E-readiness of the South African informal sector for electronic portal technology support

Abstract

E-readiness signifies the level to which a nation or entity is well-positioned to reap the full benefits of a digitalised world. At the micro-level, it determines how an individual is strategically positioned to effectively use the opportunities that come with Information and Communication Technology. Information technology infrastructure, human capital development, government regulations and policies, and internet penetration are critical components of e-readiness. In most transitioning or developing economies, including South Africa, the informal sector represents the lowest level of micro-, small-, and medium-scale enterprises (MSMEs). Technically, informal businesses are unregistered and unregulated; therefore, they operate outside government jurisdiction. They are non-taxable. This sector is subject to several constraints (external and internal) which impede its efficiency and growth. A technology-centric approach has been articulated to address some of the key constraints. This approach is a multi-modal electronic portal as a niche e-portal for personalised information access and management targeted to the informal sector of South Africa. This doctoral study aims to ascertain the e-readiness of the SA informal sector service providers for electronic technology support. The thrust of this research is the provision of the premise for the gradual migration of the SA informal service providers to a technology-based agenda that supports their visibility, brand, profitability and, eventually, their semi-formalisation. A synthesised conceptual framework was developed from Information Systems theories comprising self-efficacy theory (SET), unified theory of acceptance and use of technology (UTAUT), and technology readiness index (TRI). This framework became the research model. Data was collated from 419 respondents in the Cape Town metropolis after using a survey research design. Prior to data collection, the researcher demonstrated how to use the electronic portal technology (web technology portal) artefact to the respondents. A structural equation modelling was performed on the data using SmartPLS-SEM (vs, 3.3.5), to assess the degree of e-readiness of several service providers in the SA informal sector. The relationship between gender, business type and their e-readiness, and pertinent factors that impede or enhance the state of e-readiness of the informal sector providers were determined. The findings obtained after performing descriptive statistics, and PLS-SEM analysis are presented and show the participants' demographics in terms of gender, age distribution, sub-sector concentration, and internal and external factors. The PLS analysis showed that self-efficacy, performance expectancy, social influence, and external factors relate positively and significantly to e-readiness use of a web technology portal. Comparatively, other hypotheses had positive non-significant relationships to the use of a web technology portal. These constructs were non-supportive and therefore rejected. Gender and business type were the moderating variables on the dependent variable for respondents’ e-readiness to use a web technology portal. Conclusively, gender and business type did not significantly influence the e-readiness of the micro-entrepreneurs. Adding moderating variables (gender and business type) to the model makes no significant improvements to the original model. The findings showed no significant differences between gender and type of businesses (sub-sectors) regarding the use of web technology portal and the degree of e-readiness. Additionally, considering factors influencing the intention to leverage web technology portal, performance expectancy, self-efficacy, social influence, and external factors had significant positive influence on their degree of e-readiness, while exogenous constructs such as effort expectancy, facilitating conditions, optimism, innovativeness, discomfort, insecurity, and internal factors all had a positive but non-significant influence on their degree of e-readiness. The implications of these findings for theory, subsequent research, policy, and practice are emphasised here. A synthesised research model was used for this study to contribute to theory and improve scholarship in terms of IS research. A new theoretical lens has been adapted for this study, and future research will entail the validation of the synthesised research model, using multiple research settings before generalising about the informal sector. In terms of policy, governments and other stakeholders in the informal sector can harness the functionality and applicability of web technology portal (e-portal) to greatly improve the productivity and competitiveness of informal sector workers. Policy incentives and technology must be applied in tandem to improve the productivity of informal practitioners. Equally, the government must become aware that external variables (support, cost of internet connectivity, absence of internet hotspots in communities, and constant power availability) are very important to the operational activities of informal workers, and adequate steps should be taken to address these challenges. In practice, leveraging technology/innovation can assist the informal sector providers to increase their output (productivity and wage earnings). Increased wages lead to improved livelihood and well-being, and eventually some form of semi-formalisation of the sector.