ICT Policies & Global

Supply Chain Penetration

in Developing Countries

WSIS Facilitation Meeting on

« E-Business and E-Employment »
UNCTAD, ITC and ILO
Palais des Nations , 24 May 2007

Claudine Bichara de Oliveira

neTune, Executive Director (Brazil)
ICT Policies & GSC Penetration in Developing Countries

Plan
• Global Supply Chains in Developing Countries
– How it Works?
– Main Obstacles
– ICT Requirements and Trends

• Policies & Practices in Latin America

– Business Environment Policies
– ICT related Policies and Practices
– Innovation and IT Adoption by SMEs

• General Assessment

2 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

ICT Policies & GSC Penetration in Developing Countries

Global Supply/Value Chains: What is it?

“Global Value Chains cover a full range of

interrelated productive activities performed
by firms in different geographical locations to
bring out a product or a service from
conception to complete production and
delivery to final consumers”
Global Value chains for Building National Productive Capacities
UNCTAD – TD/B/COM.3/79

3 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

 ICT Policies & GSC Penetration in Developing Countries

GSC: How it Works?

Suppliers Manufacturers
s
Distributors Retailers Consumers
Competitiveness
based on cost
reduction through:

• Just-in-time
manufacturing

• Cost of labour in
developing
Competition between chains
countries
Source
VOLLMANN, T.E., CORDON,C. Making supply chain relationships work . M2000 Business
: Briefing, n.8,
Lausanne , IMD, 1996.

4 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

ICT Policies & GSC Penetration in Developing Countries

Attractive Factors to FDI

Market Share 83%

Political Stability 54%
Legal Environment 52%
Macro-Economic Stability 43%
Presence of Competitors 41%
Quality of Infrastructure 30%
Profit Repatriation 29%
HR Cost & quality 28%
Local Government Support 23%
Access to export market 23% Source: A. T. KEARNEY

5 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

ICT Policies & GSC Penetration in Developing Countries

Global Competition Challenges

For TNCs For SMEs

• Management • Economic Globalisation /New

• Markets and Competitors
Real time data sharing
• New Products and Services
• Delivery Delays
• Speed of Change
• High demand on technology
• Exponential Multiplication of
• Infrastructure
Information
• Production Capability

ICT: Key Ingredient to Enhance Competitiveness

6 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

ICT Policies & GSC Penetration in Developing Countries

Main Obstacles in Developing Countries

• Lack of strategic vision and/or concrete actions

• Red Tape and Informal economy
• Lack of Venture Capital
• Lack of technology infrastructure and logistics
• Human Resources Capabilities
• Legal Framework
- Taxes - Telecommunications
- Consumer rights - Security (payment, delivery…)
- Intellectual property - Electronic contracts and signatures
- Self-regulation - Internet crimes

7 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

ICT Policies & GSC Penetration in Developing Countries

ICT Requirements & Trends

• Ubiquitous Communication
– High Speed
– Wireless Technology
– IPv6
• Interoperability and Convergence
– Multi-channel operation
– XML language
• Management Support Applications
– SCM applications
– PLM (Product Life Cycle Management)
• Security, Confidence and Trust Aplications and Services

8 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

ICT Policies & GSC Penetration in Developing Countries

ICT Trend - Example

• RFID - Radio Frequency Identification Technology

for contactless identification of objects.
– Barcode: product identification
– Tag: product description (what it is, where it has been,
when it expires ..)
– Antenna: always turned on, wirelessly
– Biosensor chip: information on physical condition of
materials in transit

9 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

ICT Policies & GSC Penetration in Developing Countries

Business Environment Policies

• Infrastructure: • HR: Development of

Transport, Warehousing, Logistics capabilities & educational
• Regional/Int’l Trade Agreements system
• Free Trade Zone • Entrepreneurship and
• Tax incentives entrepreneurial culture
• Financial system; Royalty • Simplification of bureaucracy
remittances & loans
• Intelectual property,
• Venture Capital and funds
• Public Private partnership Trademarks
• SMEs competitiveness • Industrial Clustering
• International Standards
adoption
• Arbitration system adoption

10 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

ICT Policies & GSC Penetration in Developing Countries

ICT Related Practices and Policies

• Telecom privatisation • E-Business enabling

• National Strategy for ICT & environment
Development
– PKI: data protection, digital
• Technology clusters
signatures & certification
• FOSS – Interoperability of PKI oper.
• E-Gov Policies: online services & – Acceptance of digital
e-procurement
transactions
• Skill development – Business data online
– Public Awareness
validation & verification
– Technical support training
– Transport & logistics
– High level IT education
– E-payment
– Customs automation
– Self regulation for high
quality of online services

11 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

ICT Policies & GSC Penetration in Developing Countries

Innovation and IT Adoption among SMEs

• Tax incentives to stimulate IT adoption, purchase &

production
• Funding for R&D and innovation
• University - Enterprise cooperation
• E-network / linkage to int’l iniciatives
• Business Telecenters

12 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

ICT Policies & GSC Penetration in Developing Countries

Mexico: “Innovation for Competitiveness”

Programme
• Business Innovation Programme / CONACYT + World Bank
– Consortia and research networks
– Venture capital fund
– Pre-competitive fund
– Sectoral funds
– Researchers and technologists in industry

• HR: Financing scholarships Programme / CONACYT

• Technology and innovation policy framework + international

integration

13 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

ICT Policies & GSC Penetration in Developing Countries

Chile: Customs Modernization / ISIDORA

Internet-Integrated Systems for the Development of Customs
Operations and Regulations

• Integration of Customs procedures with those of other

public and private participants of the international supply
chain such as:
– Other Government agencies (Single-Window)
– Seaports
– Warehouse administrators
– Shippers
– Transport agents
– Consolidators

14 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

ICT Policies & GSC Penetration in Developing Countries

What is Brazil doing ?

15 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

ICT Policies & GSC Penetration in Developing Countries

Brazil : Governmental Programs

• Governmental Programs towards technological
development and innovation adoption in the private sector
(specially among SMEs)
– PAC: Program of Acceleration of Growth
– PROGEX: Program of Technological Support to Exportation
– PITCE: Industrial, Technological Policies & Foreign Commerce
– PROTEC: Brazilian Society Technological Pro-Innovation
– Program for the Development of the national industry of Sw &
related services
– Profarma: production, R,D&I for cies of National control

16 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

ICT Policies & GSC Penetration in Developing Countries

Brazil : Financial support

– Fiscal exemption: Lei do Bem

– Wages: PDTI; PDTA,for R&D&Inovation, and

University/enterprise cooperation: PAPPE, RBT

– Funding: Pró-Inovação (technology for supply chains); Juro

Zero (inovation in SMEs)

– Private Equity and Venture Capital: Inovar, Bovespa Mais,

Forum Brasil

– 16 sectoral funds

17 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

ICT Policies & GSC Penetration in Developing Countries

Brazil : Enhancing Online Services

• ICP-Brasil / PKI
• E-Ping / Interoperability
• FOSS
• SPB / Sistema de Pagamento Brasileiro
• SISCOMEX – Sistema Integrado de Comercio Exterior + Export Fácil Web
• Sinmetro & ABNT (Certification) procedures via WEb
• NF-e : Nota Fiscal Eletrônica
• Procomex: customs modernization
• BraziltradeNet
• Business Telecenters into SMEs Clusters

18 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

ICT Policies & GSC Penetration in Developing Countries

General Assessment
Still remaining obstacles Assets

• Red tape and high taxation • High potencial local market

• Security concerns
• New multinationals emerging from
• Informal economy not integrated, micro
enterprises still lacking in everything the developing countries
• Connectivity in remote rural areas • New business areas: biotech,
• Underdeveloped transportation energy, environment, etc. in
infrastructure traditional sectors empowered by
• Lack of a “go abroad” culture ICTs
• Latin America: distinct trading groups, • Successful associative initiatives
not a single trading block
• More emphasis on import substitution
than international market integration
• Segmented efforts

19 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

 ICT Policies & GSC Penetration in Developing Countries

How is Brazil in the picture ?

Head Goods Services
Embraer
Grandene
Petrobras Pão de Açucar
Local

Petrobras
CSN SMEs
Clusters Mendes Junior
SADIA

Automotive Tata
Remote

PIM-Manaus
(Assembling electronics) Telmex
Monsanto (soy) Telefônica
Unilever (food) Walmart

20 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

ICT Policies & GSC Penetration in Developing Countries

Role of International Organizations

• Situation analysis and strategy definition for e-trade

practices

• International standards and norms

• Research and information exchange with other

regions

• Capacity building at all levels

21 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

ICT Policies & GSC Penetration in Developing Countries

Is the World Flat ?

“Globalization has bound people, countries, markets closer than ever,
rendering national borders relics of a bygone era – or so we’re told”
“[But] In fact, more than 90% of all phone calls, web traffic, and
investment is local”
“Why the world isn’t Flat”- Pankaj Ghemawat, Harvard Business School
Foreign Policy, March-april 2007 pp.54-60

“Obviously, the world is not yet flat. ….This is about trend lines and a
scale of change brought on by these “flattening” new technologies.
Answer from Thomas L. Friedman – “The World is Flat” author
Foreign policy, May-June 2007 p.4 - Letters

22 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

ICT Policies & GSC Penetration in Developing Countries

THANK YOU !

claudine@netune.com.br

Rio de Janeiro, Brazil

Tel/Fax: +55 21 2511-3129
www.netune.com.br

23 | Claudine Bichara de Oliveira | neTune Ltd, Brazil