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    E-challenges: Countries in Action

     

     
     
    © International Trade Centre, International Trade Forum - Issue 1/2001 
     

    Internet access is a challenge for many exporting SMEs in developing countries. For this reason, several national trade promotion strategies concentrate on connecting and training SMEs.

    Ghana's e-challenge

    Ghana's national strategy is to promote export development aggressively, primarily in non-traditional export sectors. The Ghana Export Promotion Council (GEPC) coordinates the implementation of this strategy. One of Council's strategic objectives is that all registered Ghanaian exporters should become e-competent by 2003.

    According to GEPC records, some 2,600 Ghanaian companies are involved in exporting. A telephone survey of 654 of the 838 exporting companies currently registered with GEPC revealed that only ten (equivalent to 1.5% of all registered exporters) had Internet connectivity, the first step in acquiring the capability to engage in any form of e-trade.

    A related survey of a broader audience, the "national export community" (22 additional companies, 15 trade support institutions, seven trade promotion organizations and six product and trade associations) revealed a somewhat higher level of connectivity, but little application to business development.

    The surveys revealed that the low response within the Ghanaian business sector to e-trade challenges and opportunities was due to:

    • an overall view that the Internet was a status symbol and that being connected was unlikely to alter business prospects and practices;

    • general absence of computer literacy within the firm;

    • perceived high cost of acquiring e-competency within the firm;

    • perceived high cost of building e-based operations and networks;

    • perceived high initial cost of connectivity; and

    • absence of an electronic payment system.

    The response of GEPC 

    To address low e-competency and commitment to acquiring e-trade capability, the Ghana Export Promotion Council has developed an e-competency strategy that includes:

    • arranging soft loans through its Export Development and Investment Fund to exporting firms for the purchase of computer systems;

    • organizing training programmes for export firms through its Export School programme;

    • establishing a national portal, which will provide comprehensive information on Ghanaian exports and a virtual product exhibition;

    • encouraging computer companies and Internet service providers (ISPs) to participate directly in the e-competency programme;

    • encouraging exporters to "connect" to the Internet, develop enterprise web sites and devise e-trade strategies;

    • encouraging banks to set up systems to facilitate online payments for domestic and external commerce;

    • advocating changes in public policy with a view to reducing tariffs on imported computer hardware; and

    • promoting investments in the assembly and manufacture of computer hardware in Ghana as a cost-cutting measure.

    Business view from Ghana: Internet - friend or foe? 

    Ghana's national strategy is to promote economic development by expanding and diversifying exports. Promoting e-competency within the Ghanaian business community is a central feature of this strategy.

    For the strategy to be a success, it needs support from Ghanaian business leaders. Among these leaders is the head of a sizeable, Accra-based handicraft marketing company, who is also the president of the Handicraft Exporters Association of Ghana.

    To maintain regular and rapid contact with his international buyers, he established an e-mail address at a nearby Internet café. He is not convinced, however, that the cost of acquiring further e-business systems and competencies within his firm and, by extension, the entire handicraft sector in Ghana can be justified.

    From his perspective, there is little evidence that e-competency:

    • promises new operating efficiencies and access to a wider client base;

    • creates opportunities to reposition his firm in the international value chain; or

    • is essential to maintaining existing commercial relationships.

    This business community leader is, in fact, opposed to establishing a web site. In his experience, exhibiting one's products on the Internet increases the likelihood that competitors, particularly firms in other countries, will copy his designs, which are his single most important competitive advantage.

    Based on the contribution of Tawia Akyea, Ghana Export Council, during the Executive Forum 2000, reported in the book, Export Development in the Digital Economy. 


     


    Reaching SMEs 

    "Our membership is made up of about 85% small and medium-sized enterprises which is representative for the structure of the Ghanaian economy. Only about 10% of our small-scale members have access to the Internet. Though the IT sector is booming in the country, the costs of Internet access are still too high - about US$ 25-US$ 30 per month plus telephone costs. In addition, compared to developed countries, computer equipment prices are very high. We have established a library with Internet access for our members for a small fee and support our members in their Internet-related activities.

    "We see a need to inform SMEs about the chances to expand their business activities, train SMEs to use new communication technologies and make Internet access affordable for SMEs.

    "We as an organization are very much interested in e-commerce - not only to support the member companies, but also to market their services internationally. Comments of other organizations with similar activities are welcome."

    From ITC's e-mail discussions, contributed by Monika Lincoln-Codjoe, Information Systems Manager, Association of Ghana Industries. E-mail: agi@agi.org.gh Internet: http://www.agi.org.gh 




    Business case study from India 

    Acquiring e-competency: a success story 

    The Gujarat Cooperative Milk Marketing Federation Ltd (AMUL) links 10,000 village societies in India, a total of 2.1 million milk-producing families. Its business involves daily collection of milk at 25 supply centres in Gujarat; the production of butter, cheese, ice cream, baby food and milk powder; the marketing of these products through 50 sales offices throughout India; and distribution through a network of 4,000 stockists who, in turn, supply 500,000 retail outlets.

    Notwithstanding the traditional nature of its business, the cooperative's management decided in 1995 to adopt "information technology integration" as a strategic thrust. The objective was to create new efficiencies in all aspects of the business, heighten competitiveness, and extend market reach (both within India and in export markets).

    Since that time, all 650 staff have received computer and e-commerce training. All are e-literate. Only e-competent applicants are now recruited. Five hundred computers have been installed at headquarters and a company intranet has been established.

    A web site (http://www.amul.com) has been constructed featuring sports information, recipes and quizzes (to stimulate buyer interest and to establish national brand recognition) and business-to-consumer order placement.

    E-competency has been established at the supply and distribution ends of AMUL's business. At the supply end, a computerized database has been established of all suppliers and their cattle. Computerized equipment measures and records qualities and quantities collected. Around 4,000 computers have been set up at member unions and village cooperatives. At the distribution end, 3,000 stockists have been provided with basic training and computers. AMUL experts assist stockists and retailers to build promotional web pages.

    AMUL cyberstores have now been set up in 125 locations in India, the United States of America, Singapore and Dubai. Each visit to the Indian cyberstore sites results in purchases averaging over 300 rupees (US$ 6.50). An e-mail database of 10,000 customers has been developed.

    All this has been achieved in less than five years despite a national environment characterized by weak information technology infrastructure, and a high "touch-and-feel" consumer culture.

    AMUL's future plans include introduction of a web-based business-to-business ordering system for dealers/stockists and e-transaction capability at the level of the village cooperative.

    "If you want to become e-competent, it is not enough to focus just on your own company. You need to bring in your whole business network. This means creating a shared vision," says B.M. Vyas, managing director of AMUL.

    From the book, Export Development in the Digital Economy. 


     


    Milking computers in India 

    "My company transformed itself in five years from being a milk marketing company to an 'IT company in the food business'. We started in 1946 in two villages producing 247 litres of milk... and today support ten product groups through an Internet-enabled distribution channel which includes 25 supply centres, 4,000 stockists, 500,000 retail outlets and a turnover of US$ 500 million. Much of the success of the company has been due to supporting the existing culture of the village cooperative societies."

    B.M. Vyas, Managing Director, Gujarat Cooperative Milk Marketing Federation Ltd, India bmvyas@amul.com 






    El Salvador's electronic export system 

    The Electronic System of Exports (SIEX) in El Salvador enables exporters to obtain electronically via the Internet all the required export documents from the Export Procedures Centre (CENTREX), at any hour, day or night. Through SIEX, the exporter sends information on transactions and obtains the corresponding authorization directly at the place of business.

    Almost 77,000 operations were authorized by SIEX during 1999 - 30% of them during non-commercial hours - for an amount exceeding US$ 2 billion.

    Not only does the system greatly reduce the time required to obtain authorizations, it is estimated that the average operation saves the exporter an equivalent of US$ 15 in direct costs.

    From SIEX to SICEX 

    We are now launching a successor site which will improve connectivity and information, and have trained firms to use it. See http://www.centrex.gob.sv/ 

    From ITC's e-mail discussions, contributed by Rebeca Flor, Export Procedure Centre (CENTREX), Banco Central de Reserva de El Salvador, rebeca.flor@bcr.gob.sv 



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