Can the Digital Age Be the Economic Making of Africa? Disruptive Technologies May Make Some Jobs Obsolete, but They Also Open Up Opportunities; According to Research from the Pathways for Prosperity Commission

By Ndulu, Benno | African Business, November 2018 | Go to article overview

Can the Digital Age Be the Economic Making of Africa? Disruptive Technologies May Make Some Jobs Obsolete, but They Also Open Up Opportunities; According to Research from the Pathways for Prosperity Commission


Ndulu, Benno, African Business


New technologies including artificial intelligence, data management and digital communications are radically transforming business models and the way we live across the world. Fears of job losses and increasing inequalities due to automation are grabbing global headlines. For example, a widely cited statistic suggests that up to 47% of jobs in OECD countries and two-thirds of jobs in the developing world are already at risk. According to this narrative, manufacturing jobs in particular, already a scarce commodity across Africa, will disappear, depriving the continent of an elusive growth engine. And this will happen just when many African countries are trying to reinvigorate manufacturing, having lost out during earlier phases of industrialisation and the expansion of global value chains to Asian economies.

So, is Africa doomed in this new age of rapid technological progress? We don't think so, as we have laid out in two new reports for the Pathways for Prosperity Commission on Technology and Inclusive Development (www.pathwayscommission.bsg.ox.ac.uk/reports). This Commission, led by Melinda Gates, with ECONET's Strive Masiyiwa, and Indonesia's finance minister and former managing director of the World Bank, Sri Mulyani Indrawati, has been exploring the evidence. We are confident that a more positive and constructive vision for Africa's future is possible. In our reports, we lay out how countries can take advantage and harness frontier technologies to drive inclusive growth, ensuring the poorest and marginalised share in progress.

We believe the evidence for projected job losses is flawed. Throughout history, rapid technological change has been disruptive, making certain jobs obsolete, but it tends to create jobs in other areas. The introduction of spreadsheet software in the US for example cost 400,000 jobs for bookkeepers and accounting clerks but created 600,000 jobs for other kinds of accountants focused on customer service. There is every reason to believe this will apply now. But more importantly, there is no reason to be particularly pessimistic about Africa. In fact, the digital age may be Africa's economic making.

Digital technologies are not just enabling automation in manufacturing; they are opening up new economic pathways for the companies and countries that harness them effectively. In agriculture, data analytics can help optimise production decisions through smart agriculture, as shown, for example, by the peer-to-peer farming advice platform WeFarm in East Africa.

Crucially, through better data and communications, digital technologies are bringing down the costs of logistics by making value chains more efficient and opening up the scope for profitable local, regional and global trade routes. This will allow more diversification and dynamism in agriculture as the cost of market connectivity is declining, as Kenya's successful farm produce sourcing business Twiga Foods is showing.

Connecting to the formal economy

Another highly inclusive pathway to growth is unfolding where digital platforms are allowing small microenterprises or self-employed informal sector workers to connect to the formal economy. The ride hailing app Safe Boda in Uganda offers connectivity for motorbike taxi drivers, boosting their incomes. Elsewhere, in Southeast Asia for example, such services are extended to low cost food delivery or even goods delivery.

The future potential for exporting services is also increasing. Vast improvements and cost reductions in communications technologies, such as telepresence or virtual reality, allow teams to work together face to face across vast distances, opening up new chapters in the export of services beyond call centres. …

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