Workshop on ICT Strategies for Islands and Small States
(Malta, 17-19 March)

Session 6 : Business and ICTs

Mr George Sammut (Chairman – IT Trade Section – Malta Chamber of Commerce) highlighted some of the business constraints affecting small islands and states, including the fact that individually they constitute too small a local market, and must therefore survive and flourish on trade. They are too small to shape global trends and must focus on high value-added products and services. ICT are important for small islands and states as

(i) an economic sector, which is particularly suitable for small islands and states, as it does not require too much physical space;
(ii) ICT make society virtually cosmopolitan and promote societal change;
(iii) ICT can also provide support for other economic activities;
(iv) ICT can help small islands and states to gain competitive advantage by opening up markets which were previously unthinkable.

The National ICT Strategy should aim to cultivate an indigenous ICT capability by identifying opportunities in strategically important sectors. Some projects may be very important from a national perspective but are not commercially viable or cannot be justified economically. Cultivating an indigenous ICT capability, involves pump-priming the local ICT industry, upgrading the infrastructure and government services, providing ICT for all users and using ICT for problem-solving. There is a need for an institutional catalyst to provide co-ordination with other national strategies for non-ICT economic development covering financial services, leisure and tourism, education, infrastructure and the government internal ICT strategy. ICT is a means to an end and not an end in itself. Another important aspect is legislation (copyright law, data protection and computer misuse, IPR, encryption, e-commerce) which is currently lagging behind ICT developments. The National ICT Strategy should also be concerned with (de)regulation of telecomms and financial services and the tax environment (ensuring that it is favourable enough to attract the ICT industry and to encourage ICT use in industries).

The National ICT Strategy should have a linking mechanism with foreign policy as unless there is pushing and consistent messages from all Ministries, the development of appropriate bilateral agreements and other international initiatives, the country will be less competitive than other countries. The entity required for championing the Strategy needs to be tuned to the fast changing environment and should act as a catalyst for promoting partnerships and delivering plans. It should be a point of reference for government, commerce and society on all ICT-related issues. In Malta, the ICT portfolio is split over six different Ministries, each with a responsibility for a particular aspect of ICT. The ICT Strategy needs to be linked to the other socio-economic strategies and it should be user-centric and results-centric (results in terms of better telecomms, educated resources, network services, better buildings and intelligent schools). At the planning stage, the government, education, commerce, and infrastructure sectors should be involved. At this planning stage, the public sector has a major role to play, but at the implementation phase, the private sector should be used as the delivery mechanism. The majority of plans fail because the implementation side has not been well thought out.

Recommendations :

UNESCO would like to improve the national content and not just access to international content or commercial information. UNESCO also wants to provide guidance for the development of national ICT strategies. In macro-IT management, it is important to note that it is small islands which are taking the lead. Small states and islands have the opportunity to make the leap, as unlike the larger countries they do not have a large legacy of technology to dispose of.

Chambers of Commerce have a key catalytic role to play in promoting ICT, not only as a lobbyist or pressure group for ICT, but also in terms of showcasing success stories.

Mr. Ravichandhira Rao (Commonwealth Secretariat) provided an overview of the Commonwealth Business Network (COMBINET). The initiative originated from the Commonwealth Heads of Government meeting in Harare in 1991, when the need to link Commonwealth Business organisations in a network was identified. It is based on the fact that any business person, visiting a foreign country, the first port of call is the Chamber of Commerce. In the majority of cases as in Malta, the Chamber of Commerce acts as a lobby group, to make government help business investment. The Commonwealth Business Network links Chambers of Commerce and manufacturing associations in 54 Commonwealth countries. The Commonwealth with a population of 1.6 billion constitutes the largest economic and trading bloc with a membership which share the same legislative system.

Renato Ruggeriero (WTO) has observed that "Knowledge is the most essential raw material in the global economy".. In the information revolution, how will electronic commerce transform business ? It is important to note that information has no hierarchy or geography. 80% of CEOs are of the opinion that electronic commerce will reshape competition in their industries. It is projected that the value of electronic commerce will increase from $12m in 1996 to $2.16B in 2000. The factors that influence electronic commerce are financial resources, trained personnel, information on networks, computer resources, on-line services and Internet service providers. Can you do business on-line ? All businesses in conducting their business follow the same cycle : obtaining information on markets, interacting with other businesses, negotiating on focused deals and concluding business deals. The problem with doing business on-line is the information overload and not knowing if one is dealing with the right partners. This raises the need for a dedicated net for business which has now been created on COMBINET with the URL http://www.combinet.net. This site provides information on events on-line, activities. services, membership and access to 250 Chambers, links to trade-related government sites and businesses in the Commonwealth and with WCN, G77 TIN and UNCTAD. Members may also publish information on events in the Combinet Bulletin Board. The site also features an Electronic Business Clinic which assists with identifying business solutions.

In the future, businesses will do their transactions on-line. There will be new products that will enable them to obtain information, interact, negotiate and finally conclude deals. The value of a network depends on linkages to other networks and therefore strategic alliances are therefore important. The value of a network will be dependent on the contents and the potential value to businesses. Building and maintaining databases exclusively for members use will enhance the value. The Combinet features less graphics and more content as the aim is to make the site as accessible as possible to all the members. Mr. Rao gave three examples of E-commerce : a Malta-based micro enterprise uses e-mail to download drawings directly to its press to produce light fixtures. The second example is of an open air cinema in India which allows on-line seat reservations and a hotel chain that enhances its product value by allowing on-line registration for membership.

Main points from the discussion :

Small states and islands need to identify their strengths - tourism, fisheries etc and identify business niches. It was proposed that business applications for small states and islands should be developed.

International organizations have an important role to play in promulgating effective cyberlaws, to promote confidence in the security of on-line transactions. The Commonwealth law ministers will be meeting later this year and will be discussing electronic commerce and cyberlaws.

In order to set up electronic commerce, enterprises must have the appropriate financial services in place, to allow credit card transactions to take place on-line. The country’s financial regulations may restrict on-line transactions.

It was agreed that Combinet would support businesses by providing them with assistance in creating their own webpages and on-line training. It was noted that the Internet could be used to train and educate by providing links to a set of URLs. In transmitting codified knowledge, the lecturer is no longer required and this fact implies a rethinking of training and education methods.