ITC Executive Director at the WSIS 2017 (en)
Geneva - Tuesday, 13 June 2017
Secretary-General Houlin Zhao,
Ladies and Gentlemen,
Thank you for inviting me to address you on behalf of the International Trade Centre, the joint agency of the World Trade Organisation and the United Nations focused on supporting the internationalisation of micro, small and medium sized enterprises (MSMEs).
Just last week, at the European development Days, ITC had the pleasure of bringing to Brussels three delegations of young entrepreneurs from Rwanda, Morocco and Senegal whom we have been supporting to sell their products and services on-line.
For them internationalisation is about better using digital technologies to bring their goods and services closer to bigger markets; it is about using digital innovation to leapfrog; it is about connecting the unconnected.
Let me start with Anna, from Let’s Sequoia, a Rwandan start up selling biodegradable coffee capsules on-line; the beauty of the capsules is not only that they are Nespresso compatible, but also that they are the means for cooperatives of hundreds of small women coffee producers to get greater value for their Arabica coffee.
We also had Oumar, a young Senegalese entrepreneur who has set up a logistics company in Dakar to manage the distribution of on-line traded products. For him e-commerce means new business in the services sector.
We also had Zineb, a young Moroccan selling argan oil and cosmetics providing an income for hundreds of farmers in the Southern region of Morocco. Every time she sells her products, the farmers get a decent income for their labour.
E-commerce, now more than 12% of international trade, is working as an enabler of growth and poverty reduction. UN Global Goal number 17 – trade as a means, not as an end – combined with Goal 9 – access to internet – can help us end extreme poverty by 2030.
But all of this cannot just happen organically. We need concerted efforts linking infrastructure, policies and hands on support on the ground.
4 billion people in developing countries still remain offline. And less than 10% of LDCs use the internet. We have to accelerate actions to narrow this gap.
We also need smart policies. And for that partnerships are key. I am pleased that ITC is a founding partner of UNCTAD’s ‘E-trade for All’ which is doing an excellent job at helping countries develop conducive policies to support e-commerce. I am also pleased that ITC is working with the ILO on the Global Initiative for Decent Jobs for Youth to ensure that digital and entrepreneurship work hand in hand in creating employment opportunities for youth.
But we should also address connectivity issues at the firm level. A survey that ITC has run through thousands of companies worldwide shows that small firms are 10 times less likely to use email to communicate with buyers and suppliers than large firms; and are 8 times less likely to have a business website than large firms. And in developing countries are largely absent from e-commerce channels.
This matters because SMEs generate more than 50% of the world’s GDP and the majority of jobs and are central to entrepreneurial led growth. E-commerce is indeed increasing in the domestic markets of many developing countries – but so far at the expense of SMEs and local production. By failing to promote access to e-commerce, small firms are slowly being crowded out by larger, and often foreign, platforms. There is a need to build an indigenous culture of e-commerce and bring these local SMEs onto this e-commerce highway.
We should also address the gender gap in connectivity: women owned and led firms are far less likely to be engaged in e-commerce. They are 12% less likely to use email than men-managed firms which is an important proxy for internet usage. As part of ITC’s SheTrades initiative, we have pledged - working with our partners in-country- to connect one million women entrepreneurs to market by 2020, including by promoting the use of digital technologies and an application “SheTrades.com”. We are well ahead of schedule with almost 800, 000 women already connected. The demand is there and we have to harness it.
Back to where I started. We first listened to the SMEs and their needs. And on that basis we have developed a suite of tools along the value chain that address their bottleneck to go to digital markets.
In all three countries we have helped build local “Made in” e-commerce platforms that have helped SMEs try their first trade on-line directly, without intermediaries. The solution includes building on-line catalogues, international online payments, advice on logistics and much more. We are delivering this with the support of our valuable private sector partners, DHL, E-bay, Alibaba and others. Most importantly, these interventions are scalable and can easily be replicated.
My message is simple: let’s not forget the soft infrastructure dimension of e-commerce.
To conclude, in December at the WTO Ministerial Conference in Buenos Aires, your colleagues trade Minister will have a chance to discuss how trade policies can be enablers for SMEs to e-trade. Make sure they hear your voice. Make sure they act to help connect the unconnected.
Thank you for your attention.