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E-Commerce Technologies Dissemination in Russia




E-commerce technologies dissemination should be considered as a tool to lower transaction costs and raise the competitiveness of Russian economy which is crucial for its long-term growth. Specific obstacles to successful dissemination are: in B2C sector - low density of Internet users; in B2B - lack of motivation, market monopolization and corruption. Primary difficulties for both sectors: telecommunication bandwidth and the obsolete taxation system. Key driving forces are: e-commerce technology transfer as a part of foreign investments and local e-commerce ventures. The latter requires a modern stock market infrastructure to be formed.

At the same time, the vast majority of Russian companies are having difficulties in adjusting to the terms of the New Economy, mainly in adapting their culture to a faster pace and understanding the advantages of the new technologies. Nevertheless, according to our estimates, the E-commerce dissemination in Russia is accelerating because it's entered only its initial stage and is currently far away from maturing and even a steady growth phase. Since the dissemination has a strong technical background and cannot be voluntary stopped, this process should be considered as a key driving force in forming free market institutions in Russia and its integration into global marketplace.

The government with a help of international organizations should build adequate market institutions preventing price fixing and abuse of dominant market position. It would significantly promote B2B, lower transaction costs, increase competitiveness and accelerate economic growth. The key regulation issue is the obsolete taxation system. Local Internet start-ups need technology transfer and investments that can be facilitated by foreign venture funds along with international financial institutions.