How improved take up and usage of digital connectivity, in particular for ecommerce, supports development objectives
On 7 December 2023, the Broadband Commission Working Group on Connectivity for MSMEs, co-chaired by ITC and GSMA, hosted an in-person session at UNCTAD eWeek to explore the findings of their recent report, “Making Connectivity Work for MSMEs”, and discuss how improved uptake and usage of digital connectivity, especially for e-commerce, supports development.
The Working Group Co-Chairs invited global stakeholders and Working Goup members from ITU, Smart Africa and Mastercard to discuss the pivotal role of digital connectivity in empowering MSMEs. Speakers shared their perspectives and examples and called for collaborative efforts to realize the Broadband Commission’s 6th Advocacy Target.
The Broadband Commission’s 6th Advocacy Target aims to improve connectivity of micro-, small- and medium sized enterprises (MSMEs) by 50%, by sector by 2025.
Perspectives on Connectivity and MSME Empowerment
Mr. James Howe, Head Digital, Markets and Connectivity, ITC, representing Working Group Co-Chair and Executive Director of ITC, Ms. Pamela Coke-Hamilton, moderated the session and set the stage with a snapshot of the report of the Working Group on Connectivity for MSMEs. He expressed that overall, increasing MSME participation in the digital economy will require stakeholders such as governments, international organizations, companies, and NGOs, to fully participate in facilitating this trajectory: closing connectivity gaps; creating digital enablement to drive awareness and usage, and programmatically supporting underserved and marginalized communities.
Mr. Alex Wong, Senior Advisor, Strategic Engagement and Initiatives, ITU, representing Working Group Member, Commission Co-Vice Chair and ITU Secretary General Ms. Doreen Bogdan-Martin, opened the discussion by addressing the issue of affordability, agreeing that is a major barrier for MSMEs.
The Broadband Commission’s advocacy target on affordability suggests that costs should not exceed 2% of Gross National Income (GNI), however, over half of low to middle-income countries surpass this threshold, notably in Africa where 2GB data costs 4.5x the recommended amount.
Wong presented a recent report of the Giga initiative, a collaborative initiative of the ITU that aims to map the connectivity status of every school worldwide, which shows that with a combination of sustainable funding business models, around 90% of the cost of connectivity for schools can be covered. And, by utilizing schools as connectivity nodes, a global backhaul network can be created that facilitates connectivity solutions for communities and in this example for MSMEs. He noted that in addition to addressing connectivity costs, it is imperative to consider other factors in looking at the MSME challenge. Access, affordability, relevance, knowledge, and safety and security are crucial aspects that need to be tackled. The proposed framework of the Working Group report highlights these points, emphasizing their significance in enabling sustainable MSME growth.
Mr. Osman Issah, Unit Manager – Resilient and Inclusive Digital Infrastructure Initiatives, Smart Africa, and representative of Working Group Member and Director General of Smart Africa, Mr. Lacina Kone, explained how rural communities often lack basic infrastructure like water, power, roads, which makes digital development difficult, as network providers lack incentive for deployment. He went on to suggest that effort should be made to integrate the informal sector into the formal digital economy to address this issue. He noted that Smart Africa plans to start initiatives in Rwanda, Nigeria, Kenya, and Congo-Brazzaville in the second quarter of 2024 to improve affordable access of devices to close the usage gap, as well as increase capacity building around digital transformation.
Mr. Melle Tiel Groenestege, Sr. Director Digital Inclusion, GSMA, representing Working Group Co-Chair and Director General of the GSMA, Mr. Mats Granryd, set the context for his intervention by sharing that mobile is the primary way of accessing the internet in LMICs and emphasized the need to address general awareness and usage of connectivity by MSMEs, instead of just investing in connectivity infrastructure. In a pilot in Ghana, Tiel Groenestege highlighted, that the majority of women micro-entrepreneurs reported that using mobile for business increased their profitability by almost 50%. He went on to discuss gender-specific challenges to digital inclusion such as structural inequalities and restrictive social norms, including time constraints due to domestic responsibilities and dependency on gatekeepers for access to markets. He called for collective efforts to overcome these challenges and cited GSMA’s mobile internet skills training toolkit as one resource for leveling the playing field to close both the gender and usage gaps.
Ms. Cynthia Saab, Global Vice President for Digital Country Partnerships, MasterCard, joined the session as an external expert of the Working Group. Following GSMA’s comments on gender inclusion, she shared that MasterCard aims to financially include one billion individuals and 50 million small businesses, with half of them being women-owned, by 2025. Saab explained how affordable payment tools, along with proper infrastructure and connectivity, are important to ensure small businesses’ survival and growth. She summarized by stating that by leveraging private-public partnerships, advocating for affordable payment tools and infrastructure, providing suitable education and credit opportunities, and prioritizing cybersecurity, Mastercard aims to facilitate the growth and success of small businesses and achieve sustainable and inclusive economic development.
AI-Generated notes for the session can be found online.
What is UNCTAD eWeek?
Organized by UNCTAD in collaboration with eTrade for all partners, the UNCTAD eWeek 2023 will be held from 4 to 8 December 2023 in Geneva , at the CICG (International Conference Center of Geneva) under the theme ‘ Shaping the future of the digital economy ’.
Considering that digitalization is one of the most influential mega-trends that will not only affect development outcomes in the short and medium term, but also determine the future we live in, the international community needs more than ever to find ways to close the digital divides and create frameworks that enable the digital economy to generate inclusive, equitable and sustainable development .
During the week, Ministers, senior government officials, CEOs and other business leaders, international organizations, development banks, academia and civil society will come together to address 3 key questions:
- What does the future we want for the digital economy look like?
- What is required to make that future come true?
- How can digital partnerships and enhanced cooperation contribute to more inclusive and sustainable outcomes?
Throughout the various sessions, emphasis will be given to:
- Innovation: to offer a unique and fresh perspective to the discussion on the future of the digital economy
- The identification of scalable good practices and possible policy avenues
- Concrete actions and actionable steps to help shape an inclusive and sustainable future of the digital economy.