Kathy Gibson reports – There is a significant gender gap in how effective South African small and medium enterprise (SMEs) are in their use of technology.
This is the headline finding of research conducted by World Wide Worx on behalf of Nashua, to determine a South African SME Tech Index.
The study polled SMEs ranging from micro-enterprises of five employees or less, up to those with 100 employees.
Arthur Goldstuck, MD of World Wide Worx, says the aim was to evaluate how effective South African SMEs are at using technology.
The bottom line is that, while SMEs overall don’t score particularly high, women-led businesses are significantly below the curve.
Overall, 39,9% of companies find their technology use very effective, with male-led businesses significantly more so at 48,8% compared to women-led companies at 32,2%.
The picture is more balanced for those that find technology effective, at 24% for male-led business and 23,3% for women-led business, for 23,4% overall.
“So the overall tech index for effective and very effective tech impact is 64%,” Goldstuck says. “This is not great and it demonstrates that SMEs in general need support to make it more effective.”
The difference between male-led SMEs at 72% and women-led business at 56% highlights the significant gender gap, he adds.
“Even male-owned businesses are not great at 74% – you really want this number to be over 80% to have a truly effective technology landscape – but the low number for women-led business is an indictment on the whole systems and the level of access that women have to technology.
“This significant gender gap highlight the need to address the digital divide between male- and female-led business,” Goldstuck points out. “Efforts to bridge this gap are crucial for an equitable business environment, economic growth and the health of the SME sector as a whole.”
The survey found that SMEs have come through the Covid-19 pandemic and are now dealing with a constrained economy and loadshedding challenges – but remain largely competitive and even optimistic. Indeed, 73,6% believe they are very competitive while 14,9% are competitive.
Women-led business, however, have a distinct competitive advantage over men with 76,6% citing themselves as very competitive compared to 72,1% of male-led businesses.
“So what makes female-led businesses different from male-led businesses?” Goldstuck asks. “A big differentiator comes in with the concept of always-on, with just under 49% of women believing it is important to be always contactable and available, compared to around 42% of men.”
Loadshedding has had a big impact on businesses, but women-led companies are disproportionately affected, at 26% very negative and 31,5% negative, compared to 20,2% of male-led business being negatively affected and 25,6% negative.
When it comes to dealing with loadshedding, women are more likely to use generators (60,3%), but men are more likely to use solar panels at 20,9% compared to just 11% of women.
“So women-owned businesses start off more competitive, but male-led businesses are better at embracing technology,” Goldstuck says. “Typically, women are looking for the quickest way to overcome difficulties and the generator can be seen as the obvious way to do that.
“I suspect that by next year this time, the picture will have changed significantly towards solar panels.”
SMEs are still recording business growth, at 58,1% of all business growing over the last 12 months. This is split at 62,3% for women and 51,9% for men.
“So there is a significant difference in business growth,” says Goldstuck. “Female owned companies have demonstrated higher competitiveness and adeptness in navigating loadshedding and other challenges in the macro-economic environment.”
When it comes to anticipating growth in the next 12 months, both groups are on par at 83,6% and 83,7%.
Women-led business, however, fall way behind when it comes in investing in technology: 49,6% of male-led businesses have increased their investment, compared to 41,1% in women-led businesses. Far more women-led businesses kept to the same spend.
“Our conclusion is that, in order to drive economic growth, we have to address the barriers to technology we see in women-led businesses, to empower female entrepreneurs in technology adoption.”
Women are also more likely to retain their level of technology spend over the next 12 months, while 36,3% for these companies, compared to 38,8% of male-led business, will increase their spend.
More male-led companies (54%) tend to have a dedicated IT department or personal, compared to just 42,5% of female-led companies. However, women-led businesses are more likely to use an external resource, at 56,2% as opposed to 46,5% for male-led companies.
When it comes to the software that SMEs use, 80,6% of men use productivity software, compared to 74% of women-led companies; women are more likely to use accounting software (41,8%) than male-led companies (31%). They also use more collaboration software (18,5%) than male-led companies (16,3%).
Male-led SMEs, use more CRM software (16,3% compared to 5,5% for women) and project management software (13,2% compared to 8,2%).
“The more technical the solution the more likely men are to be using it,” Goldstuck concludes. “The more strategic the solution, the more likely women-led companies are to be using it.
“Our conclusion is that addressing the unique technology needs of the different genders is crucial to promote equal opportunities and optimise technological utilisation across all businesses.”
The use of the cloud is where the study gets very interesting, Goldstuck adds. Women had the edge there again, at 74,7% versus 69% of men. “The proactive adoption by female companies highlights recognition of the benefits.”
Data backups and disaster recovery shows a similar picture, with male-led companies lagging in cloud-based backups (70,5% versus 65,1%).
“The emphasis on cloud-based backups underscores the confidence of female led companies in leveraging the cloud for data security and disaster recovery,” Goldstuck says. “And cloud-based solutions are crucial for business availability.”
The main challenges of technology adoption were cited as loadshedding and the cost of infrastructure and services, with loadshedding affecting more women-led businesses.
To overcome challenges, women-led businesses are more like to outsource their technology or office equipment-related services and support.
Male-led businesses believe better networking infrastructure and connectivity would benefit business, while women would prefer better hardware and devices. Women would also prefer better automation of processes and workflows.
“We believe that tailored strategies that align the unique priorities of each gender can optimise technological capabilities and foster inclusivity in the business environment,” Goldstuck says.
Men are much more likely to have adopted a paperless environment (31,8% compared to 25,3%), but about a third of each are contemplating paperless processes. Another one-third still have no intention of going paperless.