Partnerships, clusters and networks of firms may stimulate innovation and the competitiveness of small and medium-sized enterprises (SMEs). The potential benefits of partnership and networking strategies will be examined this week (23-27 November) by the UNCTAD Commission on Enterprise, Business Facilitation and Development. The Commission is expected to recommend policies conducive to partnering and networking that will boost enterprise development in developing and transition economies.
At the opening plenary session this morning, Mr. Eduardo Michel (Argentina) said, on behalf of the Latin American countries, that the Commission´s work could be an excellent opportunity to help make up for the loss in competitiveness of enterprises in the countries most affected by Hurricane Mitch. Access to finance was a most important factor for SMEs; UNCTAD´s work on micro finance and micro banks was therefore useful.
The importance of promoting micro financing for SMEs was also stressed by Mr. Siva Palayathan (Mauritius) speaking on behalf of the African group, and by Mr. Abdul Mannan on behalf of the group of Least Developed Countries.
Mr. Palayathan stressed that the greatest handicap for African SMEs was the lack of means to give shape to their ideas. Even where capital markets existed in Africa, they were biased toward the larger enterprises, the Mauritius delegate said, to the detriment of SMEs, the backbone of African economies. Therefore, urgent action was needed in assuring access to finance. He called for a wider extension to Africa of UNCTAD´s EMPRETEC programme, a technical assistance programme for the creation and growth of SMEs. The successful experience of EMPRETEC in Latin America could be replicated in Africa.
Mr. Dilip Sinha (India), speaking on behalf of Asian developing countries, called on the Commission to endorse the "very valuable recommendations" formulated by experts at a meeting held in UNCTAD in April 1998 on the impact of government policy and government/private action in stimulating inter-firm partnerships.
Ms. Gudrun Graf (Austria) expressed the support of the European Union for UNCTAD´s endeavours to foster the dynamism and creativity of the private sector, particularly the SMEs. Its work on partnerships should focus on countries with particularly low levels of human and physical capital, she said.
The Russian Federation and Japan also took the floor during the opening plenary session. In an introductory statement, Mr. Carlos Fortin, Deputy Secretary-General of UNCTAD, earlier informed the Commission that five out of 18 partnerships concluded at the Partners for Development summit meeting, held in Lyon (France) from 9 to 13 November, were on enterprise development. These five agreements focused on entrepreneurship and SME development in developing countries of the Mediterranean region and the Horn of Africa, Central America, and Brazil´s Northeast. In addition, two of them would stimulate business partnerships between entrepreneurs from developing countries and developed countries, beginning with the United States and Spain. It was estimated that the five partnerships combined would contribute to raising, over three years, some US15 million which would not be otherwise available.
A report prepared by the UNCTAD secretariat for the current meeting (TD/B/COM.3/19) said that two expert meetings held in 1998 (the one in April on partnering, and one in September on clustering and networking) had underlined the primary role of Governments in providing an enabling macroeconomic environment, a legal and regulatory framework, and the basic infrastructure for cooperation among firms via partnerships, clustering and networking.
Enhancing the participation of developing countries in electronic commerce
The second main agenda item for the Commission is the impact of electronic commerce on trade, growth and development.
The Commission is considering two reports on e-commerce in a development perspective prepared by the UNCTAD secretariat. Both can be found on the UNCTAD website (http://www.unctad.org). Mr. Fortin highlighted the timeliness of these reports, in light of the emphasis in Lyon on electronic commerce, the OECD Ministerial Meeting on electronic commerce, from 7 to 9 October in Ottawa (Canada), and the upcoming WTO Ministerial Meeting, to be held in 1999.
One report (TD/B/COM.3/16) assesses the current state of connectivity/accessibility of countries to Internet-based electronic commerce, and identifies policies that can enhance participation. It shows that one key for SMEs and developing countries to participate in worldwide electronic commerce is their ability to connect to the Internet. While Internet connectivity has grown exponentially worldwide, including in the developing world, the capacity to produce, store and disseminate information on the Internet remains heavily concentrated in the more advanced countries. The UNCTAD secretariat warns that this will remain the case if current cost structures are not modified. "If Internet access remains scarce and expensive in developing countries, their participation in electronic commerce will remain limited to traditional ´subcontracting´ or ´pre-contractual´ relationships," the report states.
The second report (TD/B/COM.3/17) examines the implications for trade and development of recent proposals by the European Union, Japan, the United States and the OECD Secretariat, for a global framework for electronic commerce. The main findings are:
- further evaluation is needed of the potential impact of a duty-free Internet trade zone on trade and development;
- developing countries should be offered greater support in the area of capacity-building and training for electronic commerce; and
- government policies regarding the provision of a supportive legal and regulatory framework for telecommunications and information services will have a direct impact on how measures taken at the international level will affect their own trade performance and the competitiveness of their enterprises in electronic markets.
The UNCTAD secretariat stresses that one aspect that is not addressed in the current proposals is the need to ensure that the development dimension is an integral and positive part of the e-commerce debate at an early stage. "For electronic commerce to become a truly global instrument of growth and prosperity, inequalities in access, connectivity, cost, financial and human resources need to be properly identified and swiftly addressed by the international community", it stresses.
UNCTAD´s work on the quantitative and policy aspects of electronic commerce has two major policy objectives in mind. First, offering the proper regulatory, fiscal, and economic framework to modify the current cost structure of Internet usage. And, prioritizing the provision of those electronic-based products and services most likely to enhance local trade efficiency (e.g. in the area of procurement, customs operations, or payments) or competitiveness.
Bureau
Mrs. Heather Booth di Giovanni (United Kingdom) was elected Chairperson of the Commission at its current session. Mrs. Sima Eivazova (Azerbaidjan) was elected Rapporteur. Five vice-chairmen were elected: Mr. Antonio Rodas Poza (Ecuador), Mr. Jean Luc Le Bideau (France), Mr. Sugeng Rahardjo (Indonesia), Mr. Nathan Irumba (Uganda) and Mr. Tadeous Chifamba (Zimbabwe).
