Small and Medium Enterprises and ICT

This 40-page manual discusses why small and medium enterprises (SMEs)in the Asia-Pacific region may find it advantageous to adopt information and communication technology (ICT) in their business structure, surveys past ICT policies and programmes for SMEs, and recommends policy options for the consideration of interested governments. It is part of the e-Primer Series for the Information Economy, Society, and Polity, jointly produced by the United nations Development Programme (UNDP) Asia-Pacific Development Information Programme (APDIP) and the Asian and Pacific Training Centre for Information and Communication Technology for Development (APCICT).


SMEs, constituting 95 percent of enterprises in the Asia-Pacific region, as reported here, have been slow to adopt ICT due to poor telecommunications infrastructure, limited ICT literacy, the high cost of ICT equipment, and incomplete government regulations for e-commerce. However, this document states that SMEs can find benefits either as producers of ICT or as users of ICT for purposes such as increased productivity, faster communications, and reaching new clients. "The most basic ICT tool is having communication capabilities through fixed lines or mobile phones, whichever is more cost effective. SMEs may then use a personal computer (PC) with basic software for simple information processing needs such as producing text or keeping track of accounting items. Internet access enables SMEs to have advanced communication capabilities such as email, web browsing and launching a website. SMEs in manufacturing can benefit from more advanced ICT tools such as Enterprise Resource Planning (ERP) or inventory management."

Constraints include poor telecommunications infrastructure, limited ICT literacy, inability to integrate ICT into business processes, high costs of ICT equipment, incomplete government regulations for e-commerce, and a poor understanding of the dynamics of the knowledge economy. As stated in the document, "[t]he willingness of SMEs to integrate e-business practices depends on how much it can directly improve their core business and how much the potential benefits outweigh the definite costs." Strategy recommendations for designing programmes, including policy recommendations for governments, are the following:

• Target entire industries that are most likely to benefit immediately from ICT.
• Efforts to increase awareness should focus on concrete benefits, be industry specific, and target the right audience.
• Decrease the barriers to ICT adoption, including legal, financial, human capacity, and infrastructure.
• Create locally relevant resources online.
• Partner with other organisations.
• Raise awareness of the benefits of ICT.
• Strengthen ICT literacy and build capacity in the alignment of business and ICT strategies.
• Create enabling environments for the adoption and growth of ICT firms.