Enabling digital entrepreneurs

This background paper was prepared for the 'World development report 2016: digital dividends'. The term 'digital entrepreneurship' most commonly refers to the process of creating a new, or novel, Internet enabled/delivered business, product or service. This definition includes both startups - bringing a new digital product or service to market - but also the digital transformation of an existing business activity inside a firm or the public sector. In the developed world, the emergence of utility-based cloud computing is shifting focus from technical barriers to the business environment...  [+] Show more

This background paper was prepared for the 'World development report 2016: digital dividends'. The term 'digital entrepreneurship' most commonly refers to the process of creating a new, or novel, Internet enabled/delivered business, product or service. This definition includes both startups - bringing a new digital product or service to market - but also the digital transformation of an existing business activity inside a firm or the public sector. In the developed world, the emergence of utility-based cloud computing is shifting focus from technical barriers to the business environment challenges facing digital entrepreneurs. Digital entrepreneurship may level the playing field in certain sectors, creating opportunities to work from remote areas, at different hours, from the home, or on the go. It can play an important role in promoting gender equality and social and economic inclusion, stimulate local development, and contribute to sustainable development, especially when new technologies are combined with the availability of open and public data. The main barriers to digital entrepreneurship appear to include: skills, infrastructure, and various aspects of the business environment. It is also important to create a dynamic and competitive digital business environment and address concerns around digital entrepreneurship conditions in order to enable the creation of online services and applications.

This paper examines the issues, the importance of skills, opportunities cared by cloud computing, and the enabling role of government. The paper concludes that enabling digital entrepreneurs in developing countries is especially important as this allows for the creation of new markets, the exploitation of existing markets and integration into global value chains. Infrastructure, skills, financial inclusion and market access appear to be the enabling factors policy makers in these countries should focus on, at least initially. At the same time, it is important to avoid the temptation to 'pick winners' or take early position on who will or will not be successful, and instead focus on creating an enabling environment that maximizes opportunities for digital entrepreneurs.

Edited excerpts from publication.