The development of micro and small and medium sized businesses (MSMEs) in Papua New Guinea requires cheaper internet access, embracing digitisation and creating hubs for sharing ideas, entrepreneurs told an APEC discussion forum in Lae last month. These are crucial if the government is to achieve its goal of creating 500,000 SMEs by 2030.

Benefit Capital’s Bessi Graham. Source: Benefit Capital

Wayne Golding, a member of the APEC Business Advisory Council (ABAC) told the forum—whose theme was ‘Innovation and Driving the Growth of MSMEs’—that digital innovation is critical to distributing wealth evenly throughout the country.

‘The engine of growth and innovation in the APEC region are MSMEs, comprising 97 per cent of all enterprises and employing more than half the workforce of the APEC economies,’ Forum chair, David Chen from the University of PNG, told the forum.

In 2016, the PNG government launched a plan to become a middle-income country by 2030, and a high income country by 2050, by boosting the number of SMEs from 49,500 to 500,000 by 2030.

Chen claimed this would increase employment opportunities in the sector from 291,348 to two million jobs.

‘One thing that the internet does well is to break down barriers.’

This, in turn, would see the unemployment rate fall from ‘the staggering 81 per cent at present’ to 49 per cent.

‘A concerted effort is required to achieve this: regulatory reforms, better infrastructure, faster cheaper and more reliable internet, and greater access to cheaper power,’ Chen said.

Digital economy

Redex Mobile’s Jeff Gilpin

Jeff Gilpin, entrepreneur and founder of Redex Mobile and employment agency PNG Workforce, said one of the biggest challenges is the high cost of internet access.

‘One thing that the internet does well is to break down barriers. If you want to learn stuff, it’s all out there.

‘When the internet is affordable, you will have access to some of the big platforms (provided by) the big multi-million dollar companies.

‘For example, cloud software and programs like Salesforce.com are already available to small enterprises as well as big companies.’

Golding pointed to other agriculture economies where land that used to yield just 10kg per plot is now yielding as much as 30kg using the same asset base.

He said the delivery of seeds to farmers and of farmers’ product to market using drones are examples of the enormous positive impact of a digital economy.

‘Good governance is critical.’

‘No one will succeed unless we get our communications infrastructure sorted out,’ he said, adding that the gap between ‘the haves and have-nots’ is widening.

‘Digital technology is actually widening the gap, because the countries which have the infrastructure and political will to reach across the whole community are doing better.’

Governance

Golding told the students in the audience he hoped they would develop ‘E-governance’ or electronic government.

He said it has the potential to eliminate 50 per cent of corruption by introducing non-intrusive systems and processes that are not interfered with by people.

‘So, what you get is the facts and what you get is the reality—not what is told to you.’

Another keynote speaker, Bessi Graham, Director and co-founder of Benefit Capital, said good governance is critical.

‘Having accountability and having a good board and structure that give visibility and accountability with financials—the way staff are being treated, and the question of delivering on promises—requires significant focus and attention.’

‘One of the secrets of success for MSMEs is to work together and share ideas and thoughts.’

She recommended that potential entrepreneurs try to discover ‘the gap in the market’.

‘We need to start to have a different conversation and think differently about how we change ourselves in society.

‘Part of that approach is to say: “What is it that I have, or my community has, that is of value that someone might pay for?”

Hubs

Golding also said one of the secrets of success for MSMEs is to ‘work together and share ideas and thoughts’.

He said universities are the natural location for meetings because the requisite facilities are already in place.