THE CASE OF MOBILE TELEPHONY IN MSEs IN GHANA

Full title: CREATING SPACE FOR INNOVATION – THE CASE OF MOBILE TELEPHONY IN MSEs IN GHANA

Innovation is the cornerstone of competitiveness. Micro and Small Enterprises (MSEs) play a key role in national economies. In Ghana as in most developing economies, MSEs are the vehicles for productive activities contributing significantly to the overall socio-economic development. A major challenge facing policy makers is how to enhance the competitiveness of MSEs. Ghana’s goal to achieve middle-income status within the next decade depends to a large extent on the revitalization of the competitiveness of these enterprises. The competitiveness of MSEs is particularly crucial as they are instrumental in poverty alleviation and wealth creation at the grassroots of society.

Innovation is increasingly becoming an important element in economic growth, and a key driver for the emerging knowledge economy. Innovations in new technologies such as the information and communication technologies (ICTs) are providing opportunities for unleashing competitiveness and growth in the MSEs in the global economy. Mobile telephony amply illustrates the enormous transformative capacity of ICTs. A wide range of actors in many developing countries are using mobile telephones innovatively in their socio-economic activities including in the MSEs.

In the case of mobile telephony in Ghana, the crucial question is whether there is space for innovation beyond the fancy handware. The uptake of mobile phones as a revolutionary technology for communication has been widely touted especially as it has made phenomenal impact on teledensity in Africa. For example, mobile penetration in Africa experienced cumulative average growth rate (CAGR) of 49.3% between 2002 and 2007 and represented 89.6% of total telephone subscription on the continent. In the case of Ghana, mobile telephone subscription formed 95.3% of the total telephone subscription with CAGR of 81.4% for the same period.

However, in the productive segments of the economy, can innovations emerging from the application of mobile technology drive competitiveness? What are the prospects for greater competitiveness especially for MSEs through mobile telephones and options available? Against the background of these and related questions, this paper adopts the Innovation System conceptual framework for analyzing the state of mobile telephony in Ghana, the trends and implications for enhancing MSEs competitiveness. The Innovation System concept has become a veritable analytical framework for understanding the attributes and processes of innovation. The approach to the analysis emphasizes four key components namely the physical infrastructure, the institutional framework, the human resource capabilities and the policy environment. The paper uses primary and secondary data in analyzing the real and potential innovative use of mobile telephones by the MSEs in Ghana. The primary data were obtained from a research in the use of mobile telephones by micro and small enterprises (MSEs) in Ghana. The research was carried out in selected rural and less urban areas sampling MSEs from among a range of business sectors. The methodology included the survey and focus group discussions on topical issues.

This paper thus reviews the uptake of the technology in various African countries bringing out the deficiencies in Ghana’s experiences. It assesses the Ghanaian current public policies and the outcomes of such policies in the MSEs business environment. It examines the range of applications of mobile telephones in the MSEs, their emerging experiences and prospects for enhanced applications to expand the scope for businesses. Finally, it advocates for a more holistic promotion of mobile telephones from the broad perspectives of policy, industry and in the specific domains of application such as the MSEs.

Authors: George Owusu Essegbey and Godfred K. Frempong

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