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News 2009-06-04 Digital divide greatest in small firms BY PAUL VECCHIATTO , ITWEB CAPE TOWN CORRESPONDENT [ Cape Town | ITWeb, 1 June 2009 ] - The digital divide can best be seen among small, micro and medium-sized businesses, with almost 40% operating without a computer or access to the Internet, according to a study just released.
Research carried out by the UCT Centre for Innovation and Entrepreneurship (CIE) explored the adoption and usage of ICT by lower-end SMMEs that used government-funded businesssupport services. It included 1 800 SMMEs drawn from all nine provinces. The CIE is based at the UCT Graduate School of Business, and sponsored by the Small Enterprise Development Agency. According to the study, there are three key characteristics that determine ICT usage among SMMEs and illustrate the SMME digital divide: business size, whether the business is urban or rural-based, and the educational levels of the owner. In terms of computer usage, for example, smaller businesses were more likely not to have and use a computer, with 36% of micro, 27% of very small and 14% of small businesses indicating they had neither a business computer, nor any access to the Internet. SMMEs in urban areas are almost twice as likely (63.7%) to have and use a computer in their business as rural SMMEs (35.1%). When it comes to business owners, less than 30% of those with Grade 11 or less make use of a computer for business purposes, compared to over 50% with a Grade 12 and over 90% with a tertiary education. Failure risk The disparities in these three areas emerged not only in the area of computer usage – the pattern was similar for fax machine usage, landline access, e-mail and Internet usage. According to Mike Herrington, director of the CIE and the report's lead researcher, the findings clearly identify the most vulnerable SMME groups at risk of failure due to a lack of ICT access and know-how. “With just under 40% of businesses still operating without a computer and a similar figure without Internet access, it is of concern as these SMMEs will struggle to be competitive and get left behind. This lack of ICT access could further disadvantage traditional businesses, for example, which are largely rural-based, have lower monthly incomes and have business owners with lower educational levels,” he says. The same digital divide characteristics are also evident in SMME owners' perceptions of their IT skills. Rural business owners were particularly negative in their perceived competence with respect to IT skills when compared to urban business owners. Perceived IT skills increased with greater levels of education, and business owners that have been taught to use a computer were significantly more likely to have and use a computer in their business. When asked where they had been taught to use a computer, 40.2% said they taught themselves, 34.8% said they attended a computer course, and 8.5% said they learnt the skills at high school. “With only 8.5% of the respondents developing computer skills at high school, secondary schooling is falling well short in the development of IT skills, with many school leavers trying to fill this gap through self-study or by attending a computer course,” Herrington says. Cellphone domination With many SMMEs still struggling to access computers and basic ICT, like telephone and fax, the cellphone was one ICT device that dominated the survey findings. Cellphones are overwhelmingly the most popular form of connectivity, with over 94% of respondents indicating they have used a cellphone for business purposes. However, smartphone usage was low and cellphones are still being used predominantly for SMS and voice functions – only 22% of the SMME respondents accessed the Internet via a cellphone. “When analysing respondents that access the Internet via a cellphone, it was found these were almost exclusively urban-based (93.5%) and the overwhelming majority (90%) used a cellphone to complement, rather than replace a computer in their business. Becoming part of the Internet generation without a computer seems to be a plausible option, but much needs to be done to facilitate access,” Herrington says. If cellphone technology is going to be instrumental in bridging the urban/rural digital divide, the report says business owners in rural areas will need to be exposed to smartphones and other Web-enabled technology. Internet and cellphone costs will need to be reduced as they are still out of reach of many small businesses. The majority of SMMEs that have and use a computer have relatively unsophisticated software in their business, with word processing and spreadsheet software being the most popular. A small minority of the businesses indicated they used customer management or human resource software. “Much of the software that has been offered to this sector has been too complex, too expensive and has not understood the needs of the SMME market – the research revealed a need for integrated computer programs that are tailored to the small business market, affordable and easily accessible,” Herrington says. The research also made recommendations in other areas to overcome the ICT challenges. “Education needs to be at the heart of SA's interventions though.” |
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