Digital Transformation in African SMEs E-Book
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- Herausgeber: Bentham Science Publishers
- Kategorie: Fachliteratur
- Sprache: Englisch
- Veröffentlichungsjahr: 2024
Digital Transformation in Education and Artificial Intelligence: Emerging Markets and Opportunities aims to shed light on the various advantages and drawbacks of the same along with the opportunities and markets that are emerging because of digital transformation.
This volume encompasses diverse perspectives on the digital landscape for Small and Medium Enterprises (SMEs). It delves into the use of digital tools like Big Data, IoT, AI, and ML in Chapter 1, followed by an exploration of factors influencing online shopping adoption in SMEs in Ghana (Chapter 2). Chapter 3 sheds light on the digital transformation of African SMEs, while Chapter 4 offers insights into the consequences of digitalization for SMEs in Sub-Saharan Africa. The subsequent chapters cover topics such as the impact of Big Data on SMEs' performance, digitization initiatives for African telecom service providers, the role of social media as a promotional tool for SMEs in Ghana, and the utilization of Artificial Intelligence by SMEs in Africa, addressing both benefits and challenges.
The chapters provide information for educators at all levels to obtain a complete understanding of the technology-based environment that impacts teaching and commerce. It also serves as a resource for policymakers, entrepreneurs, researchers, and students interested in digital transformation in Africa.
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FOREWORD
Respected reader, you have a treasure in your hands in the name of “Digital Transformation in African SMEs: Emerging Issues and Trends”. While technological advancements play a role in digital transformation, more technological tools may be even more crucial. Some SMEs are able to complete a digital transformation faster and at much less expense to the firm than others because they have the capacity to build trust in their systems. This book is written for and about digital transformation in Africa. The editors’ expertise qualifies them for this good project. They have extensive experience in the field and have spent many years researching the challenges and successes of digital transformation for businesses. Furthermore, they have an intimate understanding of the motivations of these top brass. I agree with the writers that the emphasis should be on technology, people, and performance as the means by which an organization deals with digital disruption. According to my studies, effective digital transformation necessitates adjusting the dynamics of a business and the way its employees perform their duties. There is no sign of a halt to digital disruption any time soon, and it is likely that the typical worker will face multiple waves of disruption over the course of their lifetime. The authors considered digital tools such as social media, Artificial Intelligence, Big Data, IoT, AI, and ML for SMEs. When it comes to relevance, factors influencing the adoption of online shopping and its influence on consumers’ intention to shop online are key. The gap between industry leaders and laggards may be rising if these businesses are increasingly reporting and investing time, money, and energy on initiatives to develop these components of their culture. For most SMEs in Africa, I simply believe that changing an organization's leadership, talent, culture, and organization strategy all at once can be a disruptive and inefficient process and that focusing solely on the technological parts of digital transformation is missing out.
PREFACE
In all of Africa's urban centers and rural villages alike, a new breed of digital natives is emerging and poised to stimulate economic development and drive the acceptance of novel digital technologies and services designed to impact all facets of African society and businesses. As a result, the shift to digital is a key factor in the growth and development of resourceful and long-lasting small and medium-sized enterprises. In line with the African Continental Free Trade Area (AfCFTA), the African Union (AU) plans to create a safe and thriving online marketplace in Africa by the year 2030, where people and companies are free to move around and transact online without restriction. Therefore, SMEs in Africa should make use of this unique AU effort to become more tech-savvy, since SNEs' activities, procedures, competencies, and models can all be modernized through digital transformation. Despite this, many African SMEs have not yet fully adopted the digital change in their entire lives. Taking advantage of the digital revolution calls for a shift in perspective, as well as new forms of collaboration between small and medium-sized enterprises (SMEs) and their stakeholders, as well as between different industries. This book is written for business owners and managers of small and medium-sized enterprises (SMEs), with the goal of helping them take advantage of digital technologies and innovation to drive business transformation in Africa and to build and enhance digital networks and services with the end goal of bolstering trade, investment, and capital flows among SMEs. This book will help managers of SMEs discover and enable the digital infrastructure they need to close the digital gap and inequality between themselves and multinational enterprises (MNEs) and to boost distribution and logistics activities that support e-commerce. This book aims to help SMEs in the African market harmonize their environments in order to guarantee cheaper customer service, expand their reach, and secure more funding to help them close the digital infrastructure gap and achieve a universally accessible market, affordable prices, and secure e-commerce. Last but not least, African SMEs need to learn to embrace the adaptability of their business models, identify their greatest threats, and devise strategies to turn those threats into chances for growth. SMEs in Africa stand to gain valuable insights that will enable them to better locate and exploit new business possibilities presented by digital transformation. The book is compiled based on African SMEs, with contributors from around the globe (e.g. India, Australia, and Ghana). The book covers digital transformation tools such as e-commerce, social media, Big Data, the Internet of Things, Artificial Intelligence, Machine learning, online shopping and digitization initiatives.
List of Contributors
Digital Tools (Big Data, IoT, AI, ML, etc.) for SMEs
Ashmond Adu-Ansere1,*,Victus Elikplim Lumorvie2Abstract
This article discusses the significance of artificial intelligence (AI) and machine learning (ML) for small and medium-sized enterprises (SMEs) and the challenges that hinder their adoption in Africa and other developing countries. Despite the success of AI and ML in improving performance and productivity in large organizations, many SMEs are reluctant to adopt these digital tools due to a lack of awareness and education. The article highlights the benefits of AI and ML for SMEs, including better decision-making, increased productivity, revenue generation, and innovation. It also discusses how AI and ML can be used for customer service, marketing, and sales automation, and emphasizes the need for SMEs to embrace these technologies to improve their competitiveness in the market.
INTRODUCTION
The advent of digital technologies has impacted the novelty and efficiency of businesses immensely [1-3]. This trend has become a revolution that has taken global interactions, businesses, and transactions by storm as it influences connectivity, introduces new procedures, and enhances performance [2, 4]. Digitalization and its associated applications are disrupting several sectors and industries and threaten to make existing models and ways of doing things obsolete by introducing new trends [3, 5]. The influx and expeditious adoption of digitalization have transformed organizational and inter-organizational practices, value chains, and industrial competitiveness [3, 6]. The digitalization process involves digital tools such as the Internet of Things (IoT), artificial intelligence (AI), machine learning (ML), the Internet of People (IoP), the Internet of Energy
(IoE), and several others that are adopted by firms to manage their operations, carry out strategies, and to gain competitive advantage [7-9]. Research hasexamined the nexus between these digital tools and business performance and varied outcomes report strong and positive effects, negative effects, and others contend that these tools undermine performance [4, 7, 10, 11]. Although the adoption of these digital tools propels SMEs to be competitive both locally and globally, the majority of these SMEs are lagging in terms of digital evolution.
Small and medium-scale enterprises are motivated to adopt digitalization to achieve internal efficiencies, collaborate effectively with partners, reduce costs, introduce new offerings to satisfy needs, gather intelligence, and create employment opportunities [12, 13]. Rahayu and Day [14] posit that these tools help SMEs to become more effective, efficient, innovative, and expansive to rub shoulders with their larger competitors in the global market [7,15–17]. Thus, SMEs that use these digital tools are more likely to outwit their competitors because they expedite future research, strategic planning, and business forecasting, resulting in organizational flexibility [18, 19]. Tarutėa and Gatautisa [15] in their study observed that the adoption of these tools impacts profitability, growth, satisfaction, social and environmental performance, and value. In this light, the effect of these digital tools on the activities of SMEs in Africa can never be overemphasized.
Small and Medium-scale Enterprises (SMEs)
The contribution of small and medium enterprises (SMEs) cannot be overemphasized as they impact economic growth, global market competitiveness, national development, poverty alleviation, employment generation, and innovation commercialization [14, 15, 18, 20]. Largely, they contribute immensely to the increasing gross domestic product, new business creation, and income generation [14, 21]. Regarding employment in developed economies such as the United Kingdom, Germany, and the United States, SMEs employ nearly 99 per cent of the workforce and contribute roughly 70 per cent of the national GDP is mostly around 70 per cent [22, 23]. However, in developing nations such as Ghana, Togo, and Nigeria, their contribution to GDP hovers around 50 percent, and are private businesses dominant [14, 21]. It can therefore be interpreted that SMEs form the backbone of the global economy.
Contexts cannot be overlooked in the definition of SMEs because of the variations in economies, and the sectors that constitute the economies. As a result, the definition and classification of SMEs differ among continents, regions, and countries. Thus, no generally accepted definition and classification exist for SMEs. The parameters for classifying SMEs involve the number of employees, sales turnover, customer base, available plant and machinery, annual turnover, and several others. In developed economies like the UK, USA, and Germany, small and medium-scale enterprises are classified based on the number of employees and turnover, in that the EU sets the limit at 250 employees and an annual turnover of around Euro, and other bodies consider institutions with 50 million Euro revenue and less than 500 employees. In developing economies such as the African regions, businesses with employees from 1 to 200 or 300 are all considered SMEs [24, 25].
Small and Medium-scale Enterprises in Africa
Small and medium-scale enterprises SMEs in Africa constitute about ninety [90] per cent of private businesses, employ more than fifty [50] per cent of the working class, and contribute grossly to the gross domestic product (GDP) of the nations [14, 26, 27]. Specifically in Nigeria, SMEs are the primary source of employment and comprise more than 90 per cent of businesses in the country [17]. Similarly, in other developing countries like Ghana, SMEs are pivotal to innovation, job creation national development, and growth as they contribute approximately 70 to GDP and constitute over 90 per cent of businesses [15, 28]. In as much as these SMEs remain the driving force of the economies of these developing countries in Africa, their rate of adoption for digitalization is very low compared to their counterparts in the developed economies [14]. This in turn stifles their global competitiveness and slows down their rate of growth considering that digitalization is at the heart of efficiency and productivity that leads to achieving competitive advantage and improving overall performance [14, 26, 28-30]. Leaders of SMEs in these nations are gradually prioritizing the adoption of these digital tools through information technology to achieve efficiency, enhance product innovation, make effective decisions, explore opportunities, mitigate threats, and gain competitive advantage [26, 28, 29].
DIGITAL TOOLS FOR SMEs
Small and medium-scale enterprises (SMEs) adopt several digital tools for diverse reasons in their activities. Some of these digital tools are discussed below.
Big Data
Big data is ubiquitous to this generation as its tenets keep spreading like wildfire in a dry season. It is a pivotal digital tool adopted by SMEs in this era of data ubiquity. This age is data-driven, as both structured and unstructured facts are sourced from diverse spheres to help individuals and entities make informed decisions. Research predicts that the global big data market will rise from $193.14 billion to about $420.98 billion by 2027 and the emergence of big data will remain an inviolable phenomenon that cannot be overemphasized as the daily data generation is estimated at 2.5 quintillion bytes in the past few decades (Borasi et al., 2020; Olabode et al., 2022).
