How economic recovery could drive digital technologies uptake

The Covid-19 pandemic saw an increase in awareness of the importance and role of digital technologies, with many Sub-Saharan African countries attempting to use the opportunity to create conditions for new, better and inclusive jobs. In their latest release of Africa’s Pulse, the World Bank noted that as the region looks ahead to economic recovery, digital technology not only has the potential to create new jobs, but can also help boost the productivity of existing ones. The report themed: The Future of Work in Africa: Emerging Trends in Digital Technology Adoption, also noted that digital technologies were tested and proven during the pandemic making a case for increased uptake across the continent. Going forward, the bank said that they expect increased uptake and usage across the continent leading to new trade and employment opportunities. “I am convinced of the power of digital to transform the future of Africa, and we applaud countries that are already making necessary investments and innovative reforms. This will not only create new jobs, but improve the jobs people already have, and allow more people to work, earn, and provide for their families and communities,” said Hafez Ghanem, World Bank Vice President for Eastern and Southern Africa. To harness the full potential of the digital technologies and to take advantage of the energy and ideas of a young, dynamic population, the report recommends that African governments, development partners and the private sector prioritise digital infrastructure, invest in science, technology, engineering and math (STEM) skills and enhance the skills of workers to advance human capital. “For the continent to leapfrog and to make the digital economy more inclusive, it will require actionable policies in place to ensure fast, affordable, and reliable connectivity. This will be key to boost productivity and improve employment and wages for both women and men in the formal and informal sector. As countries move forward, jobs, digital connectivity, and skills will need to be at the center of policy action and private sector response,” said Ousmane Diagana, World Bank Vice President Western and Central Africa. The report notes that employment among informal firms using digital management solutions was 1.6 times that of nonusers. Additionally, the average wage of firms using digital transaction technologies was 1.5 to 2.4 times that of nonusers. Of the Sub-Saharan African firms surveyed in 18 countries, the report reveals that 22% either started or increased their use of digital platforms, social media, and the internet in response to the pandemic. Seventeen percent of the firms invested in new equipment, software, or digital solutions. The report also shows that firms in sectors with a greater share of tasks/jobs that can be performed from home were more likely to have increased their use of digital platforms in their businesses. For example, Sub-Saharan African firms in financial and ICT services were the most likely to use of digital platforms in response to the pandemic shock (40 and 39%, respectively). More than one-quarter of the firms in retail and wholesale trade started or increased their use of digital platforms. The growth was particularly notable for e-commerce. For example, the African platform Jumia saw an increase of more than 50%, from 3.1 million to 4.7 million, in the volume of transactions during the first six months of 2020, compared with the same period in 2019. Empirical studies assess internet readiness along five dimensions: national ICT strategy, business environment, infrastructure, financial capital, and ICT skills base. The Pulse projected that the Covid-19-induced recession is less severe than earlier anticipated, with economic activity contracting by 2.0% in 2020 mainly due to slower spread of the virus and lower Covid-19 mortality, strong agricultural growth and faster than expected recovery in commodity prices.

News

How economic recovery could drive digital technologies uptake