Small and Medium Enterprises and ICT/Foreword

Small and Medium Enterprises and ICT

List of Acronyms — Forword — Overview — Concepts and Definitions — SME Adoption of ICT — General Policy Framework for ICT Adoption by SMEs — Specific Policy Recommendations for Governments — Suggestions for Further Reading — Works Cited — Notes — About the Author

In an ever-changing and dynamic world, the advent and adoption of Information and Communication Technologies (ICTs) across the globe has permanently altered the rules of the game and expectations of the new digital and inter-connected economies. Traditional notions of trans-boundary trade have in the past two decades changed dramatically to acknowledge and embrace, at times reluctantly, the increasing number of financial transactions and trade-related activities that take place purely via the Internet and technologically assisted tools.

The role of ICTs in advancing the growth of national economies through efficiency and productivity, and expanded market reach is both undisputed and irreversible. It is within this vein that adequate and strategic attention has to be placed so that these new opportunities provided by ICts are not purely limited and accessible only by the larger corporations within national economies. As numerous reports have indicated, small and medium enterprises (SMEs) constitute almost 95 percent of enterprises within the region and directly serve as both the backbone and driver of national economies.

The Asia-Pacific region itself is currently at a critical juncture in terms of ICT adoption, where it both hosts the fastest-growing ICT markets and ICT industries in the world and is also home to low adoption of ICTs and low penetration in some countries. The slow adoption has been due to numerous major constratins that range from lack of skilled technical capacities to issues related to inadequate connectivity and infrastructure. In addition, a weak understanding of the expectations and demands of the new digital economies has also placed many SMEs in an unenviable position of being unable to participate in the new digital knowledge economy.

The United Nations agencies in the region are continuously working in close collaboration with various international development partners and civil society organizations to assist national governments in leveraging on ICTs, thus enabling greater effective and equitable participation in the global and regional economy and benefit from enhanced global and regional trade and commerce.

The United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), for example, has worked towards a harmonized development of legal and regulatory systems for electronic commerce in Asia and the Pacific, as well as the development of enabling policies for trade and investment in the ICT Sector of the Greater Mekong Subregion. It has also assisted in trade and investment promotion through effective use of ICTs in Pacific island developing countries. In 2006, UNESCAP established the Asian and Pacific Training Centre for Information and Communication Technology for Development (APCICT) to build capacity of member countries in the area of ICT for social and economic development.

It is within this context that I welcome this publication by the UNDP Asia - Pacific Development Information Programme (UNDP-APDIP) and APCICT to provide a critically needed e-Primer that elaborates on the concepts and definitions of the knowledge economy, the regional challenges, and policy frameworks and recommendations for governments within the region.

UNESCAP and UNDP-APDIP have also collaborated extensively to help build the national capacities of policy makers to formulate strategic policies and the necessary enabling environments to encourage SMEs to take advantage of the Internet to create business opportunities in Asia and the Pacific.

This is premised on the fact that the appropriate adoption and utilization of ICTs within business processes and operations of SMEs, at the minimum, will significantly strengthen nationaleconomies and provide new opportunities for enhanced efficiency and integration and flow of regional trade and commerce. The risk of exclusion of economies from the global and regional economies would be daunting, should appropriate action to encourage the adoption of ICTs not be taken by governments within the region. As such, governments within the region have a critical role to ensure that adequate policies and initiatives are in place and enabling environments are created to encourage the adoption of ICTs within business processes of SMEs. The future and shape of the regional economic landscape is changing dramatically and it is imperative that all efforts undertaken for a more equitable and sustainable approach towards addressing these developments do not impede ICT adoption by SMEs in the region.