A framework for supporting technological innovation by manufacturing small and medium enterprises in KZN

Abstract

Unemployment is an ongoing phenomenon in every country. It is rapidly increasing, which leads to a decline in the economy and other societal problems. This is particularly evident in developing countries such as South Africa, where the unemployment rate is 32.9%. The South African government has identified small and medium-sized enterprises (SMEs) as a key aspect of its strategy to reduce unemployment rates and to realise the vision outlined in the National Development Plan 2030. SMEs are major job creators and contribute significantly to the gross domestic product (GDP) of South Africa. They account for the majority of employment opportunities in the country, especially in sectors such as agriculture, manufacturing, and services. SMEs also support economic growth through their capacity for innovation and swift market adaptation. They are ideal for generating innovative ideas due to their pioneering role in adopting new technologies and are particularly adept at identifying gaps in the market which could be addressed through innovative solutions. There are ongoing debates about the uptake of technology by SMEs in African countries, including South Africa. Some scholars argue that manufacturing SMEs in South Africa have been hesitant to adopt modern technologies, which has hindered their growth and their ability to reach full potential. However, there are counterarguments that provide a more nuanced perspective on the challenges and opportunities for technology adoption among manufacturing SMEs in KwaZulu-Natal (KZN), South Africa. One significant issue is SME owners' inability to fully grasp the complexity of information and communications technology (ICT), which has a negative impact on their decision to adopt ICT. Furthermore, government regulations and compliance requirements have been a crucial factor affecting the viability and growth of manufacturing SMEs. Without a comprehensive understanding of ICT, SMEs find it challenging to make informed decisions about their investments in this field. Critically evaluating the use of Fourth Industrial Revolution (4IR) technologies as a way of improving success rates amongst manufacturing SMEs in KZN will enable the development of a framework which can provide practical guidance for the adoption of 4IR technologies by manufacturing SMEs in KZN. The objectives of this study are supported by a pragmatic methodology, which considerably expands the area of the investigation. 384 manufacturing SMEs in KZN are the target population for this study, and approaches for identification and selection of the sample size include convenience and purposive sampling. The study utilises both primary and secondary research. Interviews and questionnaires are utilised as data collection instruments. The review of literature and relevant theories such as the technology acceptance model (TAM), the technology-organisation-environment (TOE) framework, dynamic capability theory (DCT), the theory of planned behaviour (TPB), task-technology fit, process virtualisation, and the unified theory of acceptance and use of technology (UTAUT) assist in identifying and addressing potential barriers that may arise during the technology adoption process, such as cost, skills, resistance to change, and compatibility with existing systems. The primary results of this study demonstrate that digital competencies and thorough ICT knowledge are lacking in manufacturing SMEs in KZN. In addition, ICT adoption and usage in manufacturing SMEs in KZN is significantly low, which diminishes the potential of ICT as a long-term strategy. This is evident in the investigation of several factors relating to the acceptance and use of ICT by manufacturing SMEs as a longterm tool for business success. The findings of this study also suggest that manufacturing SMEs do not have the capacity to identify and implement appropriate and adequate ICTs as a sustainable strategy to improve their business viability. Based on the key findings, the study recommends that manufacturing SMEs prioritise digital literacy, which will enhance their comprehension of the potential benefits of ICT adoption. Consultation with IT professionals is recommended as a valuable means for SME owners to obtain reliable guidance and to discuss the complexities of ICT. The government should consider creating platforms to enable SMEs to express objections to regulations, contribute to amendments, and provide insight into the impact of legislation on their business.