Why Should Countries Embed ICTs into SME Policy

In this e-Note, the author argues that as "the global economy becomes
increasingly reliant on information communication technologies (ICTs) to receive, process, and
send out information, SMEs [small- and medium-enterprises] in developing countries should not be left behind."
If they miss out on ICT technology, these businesses will lose
opportunities to increase productivity and become a part of the global economy.



According to this e-Note, ICTs can benefit SMEs by:

• increasing productivity in the production process
• increasing efficiency of internal business operations; and
• connecting SMEs more easily and cheaply to external contacts, whether locally or globally.

The author notes several constraints to adoption of ICTs by SMEs:

• Limited ICT literacy
• High fixed cost (purchasing hardware and software, disrupting existing business practices, and IT maintenance)
• Poor communication infrastructure leading to high costs of accessing ICTs
• Inexperience in integrating ICTs into the business process
• Undeveloped legal policy for electronic payment
  and security issues

The e-Note concludes with the observation that while ICTs have obvious benefits for the growth of SMEs,
most countries still lack a comprehensive and focused approach encouraging adoption of ICTs. The author
recommends that nations adopt comprehensive policies which recognise the differences in needs and constraints
of various sectors, and that the governments focus their efforts accordingly.