Chapter 10. Business uptake, entrepreneurship and digital content

ICT adoption by companies

Being connected to the Internet and using ICTs in daily operations offers companies many benefits. The Internet and related ICTs connect businesses to digitally managed global value chains and offer an important platform for selling to customers world wide. This allows firms of all sizes to scale up quickly and compete with other firms not only on the national but on the global level. In areas where access to knowledge faces certain obstacles – as is often the case in rural areas in Latin America – the Internet is an important source of information supporting business innovation and knowledge accumulation. ICT applications, ranging from basic accounting or inventory applications for smaller companies, to more complex services such as customer relationship management software or enterprise resource planning systems, for larger companies, render business processes more efficient. Overall, the Internet and ICTs drive firm productivity and reduce barriers to market entry.

Several studies have analysed the link between ICT adoption, firm performance and contribution to economic growth and have been able to show the positive effects of increased ICT adoption on firms’ productivity, performance and the economy as a whole (e.g. Gaggle and Wright, 2014; Grazzi and Jung, 2016; Haller and Siedschlag, 2011; OECD, 2012).

Grazzi and Jung (2016) especially analyse the effects of broadband and ICT adoption in Latin American firms and the effect on firm performance. They analyse several determinants of ICT adoption in Latin America and find that bigger firms, firms that are more exposed to foreign markets and firms that are located in a capital or big city have a higher likelihood of having a broadband connection and a website. Moreover, they show that the skill level in a company is an important determinant of ICT adoption. This confirms results of previous studies and underlines the importance of education and training (see also Chapter 9 on education and skills for the digital economy). In addition, firms that are operating in an environment where many firms have already adopted ICTs have a higher probability of getting connected.

Grazzi and Jung (2016) are also able to demonstrate the positive effect of ICT adoption and firm performance. Firms that adopted broadband are more likely to innovate. In addition, they also found evidence that ICT adoption leads to productivity growth in Latin American firms.

The findings above provide the evidence base for policy makers that increased ICT adoption by companies leads to better firm performance, higher productivity and thus to economic benefits. Since low levels of productivity are of particular concern in many Latin American countries, policy makers should work on the elaboration and implementation of policies aiming to increase ICT adoption.

The key policy objectives for increasing ICT adoption (discussed in detail in the good practices section) include:

• Foster good Internet connectivity and ensure an open Internet so that firms can benefit from the full breadth of digital services and applications (see Chapters 4 on competition and infrastructure bottlenecks, Chapter 5 on extending broadband access and services and Chapter 7 on convergence for further details).

• Develop policies to increase ICT adoption in firms, with a focus on small and young firms. These measures are discussed further in this chapter and include such policies as targeting large companies that have extensive business relations with a high number of SMEs, seconding ICT experts to companies that are lagging behind or encouraging the development of applications and services targeted to the needs of emerging economies. Governments can also use e-government services to provide incentives for companies to use the Internet and ICTs (see also Chapter 12).

• Develop a measurement agenda to monitor the use of ICTs in businesses. One of the major challenges in Latin America is monitoring firms’ actual use of ICTs. Only limited data are available on ICT adoption in Latin America, beyond data on the number of firms with a website or using e-mail for business. Governments have an important part to play in extending the measurement of ICT adoption.

• Promote e-commerce. Promoting e-commerce in Latin America requires countries to educate firms on the possibilities of electronic commerce and its potential to increase business performance, but also to review legacy regulations and to reduce barriers to foreign markets.

• Promote the development of digital skills with a focus on ICT usage (see also Chapter 9 on education and skills for the digital economy).

• Promote the use of ICTs through e-procurement and e-government policies (see Chapter 12 on digital government for information and recommendations).

Promote ICT and digital entrepreneurship

Another important area for policy makers is how to foster entrepreneurship using the Internet and ICTs, especially in the area of digital entrepreneurship. Entrepreneurs and young firms are an important part of the dynamic economic environment in which inefficient companies are replaced by younger, more productive companies. They thus ensure that economic resources are used more efficiently. In addition, entrepreneurs increase the available choice in the market, and are often more responsive to market needs and more innovative.

In terms of entrepreneurs’ role in the labour market, young businesses significantly contribute to job creation. According to a recent OECD study that analysed the effect of young firms in 15 countries from 2001 to 2011, young firms created about 50% of all new jobs and were more resilient to the financial crisis, with a positive net job growth during this period (OECD, 2013a). Finally, several studies have shown that a greater number of entrepreneurs and start-ups contribute to more rapid economic growth (e.g. Arzeni et al., 2012; OECD, 2010).

Given the key role of entrepreneurs, encouraging entrepreneurship in Latin America is an important area of work for policy makers. This section will mainly focus on digital entrepreneurship, which can be defined as “a subset of overall entrepreneurship that can be distinguished by links to the digital economy”. Encouraging digital entrepreneurship in a country is a challenging and time-consuming task, since different policy areas are involved. However, a number of policies can help reach this goal:

• Strengthen entrepreneurial capabilities. A lack of skills is holding back digital entrepreneurship in Latin America, both in terms of managerial and ICT-related skills, such as programming and coding. Governments help strengthen entrepreneurial capabilities by promoting and/or establishing training programmes for entrepreneurs and to remedy this.

• Foster an entrepreneurial culture with the private sector and, in particular, successful entrepreneurs. Fostering a digital entrepreneurial culture could include facilitating the exchange among entrepreneurs, establishing mentoring programmes between established firms of the private sector and start-ups, and organising hackathons and trade shows.

• Review regulatory barriers to entrepreneurship. In many LAC countries, setting up a company is complex and burdensome. Labour market and bankruptcy regulations can also render entrepreneurship difficult. Regulations in LAC countries should be reviewed to identify the main obstacles and make it easier to create start-up firms in the region.

• Improve access to finance. Access to finance is often difficult for entrepreneurs, especially in an environment with few organisations to provide seed capital and venture capital, as is the case for many LAC countries. Ways should be found to ease the access to finance for entrepreneurs, including reviewing the possibilities offered by the digital economy, such as crowd funding and online micro-credits.

• Promote the use of cloud computing in Latin America. Cloud computing provides flexible and scalable access to software (e.g. customer-relationship management, or CRM, software), applications and computing power in general. The services can be easily scaled up or down, used on demand, and are typically paid by capacity used. For small companies and start-ups, cloud computing can provide easy access to ICTs, requiring no large capital investment. Starting with low amounts of capacity, new firms can and rapidly scale up computing resources as necessary.

Promoting the creation and distribution of digital content and applications, including local content

Digital content, and especially local content, and applications are crucial in increasing ICT adoption. They are not only an important source of information, but render businesses and administrative processes more efficient. A developed content market is also beneficial for the development of network infrastructure. A joint report prepared by the OECD, the internet Society (ISOC) and the United Nations Educational, Scientific and Cultural Organisation (UNESCO) found that more developed local markets tend to lead to lower international prices for bandwidth and that conversely, markets with more intense international traffic tend to report lower local prices for Internet access, particularly in emerging countries (OECD/ISOC/UNESCO, 2013).

Different cultures have a rich heritage of content in local languages. Most of this content, however, remains inaccessible, sometimes even locally. The Internet makes digital content widely available and can empower users to create local content. As a major content distribution platform, including crowd-sourced platforms, it facilitates dissemination of content and can be a repository to store content.

For policy makers in the LAC area, encouraging digital content and applications that serve the needs of businesses and society can increase overall ICT adoption and advance inclusive development.

In Latin America and the Caribbean, policy makers face two important challenges. First, the majority of content available online is in English, across many content aggregation platforms. Content in languages other than Spanish and Portuguese, such as Quechua, is only just emerging. The content and applications currently available do not always serve the needs of people and businesses in emerging countries, especially those at the bottom of the pyramid. There is thus a need to foster the development of content and applications tailored to the region.

The main policy objectives in this area include:

• Foster the creation of digital content, including local content, and in particular content and applications that address the needs of the region. This includes directly encouraging content production, for example in specialised IT centres, but also indirect measures such as improving basic literacy and digital literacy.

• Foster multilingualism on the web. Foster the creation of content in Spanish, Portuguese and other regional and local languages of the region through, for instance, governmental funding of educational and cultural content in indigenous languages.

• Access to hardware and software. This includes measures such as educating content creators on the availability of open and free online tools, and facilitating access to hardware and software (e.g. by lifting trade barriers or taxes).

• Promote local hosting services so content providers can host content within the country, rather than buy hosting capacity overseas (see Chapter 8 on regional integration for information on IXPs, global interconnection and hosting).

• Open up government data and public sector information. By making data and information available, easily accessible and reusable, digital government lets governments collaborate with citizens on innovation that can create public value. In turn, non-institutional actors, whether individuals, the private sector or civil society, can help develop content based on the cultural and local content already developed by the public sector (see also Chapter 12 on digital government).

The state of ICT adoption in business

Assessing the state of ICT adoption for the LAC region is a difficult task. Few data are available comparing the state of ICT adoption across countries of the region. However, measuring and being able to show accurate uptake levels among companies of different sizes is key to designing effective policies to increase the level of ICT adoption. The Partnership on Measuring ICT for Development (ITU, 2010) proposes a set of key indicators, but this must be implemented at the regional level. An important recommendation discussed in the section on good practices is to increase the regional effort to collect data on firms’ ICT adoption.

Data that are currently available to compare ICT adoption in the LAC include World Bank data on the use of websites and emails in companies, and data on the use of the Internet at work collected through the household survey conducted by the Comisión Economica para Latina América (CEPAL, or ECLAC) (CEPAL, 2015b).The 2010 World Bank Enterprise Survey, based on interviews conducted with firms in LAC countries, shows major differences in the percentage of enterprises with their own webpage, from 11% in Suriname to over 70% in Chile and Brazil (Figure 10.1). The average for the region was about 60%, below the 2010 OECD average of 71%.

Figure 10.1. Enterprises with a website or home page (per 100 enterprises) (2006 and 2010)

Source: OECD, based on World Bank (2016), World Bank Enterprise Surveys (WBES), www.enterprisesurveys.org/.

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Data from ECLAC provides the users’ perspective and are collected through household surveys in the different countries. Data are only available for selected countries, and the methodology for 2010 is based on the recommendations of the Partnership on Measuring ICT for Development, Core ICT Indicators 2010 (ITU, 2010). In this survey, users indicated whether they used the Internet at work in 2010. Usage rates reported ranged from 14.3% in El Salvador to 31% in Uruguay, leaving room for further progress (Figure 10.2). Taking the two indicators together, many countries in the region should increase efforts to foster ICT adoption within firms.

These statistics only show basic ICT usage patterns, and more work needs to be done on collecting comprehensive data at the regional level. In the OECD/Inter-American Development Bank (IDB) questionnaires conducted for this Toolkit, ten countries reported that they conduct national surveys for the use of ICTs by firms. This is a good start for working towards a regional measurement agenda including metrics that go beyond those already collected by the World Bank and the Economic Commission for Latin America and the Caribbean (CEPAL).

Figure 10.2. Use of the Internet at work (percentage of total users aged 15-74) (2010)

Source: OECD, based on the CEPAL ICT database.

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When countries were asked in the OECD/IDB questionnaire what main current barriers they face for increasing their use of the Internet, the main reported barriers included i) insufficient broadband infrastructure; ii) firms’ belief that they do not need the Internet and ICTs for their business; iii) the cost of ICT equipment; iv) a lack of ICT skills and talent; v) difficult access to finance; vi) a lack of confidence in online transactions.

When Colombia launched its strategy in 2010, it conducted a broad survey of firms on why they had decided not to use the Internet and ICTs. The main barrier reported was the belief that there was no need to be connected to the Internet to conduct business. The government consequently set up a series of programmes that focused on clearly demonstrating the economic benefits for businesses (see Box 10.3).

Other measures put in place by different LAC countries include providing training and website assistance, trade fairs, joint activities with industry associations, the provision of public funding for i) increasing ICT adoption by firms; ii) financial inclusion and loans for SMEs and micro-companies; as well as iii) establishing incubators.

Promote ICT and Internet-based entrepreneurship

Start-ups face more challenges obtaining access to finance in LAC than the overall OECD area. Financial markets tend to be less mature and banks less willing to provide financing to start-ups: “In the United States, for instance, bank loans provide 15%-30% of the initial finance of high-growth start-ups, well above the figure in Latin America (7% in Brazil and close to zero in Chile and Mexico). Similarly, in the United States, start-ups obtain 20%-47% of their finance from venture-capital funds and angel investors, compared to 23% in Brazil, 17% in Chile and 5% in Mexico.” (OECD, 2013b). This finding was mirrored by the replies to the OECD/IDB questionnaire on the question of the current obstacles to entrepreneurship in the region. The main reported barriers for Internet-based start-ups included: i) difficult access to finance, especially to seed capital; ii) lack of public support; iii) lack of (ICT) skills; iv) lack of online payment systems; v) a lack of entrepreneurship culture; vi) lack of electricity; vii) the fact that the ICT sector is a “new industry sector”; and viii) the cost of Internet access. In addition, administrative and regulatory burdens for start-ups tend to be higher in the LAC area than for most OECD countries, such as in Brazil, Chile and Mexico (Figure 10.3).

Figure 10.3. Barriers to entrepreneurship (2013)

Notes: For the People’s Republic of China (hereafter “China”), data are based on preliminary estimates, as some of the underlying data has not been validated with national authorities. Subsequent data validation may lead to revisions to the indicators for this country. For Indonesia, data refer to 2009. For the United States, data refer to 2007.

Source: OECD (2015c), OECD Science, Technology and Industry Scoreboard 2015, https://doi.org/10.1787/sti_scoreboard-2015-en, based on OECD (2014c), OECD Product Market Regulation Database, www.oecd.org/economy/pmr.

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Although LAC countries lag behind OECD countries in establishing policies to encourage entrepreneurship, many countries in the region acknowledge the important role of entrepreneurs for their economy. Replies to the questionnaire show that existing policies include (holistic) entrepreneurship training programmes, tax incentives, incubators, programmes designed to develop software, financial support for entrepreneurs, and efforts to develop an entrepreneurship culture. An overview of policy tools used in selected LAC countries in 2012 is provided below (Table 10.1).

Table 10.1. Targeted policy tools to promote start-ups in Latin America: A country comparison (2012)
Source: OECD (2013b), Start-up Latin America: Promoting Innovation in the Region, https://doi.org/10.1787/9789264202306-en.

Promoting the creation of digital content and applications, including local content

While much of the content available online is in English, the volume of content in Spanish, Portuguese and other regional languages has increased. The ranking of languages on Wikipedia, measured by the total number of content pages by language, is shown in Figure 10.4. All languages with more than a million content pages, and statistics for the languages with Wikipedia content pages that are spoken in the region. Spanish and Portuguese are ranked 10th and 14th, with 1.2 million and 890 000 content pages respectively (see Table 10.2 for more statistics on Spanish and Portuguese content on Wikipedia).

Besides content in these two languages, Wikipedia also lists pages in four other languages of the region: Haitian (Haiti’s official language, and a recognised minority language in Cuba), Quechua (official language in the Plurinational State of Bolivia [herafter “Bolivia”], Ecuador and Peru), Aymara (official language in Bolivia) and Guarani (official language in Paraguay). The total number of pages in these languages, however, is low. Figures for other indigenous languages in the region are not listed on the Wikipedia site. While this is only one indicator of local content made available online, Wikipedia plays an important role as a dictionary as well as for knowledge diffusion and knowledge storage. Content production on this site should thus be encouraged.

Figure 10.4. Number of content articles for selected languages (2015)

Source: OECD based on Wikipedia (2015), Wikipedia Statistics, https://en.wikipedia.org/wiki/Wikipedia:Statistics.

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Another important form of digital content, especially for education, are so called “massive open online courses” (MOOCs) (see also Chapter 9 on education and skills for the digital economy), university courses for which people can enrol online, free of charge. Platforms such as EdX, Coursera, Udacity and Miriada X provide courses from different universities. The website Class Central tracks the global course offerings from different platforms and publishes statistics on the number of courses available online. According to the site, MOOCs are currently available in 16 languages (see Figure 10.5). The large majority of courses, 75%, are taught in English. Spanish is the language with the second-highest number of offerings (9%), which is mainly due to the platform Miriada X, which includes a consortium of close to 30 universities in the LAC region and Spain (Shah, 2014). This platform is a good example of encouraging the creation and distribution of educational content relevant to the region.

Figure 10.5. Number of MOOCs by language, as measured by Class Central (2015)

Source: OECD, based on Class Central (2015), “Languages”, https://www.class-central.com/languages.

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The majority of countries that responded to the OECD/IDB questionnaire report that the government fosters the creation, distribution and access to digital content, including local content. Through the development of digital, and especially local, content, LAC countries are striving to make the Internet and ICTs more attractive to low-income groups and people in remote and rural areas, and to provide social services in areas such as education, health and public services. In addition, countries aim at developing content and applications for micro-companies and SMEs. The number of apps that have been developed for SMEs in the region is, however, harder to measure at this stage, as only information of use cases is available.

Several countries, such as Honduras, Colombia and Mexico, also reported that they promote the development of content in indigenous languages and/or about indigenous cultures. A number of countries in the region also plan to develop educational content. Countries in the region also promote the use of public sector data for further use and reuse. A majority of the LAC countries that responded to the OECD/IDB questionnaire reported having set up an Open Government Data Strategy, and by December 2014, six LAC countries had also dedicated national open data portals: Brazil, Chile, Colombia, Costa Rica, Mexico and Uruguay (see also Chapter 12).

Increase ICT adoption by companies

The first step towards an increase in ICT adoption among firms is to develop a measurement agenda, ideally harmonised across countries. A major challenge in the LAC region is measuring the actual use of ICTs in companies, not simply whether firms have a website or use emails.

A good starting point is the list of indicators drawn up by the Partnership on Measuring ICT for Development in 2010 (Table 10.3). In addition, LAC countries should engage in a regional approach to discussing additional indicators to include in business surveys to reflect recent developments. For example, a significant number of young companies use cloud services, which are not yet part of the list of indicators of the Partnership on Measuring ICT for Development. Some LAC countries, such as Costa Rica, already try to reflect these new developments in their measurement approaches, but more remains to be done.

The OECD has developed an extensive list of indicators on ICT usage of businesses (Annex 10.A1). Some LAC countries, including Chile, Brazil, Colombia and Mexico, already participate in this survey, which is conducted every two to three years. LAC countries could use this extensive list of indicators and experience to jointly identify other key indicators for measuring ICT adoption by firms in the region, in addition to those recommended by the Partnership on Measuring ICT for Development. Using indicators developed for this survey would also allow direct comparisons with ICT adoption in OECD countries.

In addition to developing this measurement framework in the regional context, countries should also ensure that the business surveys they conduct are truly representative, not always an easy task. Reliable business registers are not always available, and developing such registers should be the first step. Countries should also make sure that the informal sector is duly represented. Otherwise, results will not reflect the business uptake in the region. In general, for all surveys, countries should carefully report sample statistics and the concrete methodology used.

The second step should be to develop policies to increase ICT adoption in firms. One of the most important challenges for policy makers is how to directly increase the adoption of ICTs among companies and how to connect these companies to the applications and services in use in the supply chains they are part of. In the LAC area, micro-companies and SMEs should receive special attention, since these firms represent a significant majority in these countries, and because small players often struggle the most to adopt ICTs.

One policy approach that has proved to work well is to target big companies in supply chains and connect small companies through this entry point, since they are often either suppliers to or buyers from larger companies. Colombia offers an illustration of this policy approach (Box 10.2). From 2010 to 2014, Colombia managed to increase ICT adoption among micro-companies and SMEs from 7% to 70%.

Peru is connecting small and medium firms in remote locations through a national fibre backbone network, to provide these businesses with access to the Internet and thus the opportunity to use e-commerce and other digital tools for running their enterprises.

Another policy measure successfully used in several countries, not only in increasing R&D activities, but increasing ICT adoption, is facilitating the secondment of ICT experts, also known as “expert transfer”. Seconded ICT experts can be sent by the private sector or public research and education institutes. Arrangements should be found to combine public and private funding. For example, experts can be sent for a fixed period and employment costs shared. If companies’ business models could be significantly enhanced through the use of ICTs, other solutions worth considering include encouraging longer-term transfers of groups of experts to support firms moving into new activities.

Policy makers should also promote the development of digital skills. ICT adoption in companies can only be increased if employees have the skills to use ICTs, including generic and specific ICT skills to to adapt applications and services to their needs. Digital literacy is vital, and LAC policy makers should develop a comprehensive approach to expand ICT skills at different levels. This would include such measures as digital and online courses tailored to firms’ needs, with a focus on micro-companies and SMEs, working towards integrating courses on digital skills in training on the job, and vocational training and in integrating the teaching of ICT skills in early school education (see Chapter 9 on education and skills for the digital economy). Brazil, Colombia, Peru and Costa Rica already have such programmes. Peru is currently implementing its Competitiveness Agenda 2014-2018, one of whose goals is to enhance scientific-technological and business innovation capabilities to work towards a knowledge-based economy.

These actions should be undertaken in parallel with the promotion of e-commerce. E-commerce is an important tool for LAC firms, since it enlarges the market firms can reach, sometimes even to the global level. Compared to other regions, however, the uptake of e-commerce is still relatively low in Latin America and the Caribbean. Policy makers in the region can promote e-commerce in several ways. Many firms, particularly smaller ones, are not aware of the benefits e-commerce can bring to their businesses and how they can use e-commerce to increase their revenues. Educating firms about the benefits of e-commerce, providing insight into the tools they need, how to use online payment systems and how to secure their website is particularly important in this situation of low uptake. The Mexican Chamber of Electronic, Telecommunications and Information Technology Industry (CANIETI) and the Ministry of the Economy have developed an online Spanish tutorial that is easy to understand and provides a comprehensive overview of e-commerce (Box 10.3). This could be helpful in any Spanish-speaking country.

Countries should also review legacy regulations to examine whether they pose unnecessary barriers to e-commerce. When firms are unable to sell online in a domestic market, this could also limit their international competitiveness. Especially when firms introduce new products that either complement or compete with traditional, regulated sectors, problems might arise. Examples include companies selling travel and transport services online (e.g. Uber, Airbnb) or health and financial services. Chapter 13 on consumer protection and e-commerce provides additional insights from a general perspective.

Finally, countries should review their tax policy (Chapter 6 examines taxation and other government charges). Some LAC countries impose special taxes on telecommunications services that make adopting ICTs more expensive. They may deter small businesses from subscribing to telecommunications services, excluding them from the benefits of e-commerce. Taxes in this area should be reviewed and, if possible, abolished or replaced. A good practice introduced in Colombia is the abolition of the value-added tax on tablets and laptops for devices that cost below COP 2 million, resulting in lower prices. Colombia has also eliminated custom tariffs, and the government gives low-income population groups subsidies to purchase such devices.

Promote ICT and Internet-based entrepreneurship

Given the important role entrepreneurs play in economies, governments in LAC area should carefully assess how they can foster entrepreneurial capabilities and an entrepreneurship culture in their countries. Two important challenges experienced by entrepreneurs in the region and reported in the questionnaire were a lack of skills, both digital and managerial, and sometimes a lack of public support. Governments in the region should work towards strengthening entrepreneurial capabilities by promoting or establishing training programmes for entrepreneurs and addressing the lack of ICT skills.

Some countries in the region, such as Brazil, Chile, Colombia, Jamaica and Mexico, have established training programmes for digital entrepreneurs that address managerial and ICT skills. Colombia, for instance, set up a holistic programme that supports entrepreneurs in different phases of the business creation and business upscaling process. The programme includes courses to develop both managerial and ICT skills, depending on the skills level of the different entrepreneurs (Box 10.4).

These programmes can also be used as a tool to increase entrepreneurial culture in LAC countries, although this is a complex task beyond the responsibilities of ICT ministries and regulators. Some countries are using their digital entrepreneurship programmes to systematically bring entrepreneurs together so that they can exchange views on their entrepreneurial experiences. In addition, a number of countries are organising “hackathons” or entrepreneurship fairs. The German National IT Summit, for example, which is held annually and brings together high-level business representatives and policy makers has reserved panels and sessions for entrepreneurs.1

The section on the situation in the LAC region has shown that regulatory and administrative barriers are comparatively high. As a consequence, entrepreneurs may be dissuaded from starting a company. Policy makers should carefully review potential regulatory barriers to entrepreneurship. Various ways to reduce the regulatory burden on companies have been identified. They include increasing labour flexibility for young firms. They also ensure that regulation allows for bankruptcy and does not hold entrepreneurs back from creating a new company after a first failed attempt, and they create one-stop online government portals for launching businesses.

One-stop government portals can significantly facilitate business creation. Entrepreneurs who want to start a business often need to collect information from and file registrations at various government agencies, entailing multiple, often time-consuming visits. Procedures at the different agencies are not uniform, and agencies often work on different timelines, which can make the overall business creation process lengthy and burdensome. Online one-stop portals that contain both the information for entrepreneurs with respect to the administrative processes they need to follow as well as online forms and communication tools are effective tools for facilitating and speeding up business creation. The EUGO portal of the European Union and the Korean Start Biz Online portal are good practices in this respect. The EUGO portal is an online single point of contact for creating businesses in EU countries, providing links to the different European Union countries, which contain information on regulation and procedures. In addition, entrepreneurs can complete procedures online (EC, 2016). The Korean portal Start Biz combines the registration procedures of five different agencies, allowing entrepreneurs to complete the entire process online. Mexico is currently also developing a one-stop portal and has a beta version online (www.gob.mx/).

Another key policy action for advancing entrepreneurship is by improving access to finance. Access to finance is a key condition for entrepreneurs, but is more challenging in Latin America than in OECD countries. The Internet, however, creates new ways to access funding sources and digital platforms to provide loans to entrepreneurs and small firms. This is an interesting opportunity, since it is more difficult for these firms to obtain loans from traditional banks.

The digital funding market is growing rapidly and has some potential to change the financial sector significantly, as it is in China. Different funding models have developed over recent years. The Chinese platform Alibaba, for instance, has several models to provide small and medium companies with loans. Its small loans programme, Micro Ant Credit, has provided credits worth USD 64 billion to 800 000 SMEs. In 2014, there were 1 575 digital lending platforms in China.

Amazon is also offering funding to selected small companies in seven countries through the Amazon lending programme (Moshinaly, 2015). Loans can reach a maximum of USD 600 000 at interest rates between 6% and 14%. Other online models match entrepreneurs and start-ups with investors or crowd (P2P lending), enabling entrepreneurs to finance new products and services through platforms such as AngelList or Kickstarter.2

Most of these are currently located in the United States, Europe and Asia. Latin American and Caribbean countries should explore the possibility of developing a digital funding platform tool for the region and of facilitating companies gaining access to already existing funding tools. In terms of attracting venture capital funds, progress has been made, and a number of important VC funds have started to invest in start-ups in Latin America (Table 10.4).

While P2P lending is a promising area for facilitating access to capital for entrepreneurs, many governments have been reluctant to review regulations so far. The United Kingdom is among the few countries to have taken a pro-active stance on regulating P2P lending platforms. Important issues covered in the United Kingdom regulatory framework on crowdfunding over the Internet include minimum capital requirements, dispute resolution rules, client money protection rules, disclosure and reporting rules, as well as successor loan servicing arrangements (OECD, 2015b). Besides encouraging new forms of financing, policy makers in the region should analyse how to adapt existing regulation of financial markets.

Furthermore, policy makers should promote the use of cloud computing in LAC. Cloud computing provides easy and flexible access to information technology (IT) resources. Users of cloud-computing infrastructure and services do not have to make upfront, capital-intensive investments in IT infrastructure and software but pay for computing resources in a pay-as-you go model, and can easily scale the capacity up or down (OECD, 2014b). This is especially interesting for entrepreneurs, who often lack the means of buying costly computing infrastructure when creating their business.

The benefits of cloud computing, however, can entail challenges. Challenges in the area of privacy and security–including cross-border issues related to privacy protection and data breaches– need to be addressed, as well as issues regarding the liability of service providers in current terms and conditions of standard cloud- computing contracts.

LAC policy makers have an important role to play in educating entrepreneurs about the benefits of cloud computing and issues that they have to consider when it comes to protecting privacy and signing contracts with big cloud computing providers. The German initiative “digital SMEs” has developed a guide “Cloud computing as an opportunity for companies”, which is tailored to the needs of small and medium companies (eBusinesslotse, 2014). It explains the concept and guides companies on how to implement and integrate cloud computing into their business processes. This guide can serve as a good reference.

In addition, policy makers in the LAC region should promote the establishment of data centres in the region that increase the availability of cloud-computing services and applications. Today, most providers and their data centres are located outside the region, requiring international bandwidth (see also Chapter 8 on regional integration).

Promoting the creation of digital content and applications, including local content

The availability of content and applications for businesses and society are an important factor in increasing ICT adoption. The majority of applications and content available are in English and not always appropriate for the needs in emerging countries. By developing and distributing digital content, and especially local content and applications, LAC policy makers can make the Internet and ICTs more attractive to businesses, low-income groups and firms and people in rural and remote areas. In turn, once the content and applications are available, the Internet can be an efficient tool for content dissemination.

It is crucial that policy makers in the LAC region promote the development of content and applications at the national strategy level. Colombia has designated as a strategic priority developing content and applications for emerging countries and low-income groups. One of the three pillars of its Vive Digital Strategy 2014-2018 is the development of content and applications with a focus on social applications, government applications, and developing skills for content production. The Start-Up Chile programme, sometimes known as “Chilecon Valley”, supports start-ups developing content and applications. Bolivia includes the development of local content and applications as a key objective of its national telecommunications programme for social inclusion. It focuses on content and application development in health, education and e-government. These national initiatives are the most strategic and systematic in fostering content production. They were launched recently, but they have already generated some social apps. Tracking the outcomes of these programmes will be important in the coming years.

Policy makers should make sure that developing local content and multilingualism is supported in initiatives to promote content development. Public initiatives to foster content development should be considered. One way of doing this is to create IT centres specialised in content production, such as Colombia’s ViveLabs (Box 10.5). Training and content development courses can also be offered in ICT centres, which are often set up in rural areas or schools that have been connected to the Internet.

Another good practice for fostering local content production is to create platforms that serve not only as aggregators of local content but incentivise the creation of local content, including those in indigenous languages. The Memoria Chilena platform offers content from Chile’s National Library and other libraries, archives and museums to disseminate content central to Chile’s cultural identity.3 The Colombian projects En mi idioma and the Educatrachos project in Honduras focus on the development of content in indigenous languages.4

Besides the direct measures mentioned above, policy makers in the region also need to work on indirect measures to promote the development and distribution of digital content and applications. These include: i) improving basic literacy and digital literacy; ii) easing access to hard- and software; iii) promoting local hosting services; and iv) opening up government data (see Chapter 12 for more information on government data).

Developing digital content and applications requires a certain skills level, both in terms of general literacy skills such as language and drafting skills, and digital literacy (see Chapter 9 on digital skills). Governments of the region, and education ministries in particular, should evaluate skill levels and develop appropriate learning. This should both target the educational system and lifelong learning and training on the job (OECD, ISOC and UNESCO, 2013).

Besides the appropriate skills for developing digital content and applications, firms and individual content producers need ICT equipment, whether computers, smartphones or cameras. Policy makers should ensure that no additional luxury taxes or other levies are imposed on these devices, to make sure that they remain affordable (see Chapter 6 on affordability and government charges).

Finally, as noted above, it is recommended that policy makers in the LAC region promote the establishment of local hosting services to host the digital content produced in the region. This can both avoid routing traffic internationally and can stimulate content production in the region.