Digital Transformation and Sustainability of Entrepreneurship for Underserved Communities in East Africa

Digital Transformation and Sustainability of Entrepreneurship for Underserved Communities in East Africa

Nathan Mutwiri Mwenda, Carolyne Jebiwott Kimutai
DOI: 10.4018/978-1-6684-4322-4.ch018
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Digital transformations are transforming the economy and society in East Africa, and entrepreneurs need to leverage on these digital transformations to ensure the sustainability of their businesses. This chapter therefore seeks to examine the role of digital transformation on sustainability of entrepreneurship for the underserved communities in East Africa. The chapter adopts an interdisciplinary and pragmatic world view. There exist many challenges in East Africa which stifle the progress of digital adoption. For East African countries to exploit the potential of technology, they must develop the foundational building block of digital economy. Digital innovation contributes to the development of an ecosystem that revitalizes the digital economy by supporting new technology-based products and businesses. East African countries should ensure that the underserved communities receive basic education, strengthen, and integrate a multi-sectoral approach towards a regional digital and legal policy framework in order to encourage innovation and e-business.
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Digital transformation is a comprehensive shift in the use of technology with the objective of improving business performance. Digital transformation is a key element to the sustainability of businesses; for them to remain competitive in the market, enterprises need to adopt digital innovations (Farías & Cancino, 2021). In the recent past, the world has witnessed the evolution of digital technologies, which has led to transformation in business operations, thereby necessitating changes in the entrepreneurship process. Such technologies that can boost their entrepreneurial ventures among the underserved communities include Artificial intelligence, Block chain, Robotic Process automation and Internet of things. Artificial intelligence (AI) is where learning process is applied in large data sets to make predictions and classifications. (Homi & Cohen, 2018). Therefore AI is able to learn from the past success and failure in predicting and classifying. Recent developments in the AI have helped decision makers in organizations to make critical decisions ranging from product development, customer engagements and hiring. Entrepreneurs in the underserved communities use AI to detect customer needs and develop products that meet customer expectations. The Robotic Process automation (RPA) technology mimics the human worker. It allows employees to configure computers software to capture and interpret existing applications for processing a transaction, manipulating data, trigger responses and communicate with other systems (Nair, 2018). Whereas these developments bring significant benefits to business operations, Entrepreneurs in East Africa have a long way to access and adopt them in their entrepreneurial activities because of cost and access constraints.

Block chain is a digital ledger that allows users to transfer value and track transactions in a decentralized manner, without the need for a central authority to authenticate the information assuring data transparency (Tafotie, 2020). By enabling greater financial inclusion and increasing productivity, block chain could be beneficial to underserved communities in developing economies. With the growing number of individuals owning smart phones in East Africa the block chain enables access to finance where many people do not have a bank account or the ATM services. The use of block chain to support micropayments paves the way for the creation of long-term pay-per-use services. Furthermore, KYC block chain-based systems may make it easier for banks to resolve information asymmetries and lower their cost of serving when lending money. This can help the underserved communities access cheaper credit from the financial institutions boosting the actualization of their entrepreneurial ideas.

The internet of things revolution has been witnessed in Africa and no aspect of human life will escape the revolution. By the year 2020 tens of billions of devices are connected to the internet (Okereafor & Ndubuaku, 2015). Internet of things is a worldwide infrastructure for the information society, enabling advanced services by interconnecting (physical and virtual) things based on existing and emerging interoperable information and services.

Key Terms in this Chapter

Digital Transformation: This is the inclusion of digital technology into all areas of a business that reforms business operations.

Entrepreneurship: This is the process of setting up a business venture with the aim of making profit.

Underserved Communities: These are groups of people who are marginalized in society and include women, youth and the disabled.

Technology: This is the application of scientific knowledge for practical purposes or application in business.

Literacy: This is the ability to adopt and use technology in business operations.

Innovation: This is the creation of a new idea, method, product, or service.

Sustainability: This is the ability to sustain or continue operating entrepreneurial ventures.

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