Digital Technology uses among Microenterprises : Why is Productive use so Low across Sub-Saharan Africa?

This paper explores the use of digital technologies, their association with performance outcomes, and the main constraints to greater use among microenterprises. The study uses a sample of more than 3,300 firms across seven Sub-Saharan African countries, of which over 70 percent are informal and over half are self-employed enterprises with no full-time workers. The analysis finds that productive use of digital technologies is low: less than 7 percent of firms use a smartphone, less than 6 percent use a computer, and roughly 20 percent still do not use a mobile phone. Even fewer firms use digital tools enabled by these access technologies: among firms with smartphones, less than half use the internet to find suppliers, and only half with a computer use accounting software or inventory control/point-of-sale software. Women are less likely to use all digital technologies than men. A greater range of uses based on internet-enabled computers or smartphones relative to uses based on 2G phones are conditionally associated with higher job levels. However, there may be a tension between higher productivity and more jobs: the highest productivity firms are not generators of the highest jobs, and vice versa. That formal high-sales and high-jobs firms are more strongly associated with the use of internet-enabled tools than high-productivity firms suggests that relaxing constraints preventing the latter from using more such digital tools and expanding sales and jobs could be important. Among these constraints, more than seven in ten non-users indicate that lack of attractiveness ("no need") is the main impediment to productive use of digital technologies. The most important conditional correlates of smartphone and computer adoption are related to having a loan, having electricity, having business linkages with large firms as customers, and managers having vocational training