Rapid advances in technology are driving major changes in workplaces around the world. In the United States, it has been a source of joy – for those who can work from home thanks to advanced video technology and the Internet of Things (IoT) – and sorrow for those who have lost their jobs due to advanced robotics. Predicting the impact of new technology from the Fourth Industrial Revolution (4IR) on job opportunities around the world is now a growing industry. But how relevant is technology, and to a large extent rich country experience, to Africa’s current problems and choices?
In our recent report, we take a close look at this issue. Focusing on Africa’s current economic development challenge – how to accelerate the process of economic transformation – we examine the potential of 4IR technology to support and accelerate this process. A reasonable expectation might be that 4IR technology has a lot to contribute since technological innovation has been one of the main drivers of economic growth and development since the invention of the steam engine and electricity. However, our report argues that for Africa, the key policy question is not “What can 4IR technology do for Africa”, but rather “What are the productivity bottlenecks in Africa and what technology Could 4IR help relieve them? In other words, for the owner/operator of a business or farm, the question is not “What about robots?” It’s “What is my current productivity problem, and if I used this technology, would it produce a quick, specific answer to this problem?”
From this perspective, we share the enthusiasm for some of the potential of 4IR technology to help farms as well as formal and informal businesses in Africa reduce production costs, expand their markets through productivity and increase employment and incomes. We are more optimistic about:
- In service sectors4IR presents an opportunity for new technological products and processes. Demand rises with incomes, so opportunities abound as African countries restart the process of economic growth. In many service sectors where formal enterprises and employment dominate, technology complements rather than substitutes for labor, so technology adoption should lead to the creation of new formal wage employment for young and educated job seekers. In the large non-agricultural informal sector (63% of total employment), adoption of 4RI technology could also lead to improvements in job quality (e.g. earnings, income security) – for example, through the use of online marketplaces and platforms to find customers and meet their needs efficiently and securely.
- In the agricultural sectorBy reducing the information frictions that increase risk, 4IR technology could support productivity gains, increased farm incomes and reduced rural poverty, as well as bring significant environmental benefits. But first, the long-standing risks that impede technology adoption must be overcome, leading us to conclude that technology-enabled farming will not be a feature of small-scale agriculture anytime soon. medium scale in Africa. The adoption of technology will not lead to a large expansion of employment, as this sector has been losing its share of jobs for years due to better opportunities elsewhere.
- In the manufacturing sector, which has recently increased its share of output and employment in low- and middle-income countries in sub-Saharan Africa, 4IR technology can open up new opportunities for smaller-scale production for national and regional markets. But the sector is unlikely to continue to increase its share of employment because when applied to manufacturing, 4IR technology saves labour.
Although we are much less concerned about robots and job losses than some other analysts, our analysis leaves us concerned about the long-standing barriers to technology adoption that already exist in Africa. Without innovation, producers will lose market share to the rest of the world. But new technology is an investment and will only be adopted if a producer has access to markets to sell their products and services and can obtain the necessary complementary inputs (including services such as electricity and transportation of goods to market ) at a price that results in a competitive product. This renders problems such as construction; Operating; and maintenance of infrastructure, including information and communications technology infrastructure; deepening of the financial sector to reduce the cost of financing new investments; and reducing barriers to regional trade all the more urgent. To ensure success, the public and private sectors will need to work together on strategy and implementation.
Conscientiously crafting public policies that guide technological growth to maximize benefits for all and minimize costs will be critical to success.
Africa urgently needs employment transformation, that is, growth in the share of wage employment in employment. This will take time given the current rate of labor force growth. Africa cannot afford to let the shiny and shiny object of new technologies distract its attention from the measures needed to support income growth in the informal agricultural and non-agricultural sectors – farms and family businesses. Conscientiously crafting public policies that guide technological growth to maximize benefits for all and minimize costs will be critical to success. Countries need comprehensive, effective and achievable strategies that will address the different challenges in their national context, while ensuring inclusiveness. A policy focused primarily on supporting and satisfying high-tech sectors will exacerbate inequalities, an undesirable outcome.