Inclusion, inequality, and the Fourth Industrial Revolution (4IR) in Africa

Adoption of Fourth-Industrial-Revolution (4IR) Technologies Sub-Saharan Africa can bring not only substantial economic growth and welfare benefits, but also social and economic disruption, including widespread inequality if countervailing policies are not adopted, as discussed in our recent report, With a higher share of the labor force working informally-a trend expected to continue for several decadesAfrica’s education and industrial policies need to strike a balance between encouraging the private investment needed to create new formal jobs using advanced technology, and ensuring that all new labor force entrants have adequate livelihoods Has basic skills and infrastructure.

It’s enough written About the current and potentially disruptive impacts in advanced economies, about the suite of new technologies called the Fourth Industrial Revolution (4IR) – a group of technologies that drive digital, biological and physical innovation in applications such as advanced robotics using artificial intelligence. fuses CRISPR, digital gene editing, and a network of sensors and computers called the Internet of Things. Studies Estimated He Globally in manufacturing alone, 4IR technologies could create 133 million jobs by the end of 2022But displaces 75 million jobs, leading to a net gain of 58 million jobs.

Researchers have demonstrated that the U.S. The skill-bias of technological change in the manufacturing sector disproportionately affected regular and medium-skilled occupations, creating inequalities of opportunities, earnings and income between low and highly educated workers, and increasing the tendency of inequality. Although researchers It also argues that economic policies over the past decade could have controlled these effects rather than amplifying them.

Despite this experience, due to skill bias of 4IR technologies recommendations, from international finance institutions and private think tanks, that African countries should take urgent steps to build more high-level STEM skills into their future workforce. While there is no doubt that Africa will have to continue to upgrade the skills of its future labor force, the question is, how should this upgrade be systematically and equitably financed?

Countries in sub-Saharan Africa already spend approx. Education accounts for 4.5 percent of their GDP (including both public and private spending), but in many countries, the education system is often inadequate to meet the needs of current students., much less for those entering the system. Of the total education spending, 1 percent of GDP (22 percent of the total) goes to higher education, with gross enrollment less than 10 percent. The African Union is suggesting that member states spend other 1 percent of GDP on developing STEM skills at secondary and post-secondary levels. In today’s financial environment there will be private sector and global partnerships the wanted,

Rapidly expanding labor supply and structural change suggest challenges Most newcomers to the labor force will find work as low-skilled or semi-skilled workers or to work for themselves and their families (on farms or in informal micro-enterprises); They will not work as software developers or digital engineers. To be more productive, these youth need (i) better access to high-quality primary and secondary education, which includes problem solving and the development of foundational digital and STEM skills, and (ii) affordable mobile phones and tablets, Mobile Internet, and digital services to grow your farms and businesses. Providing an inclusive job creation platform for these workers through public investment in basic skills and internet access should remain a spending priority for governments.

Low income inequality within a country is not the only intrinsically desirable economic characteristic; It helps to support economic growth and development in various ways. More equal countries are more politically stable, less likely to weaken or erupt in violence or civil conflict. They also show greater resilience in outdoor situations tremors, Leaving large sections of the population behind actually undermines future economic growth by fueling aggregate demand capacity and the growing consumer appetite of a growing middle class, while reducing the support for public investment needed to sustain growth.

Inequality is on the rise in many sub-Saharan Africa countries, Five of the top ten most unequal countries in the world are in sub-Saharan Africa. Africa cannot afford technology to accelerate this trend. Policies to prevent or reduce inequality include action across all sectors and policy domains, and ensuring equitable access to quality education and other human capital development services is a good start. Other policies and programs needed To counteract potential increases in inequality in the 4IR context, these include:

1. Encouraging the provision of low-cost ICT services, so that they reach homes and businesses outside capital cities (by expanding the coverage of the energy grid.)
2. Additional policies to reduce the gender gap in access and use of mobile phone and Internet services.
3. Continuing to expand the coverage of mobile banking and other fintech services, including the development of interoperable payment systems within countries and across the continent.
4. Avoiding the temptation to subsidize the adoption of non-essential labor-saving technologies in the private sector.

Meanwhile, aggressive policies to attract more Personal Investment in tertiary education will be important to meet the anticipated needs of highly skilled workers.

The experience of OECD countries, particularly the US, shows that 4IR technology is not an inherently benign transformation agent. Uneven employment and earnings results have been observed. African countries should and should not avoid 4IR technology, given its potential to accelerate economic transformation in Africa. However, countries should also consider their options for increasing inclusion, especially in countries where inequality levels are already high. Some factors—such as labor savings, the skill bias of these technologies—are beyond the control of African countries. But economic policies can still direct economic growth toward greater equity.

want to know more? Tune in to Lewis and Landry’s webinar on the Brookings Africa Growth Initiative Monday September 26, 2022 @ 11:00am-12:15pm ET (GMT-5), register here