A professor at The University of Texas-Pan American has developed an index showing the potential for doing Internet business in 20 Latin American countries, including Mexico.
Dr. Michael Minor, marketing and international business professor, developed the Index of Latin American E-Commerce Potential with help from graduate student Alexandra Brandt. The index quantifies the indicators for each country that should contribute to the ability to integrate easily into e-commerce.
“An index of e-commerce potential needs to include both indicators of readiness to engage in e-commerce and indicators of the state of the overall economy,” said Minor, also director of the University’s PhD program in International Business. “After all, e-commerce doesn’t exist in a vacuum. If the economy is good in a general sense, that sets the stage.”
Two indicators of the overall economy – market size and market growth rate – were developed to indicate both the overall size of the economy and the vector of growth. These measures indicate the framework within which the Latin American digital economy will operate.
According to Minor, the country-by-country potential for expansion of the digital economy depends on a combination of computer infrastructure and communications infrastructure. He also suggests and uses mobile telephone density as an indicator of a particular country’s potential to rapidly expand communications.
Based on the index, Chile has the greatest potential, followed by Brazil and Mexico.
The E-Commerce Potential Index is part of a larger Index of Market Potential in Latin America. Minor began work on both indexes after noticing businesses use geographical proximity as the basis of developing interests in doing business with foreign countries.
The E-Commerce Potential Index, complete with an explanation of the development process, is available at www.baclass.panam.edu/mercado/papers/ecomm.htm. The Index of Market Potential will be added soon, and both indexes will be updated annually.
“I want businesses to feel free to use this information in making international business decisions” Minor said.