MSME Day: Fostering tech innovation for a sustainable future

Sustainable social and economic development in the years ahead will depend on efforts to build networks and partnerships between big corporate players and the world’s innumerable micro, small and medium enterprises (MSMEs).

And just as important will be a global networking push among MSMEs themselves, according to an online panel hosted by the International Telecommunication Union (ITU) earlier this month ahead of Micro, Small and Medium-sized Enterprises Day (MSME Day).

Celebrated annually on 27 June, the day was initiated by the UN General Assembly in 2017 to recognize the crucial role of MSMEs in sustainable development.

As drivers of promoting innovation, creativity, and decent work for all, these enterprises are a crucial factor in the pursuit of the UN Sustainable Development Goals (SDGs) for 2030.

Small and medium-sized enterprises (SMEs) are typically defined as those with annual turnover up to about USD 50 million or employing up to 250 people. Recent years have shifted emphasis increasingly to the micro players, those employing up to 10 people or with turnover of USD 2 million or less.

Economic engines

Formal and informal MSMEs make up over 90 per cent of companies worldwide, accounting for 70 per cent of total employment and up to 50 per cent of global GDP, according to United Nations estimates. With their innate flexibility and knowledge of local markets, MSMEs can be uniquely well placed to solve market-specific challenges or meet emerging needs on the ground.

“This day is a reminder that tech micro, small, and medium-sized enterprises are the engine of today’s digital economy,” said ITU Secretary-General Houlin Zhao. “At a time when one third of humanity is still unconnected, MSMEs are essential to achieving the level of connectivity and digital transformation that countries are striving for.”

Over the last eight years, ITU has progressively increased its focus on the role of small businesses in the digital ecosystem, targeting small tech firms with knowledge-sharing and mentoring programmes, dedicated networking events, awards, and a discounted ITU membership category.

The ITU Telecom World SME Awards Programme, for example, has spotlighted innovations with the potential to change lives for the better using information and communication technologies (ICTs). The awards have also given small and medium enterprises (SMEs) a platform to connect with vital resources and partners for sustainable tech projects.

The winners of the 2021 ITU Telecom SME Awards Programme joined the MSME Day panel held as part of the World Summit on the Information Society Forum 2022, an annual gathering of the world’s ICT for development community.

Building the digital ecosystem

Receiving an award from the UN agency dedicated to ICTs boosts visibility and can help make early-stage projects bankable. The panel also highlighted the need for support from international organizations to forge and develop partnerships with large industry players, as well as local, regional and national governments.

“It was very important to win this award,“ explained Armando Aguirre, co-founder of Mexican connectivity provider and recent SME Award winner WIWI. “The follow up is to be able to work with ITU and other organizations to explain how important this is, to show authorities how connectivity benefits the underserved.”

Having claimed the top prize in ITU Telecom’s Connectivity category, WIWI is working to establish free, stable WiFi connectivity on public transport networks in cities across Mexico, enabling commuters who spend an average of two hours daily on a bus to connect to the Internet for free.

Another winner in the Connectivity category was China-based SME IPification, for a proprietary platform touting a unique blend of security, user experience, and privacy protection. Deployed in a telecom provider’s core network, the platform can identify and verify the user behind any given IP (Internet Protocol) address.

“The ITU award really helped put us on a global stage as our project depends on credibility,” said Stefan Kostic, Chief Executive Officer at the company. “The ITU and UN recognition put an additional stamp on our project and our company as a whole.”

The resulting plaudits and credibility boost have, in turn, helped solidify partnerships with 53 telecom operators covering 3 billion subscribers as IPification takes its solution to scale.

Bringing it to scale

While SMEs tend to be flexible and adaptable, they can benefit from aligning with large companies and organizations that can negotiate trade and development solutions worldwide to address regulatory restrictions. The advantages of such relationships flow both ways.

“Big companies can’t develop without small companies, and SMEs can’t grow without corporate support,” said Joaquin Patron, Executive VP of Urbit, Telecom award winners in the Digital Finance category and providers of fintech services to rural and underserved areas in the United States. “We are just one piece of the puzzle in serving underserved customers, so we need to find partners to grow and break the inertia of doing the same thing by taking a risk on innovation,” he added.

Secretary-General Zhao underlined how ITU’s SME-related initiatives help to foster this key component of sustainable development.

“I am delighted to see how this award has helped SMEs scale up and address societal challenges,” he said. “I encourage others to join ITU’s growing SME community and take a seat at the table alongside governments and larger businesses to address the world’s most urgent challenges and accelerate the achievement of the SDGs.”

The World Trade Organization (WTO) and the joint UN-WTO International Trade Centre (ITC) have also launched major initiatives to support MSMEs in the tech sector. These include ITC Global Trade Helpdesks and the WTO MSME platform, new online tools providing direct and practical support to tech entrepreneurs anywhere.

ITU’s support for small tech ventures continues to evolve. The organization’s recent World Telecommunication Development Conference in Kigali, Rwanda, affirmed the importance of enabling supportive environments where entrepreneurship-driven innovation can accelerate the achievement of the SDGs, with a new resolution: “Fostering telecommunications/ICT-centric Entrepreneurship and digital innovation ecosystems for sustainable digital development.”

The resolution calls on governments and ITU’s wider membership to:

  1. develop policies and strategies, and projects nurturing digital innovation at the national level,
  2. promote the uptake of entrepreneurship-driven technology-centric schools,
  3. ensure access to domestic procurement and international markets to allow small/new enterprises to test, validate and scale-up their innovations, and
  4. pursue multisector multistakeholder collaboration to support synergies in achieving these goals.

Are you an MSME interested in joining ITU? Learn more about ITU membership benefits for MSMEs.

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