Africa’s small and medium-sized enterprises (SMEs) are increasingly investing in technology to bolster growth and enable resilience, a new report shows.
The report, titled ‘Levelling the SME playing field’ and jointly launched by Vodacom Group, Vodafone Group and Safaricom, shows that nearly 70% of SMEs across Africa invested in technology over the past 12 months, indicating that they are embracing the positive impact of technology.
“Our findings highlight the significant role that technology can play in helping small businesses tap into new opportunities, access finance, increase productivity, reduce costs and enhance their competitiveness,” says Vodacom Group CEO Shameel Joosub.
The report, the sixth research paper under the Africa.connected campaign, outlines the numerous opportunities to unlock the full potential of digitalisation for businesses and the continent.
In Africa, digitalisation has been a game changer for SMEs, with the respondents highlighting the positive effect of technology on enhancing growth, efficiency, competitiveness and customer service.
Further, by using ecommerce platforms, social media and digital payment solutions, such as M-Pesa, SMEs can expand their reach, access valuable data insights and streamline operations.
However, the adoption of technology by Africa’s SMEs does present unique challenges that require addressing barriers such as infrastructure, connectivity and the high cost of implementing technology, and developing best practice frameworks for better collaboration.
“This report explores the specific challenges SMEs face in Africa and unpacks what needs to be done to help these entrepreneurs overcome these obstacles,” says Joosub, pointing to findings that show that the greatest difficulty for 58.3% of the SMEs surveyed is the high cost of technology upgrades and renewals, which can prevent small businesses from keeping up with the latest technological advances.
Thirty-two per cent of SMEs are also concerned about a lack of digital skills and knowledge to take full advantage of technology solutions, while the research further highlights regulatory and compliance issues as stumbling blocks in SMEs’ efforts to digitalise.
“To help drive technology adoption among the continent’s SMEs, the report outlines the importance of sharing best practices, to enable better decision-making and cost-effectiveness.”
The report shows that, from a knowledge-sharing perspective, these standards foster a learning culture by helping to identify gaps in understanding and making it easier to implement innovative ideas, while providing an internal knowledge base and reducing the loss of know-how.
Adopting proven practices and technologies is also faster and safer than testing new ones.
“Digital solutions and tools open possibilities for entrepreneurs and small business owners to connect and discuss best practices so that they can learn from each other’s experiences, mitigate common hurdles and maximise their potential,” Joosub comments.
The research is based on conversations, run in partnership with South African market research business World Wide Worx, with 400 SMEs, ranging in size from one to 200 employees, across South Africa, Kenya, Egypt, Ethiopia, Mozambique, Tanzania, the Democratic Republic of Congo and Lesotho.
“We at Vodacom are keen to partner with small businesses and support them on their journey to success. As a purpose-driven business, our goal is to use our networks and our technical capabilities to help SMEs innovate so that together we can create a more resilient, inclusive and sustainable future for Africa,” Joosub concludes.