Digital trade rules and SMEs – Much to gain?

Event report

[Read more session reports from WTO Public Forum 2017]

The volume of small and medium sized enterprise (SME) digital trade is relatively small compared to that of large companies. Yet, the effective inclusion of SMEs represents an area of potential growth, and gain for sustainable development.

Moderating a diverse panel of private and public sector representatives, Mr Andrew Crosby, Managing Director at the International Centre for Trade and Sustainable Development, emphasised the link and intersections between SMEs and sustainable development, and the fact that there is much to gain. Yet, he asked, what challenges do SMEs face? While there are tangible indicators that SMEs are increasingly involved in international trade, what kind of inclusive business models do SMEs need in order to be sustainable and to grow?

Reflecting from a business perspective, Ms Rupa Ganguli, Founder and Director of SPINNA Circle, described her own experience with helping SMEs connect to the global market. E-commerce is certainly an enabler for inclusive trade, but the organisation she represents took its mission a step further.

After a solid experience with physical pop-up merchants, the organisation turned its attention to the actual stories behind the SMEs: the experience of the female entrepreneur selling goods made of jeans, or the manufacturing history of a product. Consumers were therefore able to see and experience the story and impact behind the products they were choosing.

In addition, Ganguli said that her organisation was able to assist SMEs with online platforms. Replicating pop-ups to an online environment represented many regulatory challenges. For example, SMEs needed help to sell their products, and so, the platform needed to be commercially viable. The payment system opened up a plethora of issues, from e-money to blockchain and beyond. Any goods that are sold need to be transported, bringing about even more issues related to freight regulations. Yet, the organisation has been able to help SMEs while at the same time giving consumers meaningful choices.

Speaking from a government perspective, Ms Constance Chidiogor Ikokwu, Strategy and Communications Advisor for the Nigerian Ministry of Industry, said that SMEs were a major priority for the Nigerian government. The ministry is focusing on supporting SMEs, focusing on improving access to ICTs, and on building the SMEs’ capacity to use ICTs.

Ikokwu explained that the government believes in the enormous potential for growth for SMEs, and as part of its support, it is also focusing on setting up adequate frameworks and platform to help this growing sector.

There is certainly an economic digital divide, she said. Broadband coverage – which is currently available only in 30% of the country – limits the growth of the sector. Yet, e-money is one predominant area which is enabling the spread of the digital economy.

Ms Aretha Frank, Senior Public Relations Manager at Huawei Technologies, focused on a technological perspective, explaining that Huawei’s priorities were to provide better and affordable access via fixed broadband and telephony.

The training component is essential to the SMEs’ growth, Frank explained. She mentioned the recent training for over 1300 youths from Nigeria on the basics of ICTs. Ten of the youngsters were additionally invited for an intensive training programme in Beijing, which represents a significant commitment for supporting literacy. The training is paying off, as some of the youths have established their own businesses. These success stories can encourage other organisations to support training for SMEs.

Representing a major platform provider, Mr Frank Pang, vice-president of Didi Chuxing, encouraged stakeholders to embrace the change. Speaking from his experience as a former trade diplomat for the Chinese Ministry of Commerce, Pang explained that no country, company, or government will ever be fully prepared for change. The concept of being fully prepared – which is quite unachievable – can hamper progress.

E-commerce and the sharing economy present many opportunities. In support of growth, a whole of government approach is required – an approach that was fully adopted by the Chinese government, Pang explained. The sector presents many uncertainties, yet such an approach can help support growth and development.
 

by Stephanie Borg Psaila