The Incorporation Of ICT Into The Management And Production Processes Of SMEs: Challenges And Opportunities
The expansion of business activity based on the creation of a more diversified, knowledge intensive economy and the widespread adoption of Information and Communication Technologies are central pillars in Government’s policy agenda for the promotion of sustainable development. At the core of the diversification thrust is the expansion of business activity based on the development and strengthening of the SME sector. SMEs constitute the mainstay of economic activity outside of the country’s dominant energy sector and are therefore critical to the country’s economic and social development; playing an important role in employment and income generation, delivery of goods and services within the local economy and in export markets, entrepreneurship development, innovation of new products and processes, and as suppliers to large companies. This holds true for the SME sector in developed and developing economies alike.
Notwithstanding Government’s recognition of the importance of SME activity, the sector’s continued development is contingent on the ability of the companies to compete in an increasingly liberalized and globalized trading arena. In this regard, technology, and specifically Information and Communication Technology (ICT), is critical to providing strategic competitive advantage. Various studies have clearly established the nexus between the widespread adoption of ICT and substantial growth in domestic production in developed market economies; acknowledging that ICT can play an important role in improving the competitiveness and productivity of businesses. The question arises, however, as to what extent have SMEs been able to reap such gains.
A scan of key developing regions demonstrates that, by and large, SMEs have faced major challenges in adopting and utilizing ICT. Data sourced from the United Nations Economic Commission for Latin America and the Caribbean (UNECLAC) shows that the sub optimal performance of SMEs in ICT uptake in the region is largely attributable to the following:
- Limitations at the levels of human resources, finances and access to information; taking cognisance of the imperative for SMEs to be extremely cautious in making investments in a scenario of scarce capital
- Difficulties in effecting changes to the internal processes of the enterprises and in their relations with suppliers, clients and partners, to take advantage of ICT; SMEs being particularly constrained in regard to the implementation of complex organization and information systems.
In the case of the Asia-Pacific region, where SMEs constitute almost 95% of enterprises within the region, data sourced from the United Nations Development Programme – Asia- Pacific Development Information Programme (UNDP-APDIP) shows that while the region hosts the fastest growing ICT markets and ICT industries in the world, low adoption of ICT is a stark reality. This is due primarily to major constraints ranging from inadequacy of skilled technical capacities to inadequate connectivity and infrastructure, and very limited understanding of the dynamics of the digital economy.
It is noteworthy that the scenario depicted above is not only confined to developing/advanced developing countries, as a relatively recent Study conducted by Researchers at the University of London shows. The Study, based on a survey of 378 SMEs in the south-east of England, found that the adoption and use of ICT mainly focused on routine operational matters, with very low uptake of allied adoptions of a more strategic nature, such as Enterprise Resource Planning (ERP). ICT was perceived by the SMEs to be costly and complex.
With initiatives being taken at policy and programme levels in developing and developed countries to address the identified shortcomings, the race is indeed on to assist SMEs in maximizing the use of ICT and ensure that they contribute optimally to enhanced efficiency, productivity and market reach in the fiercely competitive international market environment.
It is within this context that the relevance and significance of CARIRI’s collaborative venture with the Inter-American Development Bank (IDB) in the area of ICT can be fully appreciated. With financial support from the IDB’s Multilateral Investment Fund (MIF), CARIRI, as part of its mandate to build technological capability and enhance operational efficiency among SMEs, is undertaking a project to improve the performance of SMEs through the application of ICT. The project is targeted at companies in the Food and Beverage, and Plastics, Printing and Packaging sectors, which are among a number of key strategic sectors that have been earmarked by Government for priority attention.
The project has four (4) components, as follows:
- Sensitization/Awareness Building
Given the fact that many SMEs are not fully cognizant of the potential impacts of ICT, are confused by the terminology or see the technology as only applicable to larger companies, the first component of the project is designed to build awareness of the business benefits of ICT in SMEs - Conduct of Diagnostic Scoping Studies
This component will assess the current status of ICT use in SMEs and identify opportunities and challenges for SMEs in adopting ICT, and will include the selection of companies to participate in the third component, ie. the Intervention Programme - Implementation of ICT Intervention Programme
A major highlight of the project will be the interventionist approach which will be utilized, ie, directly hands on, working together with individual enterprises to leverage the full power of ICT. Accordingly, implementation of the Intervention Programme will involve the design and implementation of ICT solutions for fifty (50) SMEs within the targeted sectors. - Measurement and Dissemination of Lessons Learned
In order to maximize project benefits, results and lessons learned will be disseminated to Participants at all stages of the project and will be available on a purpose-built website. In addition, this will help to promote the adaptation of the project to other viable business sectors in Trinidad and Tobago, and the wider Caribbean region.
Both the Diagnostic Scoping Studies and ICT interventions will be undertaken at no cost to the companies, except for the acquisition of hardware and software items, as may be required.
CARIRI sees the project as providing an excellent opportunity for SMEs to make a quantum leap in enhancing operational efficiency, productivity, competitiveness, innovation and profitability.
The inaugural Awareness Building Forum was successfully conducted on July 1, 2011. The next two (2) Forums will be held on September 21, 2011 at Kampo Restaurant, Ramsaran Street, Chaguanas; and on October 19, 2011at Paria Suites, La Romaine. For further information and to register to attend, please contact CARIRI ICT Project Team at 662-7161 or visit the project website at www.ict4smett.com.
