Emerging Trends | SMEs/Entrepreneurship
May 20, 2017

ICT SMEs are vital for socioeconomic growth

By Houlin Zhao

ICT-enabled entrepreneurs and small to medium-sized enterprises (SMEs) have a particularly relevant role in ensuring economic growth in a sustainable and inclusive manner. They are involved in the development of innovative ICT-enabled solutions with a unique potential to make a long-lasting impact in global, regional and national economies.

In recognition of this, the theme for World Telecommunication and Information Society Day (WTISD) 2016 was ‘ICT entrepreneurship for social impact’. In his keynote address, Michael Moeller, Director General, UNOG, highlighted that “Entrepreneurship can change and shape the future by maximizing the social impact of ICTs.”

The event in Geneva brought together company founders, social innovators and members of the international community to explore recommendations for private and public actors to better inform their interventions to support small business development. The dynamic panel included: Katherine Milligan, Director, Schwab Foundation for Social Entrepreneurship; Candace Johnson, President, EBAN; Whurley, Co-Founder and CEO, Honest Dollar; Marcos Vaena, Chief of Enterprises and Competitiveness, ITC, and Houlin Zhao, Secretary-General, ITU.

Social impact

The panel noted that technology is an equalizer and enabler of opportunities, especially when building a sustainable business in developing markets. For example, Africa’s e-commerce market is projected to reach USD52 billion by 2018, up from USD8 billion in 2013. This growth will not happen on its own: entrepreneurs need to have access to the right tools and information to fully leverage the growing international e-commerce market.

As Marcus Vaena noted: It’s really access to information, to knowledge, to understand not only what is on the front end of an e‑commerce operation, but what lies behind.  A lot of it is  business as usual, but there are some specific issues related to electronic commerce that people still have to become familiar with, and it is the UN’s role to educate the public on how to better leverage these opportunities.  Katherine Milligan added that what is generally underappreciated is that the ICT industry has created a fabulous infrastructure to deliver social goods, more cost effectively and efficiently.

Finding the right regulatory balance isn’t easy. Over regulation can stifle innovation, while too little can have drastic implications for domestic markets and local economies. The panel noted that while entrepreneurs often criticize regulation as being a barrier to innovation, they do not effectively engage with the policy-makers when given the opportunity, and they tend to shy away from this community instead of actively participating in discussions which could lead to regulatory reform or modifications.  From an entrepreneur’s perspective, government regulation is just another set of requirements that they have to take into account when developing their products and services, however we should encourage regulatory frameworks that enable innovation, rather than discourage it.

This was outlined by Whurley who stated that, just as he would take requirements from a customer who wants to be able to use their mobile to do X, Y, Z, then it is necessary to look at the regulations and understand that it needs to be done within a certain context.  For Whurley the regulatory system is more about context, and regulations need to involve entrepreneurs who can help shape and modify policies to ensure that the bottom line – the user experience – is better.

This was echoed by Candace Johnson who acknowledged that governments alone can set policies.  Governments can deregulate, but Governments do not exist to do business. Entrepreneurs on the other hand have a social contract with Governments who are depending on them to bring about social change. She emphasized that Governments need to put forth a framework that can allow entrepreneurs to be able to fulfill their mission, to thrive and do business effectively.

Taking advantage of these opportunities

The future of SMEs is very important for the ICT industry, to drive development of the sector, especially in creating demand for ICT services. We are seeing a lot of support for small businesses at the local and national levels, but they often don’t have good enough access to regional and global markets. As highlighted by Katherine Milligan, there is hope but we also have to be realistic. The majority of people in developing countries are making $2, $3 or $5 a day. These are incredibly risk averse customers. It is very difficult to market to them to get them to change their behavior. It’s not on a three to five year time frame that you are going to penetrate these markets in a big way. It requires patience and vision.

To get an impression on how the ITU ceremony for WTISD was discussed on social media, see http://www.storify.com/ITU/world-telecommunication-and-information-society-da

Houlin Zhao (@ITUSecGen) was elected 19th Secretary-General of the ITU at the Busan Plenipotentiary Conference in October 2014. He took up his post on 1 January, 2015. Prior to his election, he served two terms of office as ITU Deputy Secretary-General (2007-2014), as well as two terms as elected Director of ITU’s Telecommunication Standardization Bureau (1999-2006). He is committed to further streamlining ITU’s efficiency, to strengthening its membership base through greater involvement of the academic community and of small- and medium-sized enterprises, and to broadening multistakeholder participation in ITU’s work. He is married with one son and two grandchildren.
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ICT SMEs are vital for socioeconomic growth

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