Tell us about the social impact of your innovation. Please include both numbers and stories as evidence of this impact
It is now increasingly recognized that the Small and Medium Enterprises (SMEs)
play a crucial role in employment creation and income generation and poverty reduction. However, the trend shows that many SMEs once started, it is hard to grow and become effective and competitive in their roles mentioned above. Among many reasons for their failure is lack of information acquisition or sharing.
Since SMEs tend to be labour-intensive, they create employment at relatively low
levels of investment per job created. At present in Tanzania, unemployment is a significant problem that has to deal with. According to Tanzania’s SME Policy (2003), estimates show that there are about 700,000 new entrants
into the labour force every year. About 500,000 of these are school leavers with few
marketable skills. The public sector employs only about 40,000 of the new entrants into the labour market, leaving about 660,000 to join the unemployed or the underemployed reserve. Most of these persons end up in the SME sector, and especially in the informal sector. Given that situation and the fact that Tanzania is characterized by low rate of capital formation, SMEs are the best option to address this problem.
Internet is one of the most convenient and cheap platform for SMEs to acquire and share information, but due to lack of education or computer skills, limited internet access especially in remote rural areas where majority of SMEs are found, internet hasn’t being that much helpful to many SMEs.
By establishing and promoting this information sharing platform, SMEs are better positioned to prompt receiving information about local and international markets of their products. Instant access of information at the fingertip shall have an added advantage in terms of reducing operation costs, increasing efficiency and effectiveness in doing business and hence leveraging GROWTH to SME/Private sector [IMPACT] which is regarded as an engine in driving the economy to significance by creating employment, poverty reduction and enhancing living standards of the people
Problem: Describe the primary problem(s) that your innovation is addressing
One of the primary problems this innovation faces is the lack of awareness among the community of SMEs that INFORMATION IS POWER. Many believe that failure to growth or collapse of small entrepreneur’s businesses is attributed to lack of finance only. However, even when given finance but in the absence of other growth promoting factors (business skills, information, market & marketing strategies, entrepreneurship culture etc), SMEs businesses are prone to failure. This problem exists even to other SME development stakeholders (government, NGO’s private sector organizations) when they are not willing or reluctant to campaign or promote the fact that SMEs should work on or operate based on Information.
The other problem is lack of capital of finance to put in place a professional platform for running this business. It requires ICT infrastructures like computers, modems, servers and integration costs to mobile phone operators and compliance fees to regulators (Communication Authority)
From the financial point of view, also arises lack of finances to hire professional programmers for some of the services that requires automated interaction between customer and server (platform). On top of that, since many requests are human based in nature, it requires also sort of customer care centre to treat some of the requests on the form of personal touch in sorting for replies to customers.
Actions: Describe the steps that you are taking to make your innovation a success. Include a description of the business model. What might prevent that success?
This business model is based on Electronic Business Development Services Provision (e-BDS) for SMEs in the area of Information Search and Promotion and Marketing of SMEs products (goods & services). The first step in making this innovation a success is that the business is for profit marking in order for the service to be sustainable. We stand to believe that once brought to understanding the importance of instant access to information to the development of their enterprises, the SMEs are ready to pay for it provided that it is readily available (accessed on their mobile phone) and affordable (at a cost of multiple SMS).
The second step is making this innovation success is the choice of technology and platform for its implementation.
• Majority of SMEs living in the areas where there is mobile network coverage, do own or use mobile phone services (for calling and SMS texting).
• Internet penetration in Tanzania < 2% while mobile phone penetration >30%. and increasing at a rate of 10%
• SMS service is well known and friendly to users so there is no need for training on how to use. The service has been tested and implemented for long time by the GSM operator and there is no risk in implementing this technology in new innovative ways.
• Mobile phone has the ability to reach mass audiences in a way that no other technology has had the potential to do before now. Indeed, in many parts of the world mass communication is leaping straight to mobile phones and bypassing both the internet and landlines.
What can hinder the success of this innovation is the lack of support from other stakeholders in promoting private sector growth in the country like government and its institutions, development partners and donors, private sector foundation institutions etc. Failure for their cooperation in promoting this fact to the SME sector will delay of hinder its intended impact.
Results: Describe the expected results of these actions over the next three years. Please address each year separately, if possible
This innovation aims to create Social and Business Networking for SMEs who are characterized by being young, small and often die before maturity, often less structured and less formal, with fewer fixed procedures, because there has not been time to develop them, less opportunity to automate and introduce IT or to have its own IT department with resident expertise due to limited resources, but they have the advantage of flat hierarchies and thus being very flexible esp. in decision making.
In year 1 one the expected result is a number of registered by SMEs by Opt-in with their profile of location, name and type of business being undertaken. Having this profile online is an achievement towards networking, knowing who, where is and what is doing. This kind of information is suitable even for over development partners who would plan for any intervention in development of SMEs sector in the country.
Success in year 2 is in fully taking advantage of networking given that the platform shall be loaded with lot of information useful for daily life and business of entrepreneurs. Exchange of information which when used effectively shall be manifested in increase in efficiency or effectiveness in doing business and hence growth or stabilization of business which promotes to increased in service offered, additional to employment opportunities and growth in income of the people
In year 3 we foresee increasing use of this facility and hence more enterprises grows from survival to stability and hence effectiveness. From my side also I expect increase in income generated from the payments of using the service (pre-payment of SMS service) that means more employment, more contribution to GDP and improved life standard
If your innovation seeks to impact public policy, how?