Digital technology affordance and constraints in informal economies: a micro-entrepreneurial study

Purpose Despite the increasing importance of digital technology in the global economy, there is a significant gap in understanding its impact in the informal sector of Sub-Saharan Africa (SSA), which could exacerbate the digital divide, increase marginalisation and expand the skills gap among entrepreneurs in this crucial area. In this paper, the authors investigate the application and implications of digital technology tools in entrepreneurial activities within SSA’s informal sector. Design/methodology/approach The current paper uses a qualitative approach, with open-ended in-depth interviews to explore how entrepreneurs in the informal sector leverage digital technology to scale their businesses and drive social change in underdeveloped contexts. The authors interviewed 60 informal entrepreneurs in Jos, Nigeria. Findings The study reveals that the digital technology, specifically in the forms of social media platforms and digital payment infrastructure, has led to a significant transformation in how informal entrepreneurs conduct their businesses. It has enabled them to enhance customer relationships and promote social and financial inclusion. However, the research identifies limitations, such as issues related to trust that hinder the effective use of digital technology in the informal sector. Additionally, the extent of digital technology utilisation among informal entrepreneurs in Sub-Saharan Africa remains relatively underdeveloped. Research limitations/implications The study contributes to the theoretical framework by extending the technological affordance and constraint theory (TACT) to the informal sector in Sub-Saharan Africa. The findings also have important implications for policymakers and entrepreneurs. Policymakers can develop policies and programs to support micro-entrepreneurs in adopting digital technologies. Entrepreneurs can use the findings to identify opportunities to leverage digital technologies to improve their business operations and reach new customers. Practical implications This study has implications for policymakers and entrepreneurs operating in Sub-Saharan Africa. It provides insights into how digital technology adoption can enhance business operations, foster social change and promote financial inclusion within the informal sector. Policymakers and entrepreneurs can use these insights to develop and implement strategies for the effective integration of digital technology into informal entrepreneurship. Originality/value The novelty of this paper lies in its exploration of the ways in which informal entrepreneurs in Sub-Saharan Africa are adopting digital technology to scale their businesses and drive social change. It underscores the importance of bridging the digital divide in underdeveloped contexts and offers valuable insights into the potential benefits and challenges associated with digital technology adoption in the informal sector. This research serves as a valuable resource for academics, policymakers and entrepreneurs seeking to navigate the intersection of technology and informal entrepreneurship in the context of Sub-Saharan Africa.