1 / 41

The Role of SMMEs in ICT innovation and the knowledge economy, Presentation at CODIST in Addis Ababa April 30, 2009

The Role of SMMEs in ICT innovation and the knowledge economy, Presentation at CODIST in Addis Ababa April 30, 2009. Dr. Meoli Kashorda, MIEEE MIET Professor of Information Systems, USIU & Executive Director, KENET. TOTAL PROJECT 4200 Km. ZTE. HW. SAGEM.

flora
Download Presentation

The Role of SMMEs in ICT innovation and the knowledge economy, Presentation at CODIST in Addis Ababa April 30, 2009

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The Role of SMMEs in ICT innovation and the knowledge economy, Presentation at CODIST in Addis Ababa April 30, 2009 Dr. Meoli Kashorda, MIEEE MIET Professor of Information Systems, USIU & Executive Director, KENET

  2. TOTAL PROJECT 4200 Km ZTE HW SAGEM 1342 + 1112 + 1750 Km STM16 WM STM4 WDM STM16 STM4 WDM STM16 1342 + 1112 + 1750 Km STM16

  3. Some facts about Kenya • Over 50% of population lives on more than $1 per day • ICT indicators • Mobile customers = 15 million (close to 40% teledensity) • Internet users =3 million • Population 37 million; GNI per capita = $530; • Over 150,000 university students • Kenyans dominate London, New York, Boston etc. Marathons • We are the official Athletics representatives of Africa! • Highest number of medals at the Beijing Olympics! • Innovative runners!

  4. Agenda • ICTs and Innovation • Pillars of the Knowledge Economy • Global Competitiveness Index and Knowledge Economy Index • Growth of Mobile ICTs in Kenya • Trends in mobile teledensity • ICT industry in Kenya • How is the SMME sector using ICTs? • Based on ICTs Trade and development Kenya case studies case study 2007 • Status of Mobile Commerce in Kenya – 2008 • ICT innovations to support SMMEs • M-PESA and ZAP money transfer innovations • Microfinance sector innovations • Conclusions

  5. Consumer - Enterprise LANs, ERPs Internet, Phones PC, Internet Software, Phones Enterprise - Enterprise Consumer - Consumer PC, Internet Software, Phones LANs, ERPs Internet, Phones Department - Department Firm-level assessment of ICT infrastructure for businesses

  6. What is the firm-level motivation for adopting ICT innovations? • Business or organizational strategy • Leadership believes IT matters! • Business value • Presentation has a special focus on firm-level ICT diffusion and usage

  7. Why the focus on ICT at the national level? • Knowledge economy – basis for competitiveness is knowledge and innovations • Four pillars: Institutional, educational, innovation, and informational infrastructure • Knowledge Economy Index (KEI) and the Knowledge Assessment Methodology (KAM) • Networked readiness index (NRI) • What happens if trading partner has higher KEI or NRI?

  8. Some empirical evidence of ICT-Growth-Trade • Benefits of ICT cut across Developed and Developing Countries; • Developing Country benefits are HIGHER • Example of mobile phone: For an increase of 10 units per 100 people: • GDP growth up 0.6 percent per year in Developing countries (twice as high as in Developed Countries (Prof. Fuss, London Business School) • (Over 70 billion Ksh for Kenya)

  9. What ICT sectors growth? Mobile telecoms Very profitable and attract local and foreign investments! Optical fiber backbones Government investment in national and undersea cables Emerging infrastructure companies in Kenya (KDN, TKL, KPLC) Software development industry still small and in the SMME sectors – it is harder! CODIST - SMME Driven ICT Innovations

  10. ICT regulatory regime Kenya Communications Act 1998 No duopoly in fixed or mobile services Unified Licensing Framework (ULF) Communications  ICT Act limitations Kenya Communications Regulations 2001 Dominant operator has not yet been announced Safaricom has over 80% market share – problem? Kenya ICT (Amendment) Act 2008 Assented on December 30, 2009 Recognition of e-transactions – important for M-commerce Introduces broadcasting & content regulation CODIST - SMME Driven ICT Innovations

  11. Growth of fixed and mobile telephony CODIST - SMME Driven ICT Innovations

  12. Growth of Kenya Fixed and Mobile Services (use the E-government presentation)

  13. Market environment Environment Pol. & Regulatory env Infrastructure env. Individual readiness NRI Readiness Business readiness Govt readiness Individual usage Usage Business usage Govt. usage Source: GIT report 2003-2004 What does Network Readiness Index measure?

  14. No significant change in networked readiness index? CODIST - SMME Driven ICT Innovations

  15. No significant change in NRI for Kenya or other EA countries! Internet penetration is low Low adoption of ICT by the dominant SMME sector? CODIST - SMME Driven ICT Innovations

  16. Networked Readiness Index (2004-2007) Source: World Economic Forum Global IT Reports

  17. Growth in Internet Infrastructure in Kenya • KENIC and KIXP examples of successful Public Private Partnerships • Time Server and F-root name servers installed in Kenya • KENET a national research and education network • Building a national optical-fiber based network • Estimated 2.7 million users in 2007 • Mobile Internet must have added 1 million users! • Undersea cables will be landing in Kenya in starting June 2009! • SEACOM, TEAMS, EASSY etc. • But – national leased line network still underdeveloped!

  18. Geographical dispersion of leased lines (business Internet)

  19. Innovations and the SMME sector How is it measured? 12 pillars in Global Competitiveness Report! Does the SMME sector have a role? Yes! How should Africa measure ICT innovations? Scientific innovations are not the full story! CODIST - SMME Driven ICT Innovations

  20. CODIST - SMME Driven ICT Innovations

  21. Global competitiveness and innovation rankings (out of 134) CODIST - SMME Driven ICT Innovations Source: Global Competitiveness Report 2008

  22. CODIST - SMME Driven ICT Innovations Source: World Bank KAM 2008 website

  23. What is the Knowledge Economy? One of the four Pillars measures Innovation But using developed country metrics! World Bank has developed the Knowledge Economy Index used to rank economies! Is it appropriate for Africa? Tanzania has been assessed using the Knowledge Assessment Methodology No idea if that has helped! CODIST - SMME Driven ICT Innovations

  24. CODIST - SMME Driven ICT Innovations The “4 Pillars” of a Knowledge Economy (KE) • A supportive economic and institutional regime to provide incentives for the efficient use of existing and new knowledge, and the flourishing of entrepreneurship. • An educated and skilled population to create, share, and use knowledge well. • A dynamic information infrastructure to facilitate the effective communication, dissemination, and processing of information. • An efficient innovation system of research centers, SME’s, universities, consultants, bigger businesses and organizations Source: World Bank Institute

  25. Knowledge Economy Index 2008 comparisons CODIST - SMME Driven ICT Innovations

  26. How are they measuring Innovation? Royalty payments and receipts, US$ per person • Technical journal articles per million people • Patents granted to nationals by the U.S. Patent and Trademark Office per million people This puts African countries at a distance – the Global Competitive Index could be a better measure of innovation! CODIST - SMME Driven ICT Innovations

  27. Are these measures appropriate? SMMEs cannot drive innovation if we use these measures We must develop appropriate measures of innovation that are contextually relevant Michael Porter and WEF include business innovations (sophistications) CODIST - SMME Driven ICT Innovations

  28. ICT innovations for SMMEs Information infrastructure necessary for innovations Business needs of SMMEs and low-income groups drives ICT innovations How do SMMEs use ICT? Some empirical studies CODIST - SMME Driven ICT Innovations

  29. Business Internet Usage (2003)

  30. ICT usage by SMMEs (2005)

  31. Purpose for use of ICT by SMME CODIST - SMME Driven ICT Innovations

  32. Why is Internet usage low in SMME sector? • Roundtable and focus group agreed on following factor in order: • Management mindset is the most significant barrier • Business culture that does not promote transparency especially on pricing • ICT diffusion and affordability • Low uptake of E-commerce not directly related to laws but limited internal readiness and usage of ICT • Baseline survey recommended

  33. These sector has specific needs that are driving innovations! Firm-level ICT strategies • Companies listed in NSE are effective users of ICT • Large and Medium-sized also effective users of ICT • It is stronger leadership • Business and management education for small and micro-enterprises very important • Analysis of affordability issues necessary • It is NOT just the PC – the applications are more important for diffusion 34 CODIST - SMME Driven ICT Innovations Meoli Kashorda

  34. Mobile innovations for SMME sector These sector has specific needs that are driving innovations! CODIST - SMME Driven ICT Innovations

  35. M-banking and M-commerce case studies CODIST - SMME Driven ICT Innovations

  36. Jamii Bora Customer Growth (Microfinance supporting SMMEs) CODIST - SMME Driven ICT Innovations

  37. Mobile money transfer growth in Kenya Launched by two main mobile operators Zain (17%) and Safaricom (80%) Safaricom M-Pesa money transfer It is a business proposition – Increase the data ARPU! P2P transactions – Ksh 20 billion in September from about Ksh 1 billion in September 2007 4.14 million registered users (September 2008) and 4,230 agents Zain launched ZAP on 16/02/2009 Sokotele service introduced before M-PESA failed CODIST - SMME Driven ICT Innovations

  38. Other innovations ICT applications for the sectors Web-based accounting applications services businesses New businesses with a focus on mobile applications for the SMME Challenge Lack of data on trends at the national level CODIST - SMME Driven ICT Innovations

  39. Conclusions Mobile commerce innovations developed to serve the needs of SMME sector The PC is no longer a limitation for banking and money transfer New measures of innovation required The KEI does not measure business and applications innovations! There is a need to collect data on the innovations that meet the needs of SMME sector CODIST - SMME Driven ICT Innovations

  40. Thank You Meoli Kashorda, Ph.D., MIEEE, MIET Executive Director, Kenya Education Network (http://www.kenet.or.ke) and Professor of Information Systems, USIU School of Business, Kenya (http://www.usiu.ac.ke) E-mail: mkashorda@kenet.or.ke or meoli@usiu.ac.ke CODIST - SMME Driven ICT Innovations

More Related