Digitalisation brings hope for SA’s small businesses

The Small Business Institute (SBI) released a paper this week that makes the case for digitalisation as a means to survival and growth for small businesses, job creation and the country.

The paper, Digitalisation – the best hope for South Africa and its small firms, explores how technology can, and has, transformed SMEs and their changes for survival during the Covid-19-pandemic. It says technology could be an important key to unlocking recovery and growth into the future in the country.

It also points to the fact that those SMEs which were able to continue trading were the ones that adopted a digital approach to business, using digital tools or building digital-first businesses.

For many SMEs, it was lockdown that jump-started their move to cloud computing. The report quotes one business owner as saying, “We had always planned on going on line, we just never had time. With Covid-19, we had to make the time.”

The World Bank’s survey, Measuring the Pulse of Firms in South Africa, revealed that almost two-thirds of the businesses interviewed initiated or increased their reliance on digital solutions during the pandemic.

As the SBI’s paper confirms, “during 2020, technology offered more than an opportunity, it was a lifeline.”

Fourth industrial revolution

The paper speaks of digitisation and automating processes characterising aspects of the third industrial revolution, while the fourth industrial revolution “makes way for data-driven projects merging physical, digital and biological fields.”

The fourth industrial revolution, which the world is entering right now, includes the use of:

  • Cloud computing
  • Artificial intelligence
  • The Internet of Things
  • Robotics
  • 3D printing
  • Biotechnology

An interesting fact

The SBI reports that South Africa owns the biggest 3D printer in the world. It can build objects as widely ranging as aircraft, missile components, medical implants and prostheses, but it’s an expensive exercise to use it, requiring titanium powder that costs up to R7. 5 million to fill it.

 

There are obstacles though. As the African Development Bank puts it, “the inability of the [energy] sector to guarantee a stable supply of electricity presents a major challenge to the ailing economy and curtails the opportunities of the 4IR.” According to the World Bank South Africa Enterprise Survey 2020, businesses overwhelmingly cited electricity as the primary business environment constraint.

As the SBI says, “It is in SMEs where the true spirit of enterprise is embodied. Under the right conditions, a vigorous and thriving SME community can enhance competition, entrepreneurship, job growth and spur economy wide efficiency and innovation.”

To read more of this insightful paper, click here.

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