By: Martijn Arets
While many countries in Europe are experiencing an ageing population and a tightening labour market, the opposite is happening in Africa. Specifically, in the large area south of the Sahara Desert, 10 to 12 million young people enter the labour market every year, while officially only about 3 million new formal jobs are available.
Sub-Saharan Africa is not only the region with the highest unemployment rate, but also one where a great deal of innovation is taking place. So-called “job technology” could well make the necessary difference. Entrepreneurs are increasingly looking to technology for solutions to the labour market, and technology is the link between African businesses, workers and the rest of the world. The Jobtech Alliance helps these entrepreneurs to grow, director Michelle Hassan told me in The Gig Work Podcast.
What is jobtech?
First, let's take a step back: what are we actually talking about when we talk about “jobtech”? The terms “platform economy” and “jobtech” are often used interchangeably, but they do not mean the same thing. At its core, a platform is simply a “matchmaker”: a digital marketplace that efficiently connects supply and demand. Think of Uber, Taskrabbit or Upwork. In this case, the platform worker already has the necessary skills (digital knowledge, training, driving licence) and resources (car, bicycle, smartphone, laptop).
In the African market, it is rarely enough to just make the match. People often lack the right knowledge, skills and resources to do the job. That is why African tech companies also need to invest in further training and access to financing for smartphones and tools, for example. That is why we talk about “jobtech” ( freely translated: technology related to jobs). It is an umbrella term for all technology that enables people to earn a living.
Many initiatives, few successes
In Africa, a jobtech ecosystem is necessary to enable platform work, says Michelle Hassan. She is the director of the Jobtech Alliance. This is an initiative of the international aid organisation Mercy Corps and her employer BFA Global. BFA Global is a impact innovation firm that focuses on helping underserved communities, such as refugees, young people and women. They use research and technology to create access to work.
Hassan joined the company 10 years ago with a study on financial inclusion and economic empowerment in the broadest sense. Hassan: ‘At the time, I saw many jobtech platforms emerge and fail within two or three years. The core of their problem: lack of funding and knowledge and community.’
High start-up costs, little funding
In Africa, the initial costs for platforms are higher than in the Western world because companies have to invest heavily in people at the outset. ‘Smartphones are only just emerging here, so sometimes you have to start at the basics, such as explaining how Google Maps works,’ she says. ‘Many people don't yet have their own device. This applies not only to phones, but also to other essential resources, such as tools for a handyman or a vehicle for a delivery driver.’
Furthermore, there was a lack of knowledge about what it takes to set up a successful platform. ‘There was simply no sector yet,’ she says. ‘That's why we started building a community of entrepreneurs, investors and policymakers. In collaboration with Mercy Corps, the Jobtech Alliance was created in 2021.’
New ecosystem
The Jobtech Alliance is an ecosystem for inclusive jobtech in Africa, focused on digital platforms that help people find work and earn an income. ‘Our goal is to create a community that supports and learns from each other. By sharing knowledge, we avoid repeating the same mistakes and jobtech as a whole can grow faster. We also attract capital through a network of investors.’
The Alliance also invests itself. ‘We currently offer grant assistance and technical assistance to 46 companies, from start-ups to scale-ups,’ says Hassan. She explains that funding for the sector is still limited. "This is partly due to a lack of knowledge about the sector and partly due to bad experiences in the past. Some venture capitalists have taken a chance in the past that did not work out well, making them reluctant to invest in jobtech again. Through our Jobtech Investment Network, we inform and convince them that there are indeed great investment opportunities in this sector."
Building bridges
In almost four years, the network has grown considerably. ‘We have more than 1,700 community members, about 60 people in the investment network and around 80,000 people who read our content,’ says Hassan. ‘Interesting collaborations are also emerging. Think of fintechs that arrange financing and trainers who help platforms teach workers the right skills.’
Hassan and her colleagues are looking beyond Africa. ‘In capital-powered Europe and North America, the demand for labour is rising, while we have a huge, young workforce looking for work,’ she says. ‘There is a shortage of 600,000 solar installers in Europe. That is an opportunity for Africans. Jobtech companies can bridge the gap by training people and connecting supply and demand. That's why we mainly support platforms that create high-quality jobs."
Africa is diverse
The African platform economy is more complex than that of the Western world in many ways, explains the director of the Jobtech Alliance. ‘You have to arrange more preconditions, such as further training and access to digital tools. The cost of data is quite high. And all of this varies from country to country.’
Africa is extremely diverse. Sub-Saharan Africa consists of more than 46 countries, each with their own laws, rules and challenges. ‘Africa is not a uniform market,’ she says. ‘Furthermore, the labour market is organised very differently than in Europe. About 80% of the market is informal.’
Informal: cheaper and more reliable?
This makes it difficult to make certain forms of platform work attractive, such as domestic work and nannies. ‘In Kenya, there have already been many initiatives in these sectors, but so far none have been successful,’ she says. ‘Domestic work and babysitting have traditionally been arranged informally. Africans have more confidence in a personal recommendation from their neighbours than in a platform.’
Furthermore, you have to pay the minimum wage to someone working through a platform. ‘In Kenya, that's about 15,000 shillings (100 euros),’ says Hassan. ‘Many nannies in the informal sector don't earn that much. Why would you hire someone through a platform when it's cheaper to find someone through your network? The challenge is to arrange it in such a way that it doesn't become much more expensive.’
Formalisation does offer a lot of potential advantages, she says. ‘It makes the market transparent and gives workers a better negotiating position and more opportunities to work flexibly. In addition, an app offers security. Women can share their location in the app and call for help at the touch of a button.’
Everyone is an influencer
There is one industry where platformisation has been a great success: the creative sector. Platforms such as Wowzi and Twiva enable Africans to earn money from their own small social media networks. At Wowzi, for example, young people earn money by sharing messages from brands with their own circle of friends. This turns every smartphone user into a “nano-influencer”. Twiva enables users to sell products from suppliers to their followers in exchange for a reward.
‘So we're not talking about big stars here, but ordinary users who work as influencers,’ Hassan emphasises. ‘They act as trusted intermediaries. I think this model is so successful here because it builds on existing social structures of trust. If I want to buy something, I have much more confidence in references from acquaintances than in advertisements.’
Data labelling on the rise
The popularity of “data work” or “AI annotation” via platforms is also growing. This involves people making texts and photos readable for AI so that the algorithm can learn from them. For example, data workers indicate what a lamppost or a bicycle is so that the AI behind a self-driving car learns to recognise these objects. They also check and correct the output of AI models and algorithms.
This type of work is controversial. The pay is often poor and the work monotonous and sometimes even mentally harmful. Is the rise of this type of work a good thing? ‘It's a dilemma,’ says Hassan. "You have to weigh it up against the alternative: no work. In Kenya, around 6,000 people are involved in data annotation, and for many it is an essential source of income. With the Jobtech Alliance, we are trying to promote good working conditions and sustainable incomes. Data work does not have to be bad, as long as you pay fairly and take care of the mental health of workers."
Opportunities for innovation and localisation
Existing large platforms are also expanding into Africa. This has advantages and disadvantages, says Hassan. ‘The arrival of Uber led to considerable resistance and disruption of the local taxi market,’ she says. ‘On the other hand, it opened up opportunities for innovation. Uber solved algorithmic challenges, which was a great example for local start-ups.’
Uber is only available in a few cities in Kenya, she says. ‘Local initiatives such as Little Cab are seizing their opportunity in other areas. Wasili is based on the Uber model, but focuses specifically on smaller cities such as Nakuru and Eldoret. You can see that such a local platform is successful because it responds better to local needs.’
Scaling up means adapting
Localisation is crucial for success, she says. ‘Simply copying Western models doesn't work,’ she says. ‘The local community understands the challenges. Take e-commerce: it looks very different here. Addressing is a disaster; I can't even explain my address to you. So you need delivery people who know the neighbourhood like the back of their hand.’
In short, scaling up is not easy. ‘We even see successful African platforms, such as SweepSouth from South Africa, failing when they expand to Kenya or Nigeria without adapting their model to local differences,’ she says. ‘Scaling up to multiple countries in Africa means building a unique, locally adapted model for each country.’
It is clear that jobtech offers many opportunities in Africa, but that growth is not yet a given. Hassan therefore remains committed to the sector. She has a strong motivation: her three-year-old daughter. ‘If no new jobs are created in the coming years, what will I tell her when she enters the job market?’ she says. ‘I sincerely believe that jobtech is the future of work in Africa. It is up to us to ensure that these are high-quality jobs.’
Looking back
This interview is the last in my series in Nairobi. I was there during the Africa Jobtech Summit to talk about the GigCV case and the Living Tariff. What immediately struck me during the conference was the connecting power of the Jobtech Alliance. It is impressive how they have managed to set up an ecosystem in a region that is as diverse as Europe.
After all, there is no such thing as “Africa”. Each country requires a tailored approach, starting with physical presence and building trust. I noticed this myself: from the Netherlands, I received hardly any response to emails to African start-up founders, but during the conference, the doors were wide open, after which the conversation usually continued via WhatsApp. Physical presence pays off.
Together with the Alliance, we are now actively promoting data sharing via the GigCV API. And with success: six months later, three platforms have committed and four others are showing serious interest. The lesson is clear: if you want to make an impact in the promising African market, you have to be right in the middle of it.