing services over the web will result in expecting huge business. D D 9 E-Commerce can help the tourism industry in Libya and bring more business to the whole country. D D 12 E-Commerce has to be adopted, wasting time on adoption will result in making the situation worse and needs more money to invest and catching up D - -
It will be easer for the customer to use the electronic services D - - E-Commerce will fast up the way of doing work in the company. D D 12 E-Commerce will reduce the expense of doing work in a manual way D - - Many people will shift there activity into E-commerce D D, B 3, 7 Chairman OPTC E-payment system will help many people to get cheaper products in short time D D 10 E-commerce benefits every one using it D - - E-Commerce help in selling, buying and doing activities over the internet D D 10 Marketing manager LTT
Appendices 338 M-commerce would save the country huge amount of money for building the infrastructure D - - There people who has managed to make millions of dollar by using e- commerce. D - - E-commerce will change the way of living, and speed up the way doing business D, B - - E-commerce would make companies reduces the employment and save extra money. D, B D 9 E-commerce will effect the employment rate and will slow the wheel of economy development B B 1 Internet is important for living activities D - - Traditional billing payment is time and money consuming D D 3 Traditional billing payment results in delay the economic circle in the country E-Commerce is a driver to develop the economy D D 3 E-Commerce will encourage the government state companies to catch up with the new technology D D 8 Adopting electronic charge services will help the country to reduce amount of money and time of bidding. D D 9 The reduction of cost will have its effect on customer which will benefit of reduction on using mobile services charge. D D 9 Marketing manager LIB Adopting E-commerce will result in providing better services in much less cost. D D 3, 9 Appendices 339 Adopting electronic banking system will enables customers to save time on doing their banking activities D - - Internet banking will reduce cost and employment numbers. D, B D 9 E-commerce makes communication and business easer. D D 3 For banks E-commerce is more important that it will help banks to do there transaction quickly and easily. D - - Operation manager LCB Infrastructure delay the adoption of Banking system B B 1 Central Bank of Libya project aims to large developments of information technologies and improving the banking activity environment, D D 12 The project plan is to formulate a strategy that ensures efficiency, effectiveness and safety for the developments of a national payment system to contribute in the development of financial and other economic sectors. D D 12 The successful implementation of this project not only ensure handling the technical deficiencies, rather it provides banks with potentials to provide international quality banking services. D D 8 The training and qualification programs will contribute in providing human resources needed to function and support the application associated with the programs. D - - IT Manager CBL It will reinforce the CBLs capabilities to control banking operations risks and maintain the financial stability. D - - Appendices 340 The banking sector will be more capable and efficient in intermediation between saving resources and employment opportunities. D - - E-Commerce reduces cost. D D 9 Government still has not adopted E- Commerce as a policy B B 8 E-Commerce is reducing general expenses in private companies D D 9 E-Commerce competition is more stronger, and the verity of chooses are wider then traditional market D, B B 4 E-Commerce gives the opportunity to compare prices for different products or even for the same products D D 4 E-Commerce advantages of trading, cutting the expenses, choosing the right product could result in reducing traditional importation business. B B 12 E-commerce create opportunities to expand business D D 9 E-Commerce developing the economy, D D 12 Economic development is different between cost and production, reducing the cost and increasing the possibility of opening new market places would increase the production of the economy. D D 9, 12 Libyan Market will not get effected badly from E-commerce. D D 12 E-commerce would pose some threat to traditional commerce in industrial products. B B 3, 6 Chairman BA For agriculture and internal use products, these will not get effected from e-commerce because of the low price and a good quality that people get used of. D D 8 Appendices 341 Allowing e-commerce will result in reducing the cost of imported products and services that will drive consumers to save money and reinvest them in the local economy. D D 9, 12 E-Commerce reduces the cost of employment D, B D 9 E-Commerce reduce the cost of printing and communication, D D 9 E-Commerce reduces marketing cost. D D 9 Internet user are mostly teenagers, old people see technology is complicated and time consuming B - - Business development manager CI
E-Commerce will benefit companies D D 10 and pose threat to traditional business. Right now there is no threat. B B 2, 3 General Manager OCC
E-Commerce offer a verity of products D D 10 E-Commerce enables customers to save time in searching for what they want D - - Internet Caf manager AW Many new E-commerce companies will develop, so in order for older companies to survive they have to take the same bath along with the traditional way. D D 3 There is no benefit out of having a website, B - - Having a website is waste of time and money B - - If customers are locals then no need for website - - - E-commerce has a huge market and has no limit D D 6 E-Commerce save time, D D 9 Internet Caf manager AR E-Commerce help to generate money, D - - Appendices 342 E-Commerce gives possibility to do new businesses D D 10
E-Commerce help to do business D D 4 Engineering manager OC E-Commerce is a marketing tool D D 12 10.1.7 Employment:
Table 10.5: employments issues in findings Job title Org comments D/B F D/B L No. People believes E-Commerce will affect employment badly B B 2 Employment crises in Libya because of not having the right person in the right place rather then E-Commerce D - - Libyans do not accept any type of job D - - E-Commerce will force people to learn, being trained to be re located in another job D D 3 The unemployment in the whole world is because of the economic cycle but not e-commerce D - - Undersecretary M O E E-commerce is not the only reason for unemployment but the development of the economy. D - - E-Commerce will be adopted in OPTC services B B 2 Cashers will be replaced with electronic payment system B B 2 Many people will shift there activity into E-commerce B B 5 Chairman OPTC
Payment system will be introduced in other shops D - - All services will be done electronically B B 2 Marketing manager LTT
Appendices 343 E-Commerce helps in administration work. D - - E-commerce will reduces the employment B B 2 People will think that e-commerce will affect the employment rate in the country and will slow the wheel of economy development B B 1 People could be located in other position D D 3 E-Commerce will create a new way of thinking to do new jobs D D 3 E-Commerce will help to develop workers knowledge D D 3 Marketing manager LIB Adopting e-commerce and ask people to leave reduces cost. D - - Electronic banking system will reduce employment numbers. B B 2 Central bank of Libya is sending employees for training D - - Trained and professional people are a not available in Libya. B - - Operation manager LCB This national payment system is designed to work with Oracel database system. We have no people who knows about Oracel B - - National Payments System provide training programs aimed at qualifying national professionals D - - Preparation and qualification of human resources is needed for the program to be successful D - - IT Manager CBL The training and qualification programs will contribute in providing human resources needed to function and support the application associated with the programs. D D 3 Appendices 344 National payment system will result in saving resources and employment opportunities. D D 3, 4 It also will contribute to the employment and economic growth. D D 1 E-Commerce provide a better services atmosphere to workers D - - Being able to provide services internationally can be employment benefit D - - Chairman BA
E-Commerce reduce the cost of employments B - - Education and training courses about e-commerce is needed D - - Business development manager CI
General Manager OCC Reducing number of workers B B 2 E-Commerce provide an opportunity for unemployed people D D 3 There is lack of expertise to help working with E-Commerce B - - Knowledge and experience is needed for new jobs and new workers B - - E-commerce will open new spaces and provide employment opportunities. D D 3, 4 People can work from home D D 5 Internet Caf manager AW Create employment opportunity and reduce security braches D D 3, 5 Needs for web designers and programmers B - - Training and education is needed for new employments B - - Internet Caf manager AR
Engineering manager OC No comments
Appendices 345 10.1.8 Government :
Table 10.6: government issues in findings Job title Org Comments D/B F D/B L No. Credit cards will be available across Libya by next year according to the plan of Central Bank of Libya. D D 3 If the credit card system been distributed in the whole country then that will build a very good infrastructure for e-commerce in the country. D D 3 People will not wait for government actions in regulation to start using the Internet. D, B - - Government taken action on developing theory or a law for e- commerce. D D 4 There is a decision was made by the minister of economic and commerce to start the process of establishing committee for E- Commerce regulation. D D 4 The committee has the right to choose any person that they believe he could help in doing and developing the approach. D - - Libyas government recognise the benefit of E-Commerce and compare its economy to Tunisia D D 1 All that matters is how can we make a regulation that will satisfy and keep right for both parities (Customers, and service providers). - - - E-commerce infrastructure of telecommunication is poor in the country B B 13 Undersecretary M O E High charge of Internet connection B B 13 Appendices 346 Government has responsibility in the lack of training and education B B Libya provides 1,000,000 laptop to kids D D 3 Government encourages having PC in each House D D 3 Government reduces custom to encourage people buying technological equipments D D 3 Government believes competition will not get effects from E- Commerce D - - Electronic services putting the country in better place D D 1, 5 Providing services in Libya using e- commerce could help developing the economy. D D 1, 5 E-government policy is under process D D 4 E-government adoption idea was there 1984 D - - Libya is ready for e-government D D 6 Many ministries have websites D D 3 Ministry of Economic provides services online such as registering companies D D 2 Ministry of economic claim the soon the E-commerce adopted, the better for the country and the economy D - - Electronic bill payment is developed by the OPTC D - - OPTC is responsible for E- Commerce infrastructure B B 13 E-Commerce will be effective as a service D - - Chairman OPTC Dis-organisation between government department created a chaos on responsibilities B B 14 Appendices 347 Government or companies are responsible for establishment of E- Commerce. B B 13 OPTC reduced the calls into %70. D D 3 Government thinking to privatise the two Mobile service companies (Almadar and Libyanna). D, B - - OPTC reduced the international calls up to %75 . D D 3 OPTC reduced the calling charge from fixed line to Mobile by %25 D D 10, 12 The last couple of years there were a big achievement in improving Telecommunication services. D D 3 3G service is one of Libyanna services. It provide up to 300KBper second, which could provide video calling, accessing internet via mobile and other applications. D
D 10 LTT thinking of adopting E- commerce D D 3 Barriers such as Payment systems, transactions, and government departments are lacking the improvement in the country. B B 4 Things start changing from the government point of view D D 6 LTT provides Domain registration free of charge to Local companies and government agencies D D 3 LTT provides Internet connection in the middle of the desert D D 12 Marketing manager LTT Providing free hosting services to companies would help encouraging the adoption of E-Commerce D
D
3
Marketing manager LIB Libyanna working in providing 3G services D D 3 Appendices 348 Libyanna thinking of using Top up card as money D - - Libyanna is a state company trying to help developing the country infrastructure, D D 3 The government and other private organisation should pay attention to conferences, training sessions, workshops etc. D - - Government state companies which need to wake up and catch up and move on with the new technology needs to adopt E-Commerce B B 13 The only mobile companies in the country are completing each other, and they both have a same aim which helping in developing the country infrastructure for mobile phone services. B, D B 13
Central bank of Libya has signed a deal with three international companies to put in Libya a National payment system D D 2, 15 The project designed to provide all electronic services D D 3 Adopting Internet banking is the next step D D 3 Operation manager LCB The central bank of Libya is sending employees from all Libyan public banks outside the country for training D - -
IT Manager CBL Central Bank of Libya works in increasing the benefits of the large developments of information technologies and improving the banking activity environment, D D 1, 3 Appendices 349 This system aims to develop technologies and techniques for banking activities The system will be interlinked and linked with commercial banks with various communication means D D 7 The successful implementation of this project not only ensure handling the technical deficiencies, rather it provides banks with potentials to provide international quality banking services. D D 1, 7 The training and qualification programs will contribute in providing human resources needed to function and support the application associated with these programs. D - - E-Commerce has not been implemented as a policy for the government B B 6 Government have to pay attention to infrastructure B B 3 Government has to take E- commerce issue very serious if they want to develop B B 6 Adopting E-commerce and developing E-government services will push the country into a higher position D D 1 Electronic illiteracy can be solved by the help of government and people willing to learn. B B 12 The government is planning to adopt the E-government services D D 8, 9, 14 There are website for most government ministries D D 3 Chairman BA The CBL is working in introducing ATMs Machine and providing people with Credit and Debt cards to be used D D 3
Appendices 350 The main barrier is the connection to the Internet B B 3 There should be many workshops, training courses, conferences and forum about e-commerce to educate people the right way of using the e- commerce. B - -
Business development manager CI
General Manager OCC No comments Government failure to provide cheap Internet connection drove people to break the low B - - Government failure on providing security for Internet dis-encourage people to use the Internet B - - Lack of payment system drove people to adopt hacking techniques B - - Internet Caf manager AW No law to admit Computer crime encourage people to use hacking software B B 4
There are no schools to provide courses in e-commerce B - - Failure to provide cheap Internet connection drove people to break the law B - - Internet Caf manager AR
Infrastructure, the regulation, and the knowledge in IT in general are the barriers B - - The new regulation and IT development are the new drivers. D D 4 Project manager OC
Appendices 351
10.1.9 Infrastructure:
Table 10.7: Infrastructure issues in findings Job title Org comments D/B F D/B L No. Expecting the spread of Credit cards in Libya soon D D 4 National payment system project is implemented by three large international companies. D - Credit card system build a good infrastructure for e-commerce in the country. D D 4 Advancement in Internet technology put Tunisia in a better place. D D 4 E-commerce infrastructure of telecommunication is not there B B 1 Land line infrastructure is not good B B 1 Undersecretary M O E The high charge of Internet connection is a barrier B B
1
Organization network does not cover all regions B B 1 OPTC are working in a plan to connect all its branches with a data network. D - - Companies software are developed in house D - OPTC is responsible for fixed line services B B - OPTC offers V-Sat services for businesses D D 2, 3 Chairman OPTC OPTC provides broadcasting TV to the Libyan National Broadcast corporation, OPTC provides routers services for the banks. D D 4 Appendices 352 OPTC is responsible for the infrastructure, B B 2, 3 OPTC has reduced telephone charge to 70% D D 4 OPTC expand its wireless services through its subsidiaries companies D D 4 OPTC plan to expand fixed line services in the next couple of years D D 4 In the present OPTC have around 650,000subscribers, it is around %10 of the pupation. B B 1 Restructuring and re-organizing of telecom sector is taken place. D D 6 All telecommunication companies are owned by the government through a mother company B B 2, 3 There are thinking of privatize the two Mobile service companies D, B D 7 In 2004 OPTC reduced the calling charge from fixed line to Mobile by %25, OPTC through its other companies are working in expanding the network, D D 4 Reduction on cost is depends on covering the installation expenses. B - 2 The last couple of years there were a big achievement in improving Telecommunication services. D D 4 Libyanna start providing 3G services through its mobile network D D 4 LTT is the main internet service provider in Libya. B B 2, 3 LTT provide telephone connection in rural place using a VSAT technology rather then cables using space satellites. D D 4 Marketing manager LTT Central bank of Libya project will help developing the E-Commerce infrastructure in the country D D 4 Appendices 353 Prepaid cards for shopping is an alternative solution to over come the infrastructure problems, D - - Liseline charges start from 256Kb for 9000 L.D, this price been reduces from 55000L.d. B B 3, 5 The charge of 8 Mb for 280,000 L.D B B 3, 5 LTT provide hosting and Domain registration D D 4 LTT is the only main register for .LY. B B 2, 3 LTT provides internet services using DVB-RCS. D D 4 LTT provided wi-fi services in rural areas D D 4 Needs of technological equipments and part remain the Internet connection charge high B B 3 High charge is to coupe with the high demand on the service B B 3 Libyanna provides 3G services D D 4 Libyanna introducing alternative methods for paying bills D - - Libyanna planning to connect all distributor to the main database using online application so they can issue new SIM cards and provide an efficient services to their customers. D D 4 Libyanna is a state company, its one of many state company that trying to help developing the country infrastructure D, B B 2, 3 3G charge to customer still under discussion, the cost per 1KB is 2 Dirham, the price is high comparing with other internet provider D D 3 Marketing manager LIB M-commerce would save the country money for building the infrastructure D D 4 Appendices 354 The two mobile companies in the country are completing each other, and they both have a same aim which helping in developing the country infrastructure for mobile phone services. Libyanna strategy is to reduce the cost as much as possible to enable citizen use there services, Almadar have another strategy which providing services to Businessmen in the country B B
2, 3, 5
The central bank of Libya project was done through International companies to provide banking infrastructure D D 4 Internet connection provided by LTT, the line is not fast and have problems B B 3 The biggest challenge of CBL project success is the infrastructure. B B 1 If there is no good communication infrastructure in place then the system will not be used. B B 1 There are no connection between banks branches right now. B B 1 Satellite connection (2 ways) between our branches are not allowed if not provided by the LTT B B 2 The main barriers to e-commerce in Libya is the infrastructure and communications B B 1 Commercial bank claim that Libya has a poor infrastructure B B 1, 5 A project of 40 Million Libyan dinner cost is not in use because of the infrastructure.
Operation manager LCB National payment system is one of the drivers of e-commerce in Libya, it will solve the payment problem in the country and put a right foundation for e-commerce to be used. D D 4
Appendices 355 National payment system is about to build the payment and banking infrastructure D D 4 This system provides a fundamental environment for the national automated teller distributor. D D 4 It also enables businessmen, their clients and companies that provide these services to accomplish the payments for transaction charges electronically using points of sales, in addition to the execution of all financial generally accepted international electronic transactions. D D 6 IT Manager CBL To ensure the success of the system, a new technological system was developed in order to develop the quality of services and to use sophisticated electronic techniques for the banking activity, through developing an electronic banking system and the underlying communication infrastructure. D D 4, 7
Payment for Internet around 1000 L.D a month B B 2, 3, 5 The infrastructure is the main barrier B B 1 Government have to pay attention to infrastructure B B 1 Government have to adopt E- commerce if they want to develop and catch up quickly, B B 1 Chairman BA CBL is working in introducing ATMs Machine and providing people with Credit and Debt cards to be used D D 4 Internet connection type is ADSL B - - Connection to the Internet is a barrier in Libya
Business development manager CI Connection failure and problem are common in busy time B B 1 Appendices 356 The cost of the internet connection is high in Libya. B B 2, 3 The company pay 1500 L.D a month for 1 Mb as well as 150 L.D a month a cable rental. B B 3, 5 Company break the low to have Internet connection B - - General Manager OCC Satellite connection has less connection failure and the providers provides a quick responds. D - - Satellites connection is used B - - The caf pay 750 L.D a month for 512 kb Download and 256 k.b. upload B B 1, 5 Internet Caf manager AW This is a one time cost, it is around 7000 Libyan Dinner. This cost is for the dish, and internet connection not for the equipment and PCs B B 5 Paying 1360L.D for 256KB per month B B 2, 5 ADSL is not good for Internet Caf as it has limit of 5G per month B B 1, 2, 3 Most Internet cafs uses Satellite connection B - - Un-sustainability of ADSL bandwidth is a problem B B 1 People walk away from Internet because of the bad connection B B 1 Cafs net hardly making profit because of the high charge of Internet charge of LTT B B 5 Internet Caf manager AR Internet in 1994 was 12 L.D per hour.
B - - The company use ADSL provided by LTT. B B 3, 5 5Gb per month and paying 100 for installing and 25 per month. B B 3 The infrastructure is one of the main barriers of E-Commerce in Libya B B 1 Engineering manager OC
Appendices 357
Appendices 358
10.1.10 Knowledge:
Table 10.8: Knowledge issues in findings Job title Org comments D/B F D/B L No. International companies know what they should do but Libyan do not know about E-commerce B - - Libyan mentality do not have the willing of accepting any type of job B - - European may take training to change carrier but Libyan do not. B - - Education, Knowledge and the ability of using computers is a barrier for E- Commerce. B - - Government provides 1,000,000 laptops to kids D - - Government expecting to see a PC in each house D - - Government trying to help people to be educated by reducing customs on technology equipments D - - Undersecretary M O E 25% to 30% of Libyan young generation have PCs at home and the rest uses internet cafs D
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Companies encourage in-house applications development D - - People will not accept E-commerce easily because of the lack opf knowledge in E-Commerce and payment system. B - - Not only technology is needed, willing of people themselves is also needed. B - - Chairman OPTC Encouragement and force of government to its people to use E- Commerce is necessary B - - Appendices 359 Prepaid cards for shopping will help people to learn more about E- Commerce D - - knowledge of local people is a barrier. B - - People who had the opportunity to travel abroad, use the internet and manage to get a credit or debit cards they know about e-commerce and internet D - - People who does not know about E- Commerce will face difficulty to get into the new technology B - - People will not accept easily the change in their life. B - - LTT encourage in house system development. D - - Provide services on the internet such as forums could help and be a driver for e-commerce D - - Enthusiasm is needed in order for the adoption to be successful B - - Marketing manager LTT lack of knowledge about e-commerce and internet is a barrier B - - Libyanna encourage in house system development. D - - The biggest barrier in the country is the knowledge. B - - Libyanna experience lack of knowledge in their 3G service adoption B - - Government and other private organisations are responsible for knowledge B - - In order for people to know more about e-commerce and its benefits, training and conferences is needed B - - Marketing manager LIB People needs to know about E- Commerce effect B - - Appendices 360 E-Commerce will create a new way of thinking to do new job and develop there knowledge B - - Exploring technology and understand its advantages and disadvantages as well as learning form other countries and companies mistakes is better. D - - Central bank of Libya provides training and education. D - - The central bank of Libya is sending employees from all Libyan public banks outside the country for training from time to time to learn English and get some training in banking electronic systems. D - - Other workshops and training courses are taking place inside the country. D - - Trained and professional people are a barrier. B - - Operation manager LCB English language is a barrier. B - - National Payment System provide knowledge about the using of new technology D - - Banks are being prepared, to work with National Payments System, though intensified training programs aimed at qualifying national professionals capable to mange and function all parts of the project. D - - The programs considered the preparation and qualification of human resources to function, maintain and reinforce these systems. D - - IT Manager CBL The training and qualification programs will contribute in providing human resources needed to function and support the application associated with these programs. D
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Chairman BA BA provide training for its staff D - - Appendices 361 Staff benefit from international expertise D - - BA encourage in house system development D - - Electronic illiteracy is the main barrier B - - Knowledge barrier can be dealt with if government and people are willing to solve it B - - One of the barriers is e-commerce knowledge B - - Customers do not know much about e- commerce and use of computer. B - - The higher population of internet user in the country are teenagers D, B - - Old people do not bother to learn new technology B - - Business development manager CI Old people prefer face to face communication B - - General Manager OCC No comments Finding expertise has delay adoption of new business B - - Libya needs Knowledge and expert about security and using internet in safe ways. B - - Companies can help in provide security and teaching people how to use internet safely B - - E-Commerce can be a tool for gaining knowledge D - - Lack of payment drove people to learn about hacking techniques online B - - Internet Caf manager AW E-Commerce encourage users to share knowledge D - - Lack of knowledge of E-commerce is a barrier for E-Commerce B - - Internet Caf manager AR People do not know what E-commerce means. B - - Appendices 362 There are no schools or colleges to teach E-commerce B - - Internet cafes provides training courses to Oil companies and Government departments D - - Few people uses the internet for a reason B - - Engineering manager OC The knowledge in IT in general is a barrier B - - 10.1.11 Legislation:
Table 10.9: Legislations issues Job title Org comments D/B F D/B L No. Lack of payment legislations B B 1 People will not wait for legislations D - - People will not wait for government actions D - - Absence of regulation may effect badly Libyan users B B 1,4 E-commerce law is about to develop. D D 1 Ministry of Economic issued a decision to start working in E- Commerce law D D 1 Help of expertise is permitted D - - Regulation need to not conflict with other issues. D - - There is a need for regulation. D D 1 Undersecretary M O E Absence of regulation stopping other development B - - Absence of legislation delays other development B - - Chairman OPTC legal issues are barriers in Libya B B 4 Appendices 363 Electronic payment is not permitted yet by law B B 1 Electronic signature still not permitted by law B B 1 No regulation and legislation in Libya B B 1 Security is a barrier for e-commerce B B 11 National plan to developing regulation is needed B B 1 Absence of regulations delays E- Commerce development B B 4 There is a need for Electronic payment regulations B B 1 Hackers and security are barriers B B 6, 11, 12, Marketing manager LTT No education on security issues B - - Islam may be a barrier for E- Commerce regulations B - - Transactions over internet is not allowed in Islam B - - Be ready to face security problem rather then wake away D - - Learn from other countries and companies experience D - - Marketing manager LIB
Regulation for E-Payment system is considered D D 1 E-Commerce has not used to know barriers - - - Bank cards still not accepted in Libya B B 1 Operation manager LCB Regulation is a barrier ion Libya B B 1 Regulation of Electronic payment is considered in the national payment system D D 1 Regulations for Credit and debit cards is considered D D 1 IT Manager CBL Regulation for Point of sale is considered D D 1 Appendices 364 Regulations for international payment is considered D D 1 Coding and protection software between banks are located D D 11 Updating laws and regulations to allow for the electronic transactions. D D 1 Security in Libya is a barrier B B 11 Lack of security scared people to use the Internet B B 8 Absence of regulation delays the development of E-Commerce B B 1 Absence of regulation drive people to use other county for their business B B - Chairman BA Regulation will help the economic development D - - International regulation is existed in Libya D - - Regulations are barriers for E- Commerce B B 1 Business development manager CI Education is needed for Use of E- Commerce and its rights B - - People break the law to connect to Internet D B 4 Better services drive people to break the law B B 4 Hackers are barrier. B B 12 General Manager Oil and Constru ction compan y People afraid of using e-commerce because of hackers B B 8 Pricy of software B B 3, 7 Cracked software available for free B B 3 Users help each other to share cracked software B B 3 Security software are available for free B B 12 People break the law for Internet connection D - - Internet Caf manager AW Security is a big barrier. B B 12, 11 Appendices 365 Internet needs good security. B B 12 Internet not secure to make payment B B 12 International companies needed for security D - - Education is needed D - - Copyrights, Security, and hacked software is another barrier. B - - People feel no secure of the internet. B B 8 Lack payment system drove people to adopt hacking techniques B - - No law to admit Computer crime and no company who are working in this field, B B 1, 12 No education and knowledge about computer crime. B - - Breaking the law for Internet connection D B - Internet Caf manager AR Un clarity on Internet connection contracts B
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Regulation is a barrier for E- Commerce B B 1 Engineering manager OC New regulation and IT development will be the main drivers D D 1
10.1.12 Payment:
Table 10.10: Payment Issues in Findings Job title Org comments D/B F D/B L No. Buying is limited to Credit and debit card holders B B 5 Buying is limited to overseas account holders B - - Some purchases are done on line by cards holders. D - - Undersecretary M O E expecting the spread of Credit cards in Libya D D 4 Appendices 366 If the credit card system been distributed in Libya then that will build a very good infrastructure for e- commerce in the country. D D 4 People will start trading if they have a possibility they wont wait for law to be issued, D - - In the automation plan, we have part of plan called electronic bill payment D D 3 This EBP will be with the help of banks
we are trying to work with other banks to develop and introduce this payment system. D D 2, 3 To enable online payment through the web for customers once the cards are ready to use D D 1, 3 Payment system will reduce the expense of doing things in a manual D - - Payment system will reduce the cost of security on cash D - - Payment system will reduce employment D - - We accept cash and checks only. B B 17 Bank system need to update there system, B - - Banks need to enable E-Commerce use B - - Banks do not have the legislation to authorise the acceptance of E- payment B - - E-Signature is not accepted for Libyas new E- payment B - - Banks are taking steps to put Credit Card and ATM Machine in place. D D 10, 4 There are also a culture barrier with payment system B B 13 Chairman OPTC people used on having cash than cards or E-payment B B 17 Appendices 367 Cash is more in use then personal cheques in Libya. B B 17 E-Commerce and payment adoption will not be easy B - - People need to be forced to use E- Payment system B B 13 Once the system is used people can realise the benefit D D 1 E-Payment is easy to use. D - - payment and transaction system is important for E-Commerce adoption D D 5 The government realised the importance of payment system and working in NPS. D D 4 NPS allow immediate transactions between banks D D 2 NPS allow the use of ATMs machines D D 10 Alternative payment project taken place to cover the delay of NPS adoption D - - Al-oma bank and Al-Mahari shopping centre created alternative payment cards D - - The idea of the project is enabling shopper to use prepaid cards for shopping, D - - one of our new services is a prepaid cards to be used over the Internet D - - Once NPS is ready to use, we will provide online services D D 1 Payment systems and transactions are barriers of E-Commerce, B D 5 The lack of payment system controlled our development B B 4 E-Commerce is known by people who had the opportunity to travel abroad B - - Marketing manager LTT Shopping online in Libya just for Credit and debit cards holders B - - Appendices 368 People will face problem for adopting e-commerce and payment system B B 14 LTT accept checks and Cash. B B 17 Not having a payment method is a barrier. B B 5 Banks could play an important role in encouraging people D - - We are benefiting from E-Commerce by pushing banks to adopt the NPS D - - Thinking of using Top up card as money D - - customer can pay there bills over the mobile, D - - people dont have enough time to deal with paying bills D D 1 Libyanna will take the money from your balance and transfer it to the electricity company bank account. D - - We accept Cash only, B B 17 people prefer to deal with cash, B B 17 we probably need some time to adopt any other way of payment. B B 14 E-Payment reduce the time of getting job done D D 2 E-Payment reduce the number of employment by organisation D - - E-Payment save time D D 2 E-Payment will effect positively the development of the economy. D D 4 Marketing manager LIB E-commerce will drive people to be more organised with there jobs and payments. D - - National payment system signed between central bank of Libya and three international companies D B 15 Operation manager LCB NPS would help Libyan banks to do transaction and receive payments electronically. D D 2 Appendices 369 Most of international transfer are done through the Arab Foreign bank. B - - The project designed to provide all electronic services D D 2 By the end of the project cards will be introduces to all customers. D D 5 The next step is to start thinking of adopting electronic banking system D D 2 E-Banking will enables customers to do some activities. D D 1 The biggest challenge of this project success is the infrastructure. B - - We dont have good connection between our branches right now. B - - Regulation and limitation of choosing ISP is a barrier. B - - Sending employees for overseas training in NSP and English language is done by central bank of Libya D - - Other workshops and training courses are taking place inside the country. D - - NPS is more important for banks to do there transaction quickly and easily. D D 2 Traditional payment system is time consuming (40 days for cheque liquidation) B B 17 As Bank we accept most of the type payment such as Cash, checks, approved check, Money transfer into account, etc. B B 17 The only thing we dont accept and not dealt with is the cards. B - - NPS not in use because of the infrastructure. B - - Lack of expertise in Computing and electronic system B - - Appendices 370 Overseas training is necessary to deal with the system and repair it when its needed. - - - NPS is one of the drivers of e- commerce in Libya, D D 5 NPS will solve the payment problem in the country D - - NPS will put the right foundation for e-commerce D 5 5 NPS was preceded by approving a plan, set by a committee of experts in the banking activities. D - - NPS will contribute to the development of financial and other economic sectors in Libya. D D 4 Real-Time Gross Settlement is to settles the accounts of banks and public institutions with the CBL at every working day-end. D D 4 Automated Clearing House is for settlement of all banks transactions D D 2 Automated Checks Processing is for clearing of checks D D 2 ATM provides a fundamental environment for the national automated teller distributor D D 9 ATM provide service for national and International networks D D 9 NPS enable e-payment for Business, clients and companies to accept national and International payment D D 1 Core Banking System aims to develop technologies for National banks by adopting NPS to compete with International banks. D D 4 IT Manager CBL NPS is implemented by NPS and some other commercial banks D - - Appendices 371 NPS interlinked and linked with commercial banks using optic fibbers, centimetre waves, satellites, wireless net, digital circuits and other communication means. D - - Security issue were considered with NPS D D 16 NPS provide electronic banking system and the underlying communication infrastructure. D D 4 NPS helps in updating the banking activities in accordance to these systems. D D 2 NPS force the CBL to Update laws and regulations with which banking institutions are working to reflect the effects of technological developments, and to allow for the electronic transactions. D - - NPS help to monitor the banking sensitive operations. D D 8 NPS helps to create the required data centres to tele-control risks. D - - NPS provide the potentials for local banks to provide international quality banking services. D D 4 NPS provides banks with control over their accounts. D D 2,4 CBL focuses in training and qualification programs to provide the needed human resources for the NPS D
-
-
We are working on accepting credit and dept cards via our website. D D 1 CBL is introducing ATMs Machine and providing people with Credit and Debt cards to be used, D D 10 Chairman BA Payment system is a driver D D 5 Appendices 372 we only allowed to accept money transfer B - - Business development manager CI Restriction of money transfer in and out the country B - - General Manager OCC we accept approved checks and bank transfers B B 17 No alternative method for electronic payment B B 17 Security for payment is a barrier B B 16 We accept cash only B B 17 Banks and Money Transfer is the main barriers, B B 4 Buying and selling on the Internet is limited because of E-Payment B B 4 transferring money is very difficult and expensive, B - - there is no credit or debit cards to be used B B 17 There is not even a third party to help buying from online , B - - Internet Caf manager AW Lack of payment create the popularity of hacking and cracking cards in Libya B - - Internet Caf manager AR Accept cash only B B 17
Appendices 373 10.1.13 Security
Table 10.11: Security Issues in Findings Job title Org comments D/B F D/B L No. Adopting e-commerce law and start the e-commerce regulation process D D - Undersecretary M O E How can a regulation satisfy and keep right for both parities (Customers, and service providers) B
-
-
E-Commerce provide more security to secure the cash D - - Chairman OPTC Security another barrier for e- commerce as a technical issue B B - Hackers and security are barriers for E-Commerce B B - Education is needed to show the power of technology. B - - Marketing manager LTT There are many Hardware and software barriers specially for security issues B B - E-Commerce benefit is that customer will not have to carry cash D - - By using E-Commerce people would feel more secure.
New technology needs exploration rather then fear D - - Learning form other mistakes can be a solution D - - Marketing manager LIB
Operation manager LCB One of the disadvantages is the JUNK information that is on the net, B B - IT Manager CBL CBL centres will ensure online functioning of national banks all the time and in all circumstances. D D - Appendices 374 The appropriate networking of the main data centre, auxiliary and emergency centres will allow for their automatic alteration when necessary to avoid any interruption whatsoever the reasons. D
D
-
The main disadvantage of e- commerce in Libya is the security, B B - They should be security companies in Libya to secure systems and educate people regards security. B - - Chairman BA Security scare people to use the Internet B B - Business development manager CI There should be many workshops, training courses, conferences and forum about e-commerce to educate people the right way of using the e- commerce B - - Hackers are barrier to E-Commerce B B - Hackers pose a huge threat to e- commerce user. B B - General Manager OCC Many people afraid of using e- commerce in order not to be victim in one of hackers problems. B B - Illegal downloaded software and cracked software are in favored use in Libya B B - security software such as Kasper, Kasper Sky antivirus are also cracked B B - Internet needs good security B B - transaction are not secure in the Internet B B - Security Software and Hardware is needed in Libya B - - Internet Caf manager AW Knowledge and experience sharing is needed in Libya B - - Appendices 375 special companies Is needed in the market to provide security and safe use services and to be responsible for fighting these crime as well as teaching people how to use internet safely B B - Copyrights, Security, and hacked software is another barrier. B B - As long as hackers exist in the market do not expect to see any trade online. People feel no secure of the internet. B - - Lack of payment was a reason of driving people to adopt hacking techniques B B - Hackers and Crackers techniques needs a long time to understand and be able to use, D - - Users share knowledge and information about hacking and cracking B B - No law to admit Computer crime and no company who are working in this field has created a good market for hackers and crackers B B
-
Internet Caf manager AR No comments Engineering manager OC No comments
10.1.14 Traditional Business:
Table 10.12: Traditional Business Issues Job title Org comments D/B F D/B L No. Undersecretary M O E Libyan producers are complaining that many international products have interred the country through Libyan importers or trader B B 2 Appendices 376 Travel agents will disappear because of E-Commerce B B 2, 4, 3 E-Commerce business provide cheaper staff and may be better quality B - - If the product and service in local supplier will not get better, then they face a huge competition, B B 2, 3 International travel has gone too high in the whole world because of e- commerce B - - If we start providing services in Libya using e-commerce we would help developing our economy and being in a better place. D - - E-Commerce can provide a better marketing tool D
-
-
Electronic services will fast up the way of doing work in the company and reduce the expense of doing things in a manual way D - - Electronic entry will show in the system right away the moment that been entered. Rather then the manual way that we are doing now. D - - I think e-commerce is a new way of doing business. D - - With the popularity of internet website and increasing numbers of internet users many people will shift there activity into e-commerce B B 2 Chairman OPTC There is a big threat to traditional business. B B 4
LTT provide no service over the internet, most of services are in traditional way D - - Marketing manager LTT Hackers and security can be in the benefit of traditional business D - - Appendices 377 High Internet charge was in the benefit of Traditional businesses D - -
Thinking of using Top up card as money D - - people looking for solutions to save time. D - - Electronic payment is safer D - - E-commerce will change the way of living , and will speed up the way doing business, D - - traditional way of business is a time consuming, B - - Marketing manager LIB E-Commerce actually a driver to develop the economy specially for government state companies which need to wake up and catch up to move on with the new technology that is developing too rapidly. D
B
3, 4
Central bank of Libya helping bank to transfer from traditional to electronic services providers D D 3 Next step is to start Internet banking D D 3, 4 E-commerce For banks is even more important that it will help banks to do there transaction quickly and easily. D D 3, 4 Operation manager LCB Traditional commerce will get effect by e-commerce and probably will disappear from business activities as e-business will take over every thing B
B
2, 4
IT Manager CBL Automated Teller Machines (ATM)/Points of Sales (POS) enables businessmen, their clients and companies that provide these services to accomplish the payments for transaction charges electronically using points of sales which will effect the traditional business D D 3 Electronic commerce works along the side with traditional methods D D 3 Chairman BA For products E-commerce will create a threat to traditional business B B 2 Appendices 378 Traditional importer will face difficulties with E-Commerce because of its low prices B B 2 If E-Commerce campaign with traditional commerce, companies will have a chance to expand business D D 3, 5 Libyan Market is consuming market, so it doesnt really get affected too much from e-commerce. D - - E-Commerce pose a threat to products and material importers B B 2 For agriculture and internal use products, these will not get effected from e-commerce because of the low price and a good quality that people get used of. D - -
Traditional financial trading companies have to adopt E- Commerce D D 2 E-Commerce help business activities D - - There is no threat to traditional business. D D 1 The difficulty of correcting a mistake electronically comparing to correcting mistake manually is much easer and strait forward. D D 1 The higher population of internet user in the country are teenagers B, D - - Old people do not have the time to learn as well as facing difficulty of catching ups. D - - Business development manager CI Most of old age people prefer using a traditional way of doing business. D
-
-
Most of work done over the internet D D 3 contact with supplier and sub contractor by email. D D 3 General Manager OCC Email is lower cost comparing to a telephone line. D D 3 Appendices 379 If every one start using e-commerce then we will see a big benefit which will effect the business between companies and pose threat to traditional business. Right now there is no threat. B B 4 .
E-Commerce is more convince then traditional commerce B - - Simple ideas online can be money generators D - - Security can be a threat of using E- Commerce D - - Payment system been a barrier to E- Commerce and a benefit for traditional business D - - Copyrights, Security, and hacked software is another barrier to E- Commerce. People feel no secure of the internet. D - - E-Commerce might be a challenge to traditional business, But in the same time it will drive trader to adopt this technology to catch up with the rest. D D 3 E-commerce will bring many new companies, so in order for older companies to survive they have to take the same bath along with the traditional way. D D 3 The two ways will be there. It not a real threat, D D 5 Internet Caf manager AW Few people using e-commerce D D 1 E-Commerce is a new way of making money D - - E-Commerce is smellier to the traditional ways of business with less hustle and saving time and money. D D 5 Internet Caf manager AR There is no benefit of having a website D - - Appendices 380 The charge of hosting, design, and submitting to search engine is discouraging businesses to go online D - - If customers are local then you dont need a website D - - E-Commerce is much easy way of doing business then a traditional way of doing that business. B B 1 E-Commerce is more powerful then a traditional commerce. B - - E-Commerce help you to do new businesses that they might had never come across your mind. B
-
-
Website is there to attract customers, the rest can be done in traditional way D D 5 E-Commerce and traditional business are pearl, specially in a market like Libya, Many traditional business are using the internet, it works perfect in both sides. D D 5 Engineering manager OC The future more likely to be just e- commerce. B B 4
Appendices 382 2. Company Details Company Name Industry Operational location Annual Turnover Number of employees Trading partner Customers: Suppliers: Information technology infrastructure Network
Hardware
Applications
Contact point Address
Phone no
Fax
E-mail
Website
Appendices 383 3. Interview Questions 1 Do you know the term e-commerce? 2 Does your company have a strategy for electronic commerce? 3 Which communication do you use? 4 Does your business engaged in electronic commerce ? 5 If you implementing e-commerce, what is the advantages / reasons of implementing e-commerce? What is the main befit to your business? 6 If you are not implementing e-commerce, what is the disadvantages/reason of not implementing? Why you are not involved? 7 If you dont have a clear strategy for e-commerce at present, is it likely to become important in 2-3 years? 8 How many products and services does your business offer? 9 How do you deliver your products and services to consumer/client 10 What type of payment do you accept 11 Do you update your web if you have one, or does the third party doing for you? 12 What is the barriers of e-commerce in Libya 13 What is the drivers of e-commerce in Libya 14 What is the threat to the traditional commerce 15 What are the pioneers to e-commerce in Libya 16 Any other comments Appendices 384
Appendices 385 10.3 Appendices: questionnaires answers 1 General information
1.1 Position Manager 1 Decision makers 0 Students 69 Employees 48 Self employees 9 Other 23
1.2 Number of employees 0-20 23 21-100 27 101-200 13 201-500 11 501-1000 9 1000+ 7 Dont know 60
2 E-commerce
2.1 Does your company have an e-commerce strategy? Yes 54 No 42 Don't know 54
2.2 Does your company use any of the following communication technology? Appendices 386 Automatic Data Collection 42 Telephone over the internet 98 Document image processing 59 E-Catalogue 41 EDI 6 EDI to Fax 5 EDI to Paper 0 Electronic form 36 Electronic fund transfer 25 Electronic mail 116 Fax 32 Telex 23 Trade data interchange 9 Video Conferencing 18 Voice mail 7 Others
2.3 The statement blow show the engagement with e-commerce never heard of term before 26 Have heard but not use in any way 31 I have heard and used in 27 Have visited seminars 23 have prepared strategy for e-commerce 12 planning for using e-commerce 13 Undertaking e-commerce development 9 we are extensive user of e-commerce 5 we are extensive user of other technology 4
2.4 Advantage /reason why organisation are implementing e-commerce Strongly agree agree Not sure disagree Strongly disagree No Answer N/A internal e-commerce speeds communications 2 51 32 31 13 12 9 make organisation more 2 25 37 46 13 19 8 Appendices 387 efficient email is useful for communication 3 52 19 30 13 18 15 e-commerce provide efficient 5 49 13 31 13 11 28 increase real storage way 2 52 24 25 17 19 11 Lower cost 6 43 17 37 18 13 16 retained/gained customers 3 47 19 37 7 5 32 better relationship with partners 4 42 17 35 17 19 16 less paper handling 4 45 1 43 3 7 47 better control over information 3 53 20 47 17 7 3 reduction in admin task 3 35 25 53 13 6 15
2.5 Disadvantages/ reason not adopting Strongly agree agree Not sure disagree Strongly disagree No Answer N/A We don't fully understand it 37 19 31 30 17 14 2 we don't know we to go to learn about it 13 32 35 25 24 21 0 we cannot use it 25 18 36 13 31 23 4 it does not reduce costs 2 12 61 11 36 21 7 we don't have time 12 9 59 19 12 34 5 we can not afford the cost 19 7 48 19 30 23 4 we are fearful of security 13 31 36 24 18 21 7 we have the willing but we don't have support 7 31 43 25 4 37 3 is a lack of government and industry -led visibility 13 30 54 18 8 22 5 There are lack of legal issues 2 19 47 30 12 34 6 it leads to more mundane jobs and job losses 5 30 44 30 7 33 1
2.6 Are there any other reason? No internet 66
Appendices 388 2.7 if you don't have an e-commerce strategy now, will you have a strategy within 2-3 years Yes 72 No 7 don't know 71
3 The internet
3.1 Who is you internet provider LTT 36 GPTS 12 Satellite 24 Others 78
3.2 What is the type of connection? Modem 18 Lise-line 12 Broadband 0 Wireless 36 Other 24
3.3 What tool do you use when accessing the internet? Archie 0 Email 90 Appendices 389 FTP 18 Mailing list 30 Newsgroup 24 Remote login 12 Internet browser 42 Chat 66 www via email 30 Other 0
3.4 from the used tools which is the most frequently used Archie 0 Email 48 FTP 6 Mailing list 0 Newsgroup 0 Remote login 0 Internet browser 24 Chat 24 www via email 0 Other 0
3.5 Do you have a web site? Yes 48 No 42 No answer 60
3.6 If the answer yes do you update in-house or by third party in-house 24 third party 0 Dont know 24
Appendices 390 3.7 Do you have internet security such as Firewall? Yes 42 No 24 Dont know 12
3.8 if the answer were yes please specify: Firewall Kasper
3.9 please specify the reason of using internet cafes Very important Important Not sure Not important Not very important No answer for self improvement 42 12 7 7 12 70 For internal calls 45 13 2 0 19 71 for External call 33 17 3 8 18 71 For web site visiting 51 7 9 0 13 70 for chatting 72 25 8 18 6 21 File transfer 52 20 25 13 0 40 trade 40 14 13 17 13 53 upload files 25 17 17 7 12 72 purchases 13 18 9 24 18 68 sell and marketing 24 2 6 15 30 73 to get information 67 42 5 23 0 13 others 23 14 7 0 0 106
3.9 From the listed before what was the most used reason? for self improvement 0 For internal calls 0 for External call 12 For web site visiting 6 for chatting 36 File transfer 6 Trade 0 Appendices 391 upload files 0 Purchases 0 sell and marketing 0 to get information 30 Others 6
3.10 What do you think the most internet features? Information and easy to contact Cost
3.11 What are the internet disadvantages Security, 65 Culture, 20 speed 34 No answer 31
3.12 what are the barriers in Libya Infrastructure, , 41 Government involvement 32 Young people 10 misunderstanding of the real meaning 14 No answer 53
3.13 will you buy from the internet if you have a chance? Yes 67 No 38 Dont know 45 No Answer 0
3.14 what is the best solution for the internet to successes in Libya? Reduce cost 29 Appendices 392 Knowledge and educations 13 Family support 13 Improvement 13 Cost reduction 18 Cards 25 No answer 39
Appendices 396 Section 1: company & Personal details:
1.1 : Over view Name: Sex: Position: Business sector: Number of employees:
0 -20
21-100
101-200
201-500
501-1000
1000 + Telephone: Fax: E-mail: WWW:
Section 2: Electronic commerce 2.1: Does your company have a strategy for electronic commerce? Yes No 2.2: Does your company use any of the following communications technologies?
Automatic Data Collection /Transfer
Computer Telephone Integration (CTI
Document Image Processing
Electronic Catalogues
Electronic Data Interchange (EDI)
EDI to FAX
EDI to paper
Electronic Form
Electronic Fund Transfer (EFT)
Electronic Mail (E-Mail)
Facsimile (Fax)
Financial EDI
Telex
Trade Data Interchange
Video Conferencing
Voice mail Other, please specify:
2.3: Are any of the previously stated technologies integrated?
EDI & E-mail
E-forms & Email
EDI & FEDI
CTI & Fax Other integrations:
2.4: the statements listed below attempt to characterise your companys e-commerce engagement.
Had not heard of term until now
Have heard of term, do not use in any way Have heard of term but only use, for example:
Have visited seminar(s)
Have prepared strategy for e-commerce-type activities
Planning of using e-commerce
Undertaking e-commerce development
We are extensive user of e-commerce
We are extensive user of other technology Explanations:
2.5: the statements below outline advantages and/or reasons why organisations are implementing e-commerce solution. Please use the following scale 1= Strongly agree 2= agree 3= Neither agree nor disagree 4= disagree 5= Strongly disagree
The main benefits of e-commerce to our organisation are: 1 2 3 4 5 Internal e-commerce speeds communications flows within Appendices 397
Make organisation more efficient E-mail is useful for communications with trading partners
E-commerce provides efficiencies Increase in reliable/accessible ways of storing
information
Lower costs e.g. data entry,
Retained/gained customers Better relationship with trading partners
Less paper handling Better control over information availability and reliability
Reduction in administrative tasks
2.6: the statement listed below outline disadvantages and/or reason why organisation are not implementing e-commerce solution We are not involved in e-commerce because 1 2 3 4 5
We dont fully understand it We dont know where to go to learn about it We cannot obtain easy-to-use, off- the shelf type packages We believe the supposed benefits do not outweigh the cost We dont have the time to learn about it
We cannot afford the high costs We are fearful of security, intrusions, viruses and bugs We do not have a sufficient mass of trading partners who are involved Although we would like to be, we dont have enough high-level support within our organisation There is a lack of government and industry-led visibility There lacks a legal infrastructure to support it It leads to more mundane jobs and job losses
2.7: are there any other reasons why your organisation has/is not implementing any form of e-commence?
2.8: if your company does not have a clear strategy for e- commerce at present, is it likely to become increasingly important in the next 2-3 years? Please provide details
Section 3: The Internet This section deals with the internet. If your company is not connected, please go to Question 3.13 3.1: which services provider use to connect to the internet?
Libyan Telecom and Technology (LTT) The general post and telecommunication company (GPTC)
3.3; what tools does your company use when accessing the internet?
Archie
Veronica
E-mail
WAIS
File Transfer (FTP)
WHOIS
Gopher
WWW browser
Mailing list
Please state which: Appendices 398
Newsgroups
Remote login, telnet
WWW via e-mail Other , please specify:
3.4: of the tools listed in Q3.3 which are the most frequently used?
3.5 of the tools listed in Q 3.3 do you perform any of your own administrative network services e.g. DNS, mail, news feeds or this provided by a third party?
3.6: Does your company have a Web server/Site
Yes
No If yes, please indicate if the server/site managed by your company or by a third party provider?
3.7: Does your company operate Internet security features such as Firewall
Yes
No If yes please provide brief details:
3.8: Does your company utilise the internet for any of the following business activities? Please mark 1-5 where 1= very important and 5=less important
Collaboration & Development
Communication (internal)
Communication (external)
Corporate logistics Creating a corporate presence (WWW) Creating a corporate presence (ftp/gopher site) Creating a corporate presence (other) please specify
Electronic trading opportunities
File transfer (including Documents) Gaining/maintaining competitive advantages
Globalisation
Graphics/Technical data transfer
Purchasing
Sales & Marketing
Information retrieval and utilisation
Information provision
Information exchange Other, please specify;
3.9: Approximately how many employees in your organisation have access to the internet?
3.10: Approximately how many of these employees use the internet on regular basis (at least once a week)
3.11: What do the majority of employees use the internet for e.g. email, www browsing, www searching, ftp, news?
3.12: if your company utilise the internet, what are the major benefits gained?
3.13: Does your company have, or will you soon be developing an internet strategy?
Yes
No If Yes, please provide details.
If No, is it likely to be important in the next 2-3 years? Please provide details Appendices 399
Section 4: E-commerce and Future 4.1: of the item listed below, please indicate any positive/negative opinion as to the potential success of each item within your company where 1= Very positive 2= Positive 3= Unsure/dont know 4= negative 5= Very negative 1 2 3 4 5 Accessibility
WWW browser
E-mail
Other tools e.g. ftp and gopher
Packaged solution
Integrated applications Resources
Search tools
Catalogues
Information Brokerage
Virtual shopping malls
Virtual trading malls Middleware
Access control
Authentication
Directories
Electronic payments
Mechanisms Hardware/Network
Servers
Modems/routers
Dial-up
ISDN
ATM/Frame relay Consultancy /Training
Assessment & Planning
Design service
Training
Implementation services
Management service (outsourcing) 4.2: What is your companys future perspective of electronic commerce over the internet?
4.3: Further information If you have any further information you would like to add please do so below
Section 5:Contact details If you would like to receive any future information about E-commerce and developing countries please contact Name: Abdalla Hamed UK Address: 20 Keppoch street Cardiff, UK CF24 3JW Office Phone No: +44 (0) 29 2041 6332 Mobile No: +44 (0) 78 4167 5951
Libya Address Bader Al-Hasse & Co 102 Al-Madina Tower Ali KAlifa Al-Zaidi street Triploi- Libya P.O.BOX: AL-BAIDA 270 Appendices 400 Office phone No: +218 21444 5319 / 318 Mobile No: +218 91209 3316 e-mail ahamed@uwic.ac.uk research@alhasse.com Website www.alhasse.com/e-commerce.html Thank you for participating
Appendices 401
10.5 Questionnaire question linked to e-commerce issues Table 10.13 questionnaire questions and e-commerce issues
c o m p e t i t i o n
c o s t
c u l t u r e
e c o n o m i c
a c t i v i t i e s
e m p l o y m e n t
g o v e r n m e n t
i n f r a s t r u c t u r e
k n o w l e d g e
l e g i s l a t i o n s
p a y m e n t
s e c u r i t y
t r a d i t i o n a l
b u s i n e s s
1 General information
Automatic Data Collection Telephone over the internet Document image processing E-Catalogue EDI EDI to Fax EDI to Paper Electronic form Electronic fund transfer Electronic mail Fax Telex Trade data interchange Video Conferencing Voice mail Others 2.3 The statement blow show the engagement with e-commerce never heard of term before Have heard but not use in any way I have heard and used in Have visited seminars have prepared strategy for e-commerce planning for using e-commerce Undertaking e-commerce development we are extensive user of e-commerce we are extensive user of other technology internal e-commerce speeds Appendices 402 communications make organisation more effectint email is useful for communication e-commerce provide effectint increase real storage way Lower cost retained/gained customers better relationship with partners less paper handling better control over information reduction in admin task 2.5 Disadvantages/ reason not adopting We don't fully understand it we don't know we to go to learn about it we cannot use it it does not reduce costs we don't have time we can not afford the cost we are fearful of security we have the willing but we don't have support is a lack of government and industry -led visibility There are lack of legal issues it leads to more mundane jobs and job losses 2.6 Are there any other reason? No internet 3 The internet 3.1 Who is you internet provider LTT GPTS Satellite Others 3.2 What is the type of connection? Modem Lise line Broadband Wireless Other
28KB 56KB 64KB 128KB 256 512 Appendices 403 Dont know 3.3 What tool do you use when accessing the internet? Archie Email FTP Mailing list Newsgroup Remote login Internet browser Chat www via email 3.5 Do you have a web site? 3.6 If the answer yes do you update in- house or by third party in-house third party Dont know 3.7 Do you have internet security such as Firewall? 3.9please specify the reason of using internet cafes for self improvement For internal calls for External call For web site visiting for chatting File transfer trade upload files purchases sell and marketing to get information others 3.10 What do you think the most internet features? Information and easy to contact Cost 3.11 What are the internet disadvantages Security, Culture, speed No answer 3.12 what are the barriers in Libya Infrastructure, , Government involvement Young people Appendices 404 misunderstanding of the real meaning No answer 3.14 what is the best solution for the internet to succeed in Libya? Reduce cost Knowledge and educations Family support Improvement Cost reduction Cards