Tech adoption surges, but digital entrepreneurship lags

MORE small businesses are adopting technology but not enough are starting digitally according to one technology expert.

As the digital realm becomes increasingly intertwined with business operations, there’s a prevailing notion that merely dipping one’s toes into the digital waters, such as adopting e-commerce, equates to a company’s full-fledged digital transformation. However, according to Dushyant Savadia, founder and CEO of Amber Group Limited, this perspective falls short of capturing the essence of true digital entrepreneurship.

“Digitalisation is when you build your business around a digital platform itself with no brick and mortar,” Savadia defined in an interview with the
Jamaica Observer.

While businesses are indeed adopting technology, there is a noticeable absence of digital start-up companies. Savadia emphasised that the most accurate measure of a country’s digital growth trajectory lies in examining the number of new digital companies established within the past three years.

“There are barely any,” Savadia boldly stated. “The only digitalisation I see is with the standard institutions [banks, capital markets].”

Data from the Companies Office of Jamaica (COJ) indicates that as of 2021, there are more than 69,000 active companies and upwards of 200,000 businesses registered. However, the precise number of digital start-ups within this cohort remains unknown. Despite diligent efforts, the COJ has been unable to provide this specific information up until the publication of this article.

Additionally, Savadia noted that it’s crucial to evaluate the array of government and non-government services that have undergone digital transformation, eliminating the necessity for in-store transactions.

“If you look around the digitalised world, you will get your answers. They are not doing enough for Jamaica yet,” Savadia told the Business Observer.

There exists a common misconception regarding what constitutes a digital company versus a business simply adopting technology. Savadia clarified this distinction, emphasising that standard e-commerce platforms, while valuable, do not fully embody digital entrepreneurship.

“I’m talking about proper digital start-ups where you have products that are launched fully digitally,” he explained.

In continuing his explanation to the Business Observer, he asserts that while launching an e-commerce platform may be relatively inexpensive and quick, it does not equate to being a fully digital business. According to him, a company can truly claim to be digital only when its entire revenue is generated from digital sources and when it operates exclusively on a digital platform. This differentiation, he pointed out, highlights the gap in Jamaica’s digital landscape.

While many companies are grappling with identifying the right technologies to adopt, financial constraints often hinder their efforts to develop the necessary software and tools. Recently, the Development Bank of Jamaica’s (DBJ) BIGEE Grant aims to support SMEs and medium-sized companies in their technological advancements. So far, 14 companies have utilised these grants for digital and technology-enabled projects facilitated by the DBJ. In addition to grants from the DBJ, and over 16 technology companies have been assisted through the Jamaica Promotions Corporation (Jampro), Technology Innovation District (TID) Accelerator Project which exports information technology (IT) services. Despite these assistance, Savadia believes it’s a drop in the bucket.

“What usually happens in our technology field is that if I want to upgrade a certain system, it takes $1 million, for example, to print a piece of paper that can help improve my operations, increase my profit, and lower my costs. If I receive a grant of $250,000, yes, I will take the grant, but I will never see the light of day for that product,” said Savadia, highlighting the insufficiency of government grants. “They don’t encompass the full value of what is required to launch a product. It only pays for a small percentage of what is required to be built, and that takes you some distance, but it won’t take you far enough,” Savadia explained to the Business Observer.

In response to the challenges encountered by businesses in obtaining the requisite technological infrastructure, Savadia initiated the Amber-UTech Launchpad. This endeavour is designed to finance 100 digital start-ups within 100 days, offering comprehensive assistance from conception to market launch. The Amber-UTech Launchpad covers the entire spectrum of digital product development and facilitates its introduction to global markets. Savadia emphasises that substantial investments like these are essential to propel Jamaica decisively into the digital age.

“They have to have institutional funding available through either banks or through DBJ or whichever entity that has money, properly vet businesses that have good business plans that have good road maps that are scalable, and fund them 100 percent,” said Savadia.