Mobile Telephony and Developing Country Micro-Enterprise: A Nigerian Case Study

Abstract

Informational challenges ? absence, uncertainty, asymmetry ? shape the working of markets and commerce in many developing countries. For developing country micro-enterprises, which form the bulk of all enterprises worldwide, this shapes the characteristics of their supply chains. It reduces the chances that business and trade will emerge. It keeps supply chains localised and intermediated. It makes trade within those supply chains slow, costly and risky.Mobile telephony may provide an opportunity to address the informational challenges and, hence, to alter the characteristics of trade within micro-enterprise supply chains. However, mobile telephony has only recently penetrated. This paper therefore presents one of the first case studies of the impact of mobile telephony on the numerically-dominant form of enterprise, based around a case study of the cloth-weaving sector in Nigeria.It finds that there are ways in which costs and risks are being reduced and time saved, often by substitution of journeys. But it also finds a continuing need for journeys and physical meetings due to issues of trust, design intensity, physical inspection and exchange, and interaction complexity. As a result, there are few signs of the de-localisation or disintermediation predicted by some commentators. An economising effect of mobile phones on supply chain processes may therefore co-exist with the entrenchment of supply chain structures and a growing competitive divide between those with and without access to telephony.