The informal economies across the South Pacific are central to the societies which they support. In Papua New Guinea (PNG) the informal sector employs 80% of the work force, and in the Fiji Islands it is an estimated 60% of the work force. Most of those working in these informal sectors are running small businesses or working for relatives who do. From this perspective, it is important to understand the opportunities and challenges that digital platforms will present to medium small and micro enterprises (MSMEs) in the Pacific as they continue to disrupt the way in which small businesses are launched and managed around the world.
Digital platforms like Facebook, Shopify, Whatsapp, MercadoLibre, Alibaba, and Instagram allow almost anyone with an internet connection and a smartphone to launch a business online and manage marketing and sales from a smartphone. This research investigated how these international platforms and other locally developed ones are currently being used in Fiji and PNG, and the barriers in each country to scaling their use further.
Fiji and PNG are the two most populous island nations in the South Pacific, but otherwise have very different levels of infrastructure and inclusion. Fiji is a middle-income country where 84% of the population has a SIM card, and 43% of subscribers already own a smartphone. In comparison, in PNG only 30% of people have a SIM card, of which only 22% own a smartphone. Therefore, while improving digital inclusion in both countries needs to be a top priority, the issue is an especially acute prerequisite in PNG to participating more broadly in the digital economy.
To its credit, the government of PNG has developed targeted policies to buttress the informal sector as it views it as a lynch-pin to the success of the greater economy. These policies acknowledge the need to modernize digital platforms and payments systems to spur growth. In Fiji, the informal economy has received relatively less attention from policy makers. However, with an estimated 18% youth unemployment, the ability to launch and manage small businesses on these digital platforms is a tantalizing opportunity for future efforts.
This research helps policymakers understand how small businesses in the informal economy are currently leveraging digital platforms, and how to address the barriers they are facing to enable them to really thrive.
The results of this research currently remain unpublished, but I will provide a link here in the future to them if that situation changes.