The New Tech Era: job-killer or job-creator?

At a time when Jumia, Africa’s biggest e-commerce company, is preparing to raise several hundred million dollars on the New York Stock Exchange, and the Mauritius-based IHS Towers communications giant is doing the same, it seems beside the point to ask whether “Tech” is good for the continent.

Like Kenya-based Safaricom and the pioneering M-Pesa mobile money service, these companies are at the vanguard of Africa’s technological revolution.

They are making money for their shareholders but more importantly they – and a generation of start-ups across the continent – are putting African engineers, innovators and mathematicians on the world stage, showcasing ideas and systems that other regions are rushing to copy. Norway is trying to keep up with Kenya in the mobile-money stakes.

Yet today in Abidjan, The Africa Report team, in partnership with the Mo Ibrahim Foundation, is organising a debate entitled: “The New Tech Era: Job-killer or job-creator?” As we put together our team of African tech experts – Chioma Agwuegbo, founder of TechHer in Nigeria, and Eric Kacou of Entrepreneurial Solutions Partners in Côte d’Ivoire – they guided us through the nuances of the terrain.

There’s no question that Tech, the digital economy and artificial intelligence have created thousands of jobs and speeded up production and trade over the past decade. Doubtless, it will drive economic growth – through new communications and trading platforms, as well as pioneering high-tech work in medical science, agronomy and a rapid extension of high-quality education.

But what is less clear is what it will do to jobs. Will it complement current employment, making it more efficient and productive? Or will it substitute machines for humans in millions of jobs? When Africa’s economies have to generate 18 million jobs a year just to keep pace with demographics, that’s a central question for the region. By 2030, half the world’s new working-age population will be in Africa.

By 2030, half the world’s new working-age population will be in Africa.

The answers are not reassuring, whether in the global or the African context. The World Bank thinks 60% of jobs could be put at risk in the industrialised economies, less in Africa. Yet outgoing World Bank President Jim Yong Kim said last year that AI and the digital economy would compel African governments to rethink development strategies, based on low-cost and export-led manufacturing, competing with Asia on wage costs and logistics.

Many of those industries may well stay in Asia or the Americas because of AI and robotics, of which China is now the global leader, argued Jim. That suggests a powerful indirect effect on jobs from Tech. This year there are 2.5 million robots working in industry, most of them in Asia.

McKinsey, the US consultancy outfit, reckons 40-55% of jobs in industrialised economies are at direct risk from Tech. That is perverse but good news for the consultancy business. It means plenty of new contracts from worried officials and companies. By contrast, the Paris-based Organisation of Economic Cooperation and Development takes a more relaxed view: it reckons some 7-15% of jobs in its member states will be affected by Tech.

Just because the experts can’t agree about the effects of Tech on jobs should not minimise the issue. It could prove more important for Africa than other regions. Africa is the only continent where the labour force is due to grow sharply over the next 50 years. Between now and 2040, over half the world’s new workers will come from Africa, according to the UN’s statisticians.

That gets to both the quantity and quality of jobs in the Tech era. A new report by the IMF on the future of work in Africa argues that the effects of Tech have to be measured against political, economic, security and meteorological developments. Like demographics, climate change, urbanisation and economic integration, the effects of Tech will be impossible for policy-makers to ignore. Massive social investment – in high-quality education and continuous technical training and universal health care – will be top priorities. Continue reading