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 Enterprise

From Silicon Valley to Silicon Savannah? Tech Hubs in the Global South

by Yingqin Zheng & Andrea Jimenez Cisneros

For decades, as an ICT4D intervention, telecentres have been built across many regions in the global south, with the aim to bridge the digital divide and bring socio-economic benefits to local communities. The result is mixed to say the least. Many telecentres were not sustainable due to a number of reasons.

In recent years an upgraded and “sexier” version of telecentres, tech hubs, have been rapidly diffusing in the global south. In 2018, GSMA reported 442 tech hubs in Africa and 565 in Asia Pacific (Giuliani 2018).  They are spaces that not only provide co-working space and Internet connection, but also claim to foster collaboration, entrepreneurship and innovation. This is a model that seems to have stemmed from industrialised regions and diffused to developing countries, as part of the digital and mobile boom, and promise to produce ‘local innovations by local people’ (Afrilabs). GIZ’s 2013 report describes this movement as “from Silicon Valley to Silicon Savannah”, indicating the high expectation projected to Tech Hubs to boost innovation and economic growth.

Zheng Tech Hubs

Source: Giuliani (2018)

Many hubs are designed to mirror their Western counterparts. iHub in Kenya, one of the oldest and most prominent hubs in Africa got the inspiration from “successful co-working spaces across the world”, and “the team went to work transforming the sterile office block into an interactive hive. They threw bright green paint on the walls, installed a snappy Internet connection, and imported a slick Italian espresso machine” (Sanderson 2015, p.6).

Although there is plenty of research in organisational studies that argues materiality of physical space shapes human behaviour and organisational practices, our research which compares a Tech Hub in central London with one in Lusaka (Jimenez & Zheng 2016, 2017) shows that the physical design of the hub may not be directly related to how the space is used by the members and what value is generated from it. Members in the London hub, a global chain boasting extensive networks of entrepreneurs, greatly appreciate the aesthetics and design of the hub as a co-working space, but there is limited sense of a collaborative work.  As one member stated: “[f]or shared workspace I think it’s a great place, apart from the intention of trying to get people to collaborate which I don’t think it happens that much.” It was found that despite the open design of the space, strict rules are applied on how segments of the space are used thereby imposing a structured, disciplined order in the Hub.

In contrast, the Lusaka hub, while at the time not being able to afford to become a franchise of the London hub, is located in a standard office space with compartmentalised rooms and rigid walls. Yet there is a higher level of interaction and collaboration among members, improvisation and serendipity in their activities, and a stronger sense of community and identity. One member commented:

 “So you find people around here could really help you. If I ask him how do I go about with this because sometimes I am stuck, people come and help me.

Nevertheless, while the Lusaka hub had an innovative and learning culture and clearly was highly valued by local entrepreneurs, it struggled to show evidence of market-based innovation success.

In contrast, another study on Tech Hubs in central Manila shows that while it physically resembles the colourful, open design of coworking spaces in the West and provides high speed Internet that is not widely available in the Philippines, the membership fee to use these spaces were not affordable to local entrepreneurs (Tintiangko & Soriano 2018). They therefore become spaces for international expats and local elites, in effect excluding the grassroots entrepreneurs who could benefit from the hubs the most.

So far, we only have some broad ideas of the emerging landscape of Tech Hubs across the globe (Friederici 2018), and limited understanding beyond selective in-depth case studies (Sambuli & Whitt 2017, Haikin 2018, Littlewood & Kimbuyu 2018) of what actually happens in the Tech Hubs, the impact they may have on local community and how they evolve over time. We believe that behind the homogeneous branding of Tech Hubs all over the world as “spaces for innovation”, there are almost certainly heterogeneous modes of enactment of the spaces that give rise to multiple, or limited, values to local communities.

References

Friederici, N. (2018) Grounding the dream of African Innovation Hubs: two cases in Kigali. Journal of Developmental Entrepreneurship, 23(2) https://doi.org/10.1142/S1084946718500127

GIZ (2013) From Silicon Valley to Silicon Savannah, GIZ, Bonn https://10innovations.alumniportal.com/technology-hubs/from-silicon-valley-to-silicon-savannah.html

Giuliani, D. (2018) 1000 tech hubs are powering ecosystems in Asia Pacific and Africa, Mobile for Development (GSMA), 20 Mar https://www.gsma.com/mobilefordevelopment/programme/ecosystem-accelerator/1000-tech-hubs-are-powering-ecosystems-in-asia-pacific-and-africa/

Haikin, M. (2018) Voices of the Silicon Savannah: Key Challenges facing Kenya’s Social-Tech Ecosystem – Views from Within. https://matthaikin.com/2018/10/08/voices-of-the-silicon-savannah-released/

Jimenez, A. & Zheng, Y. (2017) A spatial perspective of innovation and development: innovation hubs in Zambia and the UK. In P. J. Choudrie J., Islam M., Wahid F., Bass J., ed. Information and Communication Technologies for Development. ICT4D 2017. Springer, 12-14.

Jimenez, C. & Zheng, Y. (2016) A capabilities approach to innovation: a case study of a technology and innovation hub in Zambia, paper presented at Twenty-Fourth European Conference on Information Systems (ECIS), Istanbul, 12-15 Jun.

Littlewood, D.C. & Kiyumbu, W.L. (2018) “Hub” organisations in Kenya: What are they? What do they do? And what is their potential?, Technological Forecasting and Social Change, 131, 276–285. https://www.sciencedirect.com/science/article/pii/S0040162517313173

Sanderson, O. (2015) On Hubs, BRCKs, and Boxes:The Emergence of Kenya’s Innovation and Technology Ecosystem, Tufts University, Medford, MA. https://dl.tufts.edu/catalog/tufts:sd.0000269

Sambuli, N. & Whitt, J.P. (2017) Technology Innovation Hubs and Policy Engagement, Making All Voices Count Research Report, IDS, Brighton, UK https://www.makingallvoicescount.org/publication/technology-innovation-hubs-policy-engagement/

Tintiangko, J.T. &  & Soriano, C.R.R. (2018) Coworking spaces in the global South: local articulations and imaginaries, paper presented at 68th Annual International Communication Association Conference, Prague, 24-28 May