Developments in (I.C.T.) Information Communication Technology are moving ahead at unprecedented speeds either adding value to yesterday’s technology or rendering it obsolete. One way of improving the modern day economies is the employment of relevant technologies into daily usage of the average person anywhere. However, I.C.T. Entrepreneurship and supply chains especially in developing countries like Malawi have special challenges due to the existing I.C.T. infrastructure, urbanization, globalization and existing business environments.

This paper proposes that only through substantial I.C.T. integration can economic gains be reaped and this will be through the joint efforts of all stakeholders.  That is; the business sector, academia, government and other public institutions that will utilize the innovative application of I.C.T. solutions.

The increase of I.C.T. Entrepreneurship and more efficient supply chains have many benefits that it would contribute to the socio-economic development of nations the world over especially in developing nations. As the situation stands the developing world is grappling to catch up with other economies. In the wake of some widening economic gaps, the sure way for any developing nation to catch up would be to harness I.C.T. through innovation and create products, services and opportunities that would push their countries in the right direction at a faster pace.

Despite Malawi reportedly being the second fastest growing economy in the world, I.C.T. only makes up 2.3% of its Gross Domestic Product. Agriculture makes up the lion’s share of GDP at 36%, followed by Finance and Professional Services (11.4%), Manufacturing (9.2%), Construction (4.7%), Transport and Storage (3.9%), I.C.T. (2.3%) and lastly Mining and Quarry (1.0%). The following are some key factors creating opportunities for I.C.T. Entrepreneurship the world over and specifically in developing nations:



In Malawi’s 2009 Parliamentary meetings, the Members of Parliament passed a bill approving the investment of billions of Malawi Kwacha in the construction and development of a fiber optic cable network within and into Malawi. The network once completed would facilitate for faster internet services within Malawi, possibly decrease the cost of doing business and provide for more competitively priced internet services. This initiative is depictive of government’s apparent willingness to invest and improve upon the national I.C.T. infrastructure and maximize contemporary business applications of it.

There are more hotspot services available in Malawi as the internet service providers seem to be moving away from focusing on servicing only corporate clients and the very affluent. From a business prospective, this has become a very competitive service and the advances have meant near national availability of internet services for users as companies push for more coverage and better signal strengths. Though, it is important to note that average internet speeds in Malawi are still below international standards.

Numerous internet cafes or business centers have also sprouted in and around business districts in Malawi, mainly in the major cities (e.g. Lilongwe, Blantyre, and Zomba) and semi-urban districts like Mangochi, Salima and other tourist driven locations.

 

Two cellular network companies currently operate in Malawi, namely Zain and TNM (Telekom Networks Malawi). A third cellular network provider, G-Mobile has recently acquired a license to operate and stated they would start their services around December 2009. It would appear that the network companies are spearheading certain technological advances by offering more services at competitive rates.

TNM and Zain both provide internet services, the activation process is simple and the cost is extremely affordable. This has exponentially increased the number of internet users in Malawi. Zain has also rolled out the “Blackberry Services” where they are selling the Blackberry and offering internet services from it at a certain amount. This is mostly appealing to the wealthier members of the Malawian society as the costs are still relatively expensive.

Both of these firms have a service which allows your mobile (of course dependant on its capabilities), to act as a modem for wireless internet services.  Zain also stated in the media that they plan to roll out another service which they already provide to over 100 million users, mostly in the Middle East and North Africa. The service is called ZAP, which they stated would facilitate for money transfer from an individual, anywhere in the world to another – through their network to the recipient’s Zain number or bank account. T

his could be the advent of an improvised e-commerce industry in Malawi in the absence of credit or debit cards that facilitate for e-commerce. National Bank of Malawi and Standard Bank already offer online banking services. Opportunity International Bank of Malawi, whose clientele are mainly the poorer populace, now offer SMS bank services and cash-back services. One bank even uses some vans as “Mobile Banking Centers”.

It would seem banks are aiming for higher levels of convenience and service for their rural clientele where bank service centers are fewer and far between. Conversely, banks are more than occasionally offline due to network connectivity problems. It is also important for banks to invest in civic education campaigns which help the end user know about new services, the benefits and how to usage.

Having stated the above, some banks have stated that they plan to start offering debit and credit card services. Once the infrastructure is developed, the average Malawian would be able to participate fully online. Some, for the first time, will be able to shop and sell on eBay, buy from any e-shop, study online, book reservations online and have the opportunity of doing much more over the internet than surfing and send emails.

 

With Transatlantic telephone calls almost being free and I.C.T.s like emailing, instant messaging and internet telephony services (e.g. Skype), the average internet user has more choice and opportunity to communicate more frequently and at a lower cost. Free software like Yahoo Messenger, AOL, Hotmail Live and especially Skype are making the world a smaller place by helping people stay connected even over their cellular phones anywhere on the face of the earth where there is an internet connection. This long term cost reduction in communication is helping the consumer to learn new ideas, trends and possibilities at a fraction of the cost.


As is evident through the numerous multi-million dollar business emerging all over the world even in developed and developing nations like the United States of America, India and South Africa; three things are paramount for competitiveness: the entrepreneur’s ability to exploit knowledge, skills and creativity (U.K. DTI Innovation Report – Competing in the global economy: The innovation challenge, December 2003:20).





Developing nations are still only waking up to the very strong need to use information technology to alleviate poverty, create better living standards and stronger economies for its people. In short, I.C.T. Entrepreneurship provides a clearly viable economic tool to development. For Malawi, several challenges present the strongest arguments in agreement to this. The following are some of the most compelling reasons why Malawi must encourage I.C.T. Entrepreneurship:



This is most rampant amongst the youth; people between the ages of 15 and 25. In fact, according to the MGDS; women, youth and those with physical difficulties are those most affected by the high unemployment levels in Malawi. The following is an extract from the MGDS Final Report 2006: 40[4]

…Despite past efforts, women in Malawi …… have less access to employment opportunities both in the public and private sectors, technology, and other key market information to support their business activities.

Unemployment among the youth has worsened over the last 20 years. Increasingly, the youth are completing their education with very little prospect of securing a job, or engaging in entrepreneurial activities. Due to lack of experience, very few employers are willing to recruit and train them on the job.

Finally, people with disabilities are usually the most affected.... They experience difficulties accessing financial services and capital, skills development programmes, and technology developments. They are also the most affected by poor infrastructure such as roads, communication, and buildings not designed to accommodate or meet their special needs. A coherent and integrated approach is needed to contribute towards solving the various causes of disempowerment, which exist in different sectors of the poor and disadvantaged in Malawi.


 Generally, in Africa, there is low development and deployment of new innovative products and services to improve living standards. When it comes to health, education, inventive business solutions, most Malawians leave Malawi to seek these services or products. These solutions which people leave the country looking for are goods or services with which inventiveness and ingenuity, Malawi would be able to produce and provide locally.

Slow deployment and development of technology to improve business transactions has crippled our economy. As it stands, e-commerce is virtually non-existent in Malawi. E-commerce is being significantly sidelined. With other economies making substantial profits from their internet activities, this is one area of extreme potential in Malawi and Africa.

Few enterprises or individuals are providing inventive I.C.T. solutions to unmet needs in society, industries or businesses and in turn, a low percentage of the public are utilising I.C.T. The under-capitalisation of present technology and multi-sector knowledge is working against these developing nations as they are not fully benefiting from I.C.T.

 


With illiteracy levels for Malawi being at around 58%, the low I.C.T. literacy levels go without saying. As for Africa, 3.5% of all internet users are Africans and only 0.3% of the 3.5% are Malawians. Above that, there are few effectively implemented social initiatives to improve I.C.T. access and utilization in Malawi and the whole of Africa.

Regardless of the notable increase in I.C.T. access, for the average Malawian, the cost of I.C.T. technology and in particular internet access is still very high in proportion to what they earn. So for many Malawians, millions of other Africans and others in numerous developing regions, accessing the internet is still a luxury that they cannot regularly afford or competently benefit from. Just as the adoption of I.C.T. for business has been difficult in Africa, the I.C.T. industry in countries in the Asia Pacifica also face major constraints such as poor telecommunications infrastructure, limited I.C.T. literacy, inability to integrate I.C.T. into business processes, high costs of I.C.T. equipment, incomplete government regulations for e-commerce, and a poor understanding of the dynamics of the knowledge economy. To remove these constraints, governments need to do more than merely improving I.C.T. national policy and promoting SMEs in the I.C.T. sector.

Generally, emerging Malawian entrepreneurs give one the impression of inadequate professionalism, a lack of ongoing professional business training and generic business know-how. The fact of the matter being, these are professionals in their fields but essentially do not have additional skills to enhance their businesses e.g. business management, business organization, business communication or business administration skills.

This inadequately positions them when it comes to sourcing funding from lending institutions, seeking new clientele, managing their businesses, addressing customer concerns or innovating products and services for their markets. Some SMEs still do not understand the importance of marketing and advertising themselves and creating a tangible market presence.

One of the most economically damaging contemporary trends for the African continent is the African Diaspora. Thousands of Africans leave the continent each year for better living conditions and higher paying employment opportunities. These are people whom, if adequately supported, could contribute highly with their skills and resources.

However, the business environment is not conducive or attractive enough for these (mostly young) skilled people to return despite, in some instances, a sincere desire to. It must be noted that though a percentage of these expatriates are working within their fields of profession, an even larger number of them are unhappily in occupations of either unskilled labour or professions of convenience rather than choice.

Lastly, many entrepreneurs find it an enormous challenge to fund their activities, grow their businesses or employ more innovative I.C.T. solutions because of the stringent hurdles they have to constantly jump over when trying to acquire loans, grants or other forms of capital investment.

Banks find it risky to lend money to businesses (especially start-ups) that are owned by young entrepreneurs. The main arguments of the institution against lending to these marginalized individuals being twofold: Firstly, the majority of young I.C.T. entrepreneurs do not have adequate collateral. Secondly, these professionals have little history or proof of their ability to repay the loans. Without an adequate credit scoring system in Malawi, it appears that this will be an ongoing problem unless sufficiently addressed.