Cashless Ecosystems and Microenterprise Competitiveness: Measuring SDG 8 and SDG 9 Indicators

Abstract

The paper presents the role of cashless ecosystems in increasing competitiveness of microenterprises and in particular, quantifying the progress towards SDG 8 (Decent Work and Economic Growth) and SDG 9 (Industry, Innovation, and Infrastructure). Microenterprises in the emerging economies are usually limited in the access to finance, productivity, and integration. The shift to digital and cashless payment systems is an opportunity with a revolutionary change to overcome these challenges through enhancing transaction efficiency, financial inclusivity, and innovation capability. The study combines both a mixed inventory and empirical research method as it (i) analyses the effect of the adoption of digital payments on the growth of revenues and job creation through the use of econometric regression analysis, (ii) examines the correlation between cashless use, operational efficiency, and readiness to innovate through the application of structural equation modeling (SEM), and (iii) measures the infrastructure and technology integration level among microenterprises using a digital maturity index approach. A study sample of 420 registered microenterprises in urban and semi-urban areas were used in collecting data. The results demonstrate that the introduction of cashless payment systems resulted in the annual revenue growth by 27.6 percent, the labour productivity growth by 19.4 percent, and the transaction costs decrease by 22.1 percent, which contribute directly to SDG 8 goals. Moreover, businesses that operated on an innovative digital payment system showed a 31.8% increase in the rate of innovation adoption and a 24.7% better market connectivity, which indicates a high level of alignment to SDG 9 indicators. On the whole, the paper finds that cashless ecosystems provide a substantial boost to competitiveness of microenterprises through inclusive growth, innovation and resilient digital infrastructure, providing important policy implications to expedite sustainable economic growth.