By Arthur Goldstuck and Barry Venter
The South African SME Tech Index 2023 research, conducted by World Wide Worx on behalf of total workspace solutions provider Nashua, highlights a significant gap in the effectiveness of technology use between male and female business owners. But it also suggests that female-owned businesses have turned diversity into a competitive advantage.
The headline finding is that 63% of the 303 SMEs surveyed are making effective use of technology. But whereas 72% of male-led businesses reported effective or very effective use of technology, only 56% of female-led businesses did.
This reveals a significant gender disparity in access to technology. What is fascinating to note is that female-owned businesses in our sample outperform male-owned businesses when it comes to revenue growth while 62% of female-owned businesses reported growth in the past 12 months, only 52% of male-owned businesses said the same.
Nearly equal amounts (about 84%) of male-and female-owned businesses expect to grow in the 12 months to come. What could explain the significant (10 percentage point) difference in the numbers of male-and female-owned businesses that reported growth in their businesses over the past 12 months? It comes down to diversity and inclusion.
Female-owned businesses are more likely to have diversity built into their business models. Numerous international studies have shown a diverse workforce and management team helps organisations to grow and compete more effectively. McKinsey, for example, estimates that companies in the top quartile for gender diversity are 15% more likely to have financial returns above their industry median.
Diversity is a valuable competitive edge, especially when many sectors and industries remain male-dominated. Companies with diverse teams are better able to understand the needs of customers in a complex, multifaceted country like South Africa. They’re also able to tap into diverse perspectives and ideas that help them to be more creative and innovative.
Clearly, technology is a powerful tool and enabler for any business. But it’s not enough, on its own, to compensate for strategic shortcomings such as a poor business plan or a lack of workplace diversity. Nonetheless, the ICT industry should look at why the gender gap exists and what can be done to close it.
Equal access to technology could boost SMEs across the board.
The research is a timely reminder of how important technology is in helping SMEs to future-proof their businesses by becoming more resilient, competitive, and productive. It’s concerning to find that there is a pronounced divide in technology use effectiveness across genders — as well as lower levels of tech investment among female SMEs.
The findings suggests that women in smaller businesses face barriers such as limited resources, lack of training, and societal norms in leveraging technology. By addressing these barriers through access to resources, training programmes, and mentorship, the industry can help foster gender diversity and equal opportunities.
The research highlights that SMEs are growing in the face of challenges such as load shedding. But it’s clear that big business, policymakers, and government could do more to support them, especially female entrepreneurs. Getting this right could help us to elevate the growth of SMEs, with positive spin-offs for the economy and job creation.
Arthur Goldstuck is the CEO of World Wide Worx and Barry Venter, the CEO of Nashua.