1、 2022 Boston Consulting Group1How African Cities Can Create Digital JobsOCTOBER 21,2022 By Andrew Bosson,Jan Gildemeister,Nihmal Marrie,Tolu Oyekan,and Robin GeorgeYouth unemployment is rising in Africa.To address it,governments need toidentify the most-promising digital jobs and lay the foundation

2、for theircreation.With record levels of venture capital funding,significant infrastructureinvestments,and dramatic increases in internet usage,cities across Africa arelaying the foundation to digitize their economies.As they do,a key goal ofmunicipal and other leaders is to address high unemployment

3、,particularly amongyounger people,by creating future-proof jobs.2022 Boston Consulting Group2BCG recently analyzed the economic development efforts of more than 20 cities inemerging markets around the world,each of which has capitalized on digitaltechnology to attract investment and create tens of t

4、housands of high-quality,high-paying jobs.Based on that analysis,we have identified the most promising digitalsegments that African municipal and provincial governments can focus on.Withthe right approach,cities in Africa can digitize economies,create jobs,and buildresilient societies overall.Digita

5、l Transformation as a Solution to YouthUnemploymentRising youth unemployment is a major problem in Africa.About 60%of theAfrican population is below age 25,and many African countries face a shortage ofhigh-quality jobs.Unemployment among people aged 15 to 24 across sub-SaharanAfrica increased from 1

6、2.8%in 2018 to 14.8%in 2021,according to the World Bank.The COVID-19 pandemic exacerbated the situation by depressing economicactivity,reducing household incomes,and pushing an estimated 40 million morepeople on the continent into poverty.The traditional pathway for economic development is to advanc

7、e from agricultureto manufacturing to services.But digital technology enables countries to leapfrogstraight from agriculture to services.Brazil,India,and other countries havefollowed this approach to digitize their economies,create jobs,and generatesizable macroeconomic benefits.For example,improvin

8、g broadband penetrationleads to a corresponding li in GDP and employment.Countries in Asia,SouthAmerica,and the Middle East that implemented digitization strategies improvedemployment by as much as 10%.(See Exhibit 1.)Additionally,our analysis showsthat attracting investment into the digital economy

9、 creates a virtuous cycle ofeconomic development across sectors.Countries become more productive andthus more competitive,and,in turn,drawing in even more investment to enablefurther gains.2022 Boston Consulting Group3African countries can follow this path,using digitization to create jobs in areass

10、uch as data analytics,AI and machine learning,and digital marketing.Thesedigital jobs oen pay better than traditional roles,favor younger candidates,support local economies of small-and medium-size enterprises,and are lessvulnerable to future disruptions.The signs are already positive in terms ofatt

11、racting investment,with venture capital flows into Africa hitting a record$5.2billion in 2021even during a pandemic.Cities from Cairo to Cape Town havealready taken steps to forge partnerships between the private and public sectors toaccelerate this digital transformation.Which Digital Job Clusters

12、Are the Most Relevant forAfrican Cities?One thing is clear from our study of cities that have successfully created digitaljobs:Investors look for critical mass.Rather than a scattershot approach of tryingto develop jobs in all digital realms,governments will be more successful if theyfocus their ene

13、rgies on a small number of promising areas and address thefoundational requirements needed for success.In that way,cities can develop hubsof companies in related technology fields,creating synergies in financing,2022 Boston Consulting Group4suppliers,industry-specific knowledge,and talentall reinfor

14、ced through dedicatedgovernment policies.Based on our study,we have identified five major clusters of digital jobs that areparticularly relevant for Africa:information technology outsourcing and businessprocess outsourcing,digital media,Industry 4.0(such as 3D printing),e-commerce,and a broad startu

15、p ecosystem.Exhibit 2 details the foundational requirements foreach,with some form of high-speed internet being a constant for all.Some ofthese clusters will be more relevant for certain African cities than others,based onfactors such as local education levels.Our goal with this analysis is not to p

16、rescribea specific,continentwide solution but to offer relevant examples of what hasworked elsewhere to create digital jobs.Information technology outsourcing and business process outsourcing.Thefirst cluster is business process outsourcing(BPO),including call centers,documenthandling,and IT outsour

17、cing(ITO)such as digital infrastructure management orapplication development.Governments can kick-start clusters in these areas byoutsourcing some of their own back-office functions to local ITO/BPO providers 2022 Boston Consulting Group5while developing a clear branding strategy to attract two to t

18、hree anchor clientsfrom the private sector.Notably,African ITO/BPO providers have an importantadvantage over competitors in Asia and some other markets:Africa has a minimaltime difference with potential clients in Europe.Governments can also ensure that broadband access and cybersecurity regulations

19、are in place,and they can partner with companies on skills-based developmentsuch as online accreditations,in-person skills workshops,and on-the-job training.Bangladesh set out to create an IT outsourcing cluster by offering incentives andtargeted promotions to big tech firms,starting with a pilot pa

20、rtnership with IBM.The government of Dhaka,the capital and largest city in Bangladesh,launchedcenters of excellence to accelerate innovation and strengthen the ecosystem foremerging technologies.Those efforts have now attracted multiple large ITO/BPOfirms and generated more than 20,000 jobs in Dhaka

21、.Digital media.Digital media jobs generally fall into two categories:animationand visual effects for the entertainment industry and game development for thevideogame industry.To support a digital media cluster,governments can ensurethat critical infrastructure is in place,such as 4G connectivity,and

22、 then help localproviders negotiate contracts with global media and entertainment companies(such as Disney and Fox),creating incentives for the transfer of intellectualproperty and upskilling to make the sector sustainable.City governments interested in creating digital media jobs can look to exampl

23、eslike Seoul,South Korea,which turned a former landfill into a vibrant digital mediacity with anchor multinational corporations,small-and medium-sized entities,andstartups.To build the ecosystem,the municipal government promoted Seoul as adigital media leader,provided tax incentives and real estate

24、subsidies for the firstcompanies to move in,and required animation and visual effects courses to beincluded in STEM-related degrees at local universities.Digital media businessesbased in Seoul now generate approximately$30 billion in annual revenue andhave created more than 40,000 high-quality jobs.

25、2022 Boston Consulting Group6Industry 4.0.Companies worldwide are implementing Industry 4.0 applicationssuch as 3D printing,augmented reality,autonomous robots,the Internet of Things,and simulation to improve manufacturing productivity by up to 35%.Cities inAfrica can capitalize on this trend to gro

26、w the local manufacturing industry whereit exists and create jobs by promoting smart manufacturing practices,developing aroadmap for adoption,and establishing technological standards.Governments canalso provide incentives and technical assistance,with the goal of establishing twoto three local champ

27、ions(including multinational corporations)that can show thebenefits of these applications and persuade other firms and suppliers to invest.The Hong Kong government used this approach to promote smart manufacturing.It set up a special economic zone with benefits such as free advanced labequipment,sha

28、red facilities,and consulting services in areas such as IP protection.To be clear,Hong Kong has been an established global manufacturing hub fordecades,whereas most African cities are starting from a much less maturemanufacturing base.Yet even small improvements to local facilitiessuch asequipping f

29、actory equipment with inexpensive sensorscan have adisproportionate effect on performance and give cities a competitive advantage inworking both with African industrial companies and international companies thatoperate on the continent.E-commerce.When it comes to e-commerce,Africa is about where the

30、 UnitedArab Emirates were five years ago or the US was 10 to 15 years ago.But localleaders can accelerate broader adoption by establishing coherent regulations andtax codes to allow business models that mix traditional channels and e-commerce.Governments can also use their own procurement to provide

31、 foundationalcontracts to the local e-commerce industry and invest in infrastructure to supportdigital payments,logistics,efficient export,and last-mile delivery.Taobao,which is owned by the Alibaba Group and is the leading e-commercewebsite in China,is a good example.Given the countrys large rural

32、populationand pool of emerging online entrepreneurs,Taobao has worked with localcommunities on what it calls a“Taobao Village”model.In this model,small firms 2022 Boston Consulting Group7and vendors leverage Taobaos online platform to reach customers beyond theirlocal geographic region by offering e

33、-commerce training,operational tools,andother support.Broad startup ecosystem.Last,rather than focusing on one technology segment,countries can create the right conditions for startups in all segments to thrive.Cities such as Cape Town,Lagos,and Nairobi are launching innovation hubs withan enabling

34、environment for startups across sectors to solve inherent consumer orbusiness issues with a clear path to scale.Localities looking to create jobs through astartup ecosystem can begin by putting the right connectivity infrastructure inplace(including helping small firms provide cloud services and dat

35、a centers)andstreamlining the administrative process required to launch a new business.Theycan spur tech innovation by coordinating clear regulations and standards in areassuch as payments,data and security standards,public-private API exchanges,andIP protection.For instance,to build the digital eco

36、system in Bangalore,India,the stategovernment of Karnataka,built top-quality broadband infrastructure and offeredfunding-match programs,tax reimbursements,and other direct incentives forstartups.As a result,the city has created approximately 600,000 startup jobs as of2021.Proactive Policymakers Are

37、Key to a Thriving DigitalEconomyAll five categories that we identified share a common aspect:They require thatlocal/regional governments be proactive in both the short term(attractinginvestment from the private sector)and the long term(building ecosystems thatcan address both supply and demand const

38、raints).To strike this balance,policymakers should take a systematic approach based on four steps.Identify the most suitable tech ecosystem for a given area.First,policymakersshould assess the feasibility supporting various ecosystem categories and 2022 Boston Consulting Group8Together,the four step

39、s outlined above provide a roadmap for the development ofa vibrant digital sector that opens new job opportunities,especially for Africasyouth.identify the most promising options for their local area,weighing factors suchas long-term R&D,upskilling,and living standards required to meet thedemands of

40、 employees.Policymakers can also communicate with citizens andthe private sector to understand constituent desires and developmentpriorities.Its critical to identify specific stakeholders prioritize one category(or several),while preserving the flexibility to adapt over time.Fact-findingmissions to

41、cities elsewhere that successfully applied that approach can helpidentify lessons learned.Launch quick-win measures to build momentum.Once a government has settledon a specific segment,it should identify short-term priorities to build a criticalmass.The right measures will vary by segment and by a c

42、itys uniquecircumstances.For example,a city seeking to kick-start ITO/BPO or e-commerce can revamp its procurement processes to create a flow of work tofledgling providers.Identify longer-term measures to sustain growth.Next,governments can considerthe right set of policy measures to grow the segmen

43、t and attract continuedinvestment.These measures should address all areas of the businessenvironment:market,labor/education,legal/regulatory,and enabling factorssuch as technology or trade infrastructure.Activate the specific cluster.Last,with a clear set of short-term and long-termpolicies,governme

44、nts can start to develop an implementation roadmap withdetailed policies or financial incentives and begin reaching out to relevantprivate companies to attract investment.Not all actions require significantinvestment;rather,they entail smart policy development,planning,andpartnerships.For example,ci

45、ties can partner with federal or internationalagencies such as the African Development Banks Jobs for Youth program orthe UNs African Girls Can Code initiative.2022 Boston Consulting Group9From Bangalore to Seoul,many cities around the world have used digitaltechnology as a means of developing econo

46、mies and creating jobs.African citiescan capture this opportunity as well,following the same proven playbook togenerate faster progress and increase their odds of success.The authors would like to acknowledge the Accelerated Covid-19 Economic Support(ACES)Programme funded by the United Kingdoms Fore

47、ign,Commonwealth&Development Office for support in the initial stages of research for this article.AuthorsAndrew BossonVP of Strategy and Impact at MarketForce;former Principal at BCGNairobiJan GildemeisterManaging Director&Senior PartnerJohannesburgNihmal MarrieManaging Director&PartnerJohannesburg

48、Tolu OyekanManaging Director&PartnerLagosRobin GeorgePartner and Associate DirectorLondon 2022 Boston Consulting Group10ABOUT BOSTON CONSULTING GROUPBoston Consulting Group partners with leaders in business and society to tackle theirmost important challenges and capture their greatest opportunities

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