Kenneth L. Kraemer and Jason Dedrick’s “Globalization,
the Internet and E-Business: Convergence or Divergence in
Cross-Country Trends?” appears as a chapter in Internet
and Digital Economics, a new book edited by Eric Brousseau
and Nicolas Curien (Cambridge University Press, 2007). The
chapters in the book provide the reader with an in-depth understanding
of the economics of digital networks, the growth of digital
industries and current trends in their development, and outlines
new ways of thinking about the phenomena underlying the information
revolution. Below is a summary of the Kraemer and Dedrick
chapter.
 Globalization
has become the subject of heated debate in recent years, as
economic integration has been credited for economic miracles,
blamed for financial crises, and charged with threatening
social and economic institutions. At the heart of the debate
is the question of whether all countries tend toward a common
way of producing and organizing economic life resulting in
social and cultural homogenization, or whether national diversity
can be maintained in the face of globalization.
The debate over globalization is being intensified by
the spread of the Internet and electronic business (e-business),
linking organizations and individuals around the world with
little regard for national boundaries. There is great excitement
about the Internet’s potential for removing geographical
obstacles to economic growth and global integration in developing
as well as industrialized countries. On the other hand, there
is concern in many countries that the Internet will be a tool
of American economic hegemony, a long-held fear of many opponents
of globalization.
The chapter reports on research from the Globalization
of E-Commerce project. It finds that e-business has been driven
by a combination of broad global forces tempered by national
environments and firm-level business imperatives. Adoption
has been quite rapid in developed countries, while the more
globally oriented sectors in developing countries have been
quick to follow. The technology has been used more for coordination
than for transactions, but transaction volumes have been growing
steadily. The impacts of e-business so far have been more
incremental than revolutionary. The impact has been to support,
rather than transform, existing patterns of business activity,
and to reinforce the advantages of more global firms, particularly
in B2B commerce, while allowing local firms greater opportunities
in the B2C domain. The research team reminds us that commercial
use of the Internet is less than a decade old and we may be
seeing just the beginning of the types of transformations
that will be apparent in coming years.
The research is part of the Globalization and E-Commerce
Project of CRITO, and is supported by a grant from the National
Science Foundation under grant #0085852 (CISE/IIS/DST).
(CRITO Research Spotlight, July 2007)
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