Digital Transformation is key to Africa’s future
Many young people in Africa feel they have been lied to; education no longer equals post-graduate employment and employment no longer guarantees economic mobility. Entrepreneurship, meanwhile, is an ever-risky escape. Without digital and problem-solving skills, African youth struggle to find secure employment and create sustainable enterprises. Our increasingly technology-driven world is leaving them so far behind that even when jobs and untapped sizable markets exist in Africa, they miss out.
Youth (18-35 years) account for 60% of Africa’s jobless (Source: World Bank). Rejected by formal employment and education opportunities, millions embrace entrepreneurship. Over 70% of youth in Nigeria, Ghana, Senegal, Mali, DRC, Congo, Rwanda, Uganda, Ethiopia, and Mali are self-employed or in family work (Source: Brookings Institution). Unsurprisingly, then, small and medium-sized enterprises (SMEs) are the primary driver of economic activity across the continent. In Africa’s largest economy, SMEs contributed 48% of GDP in the last five years, accounting for 84% of employment, and comprising 96% of all businesses (Source: Nigeria Bureau of Statistics). And yet, these businesses fail at alarming rates.
In Africa’s second largest economy, 50% of SMEs disappear within 24 months (Source: Standard Bank South Africa). For instance, one entrepreneur who had started a recycling company in Nigeria to empower youth to monetize recycling services had grown her monthly revenue to $3000 within one year, but was now struggling as customers and employees alike grew wary of all high-contact businesses. The failure of SME’s has so many devastating effects- When SMEs fail, livelihoods fall under threat, food cannot be purchased, medicine cannot be procured, and Tuition cannot be paid.
The proliferation of technology has transformed the workplace as people increasingly interact digitally with ever-smarter machines. “The need for some skills, such as technological as well as social (problem-solving), analytical and critical thinking skills, will continue to rise, even as the demand for others, including physical and manual skills, falls. These changes require youths, entrepreneurs and workers everywhere to deepen their existing skill sets or acquire new ones. Companies, too, will need to rethink how work is organized within their organizations.” (McKinsey & Company, 2018). Without digital literacy and problem-solving skills, African youth will struggle to create technology-enabled enterprises that survive the increasingly frequent disruption (e.g. COVID-19, automation) in today’s world. Our world is in the midst of digital transformation, and so far, as a result of COVID-19, many have been left behind.
Employment change since the first steam powered textile looms displaced craft workers in 18th-century Britain. Consider the effects of the first Industrial Revolution: at one point, more than 95% of jobs involved growing food; today fewer than 2% of people in the developed world work in agriculture.
Reports, such as the World Economic Forum’s 2016 The Future of Jobs, suggest that we are entering a very different jobs era. In this fourth industrial revolution, automation and disintermediation are destroying jobs and disturbing the way businesses operate at such an unprecedented pace that new jobs are no longer sufficient to replace those redundant roles.
Upskilling and Reskilling in the age of COVID-19, is the Way to Go
Startups that continue to innovate consistently outpaces that of established businesses. (EY Job Creation Survey). Technologies require people who understand how they work and can innovate, develop, and adapt them. Hence, there is a significant need for everyone to develop at least, basic digital skills for the new age of automation and post-COVID era. In EY Global Job creation survey 2016, It was found that among 25 skills analyzed, basic digital skills are the second-fastest-growing category, increasing by 69 percent in the United States and by 65 percent in Europe. (EY Job Creation Survey).
Digital skills must also function alongside together with other abilities such as strong literacy and numeracy skills, critical and innovative thinking, complex problem solving, and an ability to collaborate, and socio-emotional skills. However, Nigeria and Africa’s education system is not well prepared to deliver this need because the education system and curriculum do not give flexibility or allow room for innovation and technological advancement. We are stuck in the old methods of the school system focused on hard skills with very little or no real-world practical application. Therefore, we need more edtech platforms in Nigeria and Africa to fill this gap.
To better understand these needs, I conducted stakeholder interviews with university students, recent graduates, and employers in Nigeria. Our conversations revealed that many young people, some despite receiving university education, have poor computer skills, including little knowledge of Microsoft Suite or G-Suite. Many also expressed extreme difficulty finding employment even months after graduation. These challenges are worse for youth with no higher education, and young entrepreneurs are also struggling because they lack the basic skills to succeed in their businesses. With Nigeria’s growing population, our government will be in tumult if nothing is done to revamp the education system to become more problem-solving focused.
Digital skill shortages have negative implications for the economy and the labor market. They can result in increased labor costs, lost production due to unfilled vacancies, slower adoption of new technologies, and the implicit and explicit costs of higher unemployment rates. Conversely, appropriate soft skills in individuals can boost economic growth. The skills required to stay competitive are both soft skills such as problem-solving, innovation, creativity, critical thinking, and communication. And basic digital skills such as using cloud computing tools like Microsoft teams and Google Suite Applications for collaboration. There are more advanced skills like programming and analytics but not everyone can adapt. What is required is that at least everyone, regardless of your occupation should gain basic digital skills to stay competitive in the 21st Century Workforce.
Edtech Startups are Rising to the Challenge
Edtech platforms are rising to fill the skill shortage gap. Like Nigerian-based nonprofit, Inspire Africa for Global Impacts Initiative launched the Ignite Innovation Lab (IGL) Virtual Digital Transformation, centered on elevating young people in Africa to be able to take hold of these opportunities – opportunities to drive towards their goals, opportunities to thrive and opportunities to survive. IGL Digital Transformation lab directly addresses these challenges, teaching digital business skills through design thinking, virtual collaboration and fostering entrepreneurship to help young people create new technologies, businesses, and jobs.
Launched in July 2020, IGL is exposing African youth to digital business skills in the age of COVID-19, by bringing together young talents virtually to innovate and collaborate on solutions to some of Africa’s most pressing challenges. The individuals use cloud computing to collaborate with their team members online and are supported by their mentors who provide direct feedback on the platform. They are equipped with the toolkit needed to develop digital enterprises that are progressing the Sustainable Development Goals and the skills to thrive in the 21st Century Workforce.
The Ignite Lab approach of digital transformation is a unique way of upskilling the youth and tackling high SME failure rates. It galvanizes young people to learn digital skills and business know-how and apply them towards solving issues that affect Africa and the world. The virtual Lab is using simple, yet powerful, tools like human-centered design-thinking and business technology, but builds a pan-african digital learning experience around them. Participants aren’t simply ingesting one-way information, or executing without guidance. With the support of expert facilitators, mentors and a network of social entrepreneurs, they are ideating, debating, collaborating, communicating, problem-solving, and more. As a result, more than the typical MOOC, the IGL Digital Transformation becomes an incubator, a hackathon, a mixer, a virtual watering hole for Africa’s future young leaders.
The longer term outcomes of the Digital Transformation activities are even more numerous and notable. Youth unemployment is directly targeted and one who chooses to seek formal employment will have more opportunities available to them due to their new digital skills, and their employers will be more productive for it. Those that choose to start a business will be more likely to succeed because of their learnings and, therefore, break cycles of unemployment–not only for themselves, but for others as research shows that startup hiring consistently outpaces that of established businesses (EY Job Creation Survey). Increasing employment will decrease socioeconomic inequality and contribute to economic productivity at national and regional levels. Beneficiaries of this methodology will be better positioned to contribute and benefit from greater African economic integration, having collaborated across borders during the program.
Tony Elumelu describes Africa as a continent of opportunities with huge returns on investments, therefore, we must prioritise training and mentorship, just as we prioritise capital. We must also ensure that relevant platforms to learn digital business skills are created just as Inspire Africa for Global Impacts Initiative and many others have done.