Global and national factors affecting e-commerce diffusion in Singapore

Abstract

This article provides a broad overview of the likely global/regional contextual factors and unique national characteristics that influence e-commerce diffusion in Singapore. Our analysis suggests that Singapore is likely to be a very fast adopter of e-commerce applications that have relatively proven business models in other advanced countries. In particular, advanced manufacturing clusters in Singapore with strong global supply chain links to advanced countries (especially electronics), logistics and transportation services, and other global market-oriented, business-to-business (B2B) industries are likely to be the most aggressive in adopting e-commerce applications. In contrast, we predict that Singapore will be less likely to innovate new e-commerce technologies or pioneer revolutionary e-commerce applications with radical global impacts, due to the small local market and the inadequate development of an information and communications technologies (ICT) entrepreneurial community with extensive network links to Silicon Valley and other entrepreneurial hot spots. Singapore is also unlikely to be a leader in large-scale business-to-consumer (B2C) e-commerce applications and mass consumer contents publishing. Our review of government policy initiatives to promote e-commerce suggests that although they are by and large in the right direction, they are unlikely to have significant impact until proven e-commerce models have emerged and competitive pressure start to be felt by companies. A possible exception is "e-government" applications. In contrast, we identify a number of areas where government policy initiatives have been a bit slow, notably in liberalizing the telecommunications services sector and in promoting technology entrepreneurship. Our review of the available empirical evidence on recent e-commerce diffusion trend and pattern in Singapore appears to be consistent with this analysis.