Government urged to support MSMEs in digital transformation

A research into the digital skills and use of digital tools among Micro, Small and Medium Enterprises (MSMEs) has called on the government and donor organisations to invest in MSMEs and trade associations in their digital transformation needs.

The research emphasised that “MSMEs are not able to make that journey alone while they are very important for economic growth and creating youth employment” hence need for government and donor agencies to invest in that order.

It also called government to update the curricular especially for second cycle Technical and Vocational Education and Training (TVET) institutions to include more content on technology application to help their products (students) apply digital technology to their works.

The research, commissioned in March, 2022 by the Northern Ghana Vocational and Technical Alliance (NGVoTa), was funded by Gesellschaft für Agrarprojekte in Übersee (GFA) and supervised by Smart consultancy.

The research, which was launched in Tamale, sought to develop and implement a Digital Maturity Assessment Tool for the Ghana informal sector and analyse the digital maturity of MSMEs, and come out with recommendations to improve the access and use of digital tools and skills for MSMEs.

Members of NGVoTA and Federation of Professional Trade Associations in Ghana (FEPTAG) comprising progressive hairdressers', Ghana hairdressers and beauticians association and Savelugu Tailors/wood workers were interviewed while Tamale Technical University Engineering Students Association and TVET institutions were also involved in the assessment.

The informal sector is digitising thus more business digital skills are needed to take advantage of this opportunity, and due to market changes (like the African Continental Free Trade Area) competition will increase and every MSME needs to prepare for this to thrive.

However, the research found that the average digital maturity of the informal sector was low adding “Digital skills are at a basic level, and so there is a need to improve them. Digital technologies are used, but often more at personal level than to improve business.”

It also found that “MSMEs are still on the digital transformation journey and slowly improving the use of digital technologies and improve their skills. There is still a long way to go to use digital technologies effectively in their business.”

It said “A small group of MSMEs are already using digital technologies in some business processes. They show intermediate digital skills and are able to respond more pro-actively to business changes.”

The research called on TVET training institutions to partner with trade associations to be more aware of the digital skills needed by MSMEs in the informal sector and create short upskill courses to cater for their needs.

It also expressed the need for TVET training institutions to embed digital technologies into technical trade skills and not only in basic ICT skills for offices.

It said members of NGVoTA and FEPTAG were at different digital maturity levels calling on NGVoTA and FEPTAG to find ways to encourage more digitally mature members to share their experiences with other members to improve the overall digital maturity.