THE CONSTRAINT GAP: RATIONAL UNDERUTILIZATION AND THE LIMITS OF DIGITAL ADOPTION IN AFRICAN MICRO-ENTERPRISES

Why does the rapid diffusion of digital technologies in Africa yield such modest productivity gains for micro-enterprises? This paper identifies and formalizes the constraint gap—the wedge between technology adoption and intensive utilization—as the central explanation. Using original firm-level survey data from 87 owner-managed micro-enterprises in Dar es Salaam, Tanzania, the paper shows that while 92 percent of firms adopt at least one digital technology, only 21 percent use these tools intensively across core business functions. This divergence is not driven by lack of awareness or negative attitudes, but by rational underutilization under binding financial, human capital, infrastructural, and institutional constraints. Utilization intensity declines sharply as constraints bundle, and utilization—rather than adoption—is strongly associated with reported improvements in profits, client reach, and operational efficiency. By reframing post-adoption behavior as a constrained optimization problem, the paper shifts analytical and policy attention from adoption barriers to the feasibility of intensive use, with implications for digitalization strategies targeting micro-enterprise productivity. The analysis is deliberately diagnostic rather than causal, positioning utilization intensity as a core measurement gap in digital development research.