SMEs and Government Policies on ICT

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SMEs and Government Policies on ICT

• Tim Beal
• Victoria University of Wellington
• New Zealand

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Overview

• Global digital divide
• Role of SMEs
• Data on global internet use
• Government policy options

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Global digital divide

• What is Digital Divide?
• ILO barely 6 of worlds population have ever
  logged onto the Internet
• Not a simple bifurcation into haves and have nots
• Wide variety across countries and within
  countries
• DD part of deeper deprivation

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deeper deprivation

• Poor are excluded from prosperity by variety of
  interlocking mechanisms
• Lack of political and social power
• Lack of education
• Religious, ethnic and sexual discrimination
• Lack of capital
• Digital exclusion is part of this
• Ultimately a question of political economy

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Digital exclusion is different

• Relatively easy to tackle
• Not so closely correlated to political
  powerlessness as others
• Eg in advanced countries age as important as
  poverty
• In China lack of landlinesgtgtleapfrogging into
  wireless net
• Perhaps most productive place to address general
  deprivation

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Overview

• Global digital divide
• Role of SMEs
• Data on global internet use
• Government policy options

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Role of SMEs

• Major creators of employment
• US in 97 2/3 of new jobs created by SMEs
• Seen as innovative
• Although slow to take up ICT
• ICTSMEmore exposure to digital world for more
  people at lower cost

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Overview

• Global digital divide
• Role of SMEs
• Data on global internet use
• Government policy options

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Data on global internet use

• Data is
• fragmentary
• Variable quality
• With methodological problems
• Sources used
• UNDP Human Development Report 2001
• International Telecommunications Union

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Human Development Report

• Technology Achievement Index (TAI)
• Composite index
• Technology creation
• Patents granted, receipts of royalties and
  license fees
• Diffusion of recent inventions
• Internet hosts high-and medium-tech exports
• Diffusion of old inventions
• Telephones, electricity
• Human skills
• Mean years of schooling, gross tertiary science
  enrolment ratio

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TAI groupings

• Five categories
• Leaders (18)
• Potential leaders (19)
• Dynamic adopters (26)
• Marginalized (9)
• Others (90)
• TAI not calculated for last category, and they
  are not ranked

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FIG 1 UNDP TECHNOLOGY ACHIEVEMENT INDEX
SELECTED LEADERS, POTENTIAL LEADERS AND DYNAMIC
ADOPTERS
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Internet digital divide

• ITU data on percentage of population who are
  Internet users
• Fig 2 shows top 11 and bottom 10
• Why top 11?

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FIG 2 THE INTERNET DIGITAL DIVIDE 2000 TOP 11
AND BOTTOM 10
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Overview

• Global digital divide
• Role of SMEs
• Data on global internet use
• Government policy options

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Government policy options

• Three dimensions
• SME policy
• E-Commerce/ICT/ST policy
• SME ICT/ST policy

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ICT Policy
SME Policy
SME/ICT Policy
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SME policy

• Example US Small Business Agency
• Financing
• Advocacy
• RD
• Business information services
• Etc.

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E-Commerce Policy

• Infrastructure
• Tax policies
• Education
• RD
• Standards
• B2B promotion
• E-government
• E-procurement
• Etc.

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SME ICT/ST Policy

• Because of overlap specific programs relatively
  rare
• Usually sub-set of larger program
• Australian National office for the Information
  Economy (NOIE)
• E-commerce for small business program
• research., coordination and consultation to
  encourage SMEs to take up e-commerce
• No financial, administrative or training support

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Chinas Innofund

• Innovation Fund for Small Technology-based firms
• Financing of high-tech start-ups

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Conclusion

• Global use of ICT is complex and not
  well-documented
• SME problems are well know, but how government
  can address them is less certain
• SME have role in bridging digital divide
• Problems in utilising ICT, and Gov facilitation
  require more research
• ISME project volunteers welcome