In the bustling heart of Accra, Auntie Hannah – owner of a small but thriving textile business – represents a new wave of entrepreneurship in Ghana, one that is increasingly digital and interconnected.
In a small workshop adorned with vibrant fabrics, Mr. Boye, a 40-year-old entrepreneur, is a testament to how technology is revolutionising small and medium-sized enterprises (SMEs) in Ghana. Just two years ago, Mr. Boye’s business was struggling to keep up with larger competitors. Today, thanks to a cost-sharing technology initiative, his story mirrors a growing trend among Ghanaian SMEs – embracing technology to enhance business operations, profitability and sustainability.
The rise of tech in Ghanaian SMEs
Across Ghana, SMEs like Mr. Boye are increasingly turning to technology to boost efficiency and expand market reach. From cloud-based accounting software to e-commerce platforms, the digital transformation is palpable. “Technology has levelled the playing field,” Mr. Boye says. “We can now compete with the big players.”
However, the journey hasn’t been easy. The high cost of technology remains a significant barrier for many SMEs. This is where innovative cost-sharing models have come into play, offering a lifeline to businesses eager to digitise but wary of the investment.
Breaking barriers: Cost-sharing models
Cost-sharing, a concept where SMEs and technology vendors share the investment and benefits of new technology, is gaining traction. In Mr. Boye’s case, the vendor provided the initial set-up at a reduced cost, with the agreement that they would receive a small percentage of online sales. “It was a win-win. We got the technology we needed without the prohibitive upfront costs,” Mr. Boye explains.
This model not only minimises financial risks for SMEs, but also incentivises technology providers to offer ongoing support and ensure the technology yields results.
Transformative stories from the field
Mr. Boye’s success is not an isolated case. Freda Kabuki, who runs a local organic food delivery service in Pokuase, has seen her business triple since adopting a mobile payment system through a similar cost-sharing arrangement. “Our customers love the convenience; and for us, the process is seamless,” Freda Kabuki shares.
These stories underscore a crucial trend – technology, when accessible, can be a powerful tool for business growth and sustainability.
Looking ahead: Challenges and opportunities
While the future looks promising, challenges remain. Limited digital literacy and infrastructure issues are hurdles that still need to be addressed. Yet, the potential for technology to transform SMEs in Ghana is immense.
As more businesses like Mr. Boye and Freda Kabuki embrace digital tools and innovative cost-sharing models, the landscape of Ghanaian SMEs is poised for a remarkable transformation – one that is more inclusive, competitive and sustainable.
“We are not just adopting technology; we are embracing a new way of doing business,” Mr. Boye concludes, his eyes reflecting the bright patterns of his textiles and, perhaps, the vibrant future of Ghana’s SMEs.
Cost sharing strategies
Small and medium-sized enterprises (SMEs) and technology companies can consider various cost-sharing strategies for collaborative gain. Here are some approaches:
- Shared resources and infrastructure: Collaborating companies can share physical resources such as office spaces, manufacturing facilities, or server infrastructure. This reduces the overhead costs for each company.
- Joint ventures for R&D: Technology companies often invest heavily in research and development. By forming joint ventures, SMEs can share the costs and risks associated with R&D while benefitting from shared knowledge and expertise.
- Pooling talent and expertise: SMEs can form alliances to pool their talent and expertise. This approach allows companies to undertake projects or services that they couldn’t manage individually, leading to cost savings and increased revenue opportunities.
- Collective purchasing and negotiation: SMEs can come together to purchase raw materials or software licences in bulk, benefitting from economies of scale. Collective bargaining can also lead to better terms and lower prices from suppliers.
- Co-development of products and services: Companies can collaborate to co-develop products or services. This spreads the development costs and risks across the participating companies and can lead to innovative solutions.
- Shared marketing and sales channels: By sharing marketing and sales channels, SMEs and technology companies can reach a wider audience while reducing individual marketing costs. This includes joint advertising campaigns, shared trade show booths and co-branded products.
- Technology sharing and licensing: Instead of each company developing its own technology, they can license or share existing technologies. This approach reduces costs associated with development, maintenance and upgrades.
- Risk sharing in investments: Collaborative investments in new ventures or markets allow companies to share the financial risk. This is particularly beneficial in uncertain or highly competitive markets.
- Data sharing for improved analytics: Sharing non-sensitive data can help companies gain better market insights and improve operational efficiency through advanced analytics.
- Collaborative training and development: Pooling resources for employee training can be cost-effective. It also fosters a culture of learning and innovation.
By adopting these strategies, SME operators like Auntie Hannah, Mr. Boye and Freda Kabuki and contemporary technology companies can leverage their collective strengths, reduce costs and achieve shared success.