Anthony J. Pennings, PhD

WRITINGS ON DIGITAL ECONOMICS, ENERGY STRATEGIES, AND GLOBAL COMMUNICATIONS

Factors Establishing the Feasibility of Global E-Commerce

Posted on | October 19, 2010 | No Comments

The advent of global e-commerce emerged out of a unique combination of economic, political, and technological circumstances during the 1990s. The following is a partial list of influential events that led to its development.

  • The fall of the Berlin Wall and the Communist USSR bloc meant the world was no longer significantly divided by Cold War antagonisms and a pan-capitalist condition of free flows of information and money began to spread globally.
  • The first Gulf War demonstrated a new found optimism in the US capability to conduct conventional warfare and police “rogue nations” with “smart bombs” and spy satellites, regenerating America’s belief in high technology and the power of the microprocessor.
  • Digital monetarism’s global techno-financial regime, led ideologically by the “Washington Consensus”, continued to discipline countries around the world into modernizing their telecommunications and deregulating their political economies to the global flows of capital and news.
  • The Internet had emerged by first connecting universities and research centers and then opening up to commercial activities with a series of new “killer apps”: email, FTP (File Transfer Protocol) and Gopher.
  • Tim Berners Lee at Europe’s largest nuclear research center proposed a communication system with hypertext features to facilitate communication among scientists that he called with World Wide Web. This became the technical foundation for the “click” dynamics of the Internet.
  • The multimedia browser was invented by a group of university students that allowed users from a wide spectrum of society to “surf” the World Wide Web. They would go on to form Netscape whose Initial Public Offering (IPO) would start a major investment boom in tech companies while the browser would provide the basic platform to conduct e-commerce.
  • The FCC had made distinctions between voice and data during the 1980s that allowed users to log long periods of Internet surfing without paying exorbitant phone bills, although it meant using the relatively slow 28.8 kbps and 56kbps modems of the time.
  • A new proactive Democratic government in the US pushed forward new domestic telecommunications legislation in 1996 that spurred widespread interest in the sector while its global activism helped solidify support for a the “global information infrastructure” (GII).
  • The World Trade Organization (WTO) was formed in 1995 and resulted in two quick agreements that liberalized telecommunications and sales of information technologies as 60 nation-states agreed to open up their markets.
  • Capital markets became enthused about the “tech stocks” and poured money into the notorious “dot-com” and other companies involved in the “new economy” of Internet-based electronic commerce including telecommunications. Financial destabilization increased investment rush to the US as financial shocks in the world financial system resulted in money from Asia and other distressed economies finding “safe haven” in the American stock markets.
  • IT and particularly the Internet became a “media event” in itself as television, magazines, newspapers, websites, and particularly the new business channels such as Bloomberg, CNBC, and CNNfn constantly reported on the potential of the “new economy”.
  • Search engines made the information on the web much more accessible and began to offer more sophisticated, yet easy to use methods for advertising.
  • Software concerns over the new millennium sparked major interest and purchases of new computer systems in order to avoid computer system failure on January 1st, 2000. As businesses gave up their legacy systems they looked to integrate new systems that did more than provide “back-office” capabilities. IT was seen to be able to interface more directly with sales and customer services.

Of course, this list is incomplete, but it’s a start at examining one of the most important trends in human commerce and the future of the web.

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AnthonybwAnthony J. Pennings, PhD is the Professor of Global Media at Hannam University in South Korea. Previously, he taught at St. Edwards University in Austin, Texas and was on the faculty of New York University from 2002-2012. He also taught at Victoria University in Wellington, New Zealand and was a Fellow at the East-West Center in Hawaii in the 1990s.

Category: geopolitical risk, global communications, global e-commerce
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    Professor at State University of New York (SUNY) Korea since 2016. Moved to Austin, Texas in August 2012 to join the Digital Media Management program at St. Edwards University. Spent the previous decade on the faculty at New York University teaching and researching information systems, digital economics, and strategic communications.

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