ICT Usage in Small, Medium and Micro Enterprises : a South African Perspective Of its Role and Impact on Poverty Reduction

Abstract

The role and impact of information and communications technologies (ICTs) towards enabling socio-economic development in small, medium and micro enterprises (SMMEs) has received attention from various scholars. South Africa as a lower middle-income developing country has a number of development priorities which include the urgent need to expand the economy and ultimately to eradicate poverty and unemployment. Based on evidence from more advanced economies, expanded access and usage of ICTs in SMMEs is considered an imperative to enable the acceleration of development goals.

This study sets out to advance understanding of the role and impact of ICT usage by SMMEs on poverty reduction from a South African perspective. A systematic literature review methodology was applied to analyse previous theoretical and empirical studies conducted on the interplay between ICTs, SMMEs and poverty reduction. Empirical data was gathered from SMMEs through semi structured interviews and observations. A purposively selected case study was also carried out serving to enhance contextual insight into the role of ICTs in an SMME context. The thematic analysis method, Actor-Network Theory (ANT) and Sustainable Livelihood framework (SL) were applied as the data analysis methods. The combination of ANT and the SL framework for expanded analysis has not been applied before by similar studies that examine the interplay between ICT, SMMEs and poverty reduction. The process of triangulation was applied on the empirical findings in order to reduce bias and to construct a conceptual model.

This study contributes to the body of knowledge by proposing a conceptual model that frames the role and impact of ICT usage by SMMEs towards improving their livelihoods and reducing poverty. Methodologically it offers an example of how method pluralism can be applied to gain a better understanding of the research phenomena. From a practical perspective, this study addresses real life challenges resulting in the suggestion of practical guidelines to ensure that the use of ICTs by SMMEs results in improvements in their financial and non-financial well-being. The findings of this study indicate that the relationship between ICT usage and poverty reduction is neither simple nor linear. Effective use of ICTs could result in SMMEs leveraging more benefits and thus improving their human capabilities as well as social and economic well-being resulting in poverty reduction.