In this paper, we analyse the potential contribution of the Internet and its commercial application to the development process in poor countries. In historical perspective, the Internet has diffused at a far faster rate than earlier generations of communications technology: from 1990 to early 2000, the estimated number of Internet users grew more than tenfold to roughly 300 million, affecting the way in which people communicate with each other, acquire information, learn, do business, and interact culturally. Our particular focus is on the opportunities e-commerce offers to small-scale entrepreneurs in developing countries and the challenges they face in exploiting e-commerce’s potential.

There is a risk that a “digital divide” will emerge, reinforcing existing income and wealth inequalities within and between countries. Yet, a major potential benefit of globalisation is the freer movement of technology, including information and communication technology (ICT), across borders. In ...