Biases in entrepreneurship and industrial policy in Africa

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By Wim Naudé, Professor in Business and Entrepreneurship in Emerging Markets, Maastricht University, Dean of the Maastricht School of Management, The Netherlands, and Research Fellow at the IZA Institute for Labor Economics, Bonn, Germany


Learn more about this timely topic at the upcoming
17th International Economic Forum on Africa
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shutterstock_415121221.jpgAfrica has failed to industrialise. At the same time, millions of young people are seeking jobs. Put one-and-one together and the answer seems to be that if these labour market entrants become entrepreneurs in industry then they can in one stroke create jobs and help Africa industrialise. Yet, optimising the nexus between entrepreneurship and industrialisation requires overcoming some vexing policy biases. These can be categorised as biases of over-estimation and biases of under-estimation.

First, industrialisation’s job-creation potential is often over-estimated. The world is in a Fourth Industrial Revolution (4IR) driven by technologies such as the Internet of Things, automation, additive manufacturing and big data analytics (see Naudé, 2017). These technologies are causing the loss of low-skilled routine jobs, of which Africa has a disproportionate share. It’s estimated that up to 66% of all jobs in developing countries are at risk. Relatively poor African countries such as Ethiopia are at a particular risk of having around 44% of current jobs susceptible to automation. The 4IR is furthermore leading to a ‘re-shoring’ of manufacturing back to advanced economies. This is to the detriment of low-wage labor in African and other developing countries. As Culey (2012) points out: How important is low-cost labor when you don’t actually need labor?
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Infrastructure, jobs, good governance: Bringing Africans’ priorities to the G20 table

By Michael Bratton, University Distinguished Professor of Political Science and African Studies at Michigan State University and senior adviser to Afrobarometer, and E. Gyimah-Boadi, Executive Director of Afrobarometer and the Ghana Center for Democratic Development

 

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Beyond the limelight and the headlines, the recent Group of 20 (G20) summit accomplished an important piece of business by launching the Compact with Africa. The next step is crucial: negotiating the priorities that the compact will address.

One key concept is that the compact is with – rather than for – Africa, implying that it will rely on true partnerships to pursue mutually agreed-upon goals.

With its contribution to a “20 Solutions” document presented to the G20 by a consortium of think tanks, the pan-African research network Afrobarometer is working to ensure that the compact will take into account what ordinary Africans say they want and need.

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Reimagining job-oriented education to give youth the chance of a better future

 By Mariana Costa, Co-founder and CEO of Laboratoria


 To find out more on youth and inclusive development, go to the 2017 International Economic Forum on Latin America and the Caribbean website


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Laboratoria graduates. Photo credit: the Laboratoria website

Receiving quality higher education in Latin America is still a privilege, with two-thirds of youth in the region lacking advanced technical, professional and management skills. Despite their limited access, acquiring these valuable skills is still the main vehicle to a career. The consequences are not minor. According to OECD data, 21% of youth are not working or studying, and another 19% are working in the informal economy. All of them face limited opportunities to fulfil or even discover their potential. A better way must be found to give the region’s young talent a path to professional growth.

A few years ago, I started a web development company in Lima, Peru. In the process of building our team of software developers, my partners and I discovered what appeared to be a loophole in the system. Most of these coding professionals, making competitive salaries and facing endless opportunities for career growth, did not have a fancy degree from a renowned university. They were self-taught developers, university dropouts or computer engineering graduates from obscure technical institutes. Despite the lack of a degree, they were doing great. And they were not the only ones. According to Stack Overflow’s 2016 survey, 56% of developers do not have a college degree in computer science or related fields. In tech, the key to a high paying job often has more to do with what you can build than where you studied.

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Youth Employment and Inclusive Growth: Part of the same coin in Cambodia

By Emmanuel Asomba, Development Policy Researcher, and Ji-Yeun Rim, Youth Inclusion Project Co-ordinator, OECD Development Centre

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Courtesy ©UNV Cambodia May 31, 2016

Some countries in the South Asia and Pacific region are experiencing a rapid increase in the number of working-age people. This will create some opportunities as it will contribute to reducing the dependency ratio and increasing the possibilities for social cohesion policies. But if these people fail to find decent jobs, then per capita income may slow down. With less income, people face lower living standards and difficulties accumulating capital and assets. For young people, these changes potentially bring significant challenges. Take, for example, youth in Cambodia.

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Little changes for women entrepreneurs in Africa unless mindsets and policies change

By Mike Herrington, Executive Director, GEM Global


Explore this topic further with the upcoming launch of the
2017 African Economic Outlook: Entrepreneurship and Industrialisation in Africa.
Stay tuned for details.


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Women selling eggs in Kigali, Rwanda

In the last decade, most countries in Africa underwent radical transformation, increased their GDP per capita and moved towards globalisation. Just look at Botswana where GDP per capita increased from USD 7 136 in 2013 to USD 7 505 in 2014, or Cameroon that saw an increase from USD 1 271 to USD 1 405, or Nigeria that experienced a jump from USD 1 692 to USD 3298 during the same period.1 

 However, to move closer to achieving the Sustainable Development Goals by 2030, the continent needs to change the mindset of people and pursue policies to boost the development of small, medium and micro-sized enterprises (SMMEs) to help reduce poverty and unemployment, particularly in sub-Saharan Africa.
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Girls robbed of their childhood in the Sahel

By Laurent Bossard, Director, Sahel and West Africa Club Secretariat (SWAC/OECD)

In Mali, Niger and Chad, 40% of children under five suffer from stunting. These children do not receive enough nutrients. Their bodies — their brains, bones and muscles — do not get enough calcium, iron or zinc or enough vitamins (A, B2, B12 etc.), so they do not have enough energy to grow and develop. Many of these children will suffer from chronic diseases and will have cognitive problems — so they won’t be able to go to school for long, if at all. As adults, they will have little chance to flourish and, secondarily, will have low economic productivity. Many will also die very young, often before turning five.

In these countries, at least 100 children out of every thousand die before reaching the age of five. That’s 10 times more than in Sri Lanka, 20 times more than in Canada and 50 times more than in Luxembourg. Why are these children dying and why are they doomed to a hopeless future?  Continue reading

Changing social norms through entertainment education: the case of a soap opera in India

By Poonam Muttreja, Executive Director, Population Foundation of India

 

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A promotional activity is held for Main Kuch Bhi Kar Sakti Hoon, in Bhourikala Village, India’s state of Madhya Pradesh

“You forced me into marriage. I wanted to study.”
“What difference is that gonna make! Are you going to be the Prime Minister?”
“Yes. I will become the Prime Minister.”

This powerful exchange between key characters in a soap opera demonstrates reel life emulating real life.
In 2011, the Population Foundation of India (PFI) set out to use the soap opera Main Kuch Bhi Kar Sakti Hoon (MKBKSH) or I, A Woman, Can Achieve Anything as the centre of a transmedia initiative that leverages the power of entertainment education to change social norms. At the heart of the soap opera are the struggles and triumphs of Sneha, a doctor working in Mumbai, as she journeys from the city to her village, emotionally torn between family and society, between professional aspirations and personal commitment.

But why pursue entertainment education and what has been the experience?

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