MSMEs' Competitiveness and Innovation in the Digital Agemddb.apec.org/Documents/2016/SOM/ISOM-SYM/16_isom_sym_013.pdf · Tuyen Quang Binh Phuoc Bac Lieu Lai Chau Thai Binh Quang Nam

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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

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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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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

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%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

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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

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AUS

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DEU

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%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

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2.00%

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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

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%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

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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