E-business and manufacturing sector: a study of small and medium-sized enterprises in India

It has been argued in the literature that the adoption of Information and Communication Technologies (ICTs) allows a reduction in co-ordination costs and leads to efficient electronic markets (Malone et al., 1987; Lee and Clark, 1997). Several studies in Pohjola (2001) have found significant returns on ICT investments in developing as well as developed countries. A partial survey of literature by Bedi (1999) on role of ICTs in economic development suggests numerous benefits of its adoption. These benefits range from employment, to productivity gains, consumer surplus, and improvement in product quality, etc. In fact several nations started searching for alternatives to paper-based methods of communication and storage of information in the last quarter of the twentieth century. Realizing the potential of ICTs in electronic business (e-business), the United Nations Commission on International Trade Law (UNCITL) adopted a Model Law in 1996. The UN General Assembly recommended to its members in January 1997 that they give due consideration to this Model Law, when they enact their laws related to e-business. Despite several advantages, the growth of e-business has been dismal particularly in developing countries. The major impediments in the adoption of such technologies have been the validity and authenticity of information. Lack of proper cyber laws could also be held responsible for the slow changeover to e-business.

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