Nearly two thirds (63%) of South African small and medium enterprises (SMEs) are making effective use of technology, but there is a significant gap in the effectiveness of technology use between male and female business owners. That’s according to The South African SME Tech Index 2023, a new measure of technology effectiveness based on research conducted by World Wide Worx on behalf of total workspace solutions provider Nashua.
The Index is drawn from the percentage of SMEs that self-report as being highly effective in their use of technology. This in turn allows technology effectiveness measured across industries, company sizes and the gender of their leadership.
The research, which surveyed over 300 SMEs, shows that the 2023 SME Tech Index stands at 72% for male-led businesses, and 56% for female-led businesses, highlighting a disparity in access to technology. This suggests that addressing the divide in technology use effectiveness across genders could help female-owned companies to boost their growth and competitiveness.
Bridging the technology divide
“Female-owned companies in our research show higher business growth compared to male-owned companies, indicating their competitiveness and ability to navigate challenges,” says Arthur Goldstuck, CEO of World Wide Worx. “Yet they have a lower perception of technology effectiveness than their male counterparts, as well as lower levels of tech investment.
“This suggests that women in smaller businesses face barriers such as limited resources, lack of training, and societal norms in leveraging technology. By addressing these barriers, through access to resources, training programmes, and mentorship, the industry can help foster gender diversity and equal opportunities. It is clear, from their overall competitiveness, that such investment will reap dividends for the businesses as well as for the economy.”
Vibrant and resilient
The research paints a picture of a vibrant and resilient small business sector, where neither male nor female business owners are allowing the many economic challenges South Africa faces to dent their confidence. Nine out of ten business owners report that their companies are competitive, while 58% say their business has grown over the past year and 85% expect to grow in the year to come.
SME owners aren’t allowing load shedding to get them down. The majority confirm that load shedding has had a negative effect on their businesses, but nearly 85% say that their load shedding countermeasures are effective. More than half (55.8%) have invested in generators as their primary countermeasure, while 16.5% are already using solar panels as their primary backup power source.
SMEs invest in ICT
Of the overall sample, 45% increased tech spending in the last 12 months and 38% plan to increase spending in the next 12 months. Around 47% maintained spending at the same level in the previous months and 56% plan to do so in the next 12 months. Only 5.6% plan to reduce spending in the next 12 months, down from 11.2% who curtailed spending in the previous year.
Technology accounts for a sizeable portion of SMEs’ expenses, with close to 56% spending more than 5% of their budget on ICT and around 28% spending more than 10%. The cost of technology infrastructure and services emerges as the primary challenge in technology adoption for both male and female companies, with approximately half of them identifying it as a key obstacle.
Barry Venter, CEO of Nashua, says: “The small business sector is vital to job creation and economic growth in South Africa. As such, it’s encouraging to see the research confirm that our SME sector is adaptable, optimistic and putting technology to effective use. But it’s also clear that many entrepreneurs, especially women, still face barriers to adoption of ICT solutions.
“As a Total Workspace Solutions Provider, we offer SMEs world class solutions, consulting and services that enable them to focus on their core operations and grow their businesses. We’re also working with our franchisees to empower business owners and decision makers with insights and advice that removes barriers and helps them to future-proof their businesses.”
