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2016/ISOM/SYM/013 Session IV
MSMEs' Competitiveness and Innovation in the Digital Age
Submitted by: OECD
Symposium on Priorities for APEC 2017Ha Noi, Viet Nam8 December 2016
07/12/2016
1
MSMEs’ Competitiveness and Innovation in the Digital Age
Nicolas Pinaud, Head of Sherpa Office and Global Governance [email protected]
SYMPOSIUM ON APEC 2017 PRIORITIES Ha Noi, Viet Nam 8 December 2016
Outline
1. The Digital Economy – Key Trends2. Opportunities and challenges for MSMEs3. Towards competitiveness and innovation in the digital
age
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1. THE DIGITAL ECONOMY: KEY TRENDS
Digital technologies have spread rapidly across society …
Percentage of individuals using the Internet, 2000 and 2015
Source: ITU, World Telecommunication/ICT indicators Database.
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3
Broadband connectivity by firms, 2010 and 2014Percentage of enterprises
Source: OECD, Digital Economy Outlook 2015, oe.cd/deo.Data at: http://dx.doi.org/10.1787/888933224829.
50
60
70
80
90
100%
All enterprises, 2014 All enterprises, 2010
… and in business, with access to broadband now almost universal in most OECD countries …
Source: Nguyen and Schiffbauer, 2015; data at: http://bt.do/WDR2016-Map1_1
… and some other APEC economies, such as Viet Nam
0102030405060708090
100
TuyenQuang
BinhPh
uoc
BacLieu
LaiChau
ThaiBinh
QuangNam
BinhDinh
VinhLong
AnGiang
CaoBang
HaNam
NinhThuan
YenBai
HoaBinh
GiaLai
SonLa
ThanhHoa
QuangNgai
Nam
Dinh
KonTum
TayNinh
HauGiang
BacKan|BacCan
HaTinh
QuangBinh
PhuTho
NinhBinh
PhuYen
DacNon
gHaGiang
DakLak|D
acLac
LongAn
DienBien
HaiDuo
ngQuangTri
LamDon
gTien
Giang
CaMau
LaoCai
ThaiNguyen
BacGiang
ThuaThien
-Hue
Ben
Tre
Don
gThap
Hun
gYen
NgheAn
TraVinh
CanTho
SocTrang
QuangNinh
HaiPho
ngCity|Haiph
ong
DaNangCity|DaNang
KhanhHoa
BinhThuan
VinhPh
ucBinhDuo
ngDon
gNai
BaRia-VTau|BaRia-Vun
gTau
HaNoiCity|Hanoi
Kien
Giang
LangSon
BacNinh
HoCh
iMinhCity|HoChiM
inh
%FirmsusingInternetin2007 %FirmsusingInternetin2011
Internet use in Viet Nam in 2007 and 2011, by province (% of firms)
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2. OPPORTUNITIES AND CHALLENGES FOR MSMES
8
Digital innovation is affecting all sectors of the economy …
HealthPublic Admin. Retail
TransportationAgriculture
Science & Education Manufacturing
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…. and provides new opportunities for MSMEs and start-ups …
Virtual marketplaces Crowd financing
Global reach Pay as you go 9
The Internet can help MSMEs engage in new (and global) markets through e-commerce …
Source: OECD, ICT Database; Eurostat, Information Society Statistics Database and national sources, July 2015.
Enterprises engaged in sales via e-commerce by size, 2013(as a percentage of all enterprises in each employment size class)
0
10
20
30
40
50
60
NZL
AUS
CHE
ISL
NOR
DNK
CZE
SWE
DEU
COL
BEL
IRL
NLD
JPN
GBR
OEC
D
LTU
FIN
ESP
CAN
SVN
EU28
AUT
KOR
FRA
PRT
EST
SVK
LUX
HUN
POL
GRC LV
A
TUR
ITA
MEX
%All SMEs Large 2009
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… which can also contribute to more rapid productivity growth
Source: Nguyen and Schiffbauer, 2015; data at: http://bt.do/WDR2016-FigO_11
Vietnamese firms using e-commerce have higher TFP growth, 2007-2012
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
Laborproductivitygrowtheffect
TFPgrowtheffect
e-commerce
internetuse
Enterprises using cloud computing services, by size, 2014As a percentage of enterprises in each employment size class
Source: OECD Science, Technology and Industry Scoreboard 2015, www.oe.cd/sti-scoreboard, based on OECD, ICT Database; Eurostat, Information Society Statistics and national sources, July 2015. Data at: http://dx.doi.org/10.1787/888933274459.
But, small firms typically lag large firms in their use of ICT…
0
10
20
30
40
50
60
70
%All Small (10-49) Medium (50-249) Large (250 +)
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Larger firms use the Internet more intensively across all income groups
Source: Hussain (2015), based on World Bank Enterprise Surveys, various years. Data at: http://bt.do/WDR2016-Fig1_6
… at all levels of economic development
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
small medium large small medium large small medium large
sellonline website broadband
Lowincome Lowermiddleincome Uppermiddleincome
3. TOWARDS COMPETITIVENESS AND
INNOVATION IN THE DIGITAL AGE
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– Sound Regulatory Frameworks:• Predictable, technologically neutral and based on a forward looking approach.• Regulatory agencies independent of governments in formulating and applying
regulations, with a distinct legal mandate, with adequate authority, and a stable, adequate and independent source of funding.
– Digital strategies:• Co-ordinating body and mechanisms for decision-making in areas where the
competencies of different government bodies overlap. Clear responsibilities and objectives and effective oversight mechanisms.
– Competition and infrastructure:• Issues such as licensing, openness to foreign direct investment, the role of
state-owned enterprises, etc.
– Broadband access:• Private sector can do the heavy lifting. • National Broadband Plans (NBPs) to provide access to everyone
A comprehensive approach is needed to support access…
• Build sound frameworks for electronic settlements and payments.• Remove barriers that inhibit the growth of businesses engaging in e-
commerce such as high custom taxes, high shipping cost or requirements for local installment of businesses.
• Encourage a digital security risk management approach that acknowledges risk as an economic and social issue rather than solely a technical challenge.
• Build a national privacy strategy including relevant legislation, enforcement authority and measures to encourage self-regulation
… and boost usage of technologies such as electronic commerce
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Individuals who judge their computer skills to be sufficient if they were to apply for a new job within a year, 2013 (as a percentage of all individuals)
0
10
20
30
40
50
60
70
80
90%
All Individuals Individuals with high formal education Individuals with no or low formal education
Source: OECD Measuring the Digital Economy: A New Perspective, 2014, http://dx.doi.org/10.1787/888933148354.
New skills will also be needed
A relevant and timely APEC priority
• OECD’s experience in this area: – Extensive experience at the OECD in policy analysis and
recommendations: 200 policy reports, 20 telecommunication policy and country reviews.
– Many of the policy and regulatory issues faced in the APEC region are common to those in OECD countries, and sharing good practices can be a valuable resource.
– Regular and high-level engagement with policy makers
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Thank you
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Website: www.oecd.org/sti
Twitter: @OECDinnovation
Newsletter: www.oecd.org/sti/news.htm