UNDP ICTD

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UNDP ICTD Programme Officers/Focal Points
Workshop (POW II) 12-14 February
2004 (Brainstorming- Seeds)ICT and SMMEs in
Asia Pacific James George Atsushi
Yamanaka UNDP APDIP/ BDP
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BIG PICTURE Developing countries have the
potential to achieve rapid and sustainable
economic and social development by building an
economy based upon an ICT enabled and networked
SME sector capable of applying affordable yet
effective ICT solutions.
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• WHAT WE HEAR
• Investments in technology have generated
  unprecedented gains in productivity and increased
  the levels of connectivity between Asia Pacific
  companies.
• - ICT has enabled the Small, Medium and Micro
  Enterprises (SMME) networks to become more
  integrated, and more effective across longer
  distances, operating with more efficiency and
  conducting transactions in greater volume.

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REALITY CHECK 1 Small businesses that
constitute the bulk of developing economies have
yet to reap these benefits evenly as obtaining
such opportunities rest largely upon the ability
of its SMMEs to engage in the regional and global
economic business networks which, in turn,
demands provision of a pre-requisite level of
access to and use of ICT.
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REALITY CHECK 2 SMME activities are poorly
connected and initiatives to provide an
environment of self-empowerment and
sustainability have been slow to develop
primarily attributed to inadequate information,
low skills base, operational size, high adoption
costs, and a poor understanding of the dynamics
of the knowledge economy. e.g. The industrial
informatization index for Koreas three million
SMEs is below 50, recording 47.78 on a scale of
100.1 1) Source Survey by Korea
Information Management Institute for Small and
Medium Enterprises (KIMI) 2002.
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SOME NUMBERS Out of the total registered
manufacturing companies in Malaysia, 48,197 are
SMEs, comprising more than 90 per cent of
manufacturing establishments. In comparison,
SMEs in Japan comprised 99.7 per cent, Taiwan
98.1 per cent of total manufacturing
establishments.
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WHAT IS THE LINK? Opportunities for SMMEs to be
suppliers to large companies and MNCs are very
much dependent on their technological capability
and ability of SMMEs to meet specified
manufacturing standards in terms of cost, quality
and delivery.
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• OPPORTUNITIES?
• Level playing field
• New opportunities
• Enhance potential, effectiveness and reach
• National economic development strategies
  facilitate flows of information, capital, ideas,
  people, and products
• Mode of addressing digital divide backbone of
  economy
• In essence, job creation, increased public
  revenue and a general rise in the standard of
  living

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WHY DOES IT MATTER? SMMEs account for a
significant part of economic growth and
productivity. With the development of ICT and
shift to the knowledge-based economy,
e-transformation and introduction of ICT,
becoming an increasingly important tool for the
SMMEs, both to reinvigorate corporate management
and promote growth of the national economy.
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WHAT IS MISSING? Coherent and comprehensive
policies addressing the importance of ICT
enabling SMMEs. Policies on ICT should take into
account other policy areas where ICT plays an
important and complimentary role, such as in
trade and investment, education, infrastructure,
legal, and security environment.
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• WHAT IS NEEDED?
• - A coherent and comprehensive host of
  e-strategies - conducive, achievable, and above
  all practical.
• Holistic framework - identifies actions,
  priorities, and implementation, resources and
  capacities of SMMEs on a cross-sectoral basis.
• Challenge mould various cross-sectoral issues
  into agenda that concentrates on SMMEs, and to
  harmonise these policies within a larger
  framework of economic development.

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• WHAT NEEDS TO BE DONE?
• Create an environment to strengthen market
  structure and institutions
• Facilitate environment for infrastructure
  investment and technology development
• Enhance human capacity building and promote
  entrepreneurship
• Access to Internet via Information Infrastructure

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• WHAT NEEDS TO BE DONE?
• Building Basis for SMME E-Commerce
• Expanding Basic Services for Network Utilization
  
• Facilitating Development of Business Models for
  SMEs
• Promoting Partnerships between Businesses and
  Economies
• Building Framework for Regulation and Education

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ICT USE BY SMMES
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• SUCCESS FACTORS
• Partnership between the public and private
  sector
• Setting of a clear focus and implementation plan
• Adapting to the changing needs of the target
  group
• Providing sustainable support structures
• Communication and dissemination
• Evaluation which feeds back into the programme
  delivery

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• WHAT CAN WE DO TOGETHER?
• Stimulate networking and collaboration among SMME
  ICT service providers.
• Bridge the gap between ICT service providers and
  SMMEs.
• Exchange know / experience on strategic mgt
  issues
• Exchange know / experience on relevant dev. in
  ICT that could be strategically important

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CONCLUSION Ten commandments for government
policies in support of e-business for SMMEs 1.
Establish an informed basis for policies Not
just the number of PCs and the number connected
to internet, but an insight based on a clear
understanding of problems/challenges for
SMMEs. 2. Set measurable targets Establish
relevant evaluation criteria. Focus on
measurements on how e-Transformation takes place.
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CONCLUSION 3. Develop or acquire adoption tools
Must be tools based on and representing perceived
benefits, organizational readiness and external
pressures on SMMEs. Tools have to be easy to
use. 4. Use partnership Agents, service
partners, trade organizations, trade
associations, business newspapers, and even
vendors, but with a clear set of service
level agreements and clear definition of
responsibilities of partners.
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CONCLUSION 5. Recognize diversity of SMMEs
Very large differences depending on aspirations,
strategy of SMME (cost-focus, RD focus or
customer relationship/customer ownership focus),
as well as role of SMME in vertical value chain
and or in business network. One size does not fit
all! 6. Make advantages explicit and specific
Provide relevant cases, worded in the language of
the recipient. It is not a good idea to talk
about Transaction Cost Economics.
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CONCLUSION 7. Roll out the national awareness
programs Press, TV, radio, web-based services,
e-SMME Forum, prize awards, workshops, seminars,
and web-based diagnostic tools to assess own
status. 8. Make interventions two-way rather
than one-way Very important to be interactive,
and have SMME formulate their own current status,
challenges and opportunities.
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CONCLUSION 9. SMME focused and oriented Looking
at business processes, markets, trading partners
is an expensive but very effective possibility/
necessity. 10. E-learning assisted training
programs E-learning can seldom stand alone
without loss of motivation, but it can be
extremely valuable in modular form on specific
topics which led themselves to self-study,
especially if e-learning is build into a
diffusion and adoption process.
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• Thank You
• James George
• james_at_apdip.net
• Programme Specialist
• UNDP APDIP