Inertia or Progress? Digital Technology Adoption Within a Group of South African Manufacturing SMEs

Justin Barnes () and Warren Sachs
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Justin Barnes: Toyota Wessels Institute for Manufacturing Studies, the Gordon Institute of Business Science at the University of Pretoria, the B&M Analysts.
Warren Sachs: Beier Group

No 2023-05, SARChI-ID Working Papers from SARChI Industrial Development (SARChI-ID), University of Johannesburg (UJ)

Abstract: Manufacturing SMEs make a significant contribution to the South African economy, but face severe competitiveness challenges. One of these challenges relates to the adoption of digital technologies (DTs), which form an integral part of the fourth industrial revolution. Several studies have identified use-cases for DTs, and have described how manufacturers in Europe and Asia have leveraged these technologies to secure a competitive advantage. However, the adoption of DTs by South African manufacturing SMEs remains under-researched. Whether inertia exists or progress is being made is unclear. The literature has identified several factors that inhibit the adoption of DTs in manufacturing firms, but several key factors are less researched: owner/manager mindsets towards DTs; perceptions of digital platform openness; and the ease of exchanging data in a digitalised business model. In this study, we explore the adoption of DTs by a group of South African manufacturing SMEs, along with the underlying reasons for inertia and/or progress. We also explore the strategies used by SMEs when adopting DTs, and how owner/manager mindsets and platform openness influence adoption. The findings indicate that manufacturing SMEs in South Africa adopt DTs, but only to a limited extent and at an immature level. Influencing factors include a focus on short-term operational issues, and a lack of awareness of DTs and their associated costs and benefits.

Keywords: Digital technologies; manufacturing; SME; competitiveness; mindset; platform openness; South Africa (search for similar items in EconPapers)
JEL-codes: D21 D81 L21 L23 O33 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2023-05, Revised 2023-05
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