Publication: Digital Technology Uses among Informal Micro-Sized Firms: Productivity and Jobs Outcomes in Senegal
Loading...
Date
2021-03
ISSN
Published
2021-03
Author(s)
Atiyas, İzak
Editor(s)
Abstract
This paper explores the use of digital technologies among informal micro-sized firms in Senegal, their association with productivity, sales, exports and jobs, and the role of age and gender dimensions of enterprise owners. The study uses a new national sample of over 500 firms, of which over 90 percent are not fully formal and over 95 percent are micro-sized, employing five or fewer full-time employees. The analysis finds that using a 2G mobile phone is significantly positively correlated both with productivity and sales, and using a smartphone is associated with an additional premium relative to using a 2G. The largest statistically significant conditional correlate of productivity, sales and jobs is a more specialized internal-to-the-firm management technology proxying for management capabilities more generally, namely inventory control/point of sales (POS) software. Use of digital technologies to facilitate external-to-the-firm transactions, namely using mobile money to pay suppliers and to receive payments from customers are also statistically significant conditional correlates of productivity and sales. Using a smartphone is also positively correlated with exporting (while using only a 2G phone is not). Finally, there are significant digital divides in the use of digital technologies across age and gender groupings.
Link to Data Set
Citation
“Atiyas, İzak; Dutz, Mark A.. 2021. Digital Technology Uses among Informal Micro-Sized Firms: Productivity and Jobs Outcomes in Senegal. Policy Research Working Paper;No. 9573. © World Bank. http://hdl.handle.net/10986/35251 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Publication The Macroeconomic Implications of Climate Change Impacts and Adaptation Options(Washington, DC: World Bank, 2025-05-29)Estimating the macroeconomic implications of climate change impacts and adaptation options is a topic of intense research. This paper presents a framework in the World Bank's macrostructural model to assess climate-related damages. This approach has been used in many Country Climate and Development Reports, a World Bank diagnostic that identifies priorities to ensure continued development in spite of climate change and climate policy objectives. The methodology captures a set of impact channels through which climate change affects the economy by (1) connecting a set of biophysical models to the macroeconomic model and (2) exploring a set of development and climate scenarios. The paper summarizes the results for five countries, highlighting the sources and magnitudes of their vulnerability --- with estimated gross domestic product losses in 2050 exceeding 10 percent of gross domestic product in some countries and scenarios, although only a small set of impact channels is included. The paper also presents estimates of the macroeconomic gains from sector-level adaptation interventions, considering their upfront costs and avoided climate impacts and finding significant net gross domestic product gains from adaptation opportunities identified in the Country Climate and Development Reports. Finally, the paper discusses the limits of current modeling approaches, and their complementarity with empirical approaches based on historical data series. The integrated modeling approach proposed in this paper can inform policymakers as they make proactive decisions on climate change adaptation and resilience.Publication Global Poverty Revisited Using 2021 PPPs and New Data on Consumption(Washington, DC: World Bank, 2025-06-05)Recent improvements in survey methodologies have increased measured consumption in many low- and lower-middle-income countries that now collect a more comprehensive measure of household consumption. Faced with such methodological changes, countries have frequently revised upward their national poverty lines to make them appropriate for the new measures of consumption. This in turn affects the World Bank’s global poverty lines when they are periodically revised. The international poverty line, which is based on the typical poverty line in low-income countries, increases by around 40 percent to $3.00 when the more recent national poverty lines as well as the 2021 purchasing power parities are incorporated. The net impact of the changes in international prices, the poverty line, and new survey data (including new data for India) is an increase in global extreme poverty by some 125 million people in 2022, and a significant shift of poverty away from South Asia and toward Sub-Saharan Africa. The changes at higher poverty lines, which are more relevant to middle-income countries, are mixed.Publication Geopolitical Fragmentation and Friendshoring(Washington, DC: World Bank, 2025-06-26)This paper examines the relationship between geopolitical fragmentation and friendshoring of foreign investments over time, countries, and sectors. The analysis uses comprehensive data on foreign direct investments covering greenfield projects, mergers and acquisitions, and stocks of affiliates, as well as data on four alternative measures of geopolitical distance between countries. The gravity estimations suggest that, first, geopolitical differences have a negative effect on foreign investments and the magnitude has heightened in the post-pandemic period compared to a decade ago. Second, it is primarily the companies from advanced Western economies whose foreign investment decisions are increasingly shaped by friendshoring forces. Finally, the paper shows that friendshoring is not only confined to strategic industries, implying that allocations of foreign direct investments may not solely reflect national security or resilience considerations.Publication Soaring Food Prices Threaten Recent Economic Gains in the EU(Washington, DC: World Bank, 2025-07-02)The surge in food prices following the 2021 economic rebound has become a significant concern for households, particularly low-income ones, in Bulgaria, Croatia, Poland, and Romania. Food price inflation, which surpasses general inflation rates, risks worsening poverty and food insecurity in these countries. This paper explores the distributional impacts of rising food prices and the effectiveness of government response measures. Low-income households, who allocate a larger share of their income to food, are disproportionately affected and are struggling to cope with unexpected expenses, leading to increased difficulties in accessing proper nutrition. Simulations indicate that rising food prices contribute to higher poverty rates and greater income inequality, especially among vulnerable populations. They also suggest that the main poverty-targeted social assistance schemes offer critical support for the extreme poor, but expanding both coverage and benefits is vital to shield all at-risk individuals. Targeted policies that balance immediate relief with long-term resilience-building are essential to addressing the challenges posed by escalating food prices.Publication Disentangling the Key Economic Channels through Which Infrastructure Affects Jobs(Washington, DC: World Bank, 2025-04-03)This paper takes stock of the literature on infrastructure and jobs published since the early 2000s, using a conceptual framework to identify the key channels through which different types of infrastructure impact jobs. Where relevant, it highlights the different approaches and findings in the cases of energy, digital, and transport infrastructure. Overall, the literature review provides strong evidence of infrastructure’s positive impact on employment, particularly for women. In the case of electricity, this impact arises from freeing time that would otherwise be spent on household tasks. Similarly, digital infrastructure, particularly mobile phone coverage, has demonstrated positive labor market effects, often driven by private sector investments rather than large public expenditures, which are typically required for other large-scale infrastructure projects. The evidence on structural transformation is also positive, with some notable exceptions, such as studies that find no significant impact on structural transformation in rural India in the cases of electricity and roads. Even with better market connections, remote areas may continue to lack economic opportunities, due to the absence of agglomeration economies and complementary inputs such as human capital. Accordingly, reducing transport costs alone may not be sufficient to drive economic transformation in rural areas. The spatial dimension of transformation is particularly relevant for transport, both internationally—by enhancing trade integration—and within countries, where economic development tends to drive firms and jobs toward urban centers, benefitting from economies scale and network effects. Turning to organizational transformation, evidence on skill bias in developing countries is more mixed than in developed countries and may vary considerably by context. Further research, especially on the possible reasons explaining the differences between developed and developing economies, is needed.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Digital Technology Uses among Microenterprises(World Bank, Washington, DC, 2023-01-24)This paper explores the use of digital technologies, their association with performance outcomes, and the main constraints to greater use among microenterprises. The study uses a sample of more than 3,300 firms across seven Sub-Saharan African countries, of which over 70 percent are informal and over half are self-employed enterprises with no full-time workers. The analysis finds that productive use of digital technologies is low: less than 7 percent of firms use a smartphone, less than 6 percent use a computer, and roughly 20 percent still do not use a mobile phone. Even fewer firms use digital tools enabled by these access technologies: among firms with smartphones, less than half use the internet to find suppliers, and only half with a computer use accounting software or inventory control/point-of-sale software. Women are less likely to use all digital technologies than men. A greater range of uses based on internet-enabled computers or smartphones relative to uses based on 2G phones are conditionally associated with higher job levels. However, there may be a tension between higher productivity and more jobs: the highest productivity firms are not generators of the highest jobs, and vice versa. That formal high-sales and high-jobs firms are more strongly associated with the use of internet-enabled tools than high-productivity firms suggests that relaxing constraints preventing the latter from using more such digital tools and expanding sales and jobs could be important. Among these constraints, more than seven in ten non-users indicate that lack of attractiveness (“no need”) is the main impediment to productive use of digital technologies. The most important conditional correlates of smartphone and computer adoption are related to having a loan, having electricity, having business linkages with large firms as customers, and managers having vocational training.Publication Informal Microenterprises in Senegal(Washington, DC : World Bank, 2022-06)This paper explores differences and similarities across formal and informal microenterprises in Senegal. It uses a new national sample of more than 500 firms, of which two-thirds are informal and over 95 percent are micro-size, employing five or fewer full-time employees. The analysis finds that formal firms have average performance outcomes that are in the range of three to five times higher than informal firms. Formal firms are also more likely than informal firms on average to possess “good” characteristics, namely assets and uses of digital technologies that are positively correlated with productivity, sales, exporting, and employment. Despite these average differences, informal firms are highly heterogeneous, with a sizable number similar to formal firms in terms of both performance outcomes and good characteristics: the share of informal firms in the top productivity and sales deciles having good characteristics is substantial, and one-third of all firms in the high-performance cluster based on a data-driven combination of the four performance variables are informal firms. Importantly, several characteristics that are correlates of better performance (being in the top two clusters) for informal firms are identical to those for all firms in the high-performance cluster: having electricity, having had a loan, and in terms of uses of digital technologies, having a smartphone and using a mobile phone to communicate with suppliers and customers. However, a sizable number of high-performance informal firms are lagging in terms of good characteristics. That roughly half of formal firms and no informal firm had a loan implies that it is possible to be in the top performance cluster even without having access to such formal financing. That over half of formal firms in the top cluster as well as in the top decile of productivity and sales use inventory control/point of sales software as a management tool while only one informal firm does is both indicative of the small number of informal firms that use these technologies and suggestive of the potential for performance improvements if such technologies were used more widely.Publication Technological Learning and Innovation : Climbing a Tall Ladder(World Bank, Washington, DC, 2010-07)As the global stock of ideas expands and diffuses across and within countries, technological learning is poised to become an even more important determinant of growth through its impact on innovation. This note reviews global trends that make a policy focus on technological learning and innovation more important than ever for developing countries. The note explores how the recent global financial crisis may affect these trends and outlines several implications of these trends for innovation policy moving forward. Developing countries will benefit from an increased policy emphasis on technological learning and the adoption of more efficient existing technologies to generate more and better jobs and higher standards of living.Publication Digital Senegal for Inclusive Growth(Washington, DC: World Bank, 2022-02-03)Digital Senegal for Inclusive Growth explores possible solutions for a more intensive use of digital technologies, especially by small and medium enterprises, to increase their productivity and create more quality jobs. The report will contribute to helping women and young people in particular to gain access to decent work and therefore reduce their exposure to poverty. Appropriate use of this report will make it possible to succeed in the challenges of digital transformation, especially in the context of a relatively young population that is more open to innovation and change.Publication Productivity, Innovation and Growth in Sri Lanka : An Empirical Investigation(World Bank, Washington, DC, 2013-02)This study investigates the impact of key business environment indicators on productivity, innovation, and growth in Sri Lanka through a cluster-level productivity analysis, a firm-level total factor productivity analysis, and a firm-level innovation analysis. For the cluster-level productivity analysis (as measured by output and value added per worker), it combines two established data sources in a novel way by importing average 'industry-size-location' cluster-level business environment variables from the World Bank Enterprise Survey to the comprehensive Sri Lanka Census of Industry productivity data available for similar clusters of enterprises. For the firm-level total factor productivity analysis, it compares data from the 2011 World Bank Enterprise Survey with those from 2004. For the firm-level innovation analysis, it compares findings from the 2011 World Bank Enterprise Survey with a representative sample of enterprises collected as part of the Sri Lanka Longitudinal Survey of Enterprises. The empirical findings highlight the importance -- for cluster-level productivity, firm-level total factor productivity, and innovation -- of connectivity to global knowledge (reflected by one or more of export participation, directly imported inputs, foreign ownership, and use of the internet), availability of skills, access to finance, and competition. The paper also presents evidence, under the assumption that the samples are statistically representative, that both allocative and average technical efficiency have improved, with allocative efficiency increasing roughly four-fold between 2003 and 2010, and accounting for the overwhelming share of the aggregate increase in total factor productivity over this time period. Most of the improvement in allocative efficiency has occurred among larger firms, and in large rather than small cities.
Users also downloaded
Showing related downloaded files
Publication Argentina Country Climate and Development Report(World Bank, Washington, DC, 2022-11)The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.Publication Lebanon Economic Monitor, Fall 2022(Washington, DC, 2022-11)The economy continues to contract, albeit at a somewhat slower pace. Public finances improved in 2021, but only because spending collapsed faster than revenue generation. Testament to the continued atrophy of Lebanon’s economy, the Lebanese Pound continues to depreciate sharply. The sharp deterioration in the currency continues to drive surging inflation, in triple digits since July 2020, impacting the poor and vulnerable the most. An unprecedented institutional vacuum will likely further delay any agreement on crisis resolution and much needed reforms; this includes prior actions as part of the April 2022 International Monetary Fund (IMF) staff-level agreement (SLA). Divergent views among key stakeholders on how to distribute the financial losses remains the main bottleneck for reaching an agreement on a comprehensive reform agenda. Lebanon needs to urgently adopt a domestic, equitable, and comprehensive solution that is predicated on: (i) addressing upfront the balance sheet impairments, (ii) restoring liquidity, and (iii) adhering to sound global practices of bail-in solutions based on a hierarchy of creditors (starting with banks’ shareholders) that protects small depositors.Publication The Journey Ahead(Washington, DC: World Bank, 2024-10-31)The Journey Ahead: Supporting Successful Migration in Europe and Central Asia provides an in-depth analysis of international migration in Europe and Central Asia (ECA) and the implications for policy making. By identifying challenges and opportunities associated with migration in the region, it aims to inform a more nuanced, evidencebased debate on the costs and benefits of cross-border mobility. Using data-driven insights and new analysis, the report shows that migration has been an engine of prosperity and has helped address some of ECA’s demographic and socioeconomic disparities. Yet, migration’s full economic potential remains untapped. The report identifies multiple barriers keeping migration from achieving its full potential. Crucially, it argues that policies in both origin and destination countries can help maximize the development impacts of migration and effectively manage the economic, social, and political costs. Drawing from a wide range of literature, country experiences, and novel analysis, The Journey Ahead presents actionable policy options to enhance the benefits of migration for destination and origin countries and migrants themselves. Some measures can be taken unilaterally by countries, whereas others require close bilateral or regional coordination. The recommendations are tailored to different types of migration— forced displacement as well as high-skilled and low-skilled economic migration—and from the perspectives of both sending and receiving countries. This report serves as a comprehensive resource for governments, development partners, and other stakeholders throughout Europe and Central Asia, where the richness and diversity of migration experiences provide valuable insights for policy makers in other regions of the world.Publication World Development Report 2006(Washington, DC, 2005)This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.