The impact of disruptive technologies on the growth and development of small businesses in South Africa

Abstract

The upsurge and convergence of emerging technologies have gained prominence in recent years and have become the main discourse of considerable policy and academic discussions. Such developments have ushered in a new era of technological disruption commonly referred to as the Fourth Industrial Revolution (4IR). While the 4IR is anticipated to have transformative effects on all facets of society, little research has explored the potential impact of 4IR technologies on the development of SMMEs in context of South Africa. Considering its strategic importance, the development of a robust SMME sector will be pivotal in advancing the opportunities of the 4IR. The central endeavour of the study was to assess the implementation of disruptive technologies on the development and transformation of the SMME sector with a focus on the required skills to thrive in the era of the 4IR. A qualitative exploratory design in tandem with a descriptive design was incorporated to elicit multiple views on the challenges and experiences of adopting a technology-driven business model. Qualitative data was collected through face-to-face semi-structured interviews with thirteen SMMEs. Key outcomes of the study revealed that SMMEs have the potential of becoming early adopters of 4IR/disruptive technologies which are evidenced in their use of technologies such as cloud computing, artificial intelligence, machine learning and blockchain. However, there are several factors such as lack of financial resources, the digital divide, fast-paced technological changes, automation of jobs, lack of support mechanisms and regulatory demands that may potentially inhibit the ability of SMMEs to fully participate in the 4IR. Knowledge of the 4IR and related concepts is also at a nascent stage requiring further clarification and demystification to ensure the successful transition into the 4IR. Enabling a conducive and thriving environment is crucial to enhance small business participation in a digitally-driven ecosystem. The recommendations for the study are twofold: from an internal perspective, the study proposes the need to develop a comprehensive digital transformation strategy that also looks at deploying agile IT infrastructure and instilling a culture of lifelong learning through investing in human capital. From an external perspective, the study proposes the realignment of SETA programs and the development of an integrated e-Business platform mitigating some of the challenges and difficulties experienced by the SMMEs.