The Development Of Technology Information Technology Essay
Electronic commerce (e-commerce) implies sales via the new electronic channels such as the Internet. The development of technology has made e-commerce wide spread in the developed countries and today e-commerce presents broad opportunities for economic growth in developing countries. Empirical literature suggests that one of the main contemporary drivers of long term economic growth is the development of technology (Todaro, 1999; James, 1999). E-commerce has revolutionised the channels of product and service distribution. It has allowed for online purchases, which are faster and can be made in an instant from any computer that has access to the Internet.
The scope of the research project will be set on the retail industry of Yemen. The country is known for its relatively uneven economic growth during the recent decades, technological advancement and conservatism in society. Although the country was technologically drawn into the modern world when the government established the E-Government, the Internet was widely accessed only in 1996, much later than in developed countries (Sait et al, 2004). Hence, the e-commerce sector is still new and underdeveloped. The problem of e-commerce development and its economic benefits as well as challenges and barriers to its adoption will be investigated using a primary research in which business owners and managers from retail industry will be interviewed. The rationale for exploring this problem in the context of Yemen is that the study will have practical implications and recommendations that can help the country to diversify its economy and achieve faster economic growth. At present the country’s economy is mostly dependent on the exports of energy resources. Hence, the economic growth depends on external factors such as world oil prices. The research will create a basis for practical recommendations how the new technologies and particularly e-commerce can help the country reach a more consistent economic growth. The following aims and objectives will be pursued.
1.1. Research Aims and Objectives
The key aim of the research is to assess economic benefits of adoption of e-commerce in Yemen. The study will have the following objectives:
To assess the success of e-commerce in the context of developed countries;
To evaluate the specifics of Yemen economy and opportunities for e-commerce;
To investigate the willingness of potential customers to use the services provided by e-commerce in Yemen;
To assess the barriers to implementation of e-commerce in small and medium retail companies in the country;
To make recommendations to policy makers and business owners in retail industry.
2. Literature Review
There is a great amount of literature available on the topic of e-commerce and its implementation in the context of developed countries. This literature distinguishes the e-commerce field into business to business and business to consumer sectors (Hernandez et al., 2009; Doherty and Chadwick, 2009; Alzola and Robaina, 2007). The new topic has raised a number of new concepts as well. These are electronic branding, e-payment and others. In the context of the emerging economies, the studies on e-commerce are much scarcer (Wong et al, 2004; Gunasekaran and Ngai, 2005). Moreover, even fewer studies have been conducted in the context of Middle East countries (Al-Maghrabi, 2011).
Previous studies have revealed that in spite of the economic benefits of e-commerce that developed countries enjoyed, there is wide range of potential obstacles that make e-commerce less attractive in emerging economies. For example, previous empirical findings suggest that consumers in developing countries tend to have less trust in online payment methods (Andonova, 2003; Lee, 1999). Furthermore, the absence of effective competition among the Internet providers creates other obstacles such as high cost of Internet and its unavailability in remote areas. Other researchers point out at the defects in design and infrastructure of e-commerce platforms that make them a barrier for further expansion in the countries (Barsauskas et al., 2008).
Besides the mentioned barriers and obstacles, previous studies have revealed a number of economic benefits that e-commerce has provided. First of all, it is argued that online shopping and electronic commerce provide consumers with easy tools for price comparison. The improvement in information transparency facilitates competition in the industry and fair price setting (Lee et al, 2011; Wiengarten, 2011). Secondly, e-commerce has been found to be able to reduce transaction costs for businesses. Electronic methods of payment and taking orders online help to save inventory costs and other types of expenses that are incurred in traditional retailing. However, Dekleva (2000) argues that business to business models of e-commerce failed to help companies reduce transaction costs.
Among the other economic benefits of e-commerce discussed in empirical literature, it is valid to mention the independence of retailers from demographics in locations where traditional stores would have had a risk of the fall in demand. Online stores can be accessed from any geographical location and the influence of the demographic factor on sales becomes minimal. However, it is valid to note that location of storehouses from which the products are shipped determines transportation costs (Hernandez et al, 2009).
However, another realm of literature on e-commerce emphasises the fact that e-commerce can never replace traditional retailing and is only a small part of the industry that will not have a substantial effect on economic growth. These arguments are justified by observations that e-commerce does not allow consumers to touch and taste the products they order, they are less protected from poor quality goods and they are deprived of the opportunity to socialise while shopping (Ifinedo, 2011; Tai, 2011). These arguments raise substantial doubts that e-commerce can provide substantial economic benefits. Furthermore, in the context of Middle East countries, it will be important to assess the role of cultural and religious factors as well. Due to the lack of secondary data on the e-commerce sector in Middle East countries, the research will be mostly reliant on the findings from primary studies. The expected methodology of the research is explained in the next section.
The research will use the survey strategy to reach its aims (Saunders et al, 2009). It is expected that more than fifty small and medium business owners and managers from retail industry in Yemen will take part in the survey. The retail industry has been chosen since it has the largest potential for implementation of e-commerce. It will be explored why retail companies in Yemen have not adopted e-commerce as extensively as in developed countries, what were the challenges, barriers and what managers think about perspective of e-commerce.
The survey of the retail companies will help to assess the barriers to implementation of e-commerce and potential benefits. However, an additional survey would also be required to assess the willingness of Saudi consumers to shop online. For this purpose, another primary study will be conducted, where the target audience will be Internet users from 18 to 55 years old. This study intends to survey at least five hundred people that will be selected randomly (Bryman and Bell, 2008). The survey of consumers will help to assess potential benefits of e-commerce and project its growth in Yemen. Based on the results achieved from the two surveys, recommendations for Yemen will be provided. In the first place, these recommendations will be addressed to policy makers. They will contain the steps that have to be taken to allow for quicker adoption of e-commerce in the country. Secondly, recommendations will be addressed to business owners who will be provided with the action plan on how to successfully implement the transition to e-commerce and diversify traditional channels of product sales.
3.2. Data Collection
While both primary studies will use a survey strategy, different data collection techniques will be used. When the study is conducted among the retail managers, the data will be collected by means of face to face interviews that will be audio recorded. The survey of Internet users will implement structured questionnaires as a method of data collection. Different techniques are required because the studies have different expected samples. It is feasible to interview fifty managers but it is less possible to interview five hundred Internet users. The questions used in the interviews and questionnaires will be based on the problems that are raised in literature review, which require answers that could not be provided by previous researchers.
3.3. Expected Limitations
The research project is expected to have limitations. Since it contains primary studies, there is a risk that the sufficient sample size will not be collected. Therefore, the search for people will be started in advance. Internet users will be searched online and asked to participate in the survey via social networks. However, choosing a sample from the social networks will limit the representativeness of the sample since only people of rather younger age will dominate in the sample (Saunders et al, 2009). Nevertheless, these people are expected to be the key customers online.
Another possible limitation is the lack of clear answers and extended responses. In order to ensure that desired responses are received, the questions must be presented right. For this purpose, a pilot study will be initially conducted using a sample of ten respondents. They will be asked to provide a feedback that will help in further improvement of the methodology.
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