Incompatible computer systems and the high costs of developing and maintaining systems are fast becoming the primary bottlenecks in the growth of e-commerce in the country.
This was according to a discussion paper, titled “Determinants of E-Commerce Adoption of Philippine Businesses,” authored by Philippine Institute for Development Studies (Pids) Senior Research Fellow Francis Mark A. Quimba and Research Analyst II Sylwyn C. Calizo Jr.
The study stated that poor Internet connection, existing business models, and concerns about security and privacy remain the top bottlenecks but incompatible computer systems between customers and suppliers, as well as expensive efforts to develop and maintain systems are making the growth of e-commerce difficult.
“Two bottlenecks experienced the highest increase of 2.5 percentage points from 2013 to 2015. These two are the incompatibility of computer systems between customers and suppliers, and the high cost associated with the development and/or maintenance of an e-commerce system,” the authors said.
Based on the study, archaic business models remained the top bottleneck with 18.6 percent in 2015, from 17.8 percent in 2013; while concerns about security and privacy came in second with 17 percent in 2015, from 14.9 percent in 2013.
Unreliable Internet connection came in third with 15.1 percent in 2015, from 13.1 percent in 2013. The authors, said, the rankings of these three bottlenecks have been unchanged since 2013.
In the case of incompatible computer systems, there was an increase to 10.3 percent in 2015 from 7.8 percent in 2013. For developing and maintaining systems, the increase was 13.6 percent in 2015 from 11.1 percent in 2013.
With these bottlenecks fast on the rise, the study recommended that government agencies should support micro, small and medium enterprises’ (MSMEs) e-commerce adoption by specifically targeting support for them.
This can also mean extended help, through government agencies, in assisting firms in adopting ICT in their business operations, as well as providing them access to technology.
This can be done by giving them financing to “invest in [the] physical capital needed to support their adoption of e-commerce.”
Further, the PIDS study recommended the reduction of the cost and improvement of the quality of Internet services is necessary for establishments to adopt e-commerce, particularly for MSMEs.