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April 18, 2018

Four ways to improve digital entrepreneurship in developing countries

By ITU News

E-Commerce Week 2018 at the United Nations headquarters in Geneva, Switzerland is exploring the “Development Dimensions of Digital Platforms” and the growing role of digital technologies for sustainable development.

A panel co-organized by the International Telecommunication Union (ITU) and the United Nations Conference on Trade and Development (UNCTAD) focused on the need for connectivity and digital skills to enable businesses and entrepreneurs in developing countries to reap the benefits of the rapidly evolving digital economy.

Here are four ways governments can help to enhance digital entrepreneurship in developing countries:

Policy action to remove barriers

Alex Wong, Head of Global Challenge Partnerships at the World Economic Forum (WEF) pinpointed the crux of the problem for entrepreneurs in developing countries.

“In India, 68% of the country’s 51 million Small and Medium Entreprises (SMEs) do not have access to the internet. Only 2% are digitally engaged. Those statistics lay the gap we need to address to get entrepreneurs to start using the internet to achieve its benefits,” said Wong.

“Statistics show that the next 1 or 2 billion people will probably connect through normal market forces, said Alex Wong. “But the reality is that the final few hundred million that will be very remote and hard to access. So what have we done at the Forum?  We put together a framework that addresses both the demand side and the supply side for connectivity.”

WEF is now working in Rwanda, Argentina, South Africa and Jordan with 60 global partners and 200 organizations to remove barriers and build solutions on both the demand side, referring to skills and awareness to use the internet and relevant content, and the supply side, referring to infrastructure and affordability, to allow the most remote populations connect to the internet.

Daniel Spoiala, Policy Officer of the European Commission explained that the barriers to connectivity for digital entrepreneurs in developing countries include the cost of infrastructure, access to talent, and access to finance.  He noted: “In Lagos, Nigeria, a big African hub for digital entrepreneurship, the cost for access to energy and internet is around 100,000 US$ per year. So incubators and accelerators can’t be competitive there without public support.”

He said that governments can put in place policies to facilitate digital entrepreneurship such as giving entrepreneurs access to low-interest credit, or establishing enforceable contracts that provide legal predictability.

Plan now for rewards tomorrow

Patricia Benoit Guyot, Cooordinator of the United Nations Broadband Commission,  explained that the UN Broadband Commission was  launched in 2010 with the aim to expand access to broadband internet in all countries, and recently reviewed and approved targets for 2025. “These are targets for all countries cover broadband policy, internet affordability, access to the internet, digital skills, access to digital financial services, business connectivity and gender equality”, she said.

Patricia Benoit Guyot added, “The Broadband Commission has encouraged developing countries to adopt broadband plans. We are now moving forward to work with those countries to measure how useful those national broadband plans have been, what the results are and how to move forward”.

On the topic of 5G networks, Belinda Exelby, Head of International Relations at GSMA, said: “It is critical that we get 5G right the first time so that the rollout in developing countries can be carried out fast (…), and entrepreneurs and startups can start to contribute quickly to the digital economy of those countries. (…) Two elements are key: the first is to make available significant amounts of widely harmonized spectrum and the second is to encourage extensive network investments.”

She urged developing countries to start planning and preparing for these elements now, so that 5G infrastructure can be in place tomorrow.

“Europe now has a deficit of 350,000 coders. In 2020, that number will increase to half a million (…) We don’t want the digital market to stop at European borders.”–Daniel Spoiala, Policy Officer at the European Commission

Fill the skills gap

“It turns out that many young people do not have either the digital or soft skills that employers are looking for,” said Ms Susan Schorr, Head of the Digital Inclusion Division at ITU. “This is a shame … as there are currently 67 million young people who are currently unemployed. At the same time … there are tens of millions of jobs for people who have advanced digital skills.”

She explained that this is an opportunity to provide training for young people to improve employment outcomes for youth and make a dent in the global youth employment crisis. This is why ITU and the International Labour Organization (ILO) joined forces to launch the Digital Skills for Decent Jobs for Youth Campaign. She added, “it is important for countries to build their national skills development strategies and this is why ITU just published the Digital Skills Toolkit.”

Download or view the Digital Skills Toolkit here:

Daniel Spoiala said, “Europe now has a deficit of 350,000 coders. In 2020, that number will increase to half a million.” He explained that Europe is looking to their neighbours to the South to help fill that gap. “We don’t want the digital market to stop at European borders”.

The importance of relevant content

The importance of providing relevant content to compel users to go online was also noted. As Daniel Spoiala said, “People will not go online without content that is relevant to them.”

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ITU is the United Nations' specialized agency for information and communication technology. Any opinions expressed and statistics presented by third parties do not necessarily reflect the views of ITU.

Four ways to improve digital entrepreneurship in developing countries

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