Of digital revolution and future of work post-Covid

Thursday, June 3rd, 2021 00:00 |
Covid-19 vaccine.

Lucy J Mandago 

The digital revolution is transforming industries and changing the nature of work across the world, including in Sub-Saharan Africa.

Amid this ongoing change, there are fears automation and other digital innovations will lead to large-scale job displacement in manufacturing, retail services and other industries.

Without employment providing a structure in people’s lives and with technology replacing many human activities, our societies will likely shift towards more individualistic entities with less human interaction.

In developing countries such as Kenya — where a large share of the labour force is in informal sector — there are fears automation could close the traditional industrial pathway to economic transformation through low-wage factory employment.

Across low, middle, and high-income countries, digital solutions have allowed fortunate workers in some industries to quickly adapt to working from home during the Covid-19 pandemic. What will be the future of work in Kenya?

The reality for Kenya is rather complex but is likely to be more positive going forward.

According to the World Bank Development Report 2019, Africa has the potential to take advantage of the digital revolution in varied ways.

To begin with, African countries have a smaller manufacturing base, at less than 10 per cent of gross domestic product (GDP), than other regions.

Therefore, automation is not likely to instantly replace as many jobs as in more industrialised regions of the world; even though ‘robotisation’ in other countries could slow down local job opportunities. 

Innovations in digital financial services and logistics are proving a game changer in the region.

Mobile technologies are allowing young entrepreneurs to use various digital platforms to access larger markets.

Of course, the risk of large sections of the poor, the low-skilled and the uneducated being left behind in a digital divide looms large as more than 60 per cent of the labour force is made up of ill-equipped adults and almost 90 per cent of total employment is in the informal sector.

To harness the full potential of digital technologies, the government and other crucial stakeholders, including the private sector and development partners, should prioritise investments in several key areas.

These priorities are even more important as the government addresses the humanitarian, economic and social implications of the Covid-19 pandemic and sets the foundations for the needed recovery afterward. 

The first priority is to improve availability of digital technologies to increase the productivity of workers and businesses.

It will be important to close the gap in digital infrastructure by enhancing affordable broadband access with improved regulatory frameworks.

Secondly, boosting human capital is crucial to enable broader participation of all segments of the population in the digital economy.

This, ideally, ought to complement increased investments in early childhood education and health care service delivery. Investments in digital infrastructure and solutions, facilities and personnel for health and education are even more consequential as the country adjusts to Covid-19 and develops resilience to possible future pandemics. 

The third priority is to create a business environment that helps increase the productivity and upgrade the skills of informal businesses and workers, including by leveraging worker-enhancing digital solutions for low-skilled workers.

This is a more effective approach to addressing informality than an exclusive focus on formalisation policies. 

Although much of the business focus during the relief period of the Covid-related health crisis needs to protect existing formal sector jobs and the incomes of informal workers, a better business environment coupled with support of new, more productive investments in technology adoption will be needed to create and sustain the foundations of future growth recovery and prosperity. 

Finally, Kenya should expand social protection systems to help workers manage risks in the economy in the changing world of work.

Increasing investments in social protection will entail greater efforts both to mobilise revenue from domestic sources and to improve the efficiency of current social expenditures.

The strategy of expanding social protection systems and strengthening their governance is even more critical in light of the Covid crisis as it will ensure livelihoods are protected and support the entrepreneurial risk-taking needed to underpin the vibrant recovery moving forward. 

The challenge of creating better and inclusive jobs for Kenyans is not in doubt. In this daunting task for policymakers and businesses, the digital revolution presents vast opportunities and risks.

The task will be even more daunting in a post-Covid world though if there is a silver lining, it may be linked to broader and more effective use of digital solutions.  -  The writer is the Group Head, HR & Administration at CPF Financial Services

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