WORK – Creating the jobs and workforce of the future

Does automation pose a threat for East Africa, and what is the employment potential of manufacturing, ‘industries without smokestacks’ and online platforms?

Chapter Contents:

As the demand for jobs in East Africa rapidly expands, the advance of automation poses both a challenge and an opportunity

  • Between now and 2030, EAC states need to create 7,000 jobs a day to keep pace with demographic growth.
  • Previous predictions on the extent automation threatens jobs in developing countries are likely too extreme.
  • However, automation in other economies may still create significant challenges for East African countries.
  • Nevertheless, automation could still deliver positive economic impacts for East Africa.

Growing demand from African consumers could drive a manufacturing transformation, but this needs productivity to rise and logistics costs to fall

  • Africa could double its manufacturing output within a decade. Significantly, most of this growth would be in response to African demand.
  • African manufacturing growth could occur across multiple sectors responding to many different opportunities.
  • Labour-intensive manufacturing still holds potential for African countries, but low productivity and other factors driving high unit labour costs must be addressed.

Some believe ‘industries without smokestacks’ – such as business process outsourcing, horticulture and tourism – could replace manufacturing as the engine of development

  • Economies are deindustrialising at lower levels of GDP than they did historically and in East Africa labour is
    predominantly migrating from agriculture to the service sector.
  • ‘Industries without smokestacks’ exhibit qualities typically associated with manufacturing and are playing an increasingly prominent role in East Africa’s economies.

Digital platforms are reshaping how businesses in East Africa engage customers, employ workers and manage their operations

  • The e-commerce sector in Africa is growing quickly as governments and firms seek to learn lessons from Alibaba’s success in China.
  • By 2030, there will be between 29–80 million digitally enabled gig workers in Africa as young people increasingly turn to online platforms as a source of livelihood.
  • Most of Africa’s growing youth population will be forced to find work in the informal economy, which may become gradually more formal as small businesses adopt digital technology to better manage their activities.