Abstract
Technology is key to boost productivity and generate more and better quality jobs in Senegal. This paper uses a novel approach to measure technology adoption at the firm level and applies it to a representative sample of firms in Senegal. It provides new measures of technology adoption at the firm level, which identify the purposes for which technologies are used and analyzes some of the key barriers to improving technology adoption at the firm level in Senegal. First, the adoption of general-purpose information and communications technologies, such as computers, the internet, and cloud computing for business purpose, is low but very heterogeneous and positively associated with size and formal status. Second, most firms still rely on pre-digital technologies to perform general business functions, such as business administration, production planning, supply chain management, marketing, sales, and payment. Third, most firms, including large and formal firms, still rely on manual methods or manually operated machines to perform critical pro duction tasks that are sector specific, such as harvesting in agriculture or packaging in food processing. The paper presents evidence of three main challenges to improve technology adoption: access to finance, information, and knowledge (firm capabilities), and access to markets and competition.
Highlights
Despite the importance of technology in explaining productivity and income differences and the fact that technology is a buzz word for many policymakers, good measures of the use of technology at the firm level are scarce and confined to a few technologies and sectors
This paper describes the results of the “Firm-level Adoption of Technology” (FAT) survey implemented in Senegal
The results suggest that technology adoption for both general and specific business functions are negatively associated with the lack of capabilities
Summary
Technology is the key driver of productivity differences across countries (Comin and Hobijn, 2010; Comin and Mestieri, 2018a; Easterly and Levine, 2001; Hall and Jones, 1999). On a scale from 1 to 5, where 1 represents the most basic technology to perform a general business function, 2 is the usual threshold to use computers (e.g. using a computer with standard software for production planning) and 5, the most sophisticated technology, usually advanced digital technologies, firms in Senegal score on average 1.92 on the extensive margin and 1.29 on the intensive margin.. On a scale from 1 to 5, where 1 represents the most basic technology to perform a general business function, 2 is the usual threshold to use computers (e.g. using a computer with standard software for production planning) and 5, the most sophisticated technology, usually advanced digital technologies, firms in Senegal score on average 1.92 on the extensive margin and 1.29 on the intensive margin.4 These results suggest that on average firms are not yet adopting basic digital technologies to perform general business functions.
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