Chapter 8: Disruptive Digital Technologies and the Performance of Micro, Small and Medium-Size Enterprises

Recently, the concept of frugal innovation (FI) has gained relevance in both academic and societal discourse. Whether disruptive frugal digital innovation is contributing to the growth of small and medium-sized businesses in Africa is a subject of debate. Generally speaking, frugal inventions are linked to developing nations where sizable consumer groups at the base of the pyramid have unfulfilled needs. Africa, a continent with growing economies, has witnessed a surge in disruptive FI, which makes this chapter an important discourse. Digital technologies such as the Internet of Things (IoT), social media, cloud computing, and Artificial Intelligence (AI) are finding their way in the market, and how it is affecting human development and small enterprises has been a subject for debate. This book chapter presents findings on how FI has led to sustainable human development and growth of micro, small-, and medium-sized enterprises (MSMEs) as revealed by a review of existing literature on the subject. According to findings from the literature, MSMEs' connections and interactions with partners, suppliers, and consumers have improved as a result of the adoption of disruptive digital platforms. Additionally, while operating in challenging settings in Africa, digital technologies offer certain intrinsic traits and information technology capabilities that allow firms to grow and flourish. Digital platforms are viewed as transparent, collaborative instruments that provide economic opportunities throughout the ecosystem. The results also show that disruptive digital technologies offer MSMEs an inexpensive, simple-to-use, and simple-to-deploy solution in order to compete with stronger incumbents across a range of industries.