Less than one in five SMEs has website in Africa, few use internet for transaction – UN

The United Nations says less than one in five small and micro enterprises (SMEs) has a website in sub-Sahara Africa compared with four of five in high-income countries.

The United Nations Conference on Trade and Development (UNCTAD) in a report titled “Information Economy Report 2011: ICTs as an Enabler for Private Sector Development,” said developing countries’ SMEs use the internet to obtain information rather than to conduct transactions with governments even though the use of ICT is critical for entrepreneurs to participate effectively in international value chains.

“Computer and Internet use is critical for entrepreneurs to participate effectively in international value chains, yet less than one in five enterprises in sub-Saharan Africa has a website, compared with four of five in high-income countries,” said the report released October 19, 2011.

The report continues “For many enterprises in developing countries, the Internet is primarily used to send and receive e mails – by contrast, relatively few engage themselves in electronic commerce and among those that do, it is more often used for placing than receiving orders. In general, it is easier for enterprises to purchase than to sell goods and services online, as the latter may involve creating or upgrading a Web presence and restructuring sales and inventory processes.”

UNCTAD’s report further shows that SMEs in developing economies remain far behind in terms of use of ICTs, and “even when access to ICTs is made available, small enterprises do not always apply them in their day-to-day activities, either because they are deemed too expensive or because they are not trusted.”

On the contrary, the report said usage of the computers and high-speed internet by SMEs in developed countries has become common.

According to the Information Economy Report 2011, high-speed internet connections are essential to enable enterprises to make full use of Internet-based services and applications.

The report said “One advantage is the possibility to use Voice over Internet Protocol (VoIP), such as Skype. This is of particular relevance for SMEs, as it is less expensive than traditional telephone services.”

It added that broadband connectivity also allows for increased use of social media such as Facebook, Google+ and Twitter to tap into their expanding user base which presents huge economic and marketing opportunities for enterprises.

UNCTAD noted that while around 90% of small enterprises in developed economies benefit from high-speed Internet access, the corresponding share is much lower in other developing countries, especially in the case of small enterprises.

By Ekow Quandzie

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