Research Note : Modern Commerce, Modern Banking and E-Commerce

The aim of this paper is to use historical insights from modern commerce as entry points to examine the macro-level phenomena associated with electronic commerce. Commerce in its modern form first appeared in early 13th century Italy where conducive political conditions existed. Trade facilitated the exchange of goods, thereby enhancing the efficiency of processes between production and consumption. Even more important was its role in raising the level of human capital, promoting the spread of ideas and information, changing people's attitudes and behaviour. Some modern business practices and institutions which evolved with modern commerce are bookkeeping, modern banking, commodities market, putting out systems (or outsourcing as we know it now), insurance, stock exchange, and venture capital. The current historical context favorable to e-commerce is globalization. The emergence of network organizations helped to establish some of the practices supporting business-to-business electronic commerce. E-commerce holds the potential to reduce time and transaction costs. However, the historical perspective suggests that the most profound implications of e-commerce are likely to be at the macro-level or socio-institutional level. Some implications can already be seen while others are still developing. We are witnessing the impacts of e-commerce on older business practices, and business models while there are likely implications for business cycles. Such a perspective can provide pointers for future research. Lessons from history suggest a need to pay due attention to intervention at the socio-institutional level to reap the benefits of this form of commerce