| Digital Senegal for Inclusive Growth
Technology upgrading support for better firms Senegalese firms lag in the adoption of more sophisticated technologies. Compared with the state of Ceará in Brazil,8 Senegal has a gap of 36 percent in adopting and using any type of more sophisticated technologies for general business functions (for example, keeping accounting records by hand versus by a simple Excel spreadsheet versus using a more sophisticated Enterprise Resource Planning [ERP] solution), and a gap of 30 percent for the most frequently used technology. Senegal’s average firm also lags behind Vietnam in technological sophistication in these general business functions, both on the extensive margin (whether the firm uses the technology at all) and on the intensive margin (whether it is the technology used most intensively by the firm). Moreover, Senegal lags in the adoption and use of more sophisticated technologies for industry-specific business functions. As an example, land preparation for farming remains largely manually done, with only a small share of firms using a single-axle tractor, and almost none using more sophisticated versions of GPS-guided tractors with internet-of-things sensors. Adopting better technologies is associated with faster job growth. Almost all more sophisticated technologies today have some digital elements. Firms that use more sophisticated technologies are more productive than those that use less sophisticated ones. Importantly, firms that use more sophisticated technologies also have faster job growth than those that use less sophisticated technologies. Interestingly, firms that use more sophisticated technologies intensively for general business functions, such as for business administration and production planning, have faster job growth (a 1-point increase in the technology adoption index is associated with a 14 percent increase in the number of workers in the average firm) than those that use them less frequently, controlling for initial size, age, sector, region, exporting status, and foreign or domestic ownership (see figure O.4). As well, the uses of internal-to-the-firm DTs for business administration and production planning have an association with higher average job growth than the uses of external-to-the-firm DTs for upstream sourcing and downstream
FIGURE O.4
Firms that use more sophisticated digital technologies have faster job growth 0.20 Change in employment (%)
8
0.15
0.14
0.10 0.07
0.07
0.05
0.04
0 –0.05 GBF EXT
GBF INT
SSBF EXT
SSBF INT
Source: Cirera et al. 2021. Note: See figure 3.14. EXT= extensive margin; GBF = general business function; INT = intensive margin; SSBF = sector-specific business function.
