Why women-led businesses are less likely to use digital technology -Report

In an era where digital technology is poised to enhance the productivity of Micro, Small and Medium Sized Enterprises (MSMEs), the segment led by women seems to be lagging in incorporating tech in their operations.

As stakeholders continue to push for the closure of the innovation gender gap, some experts now exhibit what could be the major obstacles to the goal.

According to the latest survey by research firm, Kenya Institute for Public Policy Research and Analysis (Kippra), female-owned businesses in Kenya are currently less likely to use digital technology compared to firms with male-female joint ownership.

It largely attributes the prevalent landscape to the policy gaps that exist in the country towards enhancing digital skills while including women in business and other special interest groups as a priority.

Kippra also points out that the prolonged informal status of firms contributes to their failure to utilise digital technology, noting that the longer firms operate informally, the less likely they are to adopt digital technology effectively.

The nature of worksites further influences the use of digital technology, according to the research body.

Apart from women-led enterprises, Kippra says older firms and ones operating in kiosks/ exhibitions/ jua kali sheds are also less likely to use digital technology.

Although the analysis does not provide the scope of the digital technology adoption among Kenyan women-led enterprises, professional services firm Deloitte paints a picture of this.

In its 2024 'Empowering Women Business Leaders in Africa's Digital Transformation' report, it says only about 36 per cent of Sub-Saharan Africans have access to broadband internet, and for those who do have access, basic data plans can cost up to three times more on the continent than in regions with more advanced digital infrastructure.

As a result, the continent thus faces a persistent digital gender gap.

"Within Sub-Saharan Africa, the primary access point for internet users has a 37 per cent gender gap, reflecting the over 190 million women not using mobile internet services," Deloitte says.

"This digital gender gap extends to the growing digital economy in Africa, where women-owned businesses often lag in adoption and use of these technologies."

It adds that women in Africa are 28 per cent less likely than men to own a smartphone, the main access point for the internet on the continent, rendering most women business owners disadvantaged.

At the micro-enterprise level, where owners largely use their mobile devices to conduct business, Deloitte notes that the gender gap is a critical constraint to utilising digital tools.

Exposure, which has obvious links to connectivity, is also critical. Women-led MSMEs with limited exposure to digital technologies, are less likely to perceive their usefulness and ease of use, lowering their intentions to adopt and actually use technologies, it adds in part.

However, the report by the service firm indicates that while women founders are driving a rising wave of innovation and digitisation through startups across Africa, they are still less likely to be part of the tech startup community.

"Even though one in four businesses in Africa are started or run by a woman, African women are less likely to launch and scale startup ventures," Deloitte says.

Nevertheless, it reckons that Africa's digital transformation is being stunted with fewer solutions being developed locally without the full participation of women innovators and with fewer women involved.

Additionally from the report, 69 per cent investment potential of African female tech founders feel disadvantaged by being a woman when speaking with potential investors on matters of innovation.

What to do

The study by Kippra firstly recommends continuous development of appropriate training on digital technology targeting informal MSMEs through MSEs associations.

It also calls for the enhancement of the capacity and capability of women entrepreneurs to access and utilise digital technology through appropriate gender-sensitive policies and initiatives.

"Governments should also put mechanisms to design and implement appropriate ICT complementary worksites for informal MSMEs and develop a national innovation policy to promote the identification, documentation and promotion of innovations," Kippra says.

"Addressing informality through the promotion of transition to formal economy; promoting e-commerce and digital market platforms to enhance market access; and continuous promotion of digital economy pillars by the government is also essential."

On the other hand, service firm Deloitte says women-led enterprises need to be given basic access to internet and offered awareness on digital solutions and how they can benefit their businesses.