EXPERIENCES AND CHALLENGES OF DIGITAL TRANSFORMATION IN THE INFORMAL BUSINESS SECTOR IN A RURAL SOUTH AFRICAN TOWN

Abstract

South Africa has one of the highest unemployment rates in the world. This unemployment is more pronounced for those living in rural areas. As a result, many unemployed rural people turn to informal trading as a gateway to employment and economic activity. The study aims to explore the experiences and challenges of digital transformation in the informal business sector in a rural South African town. A case study design was used. Data was collected through interviews with a sample of 20 purposefully selected informal traders. The data was then analysed thematically. The study revealed that there is a lack of knowledge on digital transformation among formal traders. The study further revealed that the challenges concerning digital technology include a lack of ICT skills, network and internet connectivity problems, mistrust of technology, and fear of fraudulent activity. The study recommends greater expansion of digital technology support and training to informal traders. This study further recommends that digital technologies must be developed with the end user in mind. Moreover, the study recommends greater internet and connectivity investment in rural areas. Lastly, the study recommends the development of greater security features for digital technologies aimed at informal traders with low literacy levels. The study contributes to knowledge on the benefits and enhancement of the potential of digital technologies to assist small businesses against the background of high unemployment in the rural town of Mthatha, Eastern Cape Province, South Africa.