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This Page Covers
Commerce
in all of its forms


CommercePictured below: Why Amazon Should Worry About Walmart’s Site Redesign*
* -- ​Why Amazon Should Worry About Walmart’s Site Redesign

WalmartWMT +0.3% unveiled its redesigned website and app, which immediately drew comparisons to AmazonAMZN +3.5%.com.

Tom Ward, chief e-commerce officer at Walmart U.S., wrote on a company blog last week that the retailer has made “hundreds of enhancements” over the past year to improve the shopping experience for the chain’s customers.

Walmart’s new homepage features bigger photos, live video and a “social-inspired scroll so customers can browse our selection just as they’d scroll their favorite social media apps,” Ward wrote.

“These changes, in conjunction with the Walmart Creator platform, will improve product discovery and take steps out of the purchase process,” wrote Patricia Vekich Waldron, CEO of Vision First, in an online discussion about the redesign last week on RetailWire. “It will absolutely improve the experience for existing core and casual customers, and potentially offer an alternative to dissatisfied Amazon shoppers.”

Some of Ms. Waldron’s fellow members of the RetailWire BrainTrust were likewise convinced that a solid redesign stands to make Walmart more formidable in e-commerce against the incumbent e-tail juggernaut in a number of different ways.
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“The new website and app will make consumers take the Walmart Marketplace more seriously as an alternative to, or an augmentation of, the Amazon Marketplace,” wrote David Naumann, marketing strategy lead, retail, travel & distribution at Verizon. “Walmart has aggressively added more sellers to its marketplace and now with a better user experience, it is a strong rival for Amazon.”

​The newly redesigned website is intended to make it easier for customers to find the products they need and want from Walmart and its growing network of marketplace sellers. The redesign will also benefit suppliers and third-party sellers with “new opportunities to showcase more relevant products and better tell their stories,” according to Ward.

A Fast Company article said that Walmart’s redesign comes when some Amazon customers may feel disaffected by increases in Prime subscription fees and grocery delivery charges. Walmart also offers product search results that are not cluttered with a long list of sponsored products at the top.

An article on The Verge also claims that Walmart has an opportunity to grab disgruntled customers from Amazon. Walmart.com’s new look, it asserts, offers shoppers more access to products connected to the current season and upcoming holidays or events. The report also highlights the site’s search function, which “yields several rows of products matching your search that you can scroll through horizontally.”

Walmart has been on a multi-year mission to improve its digital operations and create seamless shopping experiences regardless of the point of fulfillment. The chain offers customers the option of express, next-day and two-day delivery as well as in-store and curbside pickup.

By one BrainTrust member’s account, the digital revamp was gaining traction even before the website and app redesigns.

“I downloaded the Walmart app about a year ago when I got frustrated with an Amazon search,” wrote Jeff Sward, founding partner at Merchandising Metrics. “I quickly found the product I was looking for and it was delivered two days later. The ‘out for delivery’ and ‘delivery completed’ emails were timely and accurate.

I have since been drawn into the Walmart universe to buy groceries, tools, storage containers and even a work shirt for chopping firewood. I used to visit Walmart as homework for my retail research. I’m now a shopper and buyer and it’s a direct result of a great website and app experience.”

Others on the BrainTrust, however, held that a redesign should be seen as table stakes, no matter what Amazon is up to.

“More retailers are focusing on making digital experiences discovery-oriented, versus simplistic and mission-driven,” wrote Melissa Minkow, director of retail strategy at C&T. “I think this is a great move for Walmart, but I don’t know that it would be the variable that steals customers from Amazon.”

“The description of Walmart’s website efforts sounds like they are moving in a direction the online customer responds to,” wrote Professor Gene Detroyer. “I hope that is the objective. To suggest that they are doing it to grab disaffected Prime members is inaccurate. Hopefully all the decisions were made to design a better website, as they should be doing regularly–with or without Amazon’s competition.”

[End of Forbes April 13, 2023 Article by George Anderson]
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Commerce
​
Commerce is the large-scale organized system of activities, functions, procedures and institutions that directly or indirectly contribute to the smooth, unhindered distribution and transfer of goods and services on a substantial scale and at the right time, place, quantity, quality and price through various channels from the original producers to the final consumers within local, regional, national or international economies. 

The diversity in the distribution of natural resources, differences of human needs and wants, along with division of labour and comparative advantage are the principal factors that give rise to commercial exchanges.

Commerce consists of trade and aids to trade along the entire supply chain. Trade is the exchange of goods (including raw materials, intermediate and finished goods) and services between buyers and sellers in return for a price at traditional (or online) marketplaces. It is categorized into domestic trade, including retail and wholesale as well as local, regional and inter-regional transactions and foreign trade, encompassing import, export and entrepôt/re-export trades.

Trade also involves the exchange of currencies, commodities and securities in specialized exchange markets. Aids to trade or auxiliary commercial activities facilitate trade and include:
Their purpose is to remove hindrances related to:
The broader framework of commerce incorporates additional elements and factors such as: 
Commerce drives: 
The above:
On the other hand, commerce can worsen economic inequality by concentrating wealth (and power) into the hands of a small number of individuals, and by prioritizing short-term profit over long-term sustainability and ethical, social, and environmental considerations, leading to environmental degradation, labor exploitation and disregard for consumer safety.

Unregulated, it can lead to excessive consumption (generating undesirable waste) and unsustainable exploitation of nature (causing resource depletion). Harnessing commerce's benefits for the society while mitigating its drawbacks remains vital for policymakers, businesses and other stakeholders.

Commerce traces its origins to ancient localized barter systems, leading to the establishment of periodic marketplaces, and culminating in the development of currencies for efficient trade. In medieval times, trade routes (like the Silk Road) with pivotal commercial hubs (like Venice) connected regions and continents, enabling long-distance trade and cultural exchange.

From the 15th to the early 20th century, European colonial powers dominated global commerce on an unprecedented scale. In the 19th century, modern banking and stock exchanges along with the industrial revolution fundamentally reshaped commerce.

In the post-colonial 20th century, free market principles gained ground, multinational corporations and consumer economies thrived in U.S.-led capitalist countries and free trade agreements (like GATT and WTO) emerged, whereas communist economies encountered trade restrictions, limiting consumer choice.

Notably, developing countries saw their share in world trade rise from a quarter to a third by the century's end. 21st century commerce is increasingly technology-driven (see e-commerce), globalized, intricately regulated, ethically responsible and sustainability-focused, with multilateral economic integrations (like the European Union and BRICS) leading to its reconfiguration.


Etymology:

The English-language word commerce has been derived from the Latin word commercium, from com ("together") and merx ("merchandise").


Relation to business and trade:

Commerce is distinguishable from business and trade.

Commerce is not business (i.e. an organization or activity whose goal is to sell manufactured goods and/or services for profit), but rather the aspect of business related to the movement and distribution of finished or intermediate (but valuable) goods and services from the primary manufacturers to the end customers on a large scale, as opposed to the sourcing of raw materials and manufacturing of those goods.

Commerce is different from trade as well. Trade is the transaction (buying and selling) of goods and services that makes a profit for the seller and satisfies the want or need of the buyer. When trade is carried out within a country, it is called home or domestic trade, which can be wholesale or retail.

A wholesaler buys from the producer in bulk and sells to the retailer who then sells again to the final consumer in smaller quantities. Trade between a country and the rest of the world is called foreign or international trade, which consists of import trade and export trade, both being wholesale in general.

Commerce not only includes trade as defined above, but also the auxiliary services and means that facilitate such trade. Auxiliary services or aids to trade provide services that ease the task of producers in possession of certain goods to send those to the target consumers for satisfaction of their needs and wants.
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Such services include: 
In other words, commerce encompasses a wide array of political, economical, technological, logistical, legal, regulatory, social and cultural aspects of trade on a large scale. From a marketing perspective, commerce creates time and place utility by making goods and services available to the customers at the right place and at the right time by changing their location or placement.

Described in this manner, trade is a part of commerce and commerce is an aspect of business.


History
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Historian Peter Watson and Ramesh Manickam date the history of long-distance commerce from circa 150,000 years ago. In historic times, the introduction of currency as a standardized money facilitated the exchange of goods and services.

Commerce was a costly endeavor in the antiquities because of the risky nature of transportation, which restricted it to local markets. Commerce then expanded along with the improvement of transportation systems over time.

In the Middle Ages, long-distance and large-scale commerce was still limited within continents. Banking systems developed in medieval Europe, facilitating financial transactions across national boundaries. 

Markets became a feature of town life, and were regulated by town authorities. With the advent of the age of exploration and oceangoing ships, commerce took an international, trans-continental stature.

Currently the reliability of international trans-oceanic shipping and mailing systems and the facility of the Internet has made commerce possible between cities, regions and countries situated anywhere in the world.

In the 21st century, Internet-based electronic commerce (where financial information is transferred over Internet), and its subcategories such as wireless mobile commerce and social network-based social commerce have been and continue to get adopted widely.


Regulation:

Legislative bodies and ministries or ministerial departments of commerce regulate, promote and manage domestic and foreign commercial activities within a country. International commerce can be regulated by bilateral treaties between countries.

After the second world war and the rise of free trade among nations, multilateral arrangements such as the GATT and later the World Trade Organization became the principal systems regulating global commerce. The International Chamber of Commerce (ICC) is another important organization which sets rules and resolves disputes in international commerce.

See also:







E-commerce including E-Commerce Payment Systems Pictures Below:
TOP: Ultimate 122 Future eCommerce Business Ideas That Would Work From 2023 and Beyond;
​BOTTOM: Pros and Cons of Running an eCommerce Business*
* -- BOTTOM Picture: Ultimate 122 Future eCommerce Business Ideas That Would Work From 2023 and Beyond:

Thinking of kicking off your eCommerce business? First, consider evaluating the pros and cons of starting this particular journey. In this competitive online business world, marking your strong presence requires great effort.

You should know that E-Commerce is constantly evolving hence keeping up with every development is necessary for you. This approach helps you to stand out with your startup in the world of E-Commerce.

Evaluating the pros and cons of an E-Commerce business from your perspective is essential for you. In addition, it helps you to know whether you should kick off an E-Commerce business or not.

This write-up is worth reading for you as it manifests some significant pros and cons of running an E-Commerce business. Below are those pros and cons, so you should make sure that you look at them thoroughly.

Pros: 
  • Kicking off an E-Commerce business does not require you to have a physical store, and it is the biggest advantage which saves you a huge amount of money. To do a traditional business, you need to select an ideal location for your store, but you do not go this way in E-Commerce.
  • In E-Commerce, you get a chance to have access to a bigger market. You have an opportunity to make your business famous internationally. Reaching your target audience in the E-Commerce world is also very easy, and you have customers from every part of the world. A precise online marketing strategy can take your E-Commerce business to the next high level and make it popular internationally.
  • Your online store is open 24/7, and people make purchases whenever they want. So waiting until the following day to visit any traditional store to buy anything is no more practice. You should know that an online store provides convenience to today’s customers; hence, coming up with online stores is increasing.
  • You do not need to have a huge staff to run your online store, and it is another great attribute of an E-Commerce business. Remember that most procedures get automated, and all you need to do is supervise everything. Hiring less staff also saves you huge money which you may spend on launching more interesting products for customers.
Cons:
  • Remember that you cannot survive in the online business world. without having strong internet connectivity
  • You need to keep track of your stock, sales, and overall performance of your online store. It is essential; otherwise, you will ruin your experience of running an E-Commerce business.
  • It is also a fact that competition in E-Commerce is high, and you have to deal with dozens of competitors at a time. You should know that customers have countless options, and they do not take the time to move toward your competitors if they do not like your products.
  • In the eCommerce world, establishing a strong and positive relationship with customers is not easy ts you do not meet them face to face. However, keep in mind that you are nameless and faceless on the internet, and it comes in your way to have a strong relationship with your customers.
  • Making a high-quality website is another daunting task when it comes to E-Commerce. If your website is of low quality, customers will not take the time to move towards other similar websites. You always have to be very attentive to eliminate errors on your website daily to offer the best customer experience. Ensuring that your website is easy to navigate is not an easy task, and it may take a huge time if you go with the wrong approach.

Wrap-Up:
The abovementioned are some major pros and cons of running an E-Commerce website. Ensure that you do not overlook these pros and cons because it is essential to know them if you wish to start a successful E-Commerce business.
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E-Commerce (Wikipedia):

E-commerce (electronic commerce) is the activity of electronically buying or selling of products on online services or over the Internet.

E-commerce draws on technologies such as: 
E-commerce is in turn driven by the technological advances of the semiconductor industry, and is the largest sector of the electronics industry.


Defining e-commerce:

The term was coined and first employed by Robert Jacobson, Principal Consultant to the California State Assembly's Utilities & Commerce Committee, in the title and text of California's Electronic Commerce Act, carried by the late Committee Chairwoman Gwen Moore (D-L.A.) and enacted in 1984.

E-commerce typically uses the web for at least a part of a transaction's life cycle although it may also use other technologies such as e-mail.

Typical e-commerce transactions include the purchase of products (such as books from Amazon) or services (such as music downloads in the form of digital distribution such as the iTunes Store). 

There are three areas of e-commerce: 
  1. online retailing, 
  2. electronic markets,
  3. and online auctions.

E-commerce is supported by electronic business. The existence value of e-commerce is to allow consumers to shop online and pay online through the Internet, saving the time and space of customers and enterprises, greatly improving transaction efficiency, especially for busy office workers, and also saving a lot of valuable time.

E-commerce businesses may also employ some or all of the following:
There are five essential categories of E-commerce:
  • Business to Business (B2B)
  • Business to Consumer (B2C)
  • Business to Government (B2G)
  • Consumer to Business (C2B)
  • Consumer to Consumer (C2C)


Forms of E-Commerce:

Contemporary electronic commerce can be classified into two categories:

The first category is business based on types of goods sold (involves everything from ordering "digital" content for immediate online consumption, to ordering conventional goods and services, to "meta" services to facilitate other types of electronic commerce).

The second category is based on the nature of the participant (B2B, B2C, C2B and C2C).

On the institutional level, big corporations and financial institutions use the internet to exchange financial data to facilitate domestic and international business. Data integrity and security are pressing issues for electronic commerce.

Aside from traditional e-commerce, the terms m-Commerce (mobile commerce) as well (around 2013) t-Commerce have also been used.


Governmental regulation:

In the United States, California's Electronic Commerce Act (1984), enacted by the Legislature, the more recent California Privacy Rights Act (2020), enacted through a popular election proposition and to control specifically how electronic commerce may be conducted in California.

In the US in its entirety, electronic commerce activities are regulated more broadly by the Federal Trade Commission (FTC). These activities include the use of commercial e-mails, online advertising and consumer privacy. The CAN-SPAM Act of 2003 establishes national standards for direct marketing over e-mail.

The Federal Trade Commission Act regulates all forms of advertising, including online advertising, and states that advertising must be truthful and non-deceptive. Using its authority under Section 5 of the FTC Act, which prohibits unfair or deceptive practices, the FTC has brought a number of cases to enforce the promises in corporate privacy statements, including promises about the security of consumers' personal information. 

As a result, any corporate privacy policy related to e-commerce activity may be subject to enforcement by the FTC.

The Ryan Haight Online Pharmacy Consumer Protection Act of 2008, which came into law in 2008, amends the Controlled Substances Act to address online pharmacies.

Conflict of laws in cyberspace is a major hurdle for harmonization of legal framework for e-commerce around the world. In order to give a uniformity to e-commerce law around the world, many countries adopted the UNCITRAL Model Law on Electronic Commerce (1996).

Internationally there is the International Consumer Protection and Enforcement Network (ICPEN), which was formed in 1991 from an informal network of government customer fair trade organisations. The purpose was stated as being to find ways of co-operating on tackling consumer problems connected with cross-border transactions in both goods and services, and to help ensure exchanges of information among the participants for mutual benefit and understanding.

From this came Econsumer.gov, an ICPEN initiative since April 2001. It is a portal to report complaints about online and related transactions with foreign companies.

There is also Asia Pacific Economic Cooperation. APEC was established in 1989 with the vision of achieving stability, security and prosperity for the region through free and open trade and investment. APEC has an Electronic Commerce Steering Group as well as working on common privacy regulations throughout the APEC region.

In Australia, trade is covered under Australian Treasury Guidelines for electronic commerce and the Australian Competition & Consumer Commission regulates and offers advice on how to deal with businesses online, and offers specific advice on what happens if things go wrong.

The European Union undertook an extensive enquiry into e-commerce in 2015-16 which observed significant growth in the development of e-commerce, along with some developments which raised concerns, such as increased use of selective distribution systems, which allow manufacturers to control routes to market, and "increased use of contractual restrictions to better control product distribution".

The European Commission felt that some emerging practices might be justified if they could improve the quality of product distribution, but "others may unduly prevent consumers from benefiting from greater product choice and lower prices in e-commerce and therefore warrant Commission action" in order to promote compliance with EU competition rules.

In the United Kingdom, the Financial Services Authority (FSA) was formerly the regulating authority for most aspects of the EU's Payment Services Directive (PSD), until its replacement in 2013 by the Prudential Regulation Authority and the Financial Conduct Authority. 

The UK implemented the PSD through the Payment Services Regulations 2009 (PSRs), which came into effect on 1 November 2009. The PSR affects firms providing payment services and their customers. These firms include banks, non-bank credit card issuers and non-bank merchant acquirers, e-money issuers, etc. The PSRs created a new class of regulated firms known as payment institutions (PIs), who are subject to prudential requirements. Article 87 of the PSD requires the European Commission to report on the implementation and impact of the PSD by 1 November 2012.

In India, the Information Technology Act 2000 governs the basic applicability of e-commerce.

In China, the Telecommunications Regulations of the People's Republic of China (promulgated on 25 September 2000), stipulated the Ministry of Industry and Information Technology (MIIT) as the government department regulating all telecommunications related activities, including electronic commerce. 

On the same day, the Administrative Measures on Internet Information Services were released, the first administrative regulations to address profit-generating activities conducted through the Internet, and lay the foundation for future regulations governing e-commerce in China. 

On 28 August 2004, the eleventh session of the tenth NPC Standing Committee adopted an Electronic Signature Law, which regulates data message, electronic signature authentication and legal liability issues. It is considered the first law in China's e-commerce legislation. It was a milestone in the course of improving China's electronic commerce legislation, and also marks the entering of China's rapid development stage for electronic commerce legislation.


Global trends:

In 2010, the United Kingdom had the highest per capita e-commerce spending in the world. As of 2013, the Czech Republic was the European country where e-commerce delivers the biggest contribution to the enterprises' total revenue. Almost a quarter (24%) of the country's total turnover is generated via the online channel.

Among emerging economies, China's e-commerce presence continues to expand every year. With 668 million Internet users, China's online shopping sales reached $253 billion in the first half of 2015, accounting for 10% of total Chinese consumer retail sales in that period. 

The Chinese retailers have been able to help consumers feel more comfortable shopping online. e-commerce transactions between China and other countries increased 32% to 2.3 trillion yuan ($375.8 billion) in 2012 and accounted for 9.6% of China's total international trade. In 2013, Alibaba had an e-commerce market share of 80% in China. 

In 2014, Alibaba still dominated the B2B marketplace in China with a market share of 44.82%, followed by several other companies including Made-in-China.com at 3.21%, and GlobalSources.com at 2.98%, with the total transaction value of China's B2B market exceeding 4.5 billion yuan.

In 2014, there were 600 million Internet users in China (twice as many as in the US), making it the world's biggest online market. China is also the largest e-commerce market in the world by value of sales, with an estimated US$899 billion in 2016. 

Research shows that Chinese consumer motivations are different enough from Western audiences to require unique e-commerce app designs instead of simply porting Western apps into the Chinese market.

Recent research indicates that electronic commerce, commonly referred to as e-commerce, presently shapes the manner in which people shop for products. The GCC countries have a rapidly growing market and are characterized by a population that becomes wealthier (Yuldashev). As such, retailers have launched Arabic-language websites as a means to target this population.

Secondly, there are predictions of increased mobile purchases and an expanding internet audience (Yuldashev). The growth and development of the two aspects make the GCC countries become larger players in the electronic commerce market with time progress.

Specifically, research shows that the e-commerce market is expected to grow to over $20 billion by 2020 among these GCC countries (Yuldashev). The e-commerce market has also gained much popularity among western countries, and in particular Europe and the U.S.

These countries have been highly characterized by consumer-packaged goods (CPG) (Geisler, 34). However, trends show that there are future signs of a reverse. Similar to the GCC countries, there has been increased purchase of goods and services in online channels rather than offline channels.

Activist investors are trying hard to consolidate and slash their overall cost and the governments in western countries continue to impose more regulation on CPG manufacturers (Geisler, 36). In these senses, CPG investors are being forced to adapt to e-commerce as it is effective as well as a means for them to thrive.

In 2013, Brazil's e-commerce was growing quickly with retail e-commerce sales expected to grow at a double-digit pace through 2014. By 2016, eMarketer expected retail e-commerce sales in Brazil to reach $17.3 billion. India has an Internet user base of about 460 million as of December 2017. 

Despite being the third largest user base in the world, the penetration of the Internet is low compared to markets like the United States, United Kingdom or France but is growing at a much faster rate, adding around 6 million new entrants every month. 

In India, cash on delivery is the most preferred payment method, accumulating 75% of the e-retail activities. The India retail market is expected to rise from 2.5% in 2016 to 5% in 2020.

The future trends in the GCC countries will be similar to that of the western countries.

Despite the forces that push business to adapt e-commerce as a means to sell goods and products, the manner in which customers make purchases is similar in countries from these two regions.

For instance, there has been an increased usage of smartphones which comes in conjunction with an increase in the overall internet audience from the regions. Yuldashev writes that consumers are scaling up to more modern technology that allows for mobile marketing.

However, the percentage of smartphone and internet users who make online purchases is expected to vary in the first few years. It will be independent on the willingness of the people to adopt this new trend (The Statistics Portal).

For example, UAE has the greatest smartphone penetration of 73.8 per cent and has 91.9 per cent of its population has access to the internet. On the other hand, smartphone penetration in Europe has been reported to be at 64.7 per cent (The Statistics Portal).

Regardless, the disparity in percentage between these regions is expected to level out in future because e-commerce technology is expected to grow to allow for more users.

The e-commerce business within these two regions will result in competition. Government bodies at the country level will enhance their measures and strategies to ensure sustainability and consumer protection (Krings, et al.). These increased measures will raise the environmental and social standards in the countries, factors that will determine the success of the e-commerce market in these countries.

For example, an adoption of tough sanctions will make it difficult for companies to enter the e-commerce market while lenient sanctions will allow ease of companies. As such, the future trends between GCC countries and the Western countries will be independent of these sanctions (Krings, et al.). These countries need to make rational conclusions in coming up with effective sanctions.

The rate of growth of the number of internet users in the Arab countries has been rapid – 13.1% in 2015. A significant portion of the e-commerce market in the Middle East comprises people in the 30–34 year age group. Egypt has the largest number of internet users in the region, followed by Saudi Arabia and Morocco; these constitute 3/4th of the region's share.

Yet, internet penetration is low: 35% in Egypt and 65% in Saudi Arabia.
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E-commerce has become an important tool for small and large businesses worldwide, not only to sell to customers, but also to engage them.

Cross-border e-Commerce is also an essential field for e-Commerce businesses.  It has responded to the trend of globalization. It shows that numerous firms have opened up new businesses, expanded new markets, and overcome trade barriers; more and more enterprises have started exploring the cross-border cooperation field.

In addition, compared with traditional cross-border trade, the information on cross-border e-commerce is more concealed. In the era of globalization, cross-border e-commerce for inter-firm companies means the activities, interactions, or social relations of two or more e-commerce enterprises.

However, the success of cross-border e-commerce promotes the development of small and medium-sized firms, and it has finally become a new transaction mode. It has helped the companies solve financial problems and realize the reasonable allocation of resources field. SMEs ( small and medium enterprises) can also precisely match the demand and supply in the market, having the industrial chain majorization and creating more revenues for companies.

In 2012, e-commerce sales topped $1 trillion for the first time in history.

Mobile devices are playing an increasing role in the mix of e-commerce, this is also commonly called mobile commerce, or m-commerce. In 2014, one estimate saw purchases made on mobile devices making up 25% of the market by 2017.

For traditional businesses, one research stated that information technology and cross-border e-commerce is a good opportunity for the rapid development and growth of enterprises.

Many companies have invested an enormous volume of investment in mobile applications. The DeLone and McLean Model stated that three perspectives contribute to a successful e-business: information system quality, service quality and users' satisfaction. 

There is no limit of time and space, there are more opportunities to reach out to customers around the world, and to cut down unnecessary intermediate links, thereby reducing the cost price, and can benefit from one on one large customer data analysis, to achieve a high degree of personal customization strategic plan, in order to fully enhance the core competitiveness of the products in the company.

Modern 3D graphics technologies, such as Facebook 3D Posts, are considered by some social media marketers and advertisers as a preferable way to promote consumer goods than static photos, and some brands like Sony are already paving the way for augmented reality commerce.

Wayfair now lets you inspect a 3D version of its furniture in a home setting before buying.


Logistics:

Logistics in e-commerce mainly concerns fulfillment. Online markets and retailers have to find the best possible way to fill orders and deliver products. Small companies usually control their own logistic operation because they do not have the ability to hire an outside company.

Most large companies hire a fulfillment service that takes care of a company's logistic needs.


Impacts:

Impact on markets and retailers:
​
​E-commerce markets are growing at noticeable rates. The online market is expected to grow by 56% in 2015–2020. In 2017, retail e-commerce sales worldwide amounted to 2.3 trillion US dollars and e-retail revenues are projected to grow to 4.891 trillion US dollars in 2021. 

Traditional markets are only expected 2% growth during the same time. Brick and mortar retailers are struggling because of online retailer's ability to offer lower prices and higher efficiency. Many larger retailers are able to maintain a presence offline and online by linking physical and online offerings.

E-commerce allows customers to overcome geographical barriers and allows them to purchase products anytime and from anywhere. Online and traditional markets have different strategies for conducting business.

Traditional retailers offer fewer assortment of products because of shelf space where, online retailers often hold no inventory but send customer orders directly to the manufacture. The pricing strategies are also different for traditional and online retailers. Traditional retailers base their prices on store traffic and the cost to keep inventory. Online retailers base prices on the speed of delivery.

There are two ways for marketers to conduct business through e-commerce: fully online or online along with a brick and mortar store. Online marketers can offer lower prices, greater product selection, and high efficiency rates.

Many customers prefer online markets if the products can be delivered quickly at relatively low price. However, online retailers cannot offer the physical experience that traditional retailers can. It can be difficult to judge the quality of a product without the physical experience, which may cause customers to experience product or seller uncertainty.

Another issue regarding the online market is concerns about the security of online transactions. Many customers remain loyal to well-known retailers because of this issue.

Security is a primary problem for e-commerce in developed and developing countries. E-commerce security is protecting businesses' websites and customers from unauthorized access, use, alteration, or destruction.

The type of threats include:
E-commerce websites use different tools to avert security threats. These tools include: 
Impact on supply chain management:
Main article: Supply chain management

For a long time, companies had been troubled by the gap between the benefits which supply chain technology has and the solutions to deliver those benefits. However, the emergence of e-commerce has provided a more practical and effective way of delivering the benefits of the new supply chain technologies.

E-commerce has the capability to integrate all inter-company and intra-company functions, meaning that the three flows (physical flow, financial flow and information flow) of the supply chain could be also affected by e-commerce. The affections on physical flows improved the way of product and inventory movement level for companies.

For the information flows, e-commerce optimized the capacity of information processing than companies used to have, and for the financial flows, e-commerce allows companies to have more efficient payment and settlement solutions.

In addition, e-commerce has a more sophisticated level of impact on supply chains:

First, the performance gap will be eliminated since companies can identify gaps between different levels of supply chains by electronic means of solutions;

​Second, as a result of e-commerce emergence, new capabilities such implementing ERP systems, like SAP ERP, Xero, or Megaventory, have helped companies to manage operations with customers and suppliers. Yet these new capabilities are still not fully exploited.

Third, technology companies would keep investing on new e-commerce software solutions as they are expecting investment return.

Fourth, e-commerce would help to solve many aspects of issues that companies may feel difficult to cope with, such as political barriers or cross-country changes.

Finally, e-commerce provides companies a more efficient and effective way to collaborate with each other within the supply chain.

Impact on employment:

E-commerce helps create new job opportunities due to information related services, software app and digital products. It also causes job losses. The areas with the greatest predicted job-loss are retail, postal, and travel agencies.

The development of e-commerce will create jobs that require highly skilled workers to manage large amounts of information, customer demands, and production processes.

In contrast, people with poor technical skills cannot enjoy the wages welfare. On the other hand, because e-commerce requires sufficient stocks that could be delivered to customers in time, the warehouse becomes an important element. Warehouse needs more staff to manage, supervise and organize, thus the condition of warehouse environment will be concerned by employees.

Impact on customers:

E-commerce brings convenience for customers as they do not have to leave home and only need to browse websites online, especially for buying products which are not sold in nearby shops. It could help customers buy a wider range of products and save customers' time.

Consumers also gain power through online shopping. They are able to research products and compare prices among retailers. Thanks to the practice of user-generated ratings and reviews from companies like Bazaarvoice, Trustpilot, and Yelp, customers can also see what other people think of a product, and decide before buying if they want to spend money on it.

Also, online shopping often provides sales promotion or discounts code, thus it is more price effective for customers. Moreover, e-commerce provides products' detailed information; even the in-store staff cannot offer such detailed explanation. Customers can also review and track the order history online.

E-commerce technologies cut transaction costs by allowing both manufactures and consumers to skip through the intermediaries. This is achieved through by extending the search area best price deals and by group purchase. The success of e-commerce in urban and regional levels depend on how the local firms and consumers have adopted to e-commerce.

However, e-commerce lacks human interaction for customers, especially who prefer face-to-face connection. Customers are also concerned with the security of online transactions and tend to remain loyal to well-known retailers.

In recent years, clothing retailers such as Tommy Hilfiger have started adding Virtual Fit platforms to their e-commerce sites to reduce the risk of customers buying the wrong sized clothes, although these vary greatly in their fit for purpose. 

When the customer regret the purchase of a product, it involves returning goods and refunding process. This process is inconvenient as customers need to pack and post the goods. If the products are expensive, large or fragile, it refers to safety issues.

Impact on the environment:

In 2018, E-commerce generated 1.3 million short tons (1.2 megatonnes) of container cardboard in North America, an increase from 1.1 million (1.00)) in 2017. Only 35 percent of North American cardboard manufacturing capacity is from recycled content. The recycling rate in Europe is 80 percent and Asia is 93 percent.

Amazon, the largest user of boxes, has a strategy to cut back on packing material and has reduced packaging material used by 19 percent by weight since 2016. Amazon is requiring retailers to manufacture their product packaging in a way that does not require additional shipping packaging. Amazon also has an 85-person team researching ways to reduce and improve their packaging and shipping materials.

Accelerated movement of packages around the world includes accelerated movement of living things, with all its attendant risks. Weeds, pests, and diseases all sometimes travel in packages of seeds. Some of these packages are part of brushing manipulation of e-commerce reviews.

Impact on traditional retail:

E-commerce has been cited as a major force for the failure of major U.S. retailers in a trend frequently referred to as a retail apocalypse. The rise of e-commerce outlets like Amazon has made it harder for traditional retailers to attract customers to their stores and forced companies to change their sales strategies.

Many companies have turned to sales promotions and increased digital efforts to lure shoppers while shutting down brick-and-mortar locations. The trend has forced some traditional retailers to shutter its brick and mortar operations.


E-commerce during COVID-19:
Further information: Economic impact of the COVID-19 pandemic

In March 2020, global retail website traffic hit 14.3 billion visits signifying an unprecedented growth of e-commerce during the lockdown of 2020. Later studies show that online sales increased by 25% and online grocery shopping increased by over 100% during the crisis in the United States. 

Meanwhile, as many as 29% of surveyed shoppers state that they will never go back to shopping in person again; in the UK, 43% of consumers state that they expect to keep on shopping the same way even after the lockdown is over.

Retail sales of e-commerce shows that COVID-19 has a significant impact on e-commerce and its sales are expected to reach $6.5 trillion by 2023.


Business application
​
Some common applications related to electronic commerce are:

Timeline

A timeline for the development of e-commerce:
  • 1971 or 1972: The ARPANET is used to arrange a cannabis sale between students at the Stanford Artificial Intelligence Laboratory and the Massachusetts Institute of Technology, later described as "the seminal act of e-commerce" in John Markoff's book What the Dormouse Said.
  • 1979: Michael Aldrich demonstrates the first online shopping system.
  • 1981: Thomson Holidays UK is the first business-to-business (B2B) online shopping system to be installed.
  • 1982: Minitel was introduced nationwide in France by France Télécom and used for online ordering.
  • 1983: California State Assembly holds first hearing on "electronic commerce" in Volcano, California. Testifying are CPUC, MCI Mail, Prodigy, CompuServe, Volcano Telephone, and Pacific Telesis. (Not permitted to testify is Quantum Technology, later to become AOL.) California's Electronic Commerce Act was passed in 1984.
  • 1983: Karen Earle Lile (AKA Karen Bean) and Kendall Ross Bean create e-commerce service in San Francisco Bay Area. Buyers and sellers of pianos connect through a database created by Piano Finders on a Kaypro personal computer using DOS interface. Pianos for sale are listed on a Bulletin board system. Buyers print list of pianos for sale by a dot matrix printer. Customer service happened through a Piano Advice Hotline listed in the San Francisco Chronicle classified ads and money transferred by a bank wire transfer when a sale was completed.
  • 1984: Gateshead SIS/Tesco is first B2C online shopping system and Mrs Snowball, 72, is the first online home shopper
  • 1984: In April 1984, CompuServe launches the Electronic Mall in the US and Canada. It is the first comprehensive electronic commerce service.
  • 1989: In May 1989, Sequoia Data Corp. introduced Compumarket, the first internet based system for e-commerce. Sellers and buyers could post items for sale and buyers could search the database and make purchases with a credit card.
  • 1990: Tim Berners-Lee writes the first web browser, WorldWideWeb, using a NeXT computer.
  • 1992: Book Stacks Unlimited in Cleveland opens a commercial sales website (www.books.com) selling books online with credit card processing.
  • 1993: Paget Press releases edition No. 3 of the first app store, The Electronic AppWrapper
  • 1994: Netscape releases the Navigator browser in October under the code name Mozilla. Netscape 1.0 is introduced in late 1994 with SSL encryption that made transactions secure.
  • 1994: Ipswitch IMail Server becomes the first software available online for sale and immediate download via a partnership between Ipswitch, Inc. and OpenMarket.
  • 1994: "Ten Summoner's Tales" by Sting becomes the first secure online purchase through NetMarket.
  • 1995: The US National Science Foundation lifts its former strict prohibition of commercial enterprise on the Internet.
  • 1995: Thursday 27 April 1995, the purchase of a book by Paul Stanfield, product manager for CompuServe UK, from W H Smith's shop within CompuServe's UK Shopping Centre is the UK's first national online shopping service secure transaction. The shopping service at launch featured: 
  • 1995: Amazon is launched by Jeff Bezos.
  • 1995: eBay is founded by computer programmer Pierre Omidyar as AuctionWeb. It is the first online auction site supporting person-to-person transactions.
  • 1995: The first commercial-free 24-hour, internet-only radio stations, Radio HK and NetRadio start broadcasting.
  • 1996: The use of Excalibur BBS with replicated "storefronts" was an early implementation of electronic commerce started by a group of SysOps in Australia and replicated to global partner sites.
  • 1998: Electronic postal stamps can be purchased and downloaded for printing from the Web.
  • 1999: Alibaba Group is established in China. Business.com sold for US$7.5 million to eCompanies, which was purchased in 1997 for US$149,000. The peer-to-peer filesharing software Napster launches. ATG Stores launches to sell decorative items for the home online.
  • 1999: Global e-commerce reaches $150 billion.
  • 2000: The dot-com bust.
  • 2001: eBay has the largest userbase of any e-commerce site.
  • 2001: Alibaba.com achieved profitability in December 2001.
  • 2002: eBay acquires PayPal for $1.5 billion. Niche retail companies Wayfair and NetShops are founded with the concept of selling products through several targeted domains, rather than a central portal.
  • 2003: Amazon posts first yearly profit.
  • 2004: DHgate.com, China's first online B2B transaction platform, is established, forcing other B2B sites to move away from the "yellow pages" model.
  • 2007: Business.com acquired by R.H. Donnelley for $345 million.
  • 2014: US e-commerce and online retail sales projected to reach $294 billion, an increase of 12 percent over 2013 and 9% of all retail sales. Alibaba Group has the largest Initial public offering ever, worth $25 billion.
  • 2015: Amazon accounts for more than half of all e-commerce growth, selling almost 500 Million SKU's in the US.
  • 2017: Retail e-commerce sales across the world reaches $2.304 trillion, which was a 24.8 percent increase than previous year.
  • 2017: Global e-commerce transactions generate $29.267 trillion, including $25.516 trillion for business-to-business (B2B) transactions and $3.851 trillion for business-to-consumer (B2C) sales.
  • 2020: Government of India launched BHIM UPI digital payment interface in 2016. In the year 2020 it had 2 billion digital payment transactions.

See also ___________________________________________________________________________

​An e-commerce payment system facilitates the acceptance of electronic payment for online transactions. Also known as a sample of Electronic Data Interchange (EDI), e-commerce payment systems have become increasingly popular due to the widespread use of the internet-based shopping and banking.

Over the years, credit cards have become one of the most common forms of payment for e-commerce transactions. In North America almost 90% of online retail transactions were made with this payment type. 

It would be difficult for an online retailer to operate without supporting credit and debit cards due to their widespread use. Increased security measures include use of the card verification number (CVN) which detects fraud by comparing the verification number printed on the signature strip on the back of the card with the information on file with the cardholder's issuing bank.

Also online merchants have to comply with stringent rules stipulated by the credit and debit card issuers (Visa and MasterCard). This means that merchants must have security protocol and procedures in place to ensure transactions are more secure. This can also include having a certificate from an authorized certification authority (CA) who provides PKI (Public-Key infrastructure) for securing credit and debit card transactions.

Despite widespread use in North America, there are still a large number of countries such as China and India that have some problems to overcome in regard to credit card security. In the meantime, the use of smartcards has become extremely popular.

A Smartcard is similar to a credit card; however it contains an embedded 8-bit microprocessor and uses electronic cash which transfers from the consumers’ card to the sellers’ device.

A popular smartcard initiative is the VISA Smartcard. Using the VISA Smartcard you can transfer electronic cash to your card from your bank account, and you can then use your card at various retailers and on the internet.

There are companies that enable financial transactions to take place over the internet, such as PayPal. Many of the mediaries permit consumers to establish an account quickly, and to transfer funds into their on-line accounts from a traditional bank account (typically via ACH transactions), and vice versa, after verification of the consumer's identity and authority to access such bank accounts.

Also, the larger mediaries further allow transactions to and from credit card accounts, although such credit card transactions are usually assessed a fee (either to the recipient or the sender) to recoup the transaction fees charged to the mediary.

The speed and simplicity with which cyber-mediary accounts can be established and used have contributed to their widespread use, although the risk of abuse, theft and other problems—with disgruntled users frequently accusing the mediaries themselves of wrongful behavior—is associated with them.

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United States Department of CommercePictured below: Commerce at the Forefront in Improving Nation's Cybersecurity
The United States Department of Commerce (DOC) is an executive department of the U.S. federal government concerned with creating the conditions for economic growth and opportunity.

Among its tasks are gathering economic and demographic data for business and government decision making, and helping to set industrial standards. Its main purpose is to create jobs, promote economic growth, encourage sustainable development and block harmful trade practices of other nations. 

It is headed by the Secretary of Commerce, who reports directly to the President of the United States and is a member of the president's Cabinet. The Department of Commerce is headquartered in the Herbert C. Hoover Building in Washington, D.C.


History:
Further information on the department's publication: Commerce Reports

Organizational history:

The department was originally created as the United States Department of Commerce and Labor on February 14, 1903. It was subsequently renamed the Department of Commerce on March 4, 1913, as the bureaus and agencies specializing in labor were transferred to the new Department of Labor.

Since its creation, the Commerce Department has seen various agencies and administrative offices shift in and out of its organizational structure. The United States Patent and Trademark Office was transferred from the Interior Department into the Commerce Department in 1925. 

The Federal Employment Stabilization Office existed within the department from 1931 to 1939. In 1940, the Weather Bureau (now the National Weather Service) was transferred from the Agriculture Department, and the Civil Aeronautics Authority was also merged into the Commerce Department. 

In 1949, the Public Roads Administration was added to the department after the Federal Works Agency was dismantled.

In 1958, the independent Federal Aviation Agency was created and the Civil Aeronautics Authority was abolished. The United States Travel Service was established by the United States Secretary of Commerce on July 1, 1961, pursuant to the International Travel Act of 1961 (75 Stat. 129; 22 U.S.C. 2121 note) 

The Economic Development Administration was created in 1965. In 1966, the Bureau of Public Roads was transferred to the newly created Department of Transportation.

The Minority Business Development Agency (MBDA) was created on March 5, 1969, originally established by President Richard M. Nixon as the Office of Minority Business Enterprise. The National Oceanic and Atmospheric Administration (NOAA) was created on October 3, 1970.

The Cabinet Council on Commerce and Trade was one of multiple Cabinet Councils established in the United States on or about February 26, 1981 by the Reagan Administration.

2020 data breach:

In 2020, the Department of Commerce suffered a data breach following a cyberattack likely conducted by a nation state adversary, possibly Russia.

Herbert Hoover as secretary of commerce: ​Herbert Hoover was appointed Secretary of Commerce in 1921 by then-President Warren G. Harding. Hoover was, by far, the most active secretary in the history of the department until the end of his position in 1928.

After his election as president in 1920, Warren G. Harding rewarded Hoover for his support, offering to appoint him as either Secretary of the Interior or Secretary of Commerce.

Secretary of Commerce was considered a minor Cabinet post, with limited and vaguely defined responsibilities, but Hoover, emphasizing his identity as a businessman, accepted the position. In sharp contrast to the Interior Department, there were no scandals at Commerce.

Hoover envisioned the Commerce Department as the hub of the nation's growth and stability. His experience mobilizing the war-time economy convinced him that the federal government could promote efficiency by eliminating waste, increasing production, encouraging the adoption of data-based practices, investing in infrastructure, and conserving natural resources.

Contemporaries described Hoover's approach as a "third alternative" between "unrestrained capitalism" and socialism, which was becoming increasingly popular in Europe. Hoover sought to foster a balance among labor, capital, and the government, and for this he has been variously labeled a "corporatist" or an associationalist.

Hoover demanded, and received, authority to coordinate economic affairs throughout the government. He created many sub-departments and committees, overseeing and regulating everything from manufacturing statistics to air travel. In some instances he "seized" control of responsibilities from other Cabinet departments when he deemed that they were not carrying out their responsibilities well; some began referring to him as the "Secretary of Commerce and Under-Secretary of all other departments." 

In response to the Depression of 1920–21, he convinced Harding to assemble a presidential commission on unemployment, which encouraged local governments to engage in countercyclical infrastructure spending. He endorsed much of Mellon's tax reduction program, but favored a more progressive tax system and opposed the treasury secretary's efforts to eliminate the estate tax.

Radio and travel:

When Hoover joined the department, almost no families had radios; when he became president in 1929, 10 million owned one, and most of the rest listened in a nearby home, store or restaurant. Hoover's department set the policies that shaped the entire new industry.

Hoover's radio conferences played a key role in the organization, development, and regulation of radio broadcasting. Hoover also helped pass the Radio Act of 1927, which allowed the government to intervene and abolish radio stations that were deemed "non-useful" to the public.

Hoover's attempts at regulating radio were not supported by all congressmen, and he received much opposition from the Senate and from radio station owners. 

Hoover was also influential in the early development of air travel, and he sought to create a thriving private industry boosted by indirect government subsidies. He encouraged the development of emergency landing fields, required all runways to be equipped with lights and radio beams, and encouraged farmers to make use of planes for crop dusting. 

Hoover also established the federal government's power to inspect planes and license pilots, setting a precedent for the later Federal Aviation Administration.

As Commerce Secretary, Hoover hosted national conferences on street traffic collectively known as the National Conference on Street and Highway Safety. Hoover's chief objective was to address the growing casualty toll of traffic accidents, but the scope of the conferences grew and soon embraced motor vehicle standards, rules of the road, and urban traffic control.

Hoover left the invited interest groups to negotiate agreements among themselves, which were then presented for adoption by states and localities. Because automotive trade associations were the best organized, many of the positions taken by the conferences reflected their interests.

The conferences issued a model Uniform Vehicle Code for adoption by the states, and a Model Municipal Traffic Ordinance for adoption by cities. Both were widely influential, promoting greater uniformity between jurisdictions and tending to promote the automobile's priority in city streets.

Other Hoover initiatives:

​With the goal of encouraging wise business investments, Hoover made the Commerce Department a clearinghouse of information. He recruited numerous academics from various fields and tasked them with publishing reports on different aspects of the economy, including steel production and films.

To eliminate waste, he encouraged the standardization of products like automobile tires and baby bottle nipples. Other efforts at eliminating waste included reducing labor losses from trade disputes and seasonal fluctuations, reducing industrial losses from accident and injury, and reducing the amount of crude oil spilled during extraction and shipping.

Hoover promoted international trade by opening overseas offices to advise businessmen. Hoover was especially eager to promote Hollywood films overseas.

His "Own Your Own Home" campaign was a collaboration to promote ownership of single-family dwellings, with groups such as the Better Houses in America movement, the Architects' Small House Service Bureau, and the Home Modernizing Bureau. He worked with bankers and the savings and loan industry to promote the new long-term home mortgage, which dramatically stimulated home construction. 

Other accomplishments included winning the agreement of U.S. Steel to adopt an eight-hour workday, and the fostering of the Colorado River Compact, a water rights compact among Southwestern states.

Foreign economic policy:

The department has always been involved in promoting international non-financial business. It stations commercial attachés at embassies around the world. Currently, the key sub-agencies are the International Trade Administration, and the Bureau of Industry and Security.

The ITA provides technical expertise to numerous American companies, helping them adjust to foreign specifications. It provides guidance and marketing data as well. The Office of Export Enforcement administers export controls, especially regarding the spread of nuclear technology and highly advanced electronic technology. 

Under the administration of President Donald Trump, the policy has been to restrict high-technology flows to China. From 1949 to 1994, the department worked with the 17-nation Coordinating Committee on Multilateral Export Controls, which restricted technological flows to the Soviet Union and other communist nations.

Since 1980, the Commerce Department works to neutralize the dumping of exports or the subsidies of overseas production. Along with the export controls, this work continues to generate friction with other nations. 

On July 20, 2020, the commerce department announced adding eleven Chinese firms to an export blacklist for committing human rights abuse against Uyghur Muslims and other ethnic minorities in Xinjiang by conducting genetic analysis on them. Two of the firms sanctioned were subsidiaries of BGI Group, a Chinese genetic sequencing, and biomedical firm. 

In the same year October, the BGI Group firm was again named in the alleged exploitation of medical samples of patients testing for Covid-19 in Nevada using the 200,000 rapid testing kits donated by the United Arab Emirates under its AI and cloud computing firm, Group 42.

The Emirati firm, also known as G42, has previously been named in the mass surveillance of people via an instant messaging application called ToTok, which was actually a spy application snooping on user data.


Current Organization:

Structure below:
​Budget and finances:

The Department of Commerce was authorized a budget for Fiscal Year 2015 of $14.6 billion. The budget authorization is broken down as follows:
​
Reorganization proposals:

​Proposals to reorganize the department go back many decades. The Department of Commerce was one of three departments that Texas governor Rick Perry advocated eliminating during his 2012 presidential campaign, along with the Department of Education and Department of Energy.

Perry's campaign cited the frequency with which agencies had historically been moved into and out of the department and its lack of a coherent focus, and advocated moving its vital programs into other departments such as:
The Economic Development Administration would be completely eliminated.

On January 13, 2012, President Barack Obama announced his intentions to ask the United States Congress for the power to close the department and replace it with a new cabinet-level agency focused on trade and exports. The new agency would include the Office of the United States Trade Representative, currently part of the Executive Office of the President, as well as:
The Obama administration projected that the reorganization would save $3 billion and would help the administration's goal of doubling U.S. exports in five years. 

The new agency would be organized around four "pillars":

Pillar #1: a technology and innovation office including the United States Patent and Trademark Office and the National Institute of Standards and Technology;

Pillar #2: a statistical division including the United States Census Bureau and other data-collection agencies currently in the Commerce Department, and also the Bureau of Labor Statistics which would be transferred from the Department of Labor;

Pillar #3: a trade and investment policy office;

and Pillar #4: a small business development office. The National Oceanic and Atmospheric Administration (NOAA) would be transferred from the Department of Commerce into the Department of the Interior. 

Later that year, shortly before the 2012 presidential election, Obama invoked the idea of a "secretary of business" in reference to the plan. The reorganization was part of a larger proposal which would grant the president the authority to propose mergers of federal agencies, which would then be subject to an up-or-down Congressional vote.

(This ability had existed from the Great Depression until the Reagan presidency, when Congress rescinded the authority.)

The Obama administration plan faced criticism for some of its elements. Some Congress members expressed concern that the Office of the United States Trade Representative would lose focus if it were included in a larger bureaucracy, especially given its status as an "honest broker" between other agencies, which tend to advocate for specific points of view. 

The overall plan has also been criticized as an attempt to create an agency similar to Japan's powerful Ministry of International Trade and Industry, which was abolished in 2001 after some of its initiatives failed and it became seen as a hindrance to growth. 

NOAA's climate and terrestrial operations and fisheries and endangered species programs would be expected to integrate well with agencies already in the Interior Department, such as the United States Geological Survey and the United States Fish and Wildlife Service.

However, environmental groups such as the Natural Resources Defense Council feared that the reorganization could distract the agency from its mission of protecting the nation's oceans and ecosystems. 

The plan was reiterated in the Obama administration's FY2016 budget proposal that was released in February 2015.

See also:







Trade Pictured below: Exploring the Dynamics of Global Trade: A Comprehensive Guide*
*-Expanding on the above image:

Exploring the Dynamics of Global Trade: A Comprehensive Guide

Introduction to Global TradeThe exchange of goods and services across international borders, serves as the backbone of the modern economy. It encompasses a vast network of transactions, connecting countries, businesses, and consumers worldwide. In this comprehensive guide, we will delve into the intricacies of global trade, exploring its significance, benefits, challenges, and future prospects.

The SignificanceIt plays a pivotal role in driving economic growth, fostering international cooperation, and enhancing the standard of living for people across the globe. It allows countries to leverage their comparative advantages, specializing in the production of goods and services where they have a competitive edge. Through trade, nations can access resources, technologies, and markets that may not be available domestically, leading to increased efficiency and productivity.

Benefits of Global TradeThe benefits are manifold and far-reaching. One of the primary advantages is the expansion of market opportunities for businesses. By tapping into international markets, companies can diversify their customer base, increase sales, and achieve economies of scale. This, in turn, leads to higher revenues, profitability, and business growth.

Moreover, global trade stimulates innovation and technological advancement. When businesses compete on a global scale, they are incentivized to invest in research and development, leading to the creation of new products and processes. This continuous cycle of innovation drives productivity gains and enhances global competitiveness.

Global trade also facilitates the efficient allocation of resources. By allowing countries to specialize in the production of goods and services in which they have a comparative advantage, trade enables resource optimization and maximizes overall welfare. For example, countries rich in natural resources may export commodities, while those with skilled labor forces may focus on manufacturing and services.

​Challenges of Global Trade:

Despite its numerous benefits, global trade also presents challenges that must be addressed. One of the primary concerns is the risk of protectionism and trade barriers. Tariffs, quotas, and other trade restrictions can distort markets, impede the flow of goods and services, and hinder economic growth. It’s essential for countries to work together to promote free and fair trade policies that benefit all parties involved.

Another challenge is the unequal distribution of the gains from trade. While global trade can lead to overall economic growth, its benefits are not always evenly distributed. Certain industries and workers may be negatively affected by increased competition from abroad, leading to job displacement and income inequality. Governments must implement policies to support affected individuals and ensure that the benefits of trade are shared equitably across society.

The Role of International Organizations in Global TradeInternational organizations play a crucial role in facilitating and regulating global trade. Institutions such as the World Trade Organization (WTO), the International Monetary Fund (IMF), and the World Bank provide a framework for trade negotiations, dispute resolution, and economic cooperation among nations.

​The WTO, in particular, serves as the primary forum for trade negotiations and the enforcement of trade rules. It works to promote liberalization and facilitate the smooth flow of goods and services across borders. Additionally, the IMF and the World Bank provide financial assistance and technical support to countries seeking to integrate into the global economy.

Future Prospects of Global Trade:

Looking ahead, global trade is expected to continue expanding, driven by advancements in technology, transportation, and communication. The rise of e-commerce, digitalization, and automation has transformed the way businesses engage in trade, opening up new opportunities for growth and efficiency.

However, global trade also faces challenges in the form of geopolitical tensions, climate change, and global pandemics. It’s essential for countries to address these challenges collectively and adapt to changing circumstances to ensure the continued success and sustainability of global trade.

Conclusion:

In conclusion, global trade is a fundamental driver of economic prosperity and development worldwide. By fostering cooperation, competition, and innovation, it creates opportunities for businesses, enhances consumer welfare, and promotes global stability.

While challenges exist, the benefits of global trade far outweigh the costs, making it essential for countries to embrace open, inclusive, and rules-based trading systems.

As we navigate the complexities of the global economy, it’s imperative to recognize the importance of global trade and work together to build a more prosperous and interconnected world.
___________________________________________________________________________


Trade (Wikipedia)

​Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a system or network that allows trade as a market.

Traders generally negotiate through a medium of credit or exchange, such as money. Though some economists characterize barter (i.e. trading things without the use of money) as an early form of trade, money was invented before written history began. Consequently, any story of how money first developed is mostly based on conjecture and logical inference.

Letters of credit, paper money, and non-physical money have greatly simplified and promoted trade as buying can be separated from selling, or earning. Trade between two traders is called bilateral trade, while trade involving more than two traders is called multilateral trade.

In one modern view, trade exists due to specialization and the division of labor, a predominant form of economic activity in which individuals and groups concentrate on a small aspect of production, but use their output in trade for other products and needs/

Trade exists between regions because different regions may have a comparative advantage (perceived or real) in the production of some trade-able goods – including the production of scarce or limited natural resources elsewhere. For example, different regions' sizes may encourage mass production. In such circumstances, trading at market price between locations can benefit both locations.

​Different types of traders may specialize in trading different kinds of goods; for example, the spice trade and grain trade have both historically been important in the development of a global, international economy.

​Retail trade consists of the sale of goods or merchandise from a very fixed location (such as a department store, boutique, or kiosk), online or by mail, in small or individual lots for direct consumption or use by the purchaser. 

Wholesale trade is the traffic in goods that are sold as merchandise retailers, industrial, commercial, institutional, or other professional business users, or to other wholesalers and related subordinated services.

Historically, openness to free trade substantially increased in some areas from 1815 until the outbreak of World War I in 1914. Trade openness increased again during the 1920s but collapsed (in particular in Europe and North America) during the Great Depression of the 1930s.

Trade openness increased substantially again from the 1950s onward (albeit with a slowdown during the oil crisis of the 1970s). Economists and economic historians contend that current levels of trade openness are the highest they have ever been.


Etymology:

Trade is from Middle English trade ("path, course of conduct"), introduced into English by Hanseatic merchants, from Middle Low German trade ("track, course"), from Old Saxon trada ("spoor, track"), from Proto-Germanic tradō ("track, way"), and cognate with Old English tredan ("to tread").

Commerce is derived from the Latin commercium, from cum "together" and merx, "merchandise."


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International Chamber of CommercePictured below: ​World Chambers Federation Report: Chambers New Norm – Adapting Business Needs
A chamber of commerce, or board of trade, is a form of business network. For example, a local organization of businesses whose goal is to further the interests of businesses. 

Business owners in towns and cities form these local societies to advocate on behalf of the business community. Local businesses are members, and they elect a board of directors or executive council to set policy for the chamber. The board or council then hires a president, CEO, or executive director, plus staffing appropriate to size, to run the organization.

A chamber of commerce may be a voluntary or a mandatory association of business firms belonging to different trades and industries. They serve as spokespeople and representatives of a business community. They differ from country to country.


History:

The first chamber of commerce was founded in 1599 in Marseille, France, as the "Chambre de Commerce". The Royal Barcelona Board of Trade was established in 1758.

The world's oldest English-speaking chamber of commerce and oldest chamber of commerce in North America is the Halifax Chamber of Commerce, founded in Halifax, Nova Scotia in 1750.

The Glasgow Chamber of Commerce was founded in 1783. However, Hull Chamber of Commerce is the United Kingdom's oldest, followed by those of Leeds and of Belfast in present-day Northern Ireland.

As a non-governmental institution, a chamber of commerce has no direct role in the writing and passage of laws and regulations that affect businesses. It can, however, lobby in an attempt to get laws passed that are favorable to businesses.

The United States Chamber of Commerce has a long history of anti-union lobbying and union busting in the United States at the local and federal level.


Characteristics:

Membership in an individual chamber can range from a few dozen to well over 800,000, as is the case with the Paris Île-de-France Regional Chamber of Commerce and Industry. Some chamber organizations in China report even larger membership numbers.

Chambers of commerce can range in scope from individual neighborhoods within a city or town up to an international chamber of commerce.

In the United States, chambers do not operate in the same manner as the Better Business Bureau in that, while the BBB has the authority to bind its members under a formal operation doctrine (and, thus, can remove them if complaints arise regarding their services), the local chamber membership is either voluntary or required by law. 

Some chambers are partially funded by local government, others are non-profit, and some are a combination of the two.

Some chambers have joined state, national (such as the United States Chamber of Commerce and the British Chambers of Commerce) and even international bodies (such as Eurochambres, the International Chamber of Commerce (ICC), and Worldchambers).


Chamber models:

Community, city and regional chambers:
​
Chambers of commerce in the United States can be considered community, city, regional, state, or nationwide (United States Chamber of Commerce). City Chambers work on the local level to bring the business community together to develop strong local networks, which can result in a business-to-business exchange.

In most cases, city Chambers work with their local government, such as their mayor, their city council, and local representatives to develop pro-business initiatives. There are also bilateral chambers of commerce that link the business environments of two countries (e.g. Romanian-American Chamber of Commerce, Moldovan–American Chamber of Commerce).

Community chambers:

Community chambers of commerce started in the UK and later spread to in the US, becoming city chambers of commerce as communities developed and became larger. Community chambers of commerce are smaller and most have a limit on numbers of members.

City chambers:

​City chambers of commerce have a long history in the US. The Charleston Chamber of Commerce is one of the oldest, dating back to colonial 1773.

That same year, Boston's Chamber of Commerce organized a seminal tax protest: The Boston Tea Party.

In 2005 there were 2,800 chambers of commerce in the United States and 102 chambers representing U.S. businesses overseas. According to the Association for Chamber of Commerce Executives (ACCE), there are approximately 3,000 chambers of commerce with at least one staff person and "thousands more established as strictly volunteer entities".

State chambers:

State chambers of commerce are much different from local and regional chambers of commerce, as they work on state and sometimes federal issues impacting the business community.

Just as the local chamber is critical to the local business community, state chambers serve a unique function, serving as a third-party voice on important business legislation that impacts the business community and is critical in shaping legislation in their respective state.

State Chambers work with their Governor, state representatives, state senators, US congressional leaders, and US Senators. In comparison with state trade associations, which serve as a voice and resource to a particular industry, state chambers are looked to as a respected voice, representing the entire business community to enhance and advocate for a better business environment.

National and international chambers:

Addressing the national or international need for information is the key service that these chambers of commerce provide. These services are in most cases at no fee or cost to their members; some of them offer personal and/or business services at a very low fee (like memberships to other associations such as the NRA).

Compulsory or public-law chambers:

Under the compulsory or public law model, enterprises of certain sizes, types, or sectors are obliged to become members of the chamber. This model is common in European Union countries (e.g. France, Germany, Italy, Spain, Austria), as well as Japan and Indonesia.

The main tasks of the chambers are foreign trade promotion, vocational training, regional economic development, and general services to their members. The chambers were given responsibilities of public administration in various fields by the state which they exercise in order management.

The chambers also have a consultative function; this means the chambers must be consulted whenever a new law related to industry or commerce is proposed.

In Germany, the chambers of commerce and industry (IHK - Industrie- und Handelskammer) and the chambers of skilled crafts (HwK - Handwerkskammer) are public statutory bodies with self-administration under the inspectorate of the state ministry of economy.

Enterprises are members by law according to the chamber act (IHK-Gesetz) of 1956. Because of this, such chambers are much bigger than chambers under private law. IHK Munich, the biggest German chamber of commerce, has 350,000 member companies. Germany also has compulsory chambers for "free occupations" such as architects, dentists, engineers, lawyers, notaries, physicians, and pharmacists.

Continental/private law chambers:

]Under the private model, which exists in English-speaking countries like the United States and the United Kingdom, companies are not obligated to become chamber members.

However, companies often become members to develop their business contacts and, regarding the local chambers (the most common level of organization), to demonstrate a commitment to the local economy. Though governments are not required to consult chambers on proposed laws, the chambers are often contacted given their local influence and membership numbers.

Multilateral chambers:

A multilateral chamber is formed of companies and sometimes individuals from different countries with a common business interest towards or in a specific country. It can further be active in representing the interests of local and foreign investors in that specific country, achieved through promotion and proactivity regarding the general business environment.

Multilateral chambers of commerce are independent entities strengthening business relations and interactions between all economic players, and their members may benefit from a broad range of activities that enhance the visibility and reputation of their business.


Surveys:

In many countries, Chambers of Commerce are a source of private-sector information. The information is usually gathered by surveying Chamber members. The British Chambers of Commerce Quarterly Economic Survey is an example of a Chambers of Commerce survey that is used by official governmental departments as a guide to the performance of the economy.


See also:







​Economic InequalityPictured below: Countries by Wealth (Courtesy of  Radom1967 - Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=73783250)
​Economic inequality is an umbrella term for three concepts:
  1. income inequality, how the total sum of money paid to people is distributed among them;
  2. wealth inequality, how the total sum of wealth owned by people is distributed among the owners;
  3. and consumption inequality, how the total sum of money spent by people is distributed among the spenders.

Each of these can be measured between two or more nations, within a single nation, or between and within sub-populations (such as within a low-income group, within a high-income group and between them, within an age group and between inter-generational groups, within a gender group and between them etc, either from one or from multiple nations).

Income inequality metrics are used for measuring income inequality, the Gini coefficient being a widely used one. Another type of measurement is the Inequality-adjusted Human Development Index, which is a statistic composite index that takes inequality into account.Important concepts of equality include equity, equality of outcome, and equality of opportunity.

Historically, there has been a long-run trend towards greater economic inequality over time. The exceptions to this during the modern era are the declines in economic inequality during the two World Wars and amid the creation of modern welfare states after World War II.

Whereas globalization has reduced the inequality between nations, it has increased the inequality within most nations. Income inequality between nations peaked in the 1970s, when world income was distributed bimodally into "rich" and "poor" countries. Since then, income levels across countries have been converging, with most people now living in middle-income countries.

However, inequality within most nations has risen significantly in the last 30 years, particularly among advanced countries.

Research has generally linked economic inequality to political and social instability, including revolution, democratic breakdown and civil conflict. Research suggests that greater inequality hinders economic growth and macroeconomic stability, and that inequality of land and human capital reduce growth more than inequality of income.

Inequality is at the center stage of economic policy debate across the globe, as government tax and spending policies have significant effects on income distribution. In advanced economies, taxes and transfers decrease income inequality by one-third, with most of this being achieved via public social spending (such as pensions and family benefits).

While the "optimum" amount of economic inequality is widely debated, there is a near-universal belief that complete economic equality (Gini of zero) would be undesirable and unachievable.


Measurements:

The Gini coefficient (also known as the Gini index or Gini ratio), is a measure of statistical dispersion intended to represent the income inequality, wealth inequality, or consumption inequality within a nation or a social group. It measures the inequality among the values of a frequency distribution, such as levels of income.

A Gini coefficient of 0 reflects perfect equality, where all income or wealth values are the same, while a Gini coefficient of 1 (or 100%) reflects maximal inequality among values, a situation where a single individual has all the income or wealth while all others have none.

Oxfam's 2021 report on global inequality said that the COVID-19 pandemic has increased economic inequality substantially; the wealthiest people across the globe were impacted the least by the pandemic and their fortunes recovered quickest, with billionaires seeing their wealth increase by $3.9 trillion, while at the same time the number of people living on less than $5.50 a day likely increased by 500 million.

According to economist Joseph Stiglitz, the pandemic's "most significant outcome" will be rising economic inequality in the United States and between the developed and developing world. The 2024 Oxfam report found a significant increase in inequality as roughly five billion people have become poorer while at the same time the fortunes of the five richest individuals have doubled.

The report warned that current trends are paving the way for the world's first trillionaire within a decade and global poverty eradication being postponed for 229 years. Oxfam's 2025 report shows that over the last year billionaire wealth increased from $13 trillion to $15 trillion primarily through inheritance, monopoly and powerful connections, and predicts there will be at least five trillionaires in the next decade, while at the same time the number of people living in poverty has barely changed since 1990, with 44% of the global population living on less than $6.85 per day.

In 2016, the world's billionaires increased their combined global wealth to a record $6 trillion. In 2017, they increased their collective wealth to $8.9 trillion.

The existing data and estimates suggest a large increase in international (and more generally inter-macroregional) components between 1820 and 1960. It might have slightly decreased since that time at the expense of increasing inequality within countries.

The United Nations Development Program in 2014 asserted that greater investments in social security, jobs, and laws that protect vulnerable populations are necessary to prevent widening income inequality.

According to a 2020 study, global earnings inequality has decreased substantially since 1970. During the 2000s and 2010s, the share of earnings by the world's poorest half doubled. Two researchers claim that global income inequality is decreasing due to strong economic growth in developing countries.

According to a January 2020 report by the United Nations Department of Economic and Social Affairs, economic inequality between states had declined, but intrastate inequality has increased for 70% of the world population over the period 1990–2015. In 2015, the OECD reported in 2015 that income inequality is higher than it has ever been within OECD member nations and is at increased levels in many emerging economies. According to a June 2015 report by the International Monetary Fund (IMF):

Widening income inequality is the defining challenge of our time. In advanced economies, the gap between the rich and poor is at its highest level in decades. Inequality trends have been more mixed in emerging markets and developing countries (EMDCs), with some countries experiencing declining inequality, but pervasive inequities in access to education, health care, and finance remain.

In October 2017, the IMF warned that inequality within nations, in spite of global inequality falling in recent decades, has risen so sharply that it threatens economic growth and could result in further political polarization. The Fund's Fiscal Monitor report said that "progressive taxation and transfers are key components of efficient fiscal redistribution. In October 2018, Oxfam published a Reducing Inequality Index which measured social spending, tax and workers' rights to show which countries were best at closing the gap between the rich and the poor.

The 2022 World Inequality Report, a four-year research project organized by the economists Lucas Chancel, Thomas Piketty, Emmanuel Saez, and Gabriel Zucman, shows that "the world is marked by a very high level of income inequality and an extreme level of wealth inequality" and that these inequalities "seem to be about as great today as they were at the peak of western imperialism in the early 20th century."

According to the report, the bottom half of the population owns 2% of global wealth, while the top 10% owns 76% of it. The top 1% owns 38%.

Globally in 2023, this is how much after-tax annual income it took, in U.S. dollars, for someone to be in the top 1% of income earners:
  • Single adult with no children: $60,000
  • Two adults with one child: $130,000
  • Two adults with two children: $160,000

Income -- Income distribution within individual countries​:
Main articles: 
Pictured below: ​Countries' income inequality according to their most recent reported Gini index values as of 2018:
​In 1820, the ratio between the income of the top and bottom 20 percent of the world's population was three to one. By 1991, it was eighty-six to one. A 2011 study titled "Divided we Stand: Why Inequality Keeps Rising" by the Organization for Economic Co-operation and Development (OECD) sought to explain the causes for this rising inequality by investigating economic inequality in OECD countries; it concluded that the following factors played a role:
  • Changes in the structure of households can play an important role. Single-headed households in OECD countries have risen from an average of 15% in the late 1980s to 20% in the mid-2000s, resulting in higher inequality.
  • Assortative mating refers to the phenomenon of people marrying people with similar background, for example doctors marrying other doctors rather than nurses. OECD found out that 40% of couples where both partners work belonged to the same or neighboring earnings deciles compared with 33% some 20 years before.
  • In the bottom percentiles, number of hours worked has decreased.
  • The main reason for increasing inequality seems to be the difference between the demand for and supply of skills.

The study made the following conclusions about the level of economic inequality:
  • Income inequality in OECD countries is at its highest level for the past half century. The ratio between the bottom 10% and the top 10% has increased from 1:7 to 1:9 in 25 years.
  • There are tentative signs of a possible convergence of inequality levels towards a common and higher average level across OECD countries.
  • With very few exceptions (France, Japan, and Spain), the wages of the 10% best-paid workers have risen relative to those of the 10% lowest paid.

A 2011 OECD study investigated economic inequality in Argentina, Brazil, China, India, Indonesia, Russia, and South Africa. It concluded that key sources of inequality in these countries include "a large, persistent informal sector, widespread regional divides (e.g., urban-rural), gaps in access to education, and barriers to employment and career progression for women."

​Income inequality is measured by Gini coefficient (expressed in percent %) that is a number between 0 and 1. Here 0 expresses perfect equality, meaning that everyone has the same income, whereas 1 represents perfect inequality, meaning that one person has all the income and others have none.
  • A Gini index value above 50% is considered high; countries including Brazil, Colombia, South Africa, Botswana, and Honduras can be found in this category.
  • A Gini index value of 30% or above is considered medium; countries including Vietnam, Mexico, Poland, the United States, Argentina, Russia and Uruguay can be found in this category.
  • A Gini index value lower than 30% is considered low; countries including Austria, Germany, Denmark, Norway, Slovenia, Sweden, and Ukraine can be found in this category.
  • In the low-income inequality category (below 30%) is a wide representation of countries previously being part of Soviet Union or its satellites, like Slovakia, Czech Republic, Ukraine and Hungary.

In 2012 the Gini index for income inequality for whole European Union was only 30.6%.

Income distribution can differ from wealth distribution within each country. The wealth inequality is also measured in Gini index. There the higher Gini index signify greater inequality within the wealth distribution in country, 0 means total wealth equality and 1 represents situation, where everyone has no wealth, except an individual that has everything.

For instance, countries like Denmark, Norway and Netherlands, all belonging to the last category (below 30%, low-income inequality) also have very high Gini index in wealth distribution, ranging from 70% up to 90%.


Wealth

Wealth distribution between countries

Wealth distribution within individual countries
Main articles: List of countries by wealth per adult § By country, and Distribution of wealth

The wealth is calculated by various factors, for instance: 
Consumption
Main article: Consumption distribution

In economics, the consumption distribution or consumption inequality is an alternative to the income distribution or wealth distribution for judging economic inequality, comparing levels of consumption rather than income or wealth. This is an important measure of inequality as the basic utility of the wealth or income is the expenditure.[41] People experience the inequality directly in consumption, rather than income or wealth.

​Factors proposed to affect economic inequalityThere are various reasons for economic inequality within societies, including both global market functions (such as trade, development, and regulation) as well as social factors (including gender, race, and education).[44] Recent growth in overall income inequality, at least within the OECD countries, has been driven mostly by increasing inequality in wages and salaries.[38]
Economist Thomas Piketty argues that widening economic disparity is an inevitable phenomenon of free market capitalism when the rate of return of capital (r) is greater than the rate of growth of the economy (g).[45] According to an IMF report in 2016, after reviewing four decades of neoliberalism, it had warned that certain neoliberal policies including privatization, public spending cuts, and deregulation, have resulted in "increased inequality" and are stunting economic growth globally.[46][47]
Labour market
Main articles: Labour economics, Capitalism, Marxism, and Neoclassical economicsIn modern market economies, if competition is imperfect; information unevenly distributed; opportunities to acquire education and skills unequal; market failure results. Many such imperfect conditions exist in virtually every market. According to Joseph Stiglitz this means that there is an enormous potential role for government to correct such market failures.[48]
In the United States, real wages are flat over the past 40 years for occupations across income and education levels, e.g., auto mechanics, cashiers, doctors, and software engineers.[49] However, stock ownership favors higher income and education levels,[50] thereby resulting in disparate investment income.
Taxes
Main articles: Income tax and Progressive taxAnother cause is the rate at which income is taxed coupled with the progressivity of the tax system. A progressive tax is a tax by which the tax rate increases as the taxable base amount increases.[51][52] In a progressive tax system, the level of the top tax rate will often have a direct impact on the level of inequality within a society, either increasing it or decreasing it, provided that income does not change as a result of the change in tax regime. Additionally, steeper tax progressivity applied to social spending can result in a more equal distribution of income across the board.[53] Tax credits such as the Earned Income Tax Credit in the US can also decrease income inequality.[54] The difference between the Gini index for an income distribution before taxation and the Gini index after taxation is an indicator for the effects of such taxation.[55]
Education
Main article: Education
​An important factor in the creation of inequality is variation in individuals' access to education.[57] Education, especially in an area where there is a high demand for workers, creates high wages for those with this education.[58] However, increases in education first increase and then decrease growth as well as income inequality. As a result, those who are unable to afford an education, or choose not to pursue optional education, generally receive much lower wages. The justification for this is that a lack of education leads directly to lower incomes, and thus lower aggregate saving and investment. Conversely, quality education raises incomes and promotes growth because it helps to unleash the productive potential of the poor.[59]
Access to education was in turn influenced by land inequalities. In the less industrialized parts of 19th century Europe, for example, landowners still held more political power than industrialists. These landowners did not benefit from educating their workers as much as industrialists did, since "educated workers have more incentives to migrate to urban, industrial areas than their less educated counterparts."[60] Consequently, lower incentives to promote education in regions where land inequality was high led to lower levels of numeracy in these regions.[60]
Economic liberalism, deregulation and decline of unions
Main articles: Economic liberalism, Deregulation, and Labor unions in the United StatesJohn Schmitt and Ben Zipperer (2006) of the CEPR point to economic liberalism and the reduction of business regulation along with the decline of union membership as one of the causes of economic inequality. In an analysis of the effects of intensive Anglo-American liberal policies in comparison to continental European liberalism, where unions have remained strong, they concluded "The U.S. economic and social model is associated with substantial levels of social exclusion, including high levels of income inequality, high relative and absolute poverty rates, poor and unequal educational outcomes, poor health outcomes, and high rates of crime and incarceration. At the same time, the available evidence provides little support for the view that U.S.-style labor market flexibility dramatically improves labor-market outcomes. Despite popular prejudices to the contrary, the U.S. economy consistently affords a lower level of economic mobility than all the continental European countries for which data is available."[61]
More recently, the International Monetary Fund has published studies which found that the decline of unionization in many advanced economies and the establishment of neoliberal economics have fueled rising income inequality.[62][63]
Contrary to the proponents of neoliberalism, trickle-down economics have been proven to not be effective in resolving economic inequalities but have instead worsened it.[64]
Technology
Main articles: Information Age and Information technologyThe growth in importance of information technology has been credited with increasing income inequality.[65] Technology has been called "the main driver of the recent increases in inequality" by Erik Brynjolfsson, of MIT.[66] In arguing against this explanation, Jonathan Rothwell notes that if technological advancement is measured by high rates of invention, there is a negative correlation between it and inequality. Countries with high invention rates – "as measured by patent applications filed under the Patent Cooperation Treaty" – exhibit lower inequality than those with less. In one country, the United States, "salaries of engineers and software developers rarely reach" above $390,000/year (the lower limit for the top 1% earners).[67]
Some researchers, such as Juliet B. Schor, highlight the role of for-profit online sharing economy platforms as an accelerator of income inequality and calls into question their supposed contribution in empowering outsiders of the labour market.[68]
Taking the example of TaskRabbit, a labour service platform, she shows that a large proportion of providers already have a stable full-time job and participate part-time in the platform as an opportunity to increase their income by diversifying their activities outside employment, which tends to restrict the volume of work remaining for the minority of platform workers.
In addition, there is an important phenomenon of labour substitution as manual tasks traditionally performed by workers without a degree (or just a college degree) integrated into the labour market in the traditional economy sectors are now performed by workers with a high level of education (in 2013, 70% of TaskRabbit's workforce held a bachelor's degree, 20% a master's degree and 5% a PhD).[69] The development of platforms, which are increasingly capturing demand for these manual services at the expense of non-platform companies, may therefore benefit mainly skilled workers who are offered more earning opportunities that can be used as supplemental or transitional work during periods of unemployment.
It has also been proposed that information technologies contribute to "winner take most" market concentration, reducing the need for labor across competing suppliers.[70] Market concentration drives down labor's share of the GDP, increasing the wealth of capital and thereby exacerbating inequality.
AutomationEconomists have linked automation to increases in economic inequality, as automation raises the returns to wealth and contributes to stagnating wages at the lower end of the wage distribution.[71] Several economists have suggested that automation has increased income inequality by causing low skill jobs to be replaced with machines operated by technologically skilled workers, thereby reducing the demand for unskilled labor while increasing the demand for skilled labor.[15]: 1 
Globalization
Main articles: Globalization and International inequality
Trade liberalization may shift economic inequality from a global to a domestic scale.[73] When rich countries trade with poor countries, the low-skilled workers in the rich countries may see reduced wages as a result of the competition, while low-skilled workers in the poor countries may see increased wages. Trade economist Paul Krugman estimates that trade liberalisation has had a measurable effect on the rising inequality in the United States. He attributes this trend to increased trade with poor countries and the fragmentation of the means of production, resulting in low skilled jobs becoming more tradeable.[74]
Anthropologist Jason Hickel contends that globalization and "structural adjustment" set off the "race to the bottom", a significant driver of surging global inequality. Another driver Hickel mentions is the debt system which advanced the need for structural adjustment in the first place.[75]

Gender pay gap:
Main article: Gender inequality

Pictured below: The gender gap in median earnings of full-time employees according to the OECD 2015


In many countries, there is a gender pay gap in favor of males in the labor market. Several factors other than discrimination contribute to this gap. On average, women are more likely than men to consider factors other than pay when looking for work and may be less willing to travel or relocate.[77][78] 

Thomas Sowell, in his book Knowledge and Decisions, claims that this difference is due to women not taking jobs due to marriage or pregnancy. A U.S. Census's report stated that in US once other factors are accounted for there is still a difference in earnings between women and men.[79] 

A study done on three post-soviet countries Armenia, Georgia, and Azerbaijan reveals that gender is one of the driving forces of income inequality, and being female has a significant negative effect on income when other factors are held equal. The results show more than 50% gender pay gap in all three countries.[80] These findings are because usually employers tend to avoid hiring women because of possible maternity leave.

Other reason for this can be occupational segregation, which implies that women are usually accumulated in lower-paid positions and sectors, such as social services and education.

​Race
Main article: Social inequalityThere is also a globally recognized disparity in the wealth, income, and economic welfare of people of different races. In many nations, data exists to suggest that members of certain racial demographics experience lower wages, fewer opportunities for career and educational advancement, and intergenerational wealth gaps.[81] Studies have uncovered the emergence of what is called "ethnic capital", by which people belonging to a race that has experienced discrimination are born into a disadvantaged family from the beginning and therefore have less resources and opportunities at their disposal.[82][83] The universal lack of education, technical and cognitive skills, and inheritable wealth within a particular race is often passed down between generations, compounding in effect to make escaping these racialized cycles of poverty increasingly difficult.[83] Additionally, ethnic groups that experience significant disparities are often also minorities, at least in representation though often in number as well, in the nations where they experience the harshest disadvantage. As a result, they are often segregated either by government policy or social stratification, leading to ethnic communities that experience widespread gaps in wealth and aid.[84]
Redlining intentionally excluded black Americans from accumulating intergenerational wealth. The effects of this exclusion on black Americans' health continue to play out daily, generations later, in the same communities. This is evident currently in the disproportionate effects that COVID-19 has had on the same communities which the HOLC redlined in the 1930s. Research published in September 2020 overlaid maps of the highly affected COVID-19 areas with the HOLC maps, showing that those areas marked "risky" to lenders because they contained minority residents were the same neighborhoods most affected by COVID-19. The Centers for Disease Control (CDC) looks at inequities in the social determinants of health like concentrated poverty and healthcare access that are interrelated and influence health outcomes with regard to COVID-19 as well as quality of life in general for minority groups. The CDC points to discrimination within health care, education, criminal justice, housing, and finance, direct results of systematically subversive tactics like redlining which led to chronic and toxic stress that shaped social and economic factors for minority groups, increasing their risk for COVID-19. Healthcare access is similarly limited by factors like a lack of public transportation, child care, and communication and language barriers which result from the spatial and economic isolation of minority communities from redlining. Educational, income, and wealth gaps that result from this isolation mean that minority groups' limited access to the job market may force them to remain in fields that have a higher risk of exposure to the virus, without options to take time off. Finally, a direct result of redlining is the overcrowding of minority groups into neighborhoods that do not boast adequate housing to sustain burgeoning populations, leading to crowded conditions that make prevention strategies for COVID-19 nearly impossible to implement.[85][86][87][88][89][90][91]
As a general rule, races which have been historically and systematically colonized (typically indigenous ethnicities) continue to experience lower levels of financial stability in the present day. The global South is considered to be particularly victimized by this phenomenon, though the exact socioeconomic manifestations change across different regions.

​Westernized Nations:

While the progression of civil rights movements and justice reform has improved access to education and other economic opportunities in politically advanced nations, racial income and wealth disparity still exists.[92] In the United States for example, African American populations are more likely to drop out of high school and college, are typically employed for fewer hours at lower wages, have lower than average intergenerational wealth, and are more likely to use welfare as young adults than their white counterparts.[93] The racial wealth gap in the US has been maintained throughout history. In 1863, two years prior to emancipation from slavery, Black people owned 0.5 percent of the US national wealth, while in 2019 it is just over 1.5 percent.[94]
Mexican-Americans, while suffering less debilitating socioeconomic factors than black Americans, experience deficiencies in the same areas when compared to whites and have not assimilated financially to the level of stability experienced by white Americans as a whole.[95] These experiences are the effects of the measured disparity due to race in countries like the US, where studies show that in comparison to whites, blacks suffer from drastically lower levels of upward mobility, higher levels of downward mobility, and poverty that is more easily transmitted to offspring as a result of the disadvantage stemming from the era of slavery and post-slavery racism that has been passed through racial generations to the present.[96][97][98] These are lasting financial inequalities that apply in varying magnitudes to most non-white populations in nations such as the US, the UK, France, Spain, Australia, etc.[

Latin AmericaIn the countries of the Caribbean, Central America, and South America, many ethnicities continue to deal with the effects of European colonization, and in general nonwhites tend to be noticeably poorer than whites in this region. In many countries with significant populations of indigenous races and those of Afro-descent (such as Mexico, Colombia, Chile, etc.) income levels can be roughly half as high as those experiences by white demographics, and this inequity is accompanied by systematically unequal access to education, career opportunities, and poverty relief. This region of the world, apart from urbanizing areas like Brazil and Costa Rica, continues to be understudied and often the racial disparity is denied by Latin Americans who consider themselves to be living in post-racial and post-colonial societies far removed from intense social and economic stratification despite the evidence to the contrary.[99]
AfricaAfrican countries, too, continue to deal with the effects of the Trans-Atlantic Slave Trade, which set back economic development as a whole for blacks of African citizenship more than any other region. The degree to which colonizers stratified their holdings on the continent on the basis of race has had a direct correlation in the magnitude of disparity experienced by nonwhites in the nations that eventually rose from their colonial status. Former French colonies, for example, see much higher rates of income inequality between whites and nonwhites as a result of the rigid hierarchy imposed by the French who lived in Africa at the time.[100] Another example is found in South Africa, which, still reeling from the socioeconomic impacts of Apartheid, experiences some of the highest racial income and wealth inequality in all of Africa.[96] In these and other countries like Nigeria, Zimbabwe, and Sierra Leone, movements of civil reform have initially led to improved access to financial advancement opportunities, but data[when?] shows that for nonwhites this progress is either stalling or erasing itself in the newest generation of blacks that seek education and improved transgenerational wealth. The economic status of one's parents continues to define and predict the financial futures of African and minority ethnic groups.[101][needs update]
AsiaAsian regions and countries such as China, the Middle East, and Central Asia have been vastly understudied in terms of racial disparity, but even here the effects of Western colonization provide similar results to those found in other parts of the globe.[81] Additionally, cultural and historical practices such as the caste system in India leave their marks as well. While the disparity is greatly improving in the case of India, there still exists social stratification between peoples of lighter and darker skin tones that cumulatively result in income and wealth inequality, manifesting in many of the same poverty traps seen elsewhere.[

​Economic development
Main article: Kuznets curve

​Economist Simon Kuznets argued that levels of economic inequality are in large part the result of stages of development. According to Kuznets, countries with low levels of development have relatively equal distributions of wealth. In the early stages, individual sectors or industries are developed first, which leads to an unequal distribution of income and wealth, resulting in growing inequality within a country. As the economy progresses and development takes place in more economic sectors, eventually attracting more workers, economic inequality decreases.[103] Although the Kuznets curve described the development of inequality well at the time of its publication, there is now a growing number of critical voices questioning the link between inequality and development.[104]
Wealth concentration
Main articles: Wealth concentration, Billionaire, and OligarchyWealth concentration is the process by which, under certain conditions, newly created wealth concentrates in the possession of already-wealthy individuals or entities. Accordingly, those who already hold wealth have the means to invest in new sources of creating wealth or to otherwise leverage the accumulation of wealth, and thus they are the beneficiaries of the new wealth. Over time, wealth concentration can significantly contribute to the persistence of inequality within society. Thomas Piketty in his book Capital in the Twenty-First Century argues that the fundamental force for divergence is the usually greater return of capital (r) than economic growth (g), and that larger fortunes generate higher returns.[105]
Rent seeking
Main article: Rent-seekingEconomist Joseph Stiglitz argues that rather than explaining concentrations of wealth and income, market forces should serve as a brake on such concentration, which may better be explained by the non-market force known as "rent-seeking". While the market will bid up compensation for rare and desired skills to reward wealth creation, greater productivity, etc., it will also prevent successful entrepreneurs from earning excess profits by fostering competition to cut prices, profits and large compensation.[106] A better explainer of growing inequality, according to Stiglitz, is the use of political power generated by wealth by certain groups to shape government policies financially beneficial to them. This process, known to economists as rent-seeking, brings income not from creation of wealth but from "grabbing a larger share of the wealth that would otherwise have been produced without their effort".[107]
Finance industryJamie Galbraith argues that countries with larger financial sectors have greater inequality, and the link is not an accident.[108][109][why?]
Global warming and climate change





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