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    "Big Business" Helps Small Businesses Work with Technology

     

     
     
    © International Trade Centre, International Trade Forum - Issue 3/2003

    Today, multinationals are partnering with governments and local groups to provide seed money and skills, and to improve the policy environment for small firms to take off with technology.

    It's a familiar story in developing countries around the world; an entrepreneur has an exciting idea, perhaps a simple one, but requiring the use of technology she doesn't have. She knows the idea is great - the small business finance desk at the local trade promotion office has told her so; and even how useful the idea is for the wider community. But nothing happens and the digital divide continues to grow.

    Whatever the idea - whether a new process for shoe manufacturing or information services for rural farmers - even with everyone's recognition of its merit, these opportunities are rarely realized. Why does this happen?

    Obstacles

    The answer is complex. There are immediate obstacles facing the entrepreneur in developing countries:

    • Financing gap. Venture capital is usually only available for sizeable, stable businesses. Banks often require 100% (or more) collateral for loans and charge high interest rates. Microfinance loans aren't sufficient for business creation.
    • Business skills. MBAs (university graduates with a master's degree in business administration) are in short supply. Knowledge and training to develop information and communication technologies (ICT) is lacking. This hinders the ability to turn a good idea into a coherent and sustainable business.
    • Policy environment. A mix of poor quality infrastructure and policy regimes that don't support business is the third obstacle. A hostile policy environment can set back even the most skilful and well-financed entrepreneurs.

    • An answer

      Groups bringing together governments, civil society and, significantly, the private sector - each with complementary strengths - can help. These include structures like the Group of 8's Digital Opportunity Task Force (DOT Force), the UN's ICT Task Force and the World Economic Forum's Global Digital Divide Initiative.

      The international private sector represents a pool of as yet untapped resources and expertise - including a private sector ethos for development, based on sustainable business growth. The sector's increasing acceptance of its role as a responsible member of society and its realization of the benefits of building new markets in developing countries is pushing big business to take a stronger and, in some cases, a leading role.

      Charles Sirois is Chairman and Chief Executive Officer (CEO) of Telesystem and acting Chairman and CEO of Enablis. He remembers the first DOT Force meeting: "There was certainly an air of misunderstanding. The private sector, non-governmental organizations and governments all had different perspectives. But it soon became obvious we were all in this for the same reasons. Early on, the atmosphere was transformed to one of cooperation and joint purpose."

      Local business and civil society groups provide essential knowledge on the ground. Finally, governments are the only players that can create the correct policy environment and have access to financial resources.

      Building on this framework, Accenture, Hewlett-Packard and Telesystem created Enablis, a non-profit organization that works with developing country governments and civil society to support small businesses. The organization provides loan financing and business and technical support to help small and medium-sized firms increase their trade using technology. Each private sector participant is providing human and technical resources to create the first Enablis operating unit in South Africa, which will become the regional base for Enablis' operations in southern Africa. Enablis' aim is to eventually become a global organization.



      Groups working on bridging the digital divide
      Luke Williams (luke.williams@enablis.org) is Chief Operating Officer of Enablis and Armen Ovanessoff (armen.ovanessoff@accenture.com) is in Policy and Corporate Affairs at Accenture.