Part One — Creating 5 Million Digital Jobs in Tanzania in The Next 7 Years.
Someone asked how we can create 5 million digital jobs in Tanzania in the next five years. I decided to write this article.
First, this is not an ambitious plan. Europe is planning to train 20 million ICT specialists by 2030. Second, the true potential of the digital economy in Africa still needs to be achieved. The economy's actual size also depends on how you define the digital economy. Google and IFC estimate the size of Africa's Internet economy to be $180 Billion by 2025, but the Internet economy is a subset of the digital economy. Different sub-sectors have emerged from the digital economy, which has massive potential to create new employment opportunities for Tanzania and Africa. Deloitte has the simplest definition of the digital economy.
An economic activity that’s generated by human and technology connections formed online — Deloitte.
It is not a secret that Tanzania and Africa must create as many jobs as possible within the shortest period possible. According to Africa Development Bank, 10 to 12 million young Africans join the job market annually. That is twice the population size of a country like Finland. Hence, each year Africa brings a new nation into the job market. Africa has 15 of the fastest-growing cities in the world (three of them in Tanzania). With the increase of urbanization, only some of the traditional solutions to address unemployment might work.
Beyond unemployment challenges, the upward trajectory of population growth creates new challenges for urban Africa, disrupting the quality of services offered and access to basic needs, including health facilities. Now, getting back to the core issue. How do we create 5 million digital jobs in 7 years?
Where Will The Jobs Come From?
There are five sub-areas of the digital economy that Tanzania can leap most of the benefits if well capitalized. We are speaking about creating millions and jobs and not a few engineers and experts working here and there in public and private offices. These five sub-sectors include; The Startup Economy, The Gig Economy, The Creative Economy, E-Commerce, and Software Engineering and Digital Fabrication. These sub-sectors overlap; sometimes, some can be merged and called Internet Economy. Let’s not be obsessed with the definition.
The Startup Economy
I have been writing about the potential of the startup economy in Tanzania for some now. The startup economy refers to the ecosystem and economic environment surrounding startups, innovative businesses with unproven business models operating in untested markets with the potential to grow exponentially. I like that startups can create a few or thousands of jobs through their value chain. When we were doing the traceability study of Buni Innovation Hub and Dar Teknohama Business Incubator (DTBi), more than 15 thousand jobs were created by one startup and another startup alone, contributing to over 500 million in taxes every year. It is difficult to measure the true size of the economy since the direct contribution of startups to the economy is difficult to measure. It is important to note that African startups create jobs, contribute to taxes and attract foreign investment. How do we create jobs through the startup economy?
- Startup Funding — to create wealth locally, there is a need to establish local investment funds to fuel startup innovation, reduce risks of failure, and allow the companies to grow and disrupt traditional sectors, formalize the informal and create employment opportunities directly and indirectly. A payment aggregation startup can establish thousands of jobs for young Africans working as digital agents, “Wakalas” offering financial services to final consumers promoting digital and financial inclusion. That is just one example.
- Policies and Regulations — encourage friendly policies and regulations that allow startup companies to work on their Minimum Viable Products (MVPs) and find their Product-Market-Fit (PMF). Most startups collapse before they can even contribute meaningfully to the economy. To leap benefits from the startup economy, companies need to be allowed to grow and address local markets and value chains. Otherwise, they will have paper value with minimal impact on the ground. The policies should encourage companies to establish offices and hire locally by incentivising them.
- Promoting Startup Clusters and Hubs — recognizing startup clusters and ecosystems, investing and promoting them to encourage growth, recognition, and support from strategic partners and investors. We have been promoting SiliconDar as a startup cluster “community” in Dar es Salaam to develop investors' and partners' interest in the Tanzania Startup Ecosystem. If there is a commitment from the government, these clusters can grow and fuel further growth of the startup companies to grow and create the highly needed job. If in a single cluster, 300 startups are creating 1000 indirect jobs. Those are already 300,000 jobs.
- Infrastructure and Talent Support — investing in infrastructure support, including access to high quality internet connectivity, access to low-cost shared office spaces, computing capabilities and expert services for businesses is imperative. The role of business incubators and accelerators can’t be replaced. There is a need to invest in talents providing them with the resources they need to build a great business to create the intended jobs. Exploring alternative skilling approaches for the startup economy. According to Google and IFC's joint report, the countries that are doing well in Africa’s tech startup scene also have a significant number of software engineers.
The Gig and Sharing Economy
There have been a significant number of youths promoting the gig economy in Tanzania. The number of Tanzanian youths taking part in freelancing and gig platforms is still wanting compared to other African countries. We are losing a massive opportunity as a country by not capitalizing on this opportunity. Gig platforms allow people to work remotely from anywhere, reducing the pressure for jobs locally. There are many issues with the gig and digital freelancing, but they still create highly needed jobs. Our priority should be securing the jobs first and establishing proper governance systems.
To be continued….