As Sub-Saharan Africa stands on the brink of a technological transformation, the adoption of Fourth Industrial Revolution (4IR) technologies promises substantial economic growth and improved welfare. Yet, this promise comes with the potential for significant social and economic disruption, particularly the risk of widening inequality. A recent report underscores the necessity for African nations to adopt policies that encourage private investment in advanced technologies while ensuring equitable skill development and infrastructure access for the labor force.
4IR encompasses a suite of advanced technologies that blend digital, biological, and physical innovations—ranging from artificial intelligence and advanced robotics to CRISPR gene editing and the Internet of Things. Globally, these technologies are projected to create 133 million jobs in manufacturing by the end of 2022, while displacing 75 million, yielding a net gain of 58 million jobs. However, the experience of advanced economies like the U.S. reveals a significant challenge: the skill bias of technological change disproportionately affects routine and middle-skilled jobs, exacerbating income inequality.
For Sub-Saharan Africa, the challenge is even more pronounced due to the region’s high levels of informal employment, a trend likely to persist for decades. Most new labor market entrants will continue to work in low-skilled or semi-skilled positions, often in informal settings. To harness the potential of 4IR while mitigating its risks, African countries must focus on improving foundational education and digital infrastructure.
Currently, Sub-Saharan African nations allocate about 4.5% of their GDP to education, with 22% of this directed towards higher education, despite gross enrollment rates being under 10%. To effectively integrate 4IR technologies, there is a pressing need for enhanced STEM (Science, Technology, Engineering, and Mathematics) education at secondary and post-secondary levels. The African Union has proposed that member states increase their education spending by an additional 1% of GDP for this purpose. Given the current fiscal constraints, this goal necessitates robust private sector and global partnerships.
Policymakers must prioritize inclusive job creation by investing in higher quality primary and secondary education, which should encompass problem-solving and foundational digital skills. Additionally, expanding access to affordable mobile devices and internet services is crucial for empowering young people to develop their farms and businesses, thereby enhancing productivity and economic participation.
Maintaining low within-country income inequality is not only intrinsically valuable but also critical for sustaining economic growth and development. More equal societies exhibit greater political stability and resilience to external shocks, fostering a conducive environment for sustainable development. However, inequality remains a pressing issue in Sub-Saharan Africa, with five of the top ten most unequal countries globally located in the region.
To counteract the potential rise in inequality due to 4IR, African countries must implement multifaceted policies. These include incentivizing lower-cost ICT services to reach rural and underserved areas, bridging the gender gap in digital access, expanding mobile banking and fintech services, and avoiding subsidies for non-essential labor-saving technologies. Concurrently, policies should attract private investment in tertiary education to meet the growing demand for high-skilled labor.
While the transformative potential of 4IR is immense, African nations must navigate its adoption carefully. By focusing on equitable education and digital inclusion, and learning from the experiences of OECD countries, particularly the U.S., Sub-Saharan Africa can harness the benefits of 4IR technologies while promoting economic equality and sustainable growth.