Job creation is vital for Africa’s success, and 4IR can supply much of that
Africa can be viewed as a large-scale startup, much like East Asia and China were back in the 1990s
As the 28th World Economic Forum (WEF) on Africa meeting came to a close against a backdrop of demand for change following social unrest within SA, it was clear that the need to deliver on the promise of Africa’s booming youth population has never been more acute.
With Africa witnessing a population explosion — 2.4-billion people are expected to call the continent “home” by 2050 a fundamentally new approach from African leaders across the board must be adopted to address the current lack of cohesion (social, technological and political) that will be required to catapult the continent forward and create the inclusive growth and a shared future that will benefit all.
Job creation must be the core of Africa’s approach, and the fourth industrial revolution (4IR) — underpinned by forward-looking trade agreements and support systems for entrepreneurs/SMEs — has the potential to supply much of that need. Entrepreneurship and SMEs are the backbone of any economic success story.
It was unanimous among delegates at the WEF on Africa that the AU’s launch back in March 2019 of the African Continental Free Trade Area (AfCFTA) is undoubtedly the catalyst for the scale of change required given the agreement’s aim to create a single market expected to generate a combined GDP of more than $3.4-trillion and benefit over 1-billion people.
However, in spite of recent economic growth, the continent remains subject to lingering challenges, including vast inequality, relatively poor agricultural productivity, significant youth unemployment, pervasive nationalist government thinking and little or no cross-border frameworks in place to support the required flow of goods/people/skills/data that an effective economic stimulus would require.
In April this year the SA government announced the launch of a new Affiliate Centre of the World Economic Forum’s Centre for the 4IR. This signifies a shift from increasing recognition that the 4IR has a critical role to play in securing Africa’s future, to a new era in which efforts to capture its value will be orchestrated at national level and beyond.
The centre will act as a focal point for dialogue and co-operation on the challenges and opportunities presented by advanced technologies, which are merging our physical, digital and biological worlds. These include a number of tools that, combined, will disrupt Africa’s dominant agricultural, extractive and manufacturing industries, offering the continent an unparalleled opportunity to transform and thrive.
Africa has definitely grasped the promise of the 4IR. More than 400 tech hubs have sprung up across the continent, with Lagos, Nairobi and Cape Town emerging as internationally recognised technology centres. These cities now host thousands of startups, along with the incubators, accelerators, innovation hubs, maker spaces, technology parks and co-working spaces that support them.
Efforts like these will become increasingly important to help a hyperconnected and entrepreneurial youth population on its way to a digital future. However, with one or two exceptions these initiatives are largely being driven at a city or enterprise level, rather than an integrated national level, to Africa’s detriment overall.
One illustration of this can be found in the WEF’s Readiness for the Future of Production Report 2018, which analysed countries’ preparedness to capitalise on emerging technologies. Of the 25 African countries assessed, 22 were classified as having a low level of readiness for the future due to a lack of the necessary enabling conditions. Beyond tech platforms and innovation capacity, these include a robust institutional framework, the right skills and talent, the ability to attract global trade and investment, availability of sustainable resources, and a thriving demand environment.
Although the Middle East and North Africa region fared better on average than sub-Saharan Africa, readiness across each driver varies considerably by country, indicating the absence of united action. And this, as we have seen from other global tech hubs from Bengaluru to Berlin, Beijing to Boston, spurs the chances of success even more than the technology itself. Policy, regulation, finance, infrastructure, education and talent must all come together in an innovation ecosystem focused on an integrated agenda, and propelled by unconstrained collaboration.
If we look at the situation through the business lens, Africa can be viewed as a large-scale startup, much like East Asia and China were back in the 1990s. There they managed to match the opportunity to the reality. Execution and urgency were key. The creation of jobs become the focal point for all of their efforts. This required fundamental reforms to policy and implementation tactics in areas such as education, industrialisation, digitisation and entrepreneurship. The gap was plugged.
Last week the WEF launched the Africa Growth Platform. Co-founded by AT Kearney, Alibaba Group, Dalberg Group, Export Trading Group, US African Development Foundation and Zenith Bank, the objective of this platform is to bring together governments, investors and entrepreneurs to enhance funding prospects and create better enabling environments for entrepreneurs and SMEs across the region, and in doing so provide the growth impetus so needed to create jobs and prosperity.
With early-stage entrepreneurial activity 13% higher than the global average, Africa is well placed to get startups off the ground, but it also has a higher failure rate on average, due to insufficient support and infrastructure. Africa has to leverage the entrepreneurship and digital connectivity of its youth. Young people are wired to try new things, and they have the energy and zeal to take the type of risks necessary in this new environment. But the continent must also overcome some significant hurdles if it is to grab the 4IR opportunity and become the global hotbed of innovation. Three ingredients are key to making that grab:
- Definitively tackling the hygiene factors. The single basic requirement for any job creation is access to cutting-edge digital connectivity, which has come on in leaps and bounds across Africa as mobile adoption has accelerated. However, many “last mile” or even “last 50m” connectivity gaps remain, the allocation of licensed spectrum is sporadic, and government-driven internet shutdowns continue to plague countries like Somalia and Ethiopia. What’s more, reliable access to energy, clean water and other resources is not a given, while digital tools do not completely remove the need for effective road systems and transportation links.
- Gaining useful, actionable insights from the data glut. It has become common to refer to data as the new oil, and in one sense it is; according to research, the big data analytics market is set to reach $103bn by 2023, and it’s estimated that every person will generate 1.7Mb in just one second by 2020. So on the other hand, data is nothing like oil because it’s not a finite resource. Far from it.
This presents Africa with an opportunity, if it can turn the forthcoming glut of bits and bytes into valuable, actionable insights that can be accessed and shared easily. There are three basic stages needed to execute this successfully: create, collect and protect. Create the cross-continental policies and standards for data generation and regulation; collect the data required to inform future policy and opportunity; and protect the people you serve from the threats posed by cybercrime and abuse by those looking to exploit this data for negative gain.
- Building the new skills needed — against the clock. The machinery and technology on its own isn’t enough to succeed in the 4IR — you also need to know how to run it. Africa is by no means alone in facing a potential gap here, not only in the specialist technical skills required to work with emerging technologies, but in the complementary capabilities to help people adapt to an ever-changing job market. Moves to skill and reskill the future and existing workforce will need to be fast-tracked, making sure adjustments are addressed early within the education ecosystem, and refined on an ongoing basis through further education and lifelong learning.
To do all of this effectively, today’s fragmented efforts must be turned into a cohesive approach. Institutions like the AU, Africa50, along with the Africa Growth Platform and the C4IR have sown the seeds for pan-African collaboration and investment, but more public-private partnerships are essential. The World Bank suggests that the comparative success of certain African tech clusters can be attributed to the establishment of “organic, multistakeholder ecosystems” and that these are more effective than initiatives led by government, the private sector or academia alone.
If Africa can develop these clusters further and create an integrated innovation ecosystem to tackle the 4IR, it stands to supercharge its economies, its societies, and the livelihoods of millions.
• Liu, one of the seven co-chairs at last week’s World Economic Forum on Africa gathering, is managing partner and chair of AT Kearney.