Digital technology usage and entrepreneurship in Africa

Abstract

In relation to actual digital usage, empirical research is limited on whether digital technology promotes entrepreneurial development in African economies. This study, therefore, investigates the impact of digital technology usage on entrepreneurship in selected African countries. This study contributes to the literature by using 20 selected African countries over the period of 2012–2016. Unlike existing studies, this paper differentiates between the impact of business, government and individual usage of digital technology by employing the 6th, 7th and 8th pillars of the Network Readiness Index. The study employs panel least square and instrumental variable (IV) estimating techniques and panel corrected standard errors (PCSEs) to analyze the data. The results show that digital technology usage has a positive and significant impact on entrepreneurship in Africa. Further analysis shows that individual usage and business usage have a positive and significant impact on business creation. Social media network usage has a positive and significant impact on entrepreneurial development. The study suggests that the growth of entrepreneurship can be enhanced through an ICT usage enabling environment. Individual usage and business usage including social media usage of digitalization are the main drivers of entrepreneurial development in the region.

Keywords:

• new business density
• digitalization
• technology usage
• Africa

JEL codes:

• L26
• 031
• O33
• O55
• M13

Disclosure statement

No potential conflict of interest was reported by the authors.