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Africa's emergent tech sector: It's characteristics impact on development and labour markets

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  • Lay, Jann
  • Tafese, Tevin

Abstract

This study investigates the characteristics of Africa's tech sector, its digital services, and its impact on economic development, specifically on labour markets. Our literature review and new analyses based on a database of African startups shows that Africa's emergent tech sector is adapting to the continent's constraints on development and, sometimes, contributes to overcoming them. A case in point is the credit constraints that numerous startups have overcome to attract very significant amounts of capital. Tech startups tend to be concentrated in financial services in the "Big Four": Egypt, Kenya, South Africa, and Nigeria. We show, first, that "home-grown" African platform businesses do not simply connect demand and supply, but also invest in logistics and infrastructure; second, that many tech firms offer multiple products that complement the original service; and third, that business models often rely on large networks of agents. We conclude that more evidence on the impact of digital technologies is needed.

Suggested Citation

  • Lay, Jann & Tafese, Tevin, 2023. "Africa's emergent tech sector: It's characteristics impact on development and labour markets," GIGA Working Papers 333, GIGA German Institute of Global and Area Studies.
    • Handle: RePEc:zbw:gigawp:333
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    References listed on IDEAS

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    1. Ahmad Hassan Ahmad & Christopher Green & Fei Jiang, 2020. "Mobile Money, Financial Inclusion And Development: A Review With Reference To African Experience," Journal of Economic Surveys, Wiley Blackwell, vol. 34(4), pages 753-792, September.
    2. Jonas Hjort & Jonas Poulsen, 2019. "The Arrival of Fast Internet and Employment in Africa," American Economic Review, American Economic Association, vol. 109(3), pages 1032-1079, March.
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    More about this item

    Keywords

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    JEL classification:

    • N27 - Economic History - - Financial Markets and Institutions - - - Africa; Oceania
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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