Is it more challenging to start a business online if you live in a developing country?

The whole idea of the internet is to make this big world of ours seem more of a connected village, with everyone being able to know what others are doing, how they’re feeling about issues and we’re all updated on international news as it happens. With a few clicks you can connect with someone in Japan, Hawaii, Australia or Mongolia, if you choose. Even the summit of Mount Everest has internet connectivity now, go figure.

And doing business got a whole lot easier and faster, with marketers able to reach millions with their online storefronts instead of having a customer base consisting of just their local communities or passing tourists. One can buy things from anywhere, at any time. The costs ofadvertising are minuscule in comparison to marketing the old fashioned way. Life just got soooooo much better, more convenient and instant. It is a joy all around, and life is grand.

Or is it?

So, what is the problem then?

Are we standing in our own way?

In a developing world, life is sometimes surprisingly similar to the developed world. Technology and economic empowerment have reached almost all of even the most far flung corners of the world. The main differences would probably lie in what has been done with it and who is benefitting most at any given time.

If I had to choose one most important requirement to progress, I would say it is the right leadership. In all countries around the world it is most noticeable that bad leaders run poor countries and better leaders run more prosperous countries whose electorate have a significant input in their own destiny. Bad governance and poor decision making, corruption and fraud all appear to be aimed at keeping the masses uneducated and controlled, so that the top echelon has the life of Riley.

So where are we currently and how do we get to where we want to be, in spite of all the challenges?

As there are so many developing countries, which each have their own set of challenges, legal battles and governmental issues, I will take South Africa (sometimes referred to as second world) as an example of a developing country, seeing as it was on the international stage not long ago. (And very successfully, I might add)

They have, inter alia:

• Infrastructure with a fair amount of housing, road systems, public transport, water, electricity, sanitation
• Telephone-, TV- and Internet connectivity to a fair percentage of the population
• A thriving electronics buyers’ market and a booming mobile customer base (people are eager to socialize and communicate, and they all want what they see others have on programs screened on TV)
• Central and local authorities, political structures, judicial systems and sound international economic relations
• A strong currency which weathered the economic slowdown better than most countries
• An eager, enthusiastic population who love innovation and change
• A large part of the youth ready and desirous for a brighter future, who want to be able to travel and be part of the world community
• Huge potential investment areas still available
• Unsaturated markets, with plenty of lucrative business ventures and opportunities still to be explored and conquered

What they don’t have:

• Rural integration, and this covers everything under infrastructure and connectivity
• Poor education, impure water, not enough electricity, great lack of proper housing
• Inadequate cellular infrastructure (they forecast only 15% of household penetration in 2019 – yikes!)
• A red tape environment towards small and medium enterprise
• Having to give up part of every business to Black Economic Empowerment shareholders
• A too small taxpayer base which has to carry too big a part of the population
• Too big a margin between rich and poor, with a super rich elite and a very large population under the bread line
• Leadership which seems to be torn between helping the country or rather themselves
• Poor political will to give the electorate a voice, poor will to work with all opposition parties, efforts to muzzle the media and curtail free speech, taking away the independence of elite priority crimes units and the judiciary, etc.
• Insufficient knowledge and consultation in order to move the country towards bridging the digital divide
• A Youth League which is adamant in moving towards a dictatorship-style with nepotism running rampant

So imagine having to start an online business from an internet café, if you had one close to you. (The country is huge, with towns and cities few and far between, let alone with internet cafes available.) Some countries in developing worlds may not use PayPal to receive monies and so cannot use it for their online businesses. The power supply is often enough interrupted, and the internet connection is oft slow and cumbersome for reasons unknown. When computer problems occur they can often not be fixed as there is no-one close by to do it, or it takes quite some time before it can be done.

According to a new report just out, mobile spectrum allocation and the additional taxes being charged on mobile services are two of the main reasons why the launch of next generation broadband technology, Long-Term Evolution (LTE) cannot be implemented. SA was found to be 42nd for quality of broadband connectivity, but came last out of 34 in the Stage 2 Category, (Efficiency Driven). One of their northern neighbours, Kenya, showed an improvement of 174% improvement over 3 years. How’s that for having the will to succeed? They were also willing to try fibre instead of ADSL, and this translated to magnificent gains for their people. Reportedly, in South Africa today, a staggering 45 million people have no internet connectivity.

But on the other hand, there are more cell phones in South Africa than people! Although there are many areas where there is no signal, at least they have them for those times when they are able to use them. (Many are prepaid cellular phones) Tablet computers are set to become a goldmine in this country, as well as in many other developing countries as well. Advancements in mobile connectivity will benefit social development and economic progress, which in turn will greatly benefit potential business owners and encourage many more new start-ups. Closing the digital have-not gap would mean better education which in turn will deliver smarter entrepreneurs.

So although the challenges are many, progress is an unstoppable force and we rejoice in it. Life is changing, albeit slowly, but it IS changing, and with change, successful business owners will seize the abundant opportunities, grow and prosper.

From a place of determined optimism,
‘Till we meet again,
Ursula

Your thoughts

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