Just Published -- ICTs and Urban Microenterprises: Identifying and Maximizing Opportunities for Economic Development

ICTs and Urban Microenterprises: Identifying and Maximizing Opportunities for Economic Development - Final Report

By
P. Vigneswara Ilavarasan and Mark R. Levy

July 2010, IDRC Canada

This publication reports on a research project financed by Canada's International Development Research Centre (www.idrc.ca).

Executive Summary

The research reported here was guided by three questions: (1) What are the current and potential patterns of mobile phone, landline, PC, and Internet café use among urban microentrepreneurs? (2) Are mobile phones, PCs, and Internet cafés related to the stability or growth of urban microenterprises? (3) Can we identify those urban microentrepreneurs and/or microenterprises for which ICT use is associated with economic growth? We conducted in-depth interviews in Mumbai City, India, with 329 male owners or managers of microenterprises and 231 female owners of microenterprises from April through June 2009. In addition, data from a convenience sample of 102 men and women was carried out in September and November 2009. We defined microenterprises as businesses that had more than one but fewer than twenty hired workers. We found that:

• Nearly everyone who owned or managed a microenterprise—regardless of sex—had a mobile phone.
• Many female and male microentrepreneurs who owned or managed microenterprises and who used a mobile for business communication reported that the year-over-year income of their business had risen.
• Urban microentrepreneurs experience different levels of economic growth depending on how they use their mobiles for business communication.
• The positive impact of mobile phones on microenterprises might emerge only after two years of use. Microentrepreneurs who owned a mobile for two years or less saw some growth in business income; those who had begun to use their mobile more than two years earlier experienced even greater income growth.
• Levels of PC ownership and usage at home and work were low.
• Few microentrepreneurs frequented Internet cafés for business purposes.
• Only small numbers used their mobiles for the full range of business-enhancing activities.
• Consideration of a microentrepreneur’s full repertoire of ICT use showed a positive relationship with microenterprise growth, especially when other factors such as gender and motivation were also taken into account.
• Compared to women-owned microenterprises, microenterprises owned or managed by men had much greater increases in business income, although female owned microenterprises also experience some growth.
• The more positive a female microentrepreneur felt about her status and power because of her business, the more she was motivated to use ICTs in support of her business.
• The more that a woman entrepreneur used mobile phones, workplace computers, etc., the more her microenterprise grew, especially businesses in the trade sector of the informal economy.
  

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