ICT Policies & Global Supply Chain Penetration in Developing Countries

1. 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)

2. 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 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

3. 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 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

4. Competitiveness based on cost reduction through: Just-in-time manufacturing Cost of labour in developing countries Suppliers Manufacturers Distributors Retailers Consumers s Competition between chains Source VOLLMANN, T.E., CORDON,C. Making supply chain relationships work . M2000 Business : Briefing, n.8, Lausanne , IMD, 1996. GSC: How it Works? | Claudine Bichara de Oliveira | neTune Ltd, Brazil

5. Attractive Factors to FDI 83% Market Share 54% Political Stability 52% Legal Environment 43% Macro-Economic Stability 41% Presence of Competitors 30% Quality of Infrastructure 29% Profit Repatriation 28% HR Cost & quality 23% Local Government Support 23% Source: A. T. KEARNEY Access to export market | Claudine Bichara de Oliveira | neTune Ltd, Brazil

6. For TNCs Management Real time data sharing Delivery Delays High demand on technology Infrastructure For SMEs Economic Globalisation /New Markets and Competitors New Products and Services Speed of Change Exponential Multiplication of Information Production Capability Global Competition Challenges ICT: Key Ingredient to Enhance Competitiveness | Claudine Bichara de Oliveira | neTune Ltd, Brazil

7. 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 • Consumer rights • Intellectual property • Self-regulation • Telecommunications • Security (payment, delivery…) • Electronic contracts and signatures • Internet crimes | Claudine Bichara de Oliveira | neTune Ltd, Brazil

8. 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 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

9. ICT Trend - Example • RFID - Radio Frequency Identification Technologyfor 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 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

10. Infrastructure: Transport, Warehousing, Logistics Regional/Int’l Trade Agreements Free Trade Zone Tax incentives Financial system; Royalty remittances & loans Venture Capital and funds Public Private partnership SMEs competitiveness HR: Development of capabilities & educational system Entrepreneurship and entrepreneurial culture Simplification of bureaucracy Intelectual property, Trademarks Industrial Clustering International Standards adoption Arbitration system adoption Business Environment Policies | Claudine Bichara de Oliveira | neTune Ltd, Brazil

11. Telecom privatisation National Strategy for ICT & Development Technology clusters FOSS E-Gov Policies: online services & e-procurement Skill development Public Awareness Technical support training High level IT education E-Business enabling environment PKI: data protection, digital signatures & certification Interoperability of PKI oper. Acceptance of digital transactions Business data online validation & verification Transport & logistics E-payment Customs automation Self regulation for high quality of online services ICT Related Practices and Policies | Claudine Bichara de Oliveira | neTune Ltd, Brazil

12. 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 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

13. 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 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

14. 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 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

15. What is Brazil doing ? | Claudine Bichara de Oliveira | neTune Ltd, Brazil

16. 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 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

17. 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 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

18. 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 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

19. Red tape and high taxation Security concerns Informal economy not integrated, micro enterprises still lacking in everything Connectivity in remote rural areas Underdeveloped transportation infrastructure Lack of a “go abroad” culture Latin America: distinct trading groups, not a single trading block More emphasis on import substitution than international market integration Segmented efforts High potencial local market New multinationals emerging from the developing countries New business areas: biotech, energy, environment, etc. in traditional sectors empowered by ICTs Successful associative initiatives General Assessment Assets Still remaining obstacles | Claudine Bichara de Oliveira | neTune Ltd, Brazil

20. How is Brazil in the picture ? Tata Embraer Automotive Pão de Açucar Services Head Goods Grandene Petrobras Local Petrobras CSN SMEs Clusters Mendes Junior SADIA Remote PIM-Manaus(Assembling electronics) Telmex Monsanto (soy) Telefônica Walmart Unilever (food) | Claudine Bichara de Oliveira | neTune Ltd, Brazil

21. 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 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

22. 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 SchoolForeign 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 | Claudine Bichara de Oliveira | neTune Ltd, Brazil

23. THANK YOU ! claudine@netune.com.br Rio de Janeiro, Brazil Tel/Fax: +55 21 2511-3129 www.netune.com.br | Claudine Bichara de Oliveira | neTune Ltd, Brazil