Digital Economy, Digital Enterprise

Surviving in the digital era – business models of digital enterprises in a developing economy

A new paper on Digital Business Models of Digital Enterprises in a Developing Economy has been published by the DIODE Ghana Team.

This study aims to explore the business models and strategies of digital enterprises in a developing economy context to understand the nature of their operations, as well as their survival tactics. A review of literature on digital enterprise models led to the adaptation of a 16 business model archetype for analyzing digital enterprises in Ghana. Using a critical realism perspective, survey data from a sample of 91 digital enterprises were used for the study.

The findings suggest that among human, physical and intangible assets, financial assets were the least used assets in the operations of the digital enterprises. This stems from the fact that the online financial business sector is still in its nascent stages in most developing economies. The findings further suggest that all digital enterprises leverage on accessible and low-cost social networking services as part of their operations and use them as an avenue to engage with their target customers. The findings from this study provide guidelines to entrepreneurs who wish to venture into the digital ecosystem of Ghana, particularly with regard to the economic, financial and technological factors that enable digital enterprises to survive in the competitive digital economy.

 

The findings also suggest that it is important for governments to realize that there is an increasing rise in digital enterprises in the developing economies and these enterprises are creating jobs and providing business solutions locally that would hitherto be sought from developed economies. There is therefore the need for the requisite legal infrastructure and financial support that will cushion these enterprises from the fierce competitions that stagnate their growth.

The study provides a mapping of the digital business models of Ghanaian digital enterprises. This knowledge is arguably the first of its kind in the context of a developing economy. Hence, it serves as a stepping-stone for future studies to explore other areas in the digital economy, especially from a developing economy perspective.

Access Publication:

Eric AnsongRichard Boateng, (2019) “Surviving in the digital era – business models of digital enterprises in a developing economy”, Digital Policy, Regulation and Governance, https://doi.org/10.1108/DPRG-08-2018-0046

Digital Labour

Mobile Microwork in South Africa

When Richard launched the DIODE network, I took this as a cue to initiate a mini-empirical research project and got Zaakirah Roomaney, one of my honours research students, to look at mobile microwork in South Africa. We just wrote up the findings as a conference paper which my colleague/co-researcher Pitso Tsibolane will present at AMCIS, New Orleans, in August. However, I thought it would be useful to mention some of our key findings here as well. (We’ll upload the paper after the conference.)

We sent out a survey request and link via Facebook, soliciting people with mobile micro-work experience or interested in participating. The sample consisted of 125 valid responses of which 70% (n=87) of respondents were female and 30% (n=38) were male. The age distribution was positively skewed with the largest response from the 20-29 years age group which represented 45% (n=17) of the male respondents being male but a fully 71% (n=62) of the female respondents. The education level of the respondents was quite high with 62% of the respondents either have a Diploma or Bachelor degree or above and 37% of the respondents having completed secondary school. 74% of respondents had not participated in any form of microwork while 26% had participated in some form of microwork.

Figure 1 below illustrates the types of microwork that respondents indicated that they would most likely (want to) partake in (single response item). The majority of respondents (20%) indicated that would most likely complete surveys if they were to participate in microwork. The second most popular task amongst the respondents was rating services (14%, n=31) followed by mystery shopping (11%, n=33).

Microwork_SA_Fig_1

Figure 1: Tasks Respondents are “most likely to complete

Potential Contribution of Microwork

When we asked what they think the major contribution of microwork could be to a nation, 69 of respondents think that microwork has the potential to decrease unemployment while 35 indicated that microwork has the potential to help a country develop. Interestingly, 11 of respondents are of the opinion that participation in microwork is a new form of exploiting cheap labour.

Microwork_SA_Fig_2

Figure 2: Potential Contribution of Microwork

Key motivators for participating in Mobile Microwork

We also asked them about a number of potential motivating factor as well as barriers. Figure 3 shows to what extent they rated particular motivators/barriers as being important.

Microwork_SA_Fig_3

Figure 3: Motivators for (intended) participation into mobile microwork.

However, more interesting was when we ran a multiple linear regression test to see which of these actually were a statistical predictor for their intended future participation in mobile microwork. It turns out that only payment/remuneration is significant in the model (p = 0.006)> However, the overall multiple regression model has an R² of only 0.13 with an adjusted R² of a measly 0.03 i.e. we could only ‘explain’ 3% of the variance in intended future microwork participation from the usually cited motivators and inhibitors !

More interpretations and full details in the forthcoming publication of the AMCIS paper. Please feel free to comment or contact me directly.

Jean-Paul Van Belle; Centre for IT and National Development in Africa (CITANDA), University of Cape Town (UCT).

 

Digital Economy, Digital Enterprise

Enter Digital Enterprises in Africa

Digital technologies like Internet applications and mobile phones are changing the nature of work, business and organisations. Their extensive embeddedness in the economic exchange of goods and services is also creating digital economies – a phenomenon with growing importance. The digital economy is “that part of economic output derived solely or primarily from digital technologies with a business model based on digital goods or services”. For the global South in particular, the digital economy even though usually only accounting for 3 percent to 4 percent of gross domestic product (GDP), has a much larger impact when firms use it to spur competition and productivity in traditional sectors, such as retail, banking, and manufacturing. Available statistics suggest that the mobile ecosystem alone contributed US$8.3 billion to the Nigerian economy and 7% of Mali’s GDP consists of its digital industry (da Silva, 2014). Despite these successes, the region is yet to catch up with the bigger benefits the global North enjoys from the digital economy.

Synthesising Available Evidence
To have a deeper understanding of the digital economy in the global South (specifically Africa), available evidence was gathered and synthesised as part of DIODE Network activities. Unfortunately, the synthesis had to rely mostly on practice-based literature due to the scarcity of academic research on the digital economy of Africa. Such a synthesis was also important to uncover areas that need further research. Guided by the narrow definition of the digital economy, the synthesis focused on the activities of enterprises in telecommunications, digital services, software and IT consulting, hardware manufacture, information services, platform economy, gig economy, and sharing economy. Available evidence suggests countries like South Africa, Nigeria, Kenya and Ghana are quite advanced in the digital economy. Their advancement reflects their level of development and abounding availability of digital enterprise activities. Encouragingly, other countries with some investments from established players in the global North, are also making efforts to catch up.

Areas for New Research
Overall, five main themes emerged as areas that need new research efforts. First, there is need to undertake studies that trace value creation amongst various forms of digital enterprises. Second, there is need to study the career trajectories of people who engage in the various aspects of digital enterprises – especially the gig economy; in order to understand the factors determining their involvement. Third, there is need to undertake periodic and regular research to find out the motivations of the companies that want digital presence and mobile apps developed for them, and the development impact of their decisions on those who work on such requests especially if they are gig workers. Fourth, there is need to undertake country and cross-country case studies of the various platform and digital enterprise issues, to generate lessons and best practices for countries that are now picking up. Fifth, one big question that remains unanswered relates to knowing who exactly is benefiting from the digital economy in Africa, therefore it would be interesting to know the true beneficiaries, and also the coping mechanisms of the losers.

In summary, there is a paucity of academic research on digital enterprises in Africa. In order to end this paucity, more research needs to be conducted around this phenomenon in the global South. Such research could begin with the areas derived and discussed in this synthesis study.

Read More in the Synthesis Study here:

Boateng, R., Budu, J., Mbrokoh, A.S. Ansong, E., Boateng, S.L. & Anderson, A.B. (2017). Digital Enterprises in Africa: A Synthesis of Current Evidence, Paper 2. DIODE Network, University of Manchester.

Text Reference

da Silva, I. S. (2014). Mali Digital Plan 2020 to reorganise economy. Retrieved from http://www.biztechafrica.com/article/mali-digital-plan-2020-reorganise-economy/9327/

Picture Reference

Ansip, A. (2017). Heading to Nigeria, EU Commission and Its Priorities, Retrieved 23 November 2017 from https://ec.europa.eu/commission/commissioners/2014-2019/ansip/blog/heading-nigeria_en