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How Is Technology Driving Job Creation In Poor Countries?

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As the old wisdom goes, if you lost your job you could blame two suspects: cheap labor in the developing world or computers. Of course, it is a truism that technological change causes disruption in economies, but it's a much greater step to argue that it causes unemployment; in fact, the opposite seems to be true. Technology crucially contributes to a country's market development, boosting productivity -- especially in primary industries like agriculture.

In the developing world, the pace of change may be slower than many would like but, nonetheless, there are marked examples of technology's role in raising incomes and driving employment opportunities.

It's not just the supply chain and information-based jobs spawned by technological innovation that create jobs in less developed countries. In many cases, it's the technology firms themselves that need trained IT programmers and other professionals to fill knowledge gaps and keep up with the demands of the rapidly growing economy.

In 2011, Samsung launched its Electronics Engineering Academy in South Africa, Kenya and Nigeria to open up "skilled, well-paying job opportunities" for recent high school graduates. The program is as part of Samsung's broader goal to develop 10,000 electronics engineers across Africa by 2015.

Similarly, a project called e-Ghana [PDF] has created 1,000 new jobs in the West African nation with an innovative public-private partnership designed to transform revenue collection using an electronic tax application. The project has provided financial support to a business process outsourcing facility that employs thousands of local software engineers.

In Mexico, a government-supported project called MexicoFIRST has seen the formation of a collaboration between local companies and global IT firms to help train skilled workers in the IT industry. It is expected to provide high-paying jobs for 30,000 people by the time the program finishes in 2013.

Last year, NetHope and Accenture Development Partnerships asked nearly 300 business leaders from around the world which sectors they thought had the greatest potential for growth with the aid of technology in the developing world. The majority said energy and utilities would most benefit from technologies but the consumer goods sectors and financial services followed closely in the rankings.

One of the most promising uses of technology in the developing world is called "impact sourcing," which refers to businesses employing disadvantaged individuals to perform processing tasks that require human interaction but can be performed on an outsourced basis. The market for impact sourcing was $4.5 billion in 2010, and employed 144,000 people in developing countries. It is expected to grow to $20 billion annually by 2015 and provide 780,000 jobs, according to a study commissioned by The Rockefeller Foundation.

Meanwhile, Vodafone has found that across 12 markets, new mobile solutions could increase workers' livelihoods by US$7.7 billion by 2020, while enabling a further US$30.6 billion in benefits to organizations through improved productivity.

Whether it be the career opportunities needed to support new IT systems adopted by existing industries or technologies' power to grow markets faster and create more jobs to meet demands, there is significant evidence that technology can empower developing countries.

Bitange Ndemo, honorary chair of the Alliance for Affordable Internet (A4AI) and former permanent secretary at the Ministry of Information and Communications in Kenya, believes technology will dramatically increase productivity, specifically on farms: "The moment we begin to mechanize farms, to produce more and store value, through better technology such as food dryers, people begin to understand that value can be stored. The whole supply chain is going to change...better communications in Africa will help redistribute produce like never before and create new value chains."

As ever, we must be cautiously optimistic. But we can be optimistic. Business leaders and many NGOs agree that the opportunity for poor countries to harness technology to their economic and social benefit has never been greater. If we help drive this transformation by supporting infrastructure build-outs and building local IT skills, the benefits would be immeasurable for developing and developed countries alike.

Join the debate at http://bit.ly/TechInDev or via Twitter with #techindev.

Cisco Systems has supported NetHope since its inception in 2001 with equipment, employee time, and expertise. For more information click here.

 
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