In recent years the integration of technology and trading has brought a tremendous transformation in the way of traditional business. The emerging global world economy is electronic, integrated through information systems and technology rather than organizational hierarchies.
Cyberspace is neither the physical, geometric, geographical nor political. It is absolutely global without any boundaries. We can’t determine where business is taking place, whether transactions are cross-border or not. In electronic transactions location is irrelevant. The Internet blurs national boundaries, thus circumvent all the related complexities of cross-border trade in products and services. The irrelevancy of the location of transactions is contradictory to what traditional business has been dealing with till date. Import and export taxes are calculated based on location.
The idea of geography as the basis for economics may be losing meaning. For instance, a Nepalese software company updated the software of a US bank through satellite linkage. How is the government going to monitor this electronic business? Where did this transaction take place? Who gets to tax the sale? It is far from clear that buyers and sellers transacting over the Internet actually know where the other party is located. If the bytes comprising an album are routed through five countries do they really cross five borders? There are numerous questions like these, yet to be answered.
Electronic transactions carried out on the Internet can be broadly divided into three broad categories for the purpose of policy discussion: the searching stage where producers and consumers, or buyers and sellers, first interact; the ordering and payment stage once a transaction has been agreed upon; and the delivery stage.
The first stage in any kind of trading is the advertising of goods. This stage does not create any complexity to the existing framework of the business. Rather, it helps to enhance the business probability of traditional business. The second is the purchase stage, including the finalization of purchase and payment conditions. The final payment stage involving the flow of foreign exchange is a restrictive matter depending on national policies. The delivery of the final product has two aspects: the products that can be transferred electronically (for example, music, software, e-books) and the products that have to be transferred by traditional means (such as cars, furniture and electronic goods).
It has taken a long time, probably hundreds of years, to establish the framework of existing business, the so-called traditional business. It has been only a decade since the modern form of business began to evolve. The existing framework of global business has to be revived to keep up with newly evolving technologies. E-commerce may only be a beginning towards the spectacular future for technology and business. Countries like Nepal are already facing the loss of revenues in the existing structure of business.
Global organizations like the United Nations and the World Trade Organization need to take the initiatives to nullify the problems arising from electronic commerce. Simplifying the complexities of the existing framework of e-commerce can be expected to refurbish the ways of business itself. The issue is itself a global issue because every country in the world needs to come to an agreement for mutual benefit. The world itself needs to be converted to a global village where each individual thinks of communal benefits as well.
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