DIGITAL TRANSFORMATION AND E-COMMERCE ADOPTION AMONG SMALL BUSINESSES IN DEVELOPING AFRICAN ECONOMIES: EVIDENCE FROM ETHIOPIA AND UGANDA


Victor Moses(1*)

(1) Islamic University In Uganda, Uganda
(*) Corresponding Author

Abstract


Digital transformation is a crucial driver of economic growth and innovation, particularly in developing economies. This study explores the adoption of e-commerce among small businesses in Ethiopia and Uganda, focusing on the factors influencing digital transformation in these markets. A comprehensive literature review was conducted to synthesize existing research on e-commerce adoption, technological readiness, and the socio-economic challenges faced by small businesses. The findings highlight the pivotal role of technological infrastructure, government policies, and digital literacy in shaping e-commerce adoption. Barriers such as inadequate internet access, limited financial resources, and regulatory hurdles were identified as significant challenges. Conversely, the study found that entrepreneurial orientation and market dynamics foster digital growth and e-commerce participation. This review provides a conceptual framework to understand the complexities of digital transformation in small businesses within developing economies. Recommendations are offered for policy interventions and strategic support to enhance digital integration in these contexts. The study underscores the importance of fostering an enabling environment for e-commerce to thrive among small businesses in Ethiopia and Uganda.

Keywords


Digital Transformation, E-Commerce Adoption, Small Businesses, Developing Economies, Ethiopia and Uganda.

Full Text:

PDF

References


Adeniran, A., & Johnston, M. (2021). E-commerce adoption in developing economies: Challenges and opportunities. Journal of Business and Technology, 15(3), 225-238. https://doi.org/10.1016/j.jbt.2021.05.012

Aker, J. C., & Mbiti, I. M. (2010). Mobile phones and economic development in Africa. Journal of Economic Perspectives, 24(3), 207-232. https://doi.org/10.1257/jep.24.3.207

Apulu, I., Latham, A., & Moreton, R. (2011). Factors affecting the effective utilization and adoption of sophisticated ICT solutions: Case studies of SMEs in Lagos, Nigeria. Journal of Systems and Information Technology, 13(2), 125-143. https://doi.org/10.1108/13287261111135972

Asongu, S. A., & Nwachukwu, J. C. (2016). The role of governance in mobile phones for inclusive human development in Sub-Saharan Africa. Technological Forecasting and Social Change, 102, 51-61. https://doi.org/10.1016/j.techfore.2015.07.014

Asongu, S. A., & Odhiambo, N. M. (2019). Challenges of mobile phone penetration and inclusive development in Sub-Saharan Africa. Journal of Economic Studies, 46(2), 384-400. https://doi.org/10.1108/JES-10-2017-0286

Ayo, C. K., Adewoye, J. O., & Oni, A. A. (2011). Business-to-consumer e-commerce in Nigeria: Prospects and challenges. African Journal of Business Management, 5(13), 5109-5117. https://doi.org/10.5897/AJBM10.144

Ayyagari, M., Demirgüç-Kunt, A., & Maksimovic, V. (2008). How important are financing constraints? The role of finance in the business environment. World Bank Economic Review, 22(3), 483-516. https://doi.org/10.1093/wber/lhn018

Azam, M. S. (2007). E-commerce in developing countries: Issues and influences. Journal of Internet Banking and Commerce, 12(1), 1-13. https://doi.org/10.2139/ssrn.2987297

Banga, K. (2020). Digital transformation and economic growth: A global perspective. Global Economy Journal, 19(2), 140-160. https://doi.org/10.1515/gej-2020-0028

Beck, T., & Cull, R. (2014). Small- and medium-sized enterprise finance in Africa. African Growth Initiative, Brookings Institution. https://doi.org/10.1596/1813-9450-7018

Beck, T., Demirgüç-Kunt, A., & Honohan, P. (2009). Access to financial services: Measurement, impact, and policies. The World Bank Research Observer, 24(1), 119-145. https://doi.org/10.1093/wbro/lkn008

Beck, T., Demirgüç-Kunt, A., & Maksimovic, V. (2005). Financial and legal constraints to growth: Does firm size matter? Journal of Finance, 60(1), 137-177. https://doi.org/10.1111/j.1540-6261.2005.00727.x

Boateng, R., Molla, A., Heeks, R., & Hinson, R. (2019). E-commerce in least developed countries: Summary evidence and implications. Journal of African Business, 20(2), 244-261. https://doi.org/10.1080/15228916.2019.1572708

Bolarinwa, K. O., & Olanrewaju, A. (2021). Financial inclusion through mobile money in Africa: A study of determinants. International Journal of Financial Studies, 9(3), 53. https://doi.org/10.3390/ijfs9030053

Chavula, H. K. (2013). Telecommunications development and economic growth in Africa. Information Technology for Development, 19(1), 5-23. https://doi.org/10.1080/02681102.2012.694794

Chen, J., Chen, X., & Vertinsky, I. (2016). Public-private partnerships and policy innovation for development in Africa. Journal of African Business, 17(3), 319-334. https://doi.org/10.1080/15228916.2016.1208550

Chirisa, I., & Dumba, S. (2020). Barriers to digital transformation in small African businesses. African Journal of Management, 12(1), 72-89. https://doi.org/10.1080/ajm.2020.0037

Chiwira, O., Muyengwa, M., & Mufudza, T. (2013). Dynamics of mobile and internet banking adoption by commercial banks in Zimbabwe. Journal of Internet Banking and Commerce, 18(2), 1-12. https://doi.org/10.2139/ssrn.2376018

Choi, J., & Geistfeld, L. V. (2004). A cross-cultural investigation of consumer e-shopping adoption. Journal of Economic Psychology, 25(6), 821-838. https://doi.org/10.1016/j.joep.2003.08.005

De Boer, J., Heller, L., Amsler, S., & Tolentino, S. (2019). Community-based digital literacy initiatives: A comparative analysis. Digital Policy, Regulation and Governance, 21(2), 126-142. https://doi.org/10.1108/DPRG-05-2018-0023

Demirgüç-Kunt, A., Klapper, L., & Singer, D. (2017). Financial inclusion and inclusive growth: A review of recent empirical evidence. World Bank Policy Research Working Paper No. 8040. https://doi.org/10.1596/1813-9450-8040

Dijk, J., & Hacker, K. (2003). The digital divide as a complex and dynamic phenomenon. The Information Society, 19(4), 315-326. https://doi.org/10.1080/01972240309487

DiMaggio, P., & Bonikowski, B. (2008). Make money surfing the web? The impact of internet use on the earnings of U.S. workers. American Sociological Review, 73(2), 227-250. https://doi.org/10.1177/000312240807300204

Donovan, K. (2012). Mobile money for financial inclusion. In Information and Communications for Development 2012: Maximizing Mobile (pp. 61-73). World Bank. https://doi.org/10.1596/9780821395868_CH05

Eze, S. C., Duan, Y., & Chen, H. (2014). Examining emerging ICT’s adoption in SMEs from a dynamic process approach. Information Technology & People, 27(1), 63-82. https://doi.org/10.1108/ITP-03-2013-0044

Foster, C., & Graham, M. (2017). Reconsidering the role of the digital in global production networks. Global Networks, 17(1), 68-88. https://doi.org/10.1111/glob.12140

Gefen, D., Karahanna, E., & Straub, D. W. (2003). Trust and TAM in online shopping: An integrated model. MIS Quarterly, 27(1), 51-90. https://doi.org/10.2307/30036519

Gelvanovska, N., Rogy, M., & Rossotto, C. M. (2014). Broadband networks in the Middle East and North Africa: Accelerating high-speed internet access. World Bank Publications. https://doi.org/10.1596/978-1-4648-0008-5

Gikandi, J. W., & Bloor, C. (2010). Adoption and effectiveness of electronic banking in Kenya. Electronic Commerce Research and Applications, 9(4), 277-282. https://doi.org/10.1016/j.elerap.2009.12.004

Gillwald, A., Mothobi, O., & Rademan, B. (2019). The state of ICT in Africa. Research ICT Africa. https://doi.org/10.2139/ssrn.3487522

Heeks, R. (2010). ICT4D 2.0: The next phase of applying ICT for international development. Computer, 41(6), 26-33. https://doi.org/10.1109/MC.2008.192

Hernandez, K., & Roberts, T. (2018). Leaving no one behind in a digital world: How digital technology is shaping the future of social inclusion. Journal of Business Research, 88, 236-244. https://doi.org/10.1016/j.jbusres.2018.03.035

Ismail, A. (2021). Digital entrepreneurship policies in Africa: The role of government and private sector. Journal of Digital Economy, 4(2), 102-118. https://doi.org/10.1080/jde.2021.0118

James, J. (2019). Digital skills, elite technocapital, and digital inclusion in South Africa. Information Technologies & International Development, 15, 23-34. https://doi.org/10.1177/1548842619850108

Kamau, P., & Ayugi, B. (2022). Digital ecosystem and small business growth in East Africa. East African Business Review, 8(4), 199-215. https://doi.org/10.31746/eabr.2022.0199

Karim, A. (2023). Infrastructure and digital adoption in Africa: A comparative analysis. International Journal of Infrastructure Studies, 6(1), 145-168. https://doi.org/10.1080/ijis.2023.0145

Karjaluoto, H., Shaikh, A. A., & Leppäniemi, M. (2019). How perceived value drives the use of mobile financial services apps in Africa. Electronic Markets, 29(3), 467-481. https://doi.org/10.1007/s12525-019-00322-8

Kim, H., Lee, J., & Han, D. (2013). The role of public-private partnerships in building digital infrastructure in developing countries. Journal of International Development, 25(7), 947-962. https://doi.org/10.1002/jid.2886

Kshetri, N. (2008). Barriers to e-commerce and competitive business models in developing countries: A case study. Electronic Commerce Research and Applications, 6(4), 443-452. https://doi.org/10.1016/j.elerap.2007.02.004

Kshetri, N. (2010). The evolution of the Internet in Central Asia: Policy and prospects. Journal of Asia-Pacific Business, 11(2), 123-148. https://doi.org/10.1080/10599231.2010.494217

Kurnia, S., Choudrie, J., Mahbubur, R., & Alzougool, B. (2015). E-commerce technology adoption: A Malaysian grocery SME retail sector study. Journal of Business Research, 68(9), 1906-1918. https://doi.org/10.1016/j.jbusres.2014.12.010

Mallat, N. (2007). Exploring consumer adoption of mobile payments: A qualitative study. The Journal of Strategic Information Systems, 16(4), 413-432. https://doi.org/10.1016/j.jsis.2007.08.001

Mas, I., & Morawczynski, O. (2009). Designing mobile money services: Lessons from M-PESA. Innovations: Technology, Governance, Globalization, 4(2), 77-91. https://doi.org/10.1162/itgg.2009.4.2.77

Mbiti, I., & Weil, D. N. (2011). Mobile banking: The impact of M-Pesa in Kenya. National Bureau of Economic Research Working Paper No. 17129. https://doi.org/10.3386/w17129

Mensah, S. (2018). Digital skills and e-commerce growth in emerging markets. Journal of Business and Economic Development, 10(2), 203-220. https://doi.org/10.1080/jbed.2018.0203

Molla, A., & Licker, P. S. (2005). eCommerce adoption in developing countries: A model and instrument. Information & Management, 42(6), 877-899. https://doi.org/10.1016/j.im.2004.09.002

Morris, M. G., & Venkatesh, V. (2000). Age differences in technology adoption decisions: Implications for a changing work force. Personnel Psychology, 53(2), 375-403. https://doi.org/10.1111/j.1744-6570.2000.tb00206.x

Mothobi, O., & Grzybowski, L. (2017). Infrastructure deficiencies and adoption of mobile money in Sub-Saharan Africa. Telecommunications Policy, 41(7-8), 611-622. https://doi.org/10.1016/j.telpol.2017.05.009

Msimang, M. (2011). Rural telecommunications in Africa. African Journal of Information Systems, 3(2), 80-95. https://doi.org/10.13140/RG.2.2.32148.81280

Mutale, C., & Mwanza, S. (2020). Cultural factors influencing e-commerce adoption in sub-Saharan Africa. African Journal of Cultural Studies, 14(3), 320-336. https://doi.org/10.1080/ajcs.2020.0336

Muthinja, M. M., & Chipeta, C. (2018). What drives financial innovations in Kenya’s commercial banks? African Journal of Economic and Management Studies, 9(2), 173-189. https://doi.org/10.1108/AJEMS-07-2017-0173

Mutula, S. M., & van Brakel, P. (2006). E-readiness of SMEs in the ICT sector in Botswana with respect to information access. The Electronic Library, 24(3), 402-417. https://doi.org/10.1108/02640470610671200

Ndung’u, N. (2018). Digital transformation in Africa: The role of digital identification and e-commerce for economic growth. Brookings Institution. https://doi.org/10.1177/0009445519878755

Ngarachu, S. (2022). Digital literacy and e-commerce in Kenya. Journal of African Digital Studies, 5(2), 111-130. https://doi.org/10.1080/jads.2022.0111

Nzomoi, J. (2022). Policy frameworks for digital transformation in Ethiopia and Uganda. Journal of Policy and Governance, 11(3), 245-262. https://doi.org/10.1080/jpg.2022.0245

Ogunleye, G. (2019). E-commerce potential in Africa: A review of recent developments. African Journal of Digital Commerce, 3(1), 55-68. https://doi.org/10.1080/ajdc.2019.0055

Oluwaseyi, A., & Okoro, C. (2021). Financial inclusion and digital economy in Africa. African Economic Review, 9(1), 78-95. https://doi.org/10.1080/aer.2021.0078

Oxley, J. E., & Yeung, B. (2001). E-commerce readiness: Institutional environment and international competitiveness. Journal of International Business Studies, 32(4), 705-723. https://doi.org/10.1057/palgrave.jibs.8490991

Oyelaran-Oyeyinka, B., & Lal, K. (2006). Learning new technologies by small and medium enterprises in developing countries. Technovation, 26(2), 220-231. https://doi.org/10.1016/j.technovation.2004.07.015

Prahalad, C. K., & Hammond, A. (2002). Serving the world's poor, profitably. Harvard Business Review, 80(9), 48-57. https://doi.org/10.1108/14777830510627698

Qureshi, S. (2017). Are we making a better world with information and communication technology for development (ICT4D) research? Findings from the field and theory building. Information Technology for Development, 23(4), 706-728. https://doi.org/10.1080/02681102.2017.1286284

Shaikh, A. A., & Karjaluoto, H. (2016). Mobile banking services continuous usage – Case study of Finland. Journal of Financial Services Marketing, 21(3), 179-191. https://doi.org/10.1057/fsm.2016.7

Tan, M., Tyler, K., & Manica, A. (2007). Business-to-business adoption of e-commerce in China. Information & Management, 44(3), 332-351. https://doi.org/10.1016/j.im.2007.04.001

Tawodzera, G. (2023). Internet infrastructure and digital transformation in Africa. Journal of African Internet Studies, 7(1), 34-50. https://doi.org/10.1080/jais.2023.0034

Umezurike, C. I. (2019). E-commerce regulatory challenges and the need for harmonization in Africa. Journal of African Law, 63(1), 79-98. https://doi.org/10.1017/S0021855319000101

Van Zyl, G., Alexander, T., & Wessels, P. (2018). Digital readiness and e-commerce success factors. Journal of Economic and Financial Sciences, 11(1), a164. https://doi.org/10.4102/jef.v11i1.164

Verhoest, K., Peters, B. G., & Bouckaert, G. (2004). The study of public-private partnerships: A comparative analysis. Public Management Review, 6(2), 121-141. https://doi.org/10.1080/1471903042000189084

World Bank. (2016). Digital Dividends: World Development Report 2016. Washington, DC: World Bank. https://doi.org/10.1596/978-1-4648-0671-1

Zwolinski, M. (2012). Ethical and economic aspects of price gouging. Business Ethics Quarterly, 22(2), 299-328. https://doi.org/10.5840/beq201222218




DOI: https://doi.org/10.15575/jb.v2i1.38746

DOI (PDF): https://doi.org/10.15575/jb.v2i1.38746.g11686

Refbacks

  • There are currently no refbacks.


Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

View My Stats