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'Open source software key to export growth'

BS Economy Bureau in New Delhi

An international report on e-commerce trends has said the continued high growth rate of information technology (IT) exports of developing countries will depend on the adoption of open source software products like the Linux operating system.

The E-Commerce and Development Report 2002 by the United Nations Conference on Trade and Development says while products like semi-conductors and electronic data processing now represent a larger share of the exports of developing nations than traditional products, the share of "commoditised products", which have low value addition, is still higher.

The report says India's IT services exports, especially software and business process outsourcing (call centres), currently account for more than 16 per cent of its exports and 8 per cent of its foreign exchange earnings.

However, the report says business-to-business services are a better prospect for e-commerce than business-to-customer services.

The lack of physical infrastructure is a major constraint for the development of e-commerce, it says, adding that the Indian market at $300 million is half of that of China in 2002.

According to the report, B2B volumes are concentrated in the automotive, banking and financial sectors because Internet users in the country are concerned about online security and, therefore, do little shopping online.

The country has the potential to record annual e-commerce sales of around $10 billion through its IT-enabled services, it says, adding that BPO, which has emerged as the new buzzword in the country, is heavily dependent on the US market.

The report says non-proprietary software, which are now used in 30 per cent of the active website servers, are an ideal match for hardware developing countries.

It says that given the level of hardware production in developing countries, which are mostly PC-based, such software can help the countries capitalise on their strength.

The report says that IT multinationals outsourcing part of their investments to developing countries can contribute to the latter's e-business activity.

It says the result of a survey carried out among leading multinationals show that they have gone in for greenfield projects with a long-term objective.

The report also says that governments need to deepen the linkage between multinationals and local firms by strengthening the enforcement of contracts, developing IT competencies of local firms and improving telecommunications infrastructure.

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