Smart use of information technologies: the
integration of SMEs in global value chains
WANDE ADALEMO
email: wande.adalemo@oxygen.net.ng
phone: +234-8093413215
Intro…
Changing Emerging Market (SAAAME) Dynamics >
Source: PwC, 2014
Changing Emerging Market (SAAAME) Dynamics >
Source: PwC, 2014
The transforming power of information technology in SMEs
•
Information technology is one of the strongest drivers for competitiveness,
innovation and change in our modern economy. ICT is changing our lives –
the way we socialise, work, shop, search for information, and communicate.
A few figures to capture the emerging trends:
•
Two billion people are now connected to the Internet and this number is
growing by 200 million per year.
•
Information technologies cut across all industries and services and create
wealth, growth and jobs. More than 75% of the value added created by the
Internet is in traditional industries. The ICT’s main impact is through the
modernization of traditional activities. Smart innovation enabled by the
Internet and ICT developments leads to higher productivity and has
benefited all industries.
The transforming power of information technology in
SMEs-Cont’d
•
ICT enables all forms of innovation, from social to organisational and
technological innovation. ICT boosts businesses’ efficiency and
competitiveness in the global market.
•
The advent of Internet has changed the global business landscape. Internet
accounted for 10% of GDP growth over the past 15 years. Recent ICT
developments like Enterprise 2.0, cloud computing, social networks, etc.
are enabling dynamic new and smaller companies to develop and bring to
market innovations that before were too expensive to develop.
•
SMEs grow two-three times faster when they embrace the Internet.
•
For every job destroyed by the emergence of the Internet, 2.6 new jobs
were created. Still, the huge potential of ICT-enabled business innovations
remains to be unleashed by SMEs.
The nexus of forces (Social, Mobile, Analytics,
Cloud, Internet of Things) and new revenue
streams >
The challenge: combating in supply chains
• Small businesses, accounting for 99% of all enterprises and
contributing in many sectors up to 80% of all employment, are the
ones suffering the most from limited understanding of ICTs and their
potential, limited budget for ICT investments and difficulty in
recruiting ICT professionals
• Naturally, the first step for SMEs to embrace the Digital economy is
to go on-line, by establishing their own websites. A web presence is
necessary for an SME, but is not enough. There are millions of
websites on the net competing for visibility and for attracting the
interest of potential clients.
The challenge: combating in supply chainsCont’d
•
At the same time, industrial value chains are becoming increasingly sophisticated and
global. New business trends are emerging. The competitiveness of SMEs increasingly
depends on their capacity to connect better and do business with larger enterprises,
to integrate global value chains and thus become international business partners.
•
Smart use of information technology can help SMEs achieve this.
•
There are also great inefficiencies in industrial value chains, due to the fragmentation of the
regulatory and technological outlook
•
The proliferation of different business models and standards result in a lack of
interoperability between different technological solutions and disrupt efficient information
flows along value chains.
•
SMEs in particular risk elimination from global value chains, due to shortage of appropriate,
affordable and interoperable ICT solutions to link them with large business partners.
The challenge: combating in supply chainsCont’d
•
Moreover, several States have been increasingly promoting smart use of ICT along
industry-specific value chains, following different approaches and standards, risking
to add complexity and fragmentation.
So the huge potential of smart use of ICT in value chains, notably by SMEs is still
largely underexploited.
The policy response: the integration of SMEs
in global value chains
•
Ministry of Communications Technology should launch the Nigeria initiative to
promote the smart use of information technologies and the integration of SMEs
in global industrial value chains. The objective is to modernize industrial value
chains through the smart use of ICT and help notably SMEs better connect to
larger enterprises and become fully integrated international business partners.
•
The focus of these actions is on SMEs, notably how to help them get connected and
offer them a better position in the globalized world.
•
The initiative will result in simplified business processes, common data
communication standards, better return on ICT investments, and efficiency gains,
notably for the smallest enterprises. While it is conceived and designed for the
smallest enterprises, the ultimate beneficiaries will be the entire Nigerian economy.
The policy response: the integration of SMEs
in global value chains
•
This initiative will be complementary to actions plans such as the National
Broadband Plan, the NITDA Digital agenda, office of the ONC e.t.c. The focus of these
actions is on SMEs, notably how to help them get connected and offer them a better
position in the globalized world.
•
This initiative will consist of series of demonstration actions, with the objective to catalyze
the creation of interoperable eBusiness frameworks that would help link SMEs to larger
enterprises in an efficient way.
•
•
The broader tangible and intangible benefits for the different types of stakeholders are
expected to be:
For SMEs:
- facilitating the entry into the market of new, dynamic players;
- strengthening business relations between SMEs and big companies;
- helping SMEs become fully integrated international business partners;
- streamlining business processes;
- increasing returns on investments in ICT;
- improving business transactions;
- reducing administrative overheads or errors;
The policy response: the integration of SMEs
in global value chains
•
For larger companies:
- increasing their innovation capacity by partnering with other innovative SMEs,
- enhancing customer satisfaction through more flexible, personalized services;
- shorter time-to-market;
•
For the economy and society:
- promoting a more dynamic and competitive economy,
- facilitating the market entry of new players, on fair terms.
The policy response: the integration of SMEs in global value
chains