Enterprise Across the Digital Divide: Information Systems and Rural Microenterprise in Botswana

Published in the Journal of International Development in 2002, this paper explores the role of information and information-handling technologies in rural microenterprises (MSEs). Through a case study of rural MSEs in Botswana's economically poorest areas in 1999, the researchers identify social networks as the primary information system among poor rural entrepreneurs. These networks are rather informal, and highly localised information systems. While effective in many ways, these systems can also be constrained and very insular. Greater access to shared telephone services is proposed as strategy for breaking this insularity. Information and communication technologies (ICTs) may play a supplementary role. They will need to be based in intermediary organisations that can provide complementary inputs of finance, skills, knowledge, and other resources.

Three main factors justified the selection of Botswana as the site of this case study: (1) the profusion of microenterprises (MSEs) in the country; (2) the existence of relatively well-developed ICT infrastructure; and (3) the implementation of policies to support MSEs and ICTs. A sample of 14 MSEs (with one to six employees) was selected from the North-East region, one of Botswana's poorest areas. MSE represented 6 main economic activities: crafts, metal-working, food processing, livestock, poultry, and textile/clothing. Since one of the goals of the study was to explore the role of donors and government in the process of developing information management skills, participants in the study were identified via enterprise support agencies. Therefore, the study is biased towards MSEs that had links to the existing institutional support system.

The researchers gathered data from multiple sources. Interviews and observations in 14 rural MSEs were the main data source. Interviews and extended visits were carried out in five enterprise-support agencies (ESA) that provided assistance (finance, training and technology) to rural MSEs in Botswana. Twenty-three additional interviews gathered the opinions of other stakeholders such as government representatives, donor agencies, and consulting organisations. As a way to account for the urban-rural gap and peculiarity of rural MSEs, four interviews were performed with the representatives of four urban MSEs.

Key Findings:

Overall, this case study could not determine the impact of ICT on rural microenterprises because participant firms were not using ICT in their regular business. The vast majority of MSEs surveyed could not afford individual access to ICT. Few of them reported occasional use of the telephone. Those who used phones reported a reduction in their operational costs (e.g. by substituting travels), increased income, or reduced uncertainty of transactions with suppliers and customers.

Evidence suggested that information needs of rural MSEs were quite localised and likely to be met more by informal, organic information systems (social networks) than by formal, ICT-based systems. Social networks and social capital became the most valuable resource of information management for rural MSEs. Business owners also placed greater trust and value in information received from personal sources and channels. Information delivered by institutional, non-commercial institutions (e.g. government agencies, non-governmental organisations (NGOs), donor agencies) was second in importance.

The authors see that these models of information management can limit the growth of rural MSEs for various reasons. On the one hand, entrepreneurs' social networks are rather localised and insular in rural Botswana. The problem can be worse for MSEs headed by members of minority groups who tend to lack social capital and extensive social networks in their communities. On the other hand, institutional linkages could build dependency to information provider organisations and institutions. The problem can be exacerbated by biased access to particular information sources. The authors propose the use of ICT intermediaries or ICT MSEs that specialise in information management for small businesses in rural areas.