Digital Technology Uses among Microenterprises : Why Is Productive Use So Low acrossSub-Saharan Africa ?

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