Strengthening Youth Livelihoods And Enterprise Innovation In Africa’s Digital Era

This publication is the second of two to explore the findings and insights from an online global consultation, held in July 2020, exploring young Africans’ use of digital technologies in different areas in the context of the Covid-19 pandemic and beyond. More specifically, this paper discusses the topics of the second day of the consultation, when participants delved into employment in the gig economy, business and tech innovation, and financial inclusion.

Rapid technological advances are transforming the world of work, bringing both opportunities and challenges. With the Covid-19 pandemic, businesses around the world have had to accelerate digitalisation, reshape the way they are run and how they interact with the rest of the economy (GSMA, 2020). On the African continent, young people in particular are using technology to find jobs, advance their education, access financial services and become entrepreneurs.

Youth access to technology is a catalyst for a range of positive socioeconomic outcomes, including civic inclusion, a digitally literate labour force, new employment and entrepreneurship opportunities, strengthening emerging sectors and reducing youth unemployment. Young tech entrepreneurs in East Africa are coping with and adapting to the health crisis by seizing the opportunity to enhance the use of recently created apps that extend across a range of services, from linking police and ambulance services (Ntaasa emergency system app), linking market agricultural produce to markets (the Mkulima Young online marketplace) and delivering health solutions in innovative ways (Covid-19 tracing app in Uganda).

Such platforms offer huge potential for bringing increased access to fragmented and informal work. Yet, protests against Uber and other digital logistics companies across the continent indicate that these platforms also pose threats to youth livelihoods. Similarly, the surge of digital money loans and money-lending apps, while providing great access to credit to youth traditionally excluded from formal financial services, is also posing ethical concerns with regard to the levels of over indebtedness and defaulted payments.

The findings and analysis of this working paper are based on insights from an online global consultation held on 14 July 2020 on Platform4Dialogue that are presented in the text as block quotations. Over 130 participants contributed to a series of online, text-based discussions, exploring young Africans’ use of digital technologies in the context of the pandemic. Participants were selected via purposive sampling, considering the basis of their experience working with youth and digital technologies or by virtue of being young people themselves.

To provide additional insights on underexplored themes during the consultation, a closed roundtable discussion titled ‘Strengthening digital workers’ resilience, youth-led businesses and tech innovation in sub-Saharan Africa’ was hosted by ODI with support from the Mastercard Foundation on 13 April 2021. Key points raised during the roundtable are also captured in this working paper, and are illustrated by quotes from speakers and roundtable participants. This brief explores the linkages between youth livelihood and digital platforms, youth-led digitalisation and business innovation, and youth financial inclusion in the digital context.

It is part of a series on Youth and Technology and follows a first working paper based on day one of the consultation: Advancing youth-centred digital ecosystems in Africa in a post-Covid-19 world.

The first section explores how the gig economy, through the diversity of platforms, is creating mixed livelihood opportunities and the challenges gig workers face as well as the impacts of the Covid-19 on platform work. The second section explores how Covid-19 impacted business innovation and what opportunities and policies are needed to create a youth-led business sector at scale.

The third and final section looks into youth financial inclusion in the Covid-19 context and how digital technologies have and could further facilitate youth access to finance to develop their businesses.

Key findings

• The growing number and diversity of digital platforms in Africa are opening up new livelihood opportunities to the continent’s young workers. However, these might not be sufficient to meet youth employment needs. Covid-19 has boosted some sectors while eroding others that require in-person engagement. Addressing those issues will require a stronger digital and start-up ecosystem to enhance innovation and the viability of African digital platforms.

• Gig-matching and job-matching platforms offer young people flexibility, low barriers to entry into the job market and an alternative to informal employment, though job quantity often prevails over job quality. The pervasive effects of Covid-19 have exposed the urgent need for platforms and governments to provide gig workers with basic job and social protection.

• Governments could do more to build and sustain the ecosystem within which digital employment solutions can scale. This means focusing on internet connectivity, infrastructure development, digital skills and a suitable regulatory framework to facilitate innovation while managing risks. Programmes to support small and medium enterprises (SMEs), including tax relief and awareness campaigns, are other important ecosystem components.

• For young people to thrive in the digital economy and scale up their businesses, access to finance remains a key element to move to the next stage. While Covid-19 has accelerated the move to cashless transactions, financial exclusion remains a reality, especially for vulnerable groups. Financial literacy and youth-sensitive financial initiatives and services are needed to overcome these barriers.

The Youth Café has cross-published this report in partnership with the Overseas Development Institute (ODI).

The Youth Café works with young men and women around Africa as a trailblazer in advancing youth-led approaches toward achieving sustainable development, social equity, innovative solutions, community resilience and transformative change. As a thought leader, The Youth Café has published 2000+ reports, and briefs, including hundreds of peer-reviewed publications on positive youth development.

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