Working Paper
Competing in the Digital Economy?

This paper explores the current state of play and likely future direction of business-to-business electronic commerce in the South African manufacturing sector. The empirical evidence presented draws on 120 firm-level interviews, and 31 personal interviews with industry experts. The research findings highlight the fact that B2B e-commerce is in an inchoate stage of development in the South African manufacturing sector, with sociotechnical factors and contemporary market dynamics heavily influencing its evolutionary trajectory. Overly optimistic and technicist approaches to e-commerce do not take into account the real world of global trade and production networks and the position of South African manufacturing firms within it. The paper concludes that e-commerce development in the South African manufacturing sector is likely to be a cumulative, incremental and path-dependent process, that takes the form of the steady accumulation of tacit capability, rather than a sequence of discrete acts of technology building. Note that in the context of this paper, ‘digital economy’ refers to economic transactions and economic functions that are governed and executed digitally, i.e. through the convergence of digital computing and telecommunications.