Digitalizing rural small businesses in agriculture and tourism: Policy strategies from a case study of Thailand

• Rural small businesses in the agriculture and tourism sectors are major contributors to economic growth in many countries and were some of the worst hit during the pandemic. Formulating the right policy interventions to increase digital adoption among these MSMEs is important to support their resilience and growth.
• A new GSMA report provides a set of policy strategies for Thailand that can be replicated by other governments elsewhere to enable the adoption of digital technology by small businesses in these sectors.
• Governments cannot solve these problems alone. Public-private partnerships can help accelerate adoption and create more productive rural MSMEs.

In their new report, the GSMA explores the role of mobile and frontier technologies (such as AI, Internet of Things, and blockchain) in supporting the development, success, and resilience of rural small businesses in Thailand’s agriculture and tourism sectors. While the report focuses on Thailand, the challenges rural small businesses face in adopting digital technologies are similar across the world. These challenges include poor digital infrastructure, low digital literacy, minimal exposure to digital tools, and the high cost of technology adoption. These limitations can have negative effects on small businesses, as seen during the pandemic. Several studies show that small businesses that adopted digital tools during the pandemic fared better than their counterparts that did not. Generally, digitalization can increase productivity for small businesses by increasing access to information, market access through platforms and e-commerce, and access to digital financial services, among other benefits.

However, for small businesses to go digital, proper support and intervention by the government is very important. In their report, the GSMA identifies several levels of support that governments and others in the small business support ecosystem in Thailand can adopt to fast-track the adoption of digital technology by rural small businesses in the agriculture and tourism sectors. Some of them can be replicated and tailored to countries where these sectors are also major contributors to economic growth.

Build the capacity of rural small businesses to adopt digital tools.

Due to the lower levels of digital literacy among rural small businesses, providing training on various digital tools can help build confidence and help them become more open and willing to try new digital innovations. For small businesses focused on tourism, for example, training on digital tools for business operations, such as property management systems, and social media marketing training could enable them to operate more efficiently, reduce operational costs, and attract more customers.

For agricultural businesses, this training can potentially help them adopt digitalized agricultural extension services, such as information and advisory services, which have the potential to improve farming practices. The GSMA recommends that governments extend the geographical reach of agricultural extension services through digital tools. For example, this can be done by collaborating with the private sector to develop and implement a mobile app that offers remote advisory services, offering rural farmers the ability to receive farming advice. The GSMA identifies Arifu (also a Strive Community grantee), an interactive platform with personalized and free product information for farmers in Kenya, as an example of what that can look like. Arifu has been used to engage more than 250,000 farmers over interactive SMS to improve agricultural practices and get better yields. The Kaset Go app in Thailand is another tool that takes up this strategy — it is an online peer community for farmers to exchange advice on a range of topics. It has a question-and-answer community where peer farmers and experts from across the country provide support by responding to queries from farmers.

Support stakeholders that offer innovative digital technologies.

Governments can support technology providers by raising awareness of available technologies among farmers and tourism businesses. For example, in Thailand, the government worked with the private sector to develop pilot farms in two provinces to exhibit several advanced digital technologies for maize farming.

The report also recommends that governments assess the impact of, endorse, and invest in technology providers that have a demonstrable impact, as well as suggests that governments incentivize investment in business-to-consumer solutions tailored to micro-enterprises.

Facilitate and invest in data-driven collaboration and innovation.

The report also recommends that government-driven initiatives collect big data on tourism and agriculture so that relevant stakeholders can access, share, and use real-time information. Governments hold a lot of relevant data that can be used by the private sector to develop smart solutions that can enhance these sectors. Big data provides a range of benefits for the tourism industry, including predictive analytics of hotel room occupancy and greater insights on customer segments, the report notes. It adds that public-private data-sharing partnerships with online travel agents and mobile network operators can further strengthen understanding of tourists’ needs and indirectly improve rural tourism businesses.

For farmers, governments can, for example, invest in a National Agricultural Data Aggregation Platform for everyone involved in agriculture to share and use agricultural data. Japan’s Agricultural Data Collaboration Platform (WAGRI) is an example of this. The platform was developed by a consortium of industry, government, and academia; it collects and organizes agriculture-related data previously scattered across various databases and websites. By providing an API, the platform makes it possible to coordinate, share, and provide organized data for everyone in the agriculture sector. This data can be used by the private sector to develop innovative solutions.

Improve network infrastructure to connect rural communities easily and affordably.

Rural areas are often less connected or experience poor network infrastructure. The key to extending network infrastructure to rural areas, the report suggests, can be incentivizing telecom operators to invest in rural connectivity infrastructure in addition to enacting policies to make access more affordable. Wider availability and affordability of digital solutions can lead to increased adoption and use. A recent survey of rural businesses in the UK found that many faced poor connectivity issues due to low-quality broadband, which affected their ability to be resilient and bounce back from the impact of COVID-19.

The tourism and agriculture sectors across the world were some of the worst hit sectors during the pandemic. Helping small businesses in these sectors become resilient through digitalization can benefit economies overall. Policymakers have a role to play, and the case study offers suggestions for replicable interventions for other countries.