The OECD has been a pioneer in addressing the issue of the digital economy in the industrialised countries. Naturally then should the Development Centre assess the scope for e-commerce in developing countries, while avoiding both technological pessimism (seeing an inevitably widening “digital divide”) and exaggerated claims about the Internet's potential to resolve a host of development problems.

The novelty of the Internet means that there is little historical evidence on which to venture projections of future trends, even in the OECD countries. A year is very long in Internet time. E-commerce is evolving rapidly, with the corporate landscape being continuously transformed by start-ups, acquisitions, and failures, and with new technologies coming to market almost daily.

Our analysis of its potential in developing countries is guided by a realistic assessment of: i) the prospects and timeframe for improving Internet access and affordability in low-income countries (no Internet, no e-commerce); and ii) the major sources of current and likely future demand for e-commerce transactions and web-based services in developing countries.

The obstacles facing developing country entrepreneurs, whether on world markets or in their domestic markets, include limited information about market opportunities, limited access to financing, and limited capacity to satisfy the quality, cost and logistical requirements of overseas customers. How can the Internet and e-commerce be used to lower if not remove these barriers?