Almost two-thirds (63%) of South African small and medium businesses (SMEs) are making effective use of technology, but there is disparity between male- and female-owned or run businesses.
This is according to the 2023 SME Tech Index, based on a survey of over 300 SMEs and conducted by World Wide Worx on behalf of Nashua. The Index is drawn from the percentage of SMEs that self-report as being highly effective in their use of technology.
The gender disparity is especially obvious when it comes to access to technology.
The results of the research, presented by Nashua in Johannesburg yesterday, show that the 2023 SME Tech Index stands at 72% for male-led businesses, and 56% for female-led businesses.
Arthur Goldstuck, CEO of World Wide Worx, said, “Female-owned companies in our research show higher business growth compared to male-owned companies, indicating their competitiveness and ability to navigate challenges. 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.”
Goldstuck echoed Nashua’s point of view that SMEs face many challenges, including loadshedding, logistics and supply chain, varying levels of fluctuation and economic hardship.
“Female-led businesses tend to have more challenges because of discrimination and other issues," he said. "But this has forced these businesses to become more resilient and therefore more competitive.”
Irrespective of the gender disparity, the research reflects a vibrant and resilient small business sector. Nine out of ten business owners reported that their companies are competitive, while 58% said their business has grown over the past year and 85% expect to grow in the year to come.
Most SME owners said 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.
Increased tech spending
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, said: “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.
The research highlighted the two main obstacles to technology adoption are the cost of technology infrastructure and services, as well as loadshedding.
In terms of the benefit of technology in business, male companies prioritise network infrastructure and connectivity (41%) and training and education for employees. Female companies value hardware/devices and process automation significantly more.