JOBS OF THE FUTURE IN GHANA, INCREASING DIGITAL ECONOMY’S CONTRIBUTION TO GHANA’S GDP FROM 2.4% TO 10.2%

Author: Augustine Blay, President of Lead One Africa

Date: June 18, 2016

On March 31, 2016, Dr. Mahamudu Bawumia, the 2016 running mate of the NPP, outlined a ten-point plan for solving unemployment in Ghana. The first item on the plan is to formalize the Ghanaian economy. Key to that is the establishment of an identity management system across all sectors of the economy as well as the promulgation of a data revolution across the country. According to the UN, a data revolution must fuse all internal and external data sources about a country. This fusion usually reveals hidden patterns in the data, improves accuracy of statistics about a country, and promotes open access to the data. It has the secondary effect of ensuring that (a) policy decisions are evidence based and (b) the progress and impact of policy implementation is efficiently tracked.

Data Revolution - The Core of Job Growth in a Digital Economy

Data revolution has been at the forefront of technology innovation and job creation; in other words the new digital economy revolves around the data revolution. A digital economy is essentially defined as a global network of new economic activities enabled by technology and data. This new economy has opened a wide horizon of possibilities that were unknown or unthinkable before. For example, e-commerce, data centers, computer games, voice over IP communication, etc.

The Physical and the Virtual World

To effectively leverage these possibilities, one must understand the engine that drove the industrial revolution. The industrial revolution started with a drive to virtualize as many physical economic activities and commodities as possible. For example, physical activities were replaced with machines that virtualized the energy expensed by workers, such as the invention of the steam engine, cotton gin, sewing machine, light bulbs, telephone, etc. As a result, governments and entrepreneurs identified two distinct worlds at both ends of a continuum of automation: Physical World and Virtual World. For centuries, developed countries have leveraged the automation economy and have grown their economy exponentially. These economies were able to do so because they understood that the materials needed to bridge the physical and virtual world consisted largely of information, information life cycle, and the full description of the processes that support information flow.

The Social World

It must be noted that the proliferation of technology has practically removed physical barriers and barriers of distance that separate relationship, communication, and socialization between individuals. Contrary to predictions, the removal of these barriers has rather increased socialization in a global village. In addition to the continuum between the physical and virtual worlds that continue to create millions of jobs, socialization adds two more continuums that exponentially increases the opportunities for digital entrepreneurs: a continuum between the physical and the social worlds and a continuum between the social and virtual worlds.

Automation Gaps

Just like the industrial revolution leveraged the gap between the physical and the virtuals to grow economies, digital economies are leveraging the three gaps between the physical, virtual, and social worlds. Digital entrepreneurs are expanding the frontier of digital economy by colonizing social activities while valorising several human interactions. Companies such as Facebook, Twitter, and many more were built purely upon the basis of valorising human interactions. This digital economy presents a new paradigm shift for Ghana. It will shape the destiny and culture of the current generation and generation to come, and provide employment opportunities for them.

Can the Digital Economy contribute 10.2% to GDP in 5 years?

Similar to the traditional economy, digital economies have the same constraints of resource scarcity. The extent to which resource scarcity can be addressed depends on the political will to expand the frontiers of virtualization and automation. Secondly, like an assembly line in a traditional economy, breaking the production and consumption life cycle of the virtual commodities into discreet steps reveals enormous opportunities for digital capitalization. These two observations alone multiply the opportunities for expanding the economy provided leaders have the political will to do so.

When the political will converges with the surge to valorise socialisation and create more virtual commodity, digital economies impact GDP growth in two ways: (a) direct digital capital investment, and (b) multiplying effect on the productivity in the other sectors of the GDP. This makes digital economy a new phenomenon that can no longer be ignored or seen as a fringe to an economy.

Ghana’s GDP has three main contributing sectors: agriculture, industry, and services. Agriculture contributes 19%, industry contributes 26.9%, and services sector contributes 54.1%. Each of these sectors have subsectors. Agriculture has 4 sub sectors, industry has 5, while services has 10 sub sectors. Information and communication services contribute only 2.4% to the total GDP of the country. Considering the investment in technology and the multiplying factors associated with this sector, we must embrace the bold idea of making the Digital Economy sector one of the key contributing sectors of the total GDP of Ghana, and increase its contribution to GDP from 2.4% to 10.2% over the course of five years.

According the McKinsey report, increasing mobile phone penetration and internet usage could account for 10% or $300 billion of the GDP of Africa by 2025. Ghana can achieve this if the right political leadership and will exists.  Let’s take the example of Senegal. Senegal has a GDP of 15 billion, a population of 15.1 million and a land area about the same size as Ghana. It’s Digital Economy, however, contributes about 3.3% annually to the Senegal’s GDP. In contrast, Ghana’s internet GDP stands at 1.1% annually, in spite of a 38 billion GDP and a population of 26 million. There’s clearly an opportunity for Ghana Digital Economy to catch up to the Senegalese and even surpass it. Expected population boom, increasing number of young tech-savvy Africans and the data revolution will drive this GDP growth.

What are the sub sectors of a Digital Economy?

When looking at the different avenues of increasing the contribution of the digital economy to the GDP, we must understand the inner workings of its subsectors. The subsectors of a digital economy sector will consist of three main areas:

1. Mainstream - the fusion of disparate data sources about the country
2. DownStream - software and solutions associated with the massaging and conversion of the data sources in the data revolution to meet new demands.
3. Upstream - data centers and infrastructures associated with the creation, storage, processing, and accessing the data revolution.

Each of these subsectors that creates several opportunities for jobs, economic stability and the prosperity of Ghana.

Mainstream - The Fusion of Identity Systems

The mainstream sector drives the establishment of shared databases that remove redundancies and duplication of efforts. There are various types of databases that can be fused into one for maximum value. For this article, I will use identity management databases as an example. As Dr Bawumia stated, it is not just about mentioning ICT in speeches but the political will to establish an identity management system must first exist. Across the country, the government maintains separate databases on identity of Ghanaians: Passport Office, Department of Motor Vehicles, Voters Register, West Africa Examination Council, Birth and Death Registry, Social Security and National Insurance Trust, National Health Insurance Authority, Immigration Office, etc. The continuous maintenance of these similar databases by separate government institutions are costly to the taxpayers and highly inefficient. Not only are there several opportunities to consolidate personal identity management databases, there are also several databases that track the identity of vehicles that must also be fused. Ghana Port and Authority, Department of Motor Vehicle, Police Department, etc. and the list goes on for the thousands of job creation opportunities associated with this data revolution (mainstream) sub-sector of the proposed digital economy.

Thousands of jobs that will be created around the streamlining of the myriads of identity databases are: architects, analysts, administrators, data scientists, infographic designers, statisticians, quality assurance analysts, engineers, cyber security. While fusing the disparate data sources, other jobs related to the establishment of data exchange protocols and data transfer mechanisms will need to be establish. Data privacy and data retention laws of the country will need to be modified or established to enforce the security and exchange mechanism. This will also create several jobs in the legal profession.

While governments spend billion of dollars every year building infrastructure such as roads, schools, hospitals, etc. The leaders must have the strong political will to see data as the new natural resources upon which the digital economy reposes. A case in point is the current discourse on the voters register. The Supreme Court of Ghana did not have to intervene in this matter if, as a country, we saw accurate data as a key infrastructure for our development. I have the 1971 voter's registration card of my dad. It has his full name, date of birth, polling station name, his address, picture, thumb print, and his signature. 45 years later, we are still struggling with data and information that Ghana started capturing way before 1971. The point here is that we must not pay lip services to using ICT for our development. We must join the data revolution bandwagon that Dr Mahamudu Bawumia is talking about.

Finally, the availability of this database will create many opportunities for our students who excel in mathematics. Mathematics and statistics have been the underlying factor in making sound and logical decisions for centuries. Traditionally, our students who excel in mathematics have had no concrete avenue for using their mathematical prowess in the country after they graduate from school. They were practically limited to becoming a teacher or taking up a profession in sectors outside of their expertise. The bold initiative for a data revolution and the increasing availability of accurate data means that data must become the gold mine of the economy. These mathematicians and statisticians will then be the gold miners of the data revolution. They are able to use algorithms to mine opportunities and discover patterns and trends in the data that are critical for sound decision making and the economy at large. Decision making will be based on the analyzed data instead of the frequently wrong opinions of executives and/or cultural biases that exist in society.

This is a large undertaking that requires an incremental approach. Jobs created in this initiative will be long term and fall in the category of the gift that keeps giving. The truth is that data is available, a political will and a new attitude towards data mining is needed in order to unlock the many jobs that will be created. Government must therefore create the right framework that will facilitate the availability of the data mine.

Downstream - Data Massaging and Conversion

Now that the mainstream sub sector is defined and established, let us discuss the downstream job creation opportunities of digital economy sector that will grow Ghana’s GDP. The downstream sector is focused on the conversion and transformation of data to meet various economic needs. This information contained in the data revolution goes through a life cycle that has several stages: from creation, storage, processing, transformation, distribution, consumption, and archiving. The detailed description of the sub processes that support each state of the information life cycle serves as huge opportunity for innovation and automation. A new breed of digital entrepreneurs will rise to create an ecosystem of new solutions based on new concepts, new content, and new online markets for businesses, governments, non-profits, churches, and consumers. As a result of the data revolution, additional thousands of jobs will be created.

There are three types of industries that will be positively impacted by the downstream sector of the digital economy:

1. Industries that depend on information processing to improve their efficiency and productivity
2. Industries that can not survive or produce anything without information technology. Example of such jobs are Facebook, Twitter, Airbnb, LinkedIn etc.
3. Industries that depend on the aggregation information of individuals and their social interactions.

Growth in the industries above will be driven by the following sub sectors of the digital economy: Big Data, ecommerce, gamification, cyber security, knowledge management, social networks, educational system, e-government, Business to Business (B2B) and Internet of Things (IoT).

1. Ecommerce refers to the electronic buying and selling of products and services. In the same fashions as the traditional markets, government must create the right legal, policy, and monetary framework for e commerce to thrive. For ecommerce to flourish, the house-to-house delivery and electronic payment systems must improve. Laws surrounding online trading, online commerce, and piracy will also have to be strengthened.
2. Gamification is the application of digital game-design elements to encourage engagement with a product or service to solve non-gaming problems. Africa has a unique culture, population growth, and challenges. Growth in gamification will help simulate several scenarios before policy decisions are made. Along side of this simulation initiatives, is the drive to grow the gaming industry of Ghana. Several hundreds of jobs will be created in this subsector alone.
3. Social networks are platforms built for the electronic social interaction and communication between two or more users such as posting information, comments, likes, messages etc. The success of Twitter and Facebook in countries with individualistic culture implies that social network provides a great opportunity for collectivistic countries such as Ghana. These social networks challenge the traditional notion of authorship. In the traditional definition of authorship, individual’s work is owned, valorised, and maintained by them. In the context of social networks, individual’s digital interactions, thoughts, and works are stored and shared with others. Companies such as Facebook and Twitter valorise these interactions without giving back to the original author. In the process they have created a new economy and new paradigm of job creation. A paradigm that perfectly fits the collectivistic culture of Ghana. With the rise of social authorship comes the inability to consistently validate the source and accuracy of information in social networks. This also creates another opportunity for jobs related to a clearing house or mechanism for validating claims and influence the knowledge network. Again, we can not overstretch the importance of the political will of our leaders.
4. E-Government involves the use of information and communication technologies to improve the delivery of public sector activities and services. This article is built upon the premise of data revolution. Once several identity data sources are fused into one, several opportunities exists for the government to be more efficient in service delivery, tax collection, and increase citizen’s confidence in the government. This provides new opportunities to have a smart government with smart employees and supported by smart citizens.
5. Knowledge Management is the process of identifying, capturing, developing and sharing knowledge, information and resources within an organisation. A whole new paradigm opens on how to quickly identify experts in the country in specific areas which in turn will add competitive advantage and spur innovation.
6. Cyber Security refers to the protection of the hardware and software, information on them and services they provide from theft, damage, misdirection or disruption. This is the dark side of the digital economy. As we look to mine data and information to influence policy making, we must also recognize the need to increase resources required to address the increasing number of cyber attacks and the thriving black market for stolen data and malware. Accompanying the traditional security services, thousands of jobs around cyber security will be created. As the economy moves to recognize technology as a sector of the economy, cyber security skills and capabilities must be built in the private sector as well as in the educational services. Companies or countries that choose to ignore the threat of cyber security do so at their own risk. With the rapid permeation of tablets, mobile devices, and laptops in the population, the government can not take the approach of limiting the capacity building to only the security forces. This creates an additional thousands of jobs related to technology.
7. Educational System pertains to formal public schooling from primary through to secondary levels. Similar to the mainstream, making digital economy a contributor of the GDP requires a political will of the leaders. The focus of the government in the school and educational system has been mostly about the distribution of laptops and construction and assembly of computing facilities. By the time the laptops are purchased, distributed and used, the technology in the laptops are almost obsolete. Integrating technology in our curriculum involves more than just knowing how to use Microsoft Office, Chrome, WhatsApp, or watching Netflix. We must integrate logic, coding, and system thinking right starting from our elementary schools. Teaching children at very young age with these curriculums will help them develop solutions that are practical to their day to day activities. This will create a new breed of young entrepreneurs in the likes of Bill Gates, Zuckerberg, and Steve Jobs. Their success was largely due to their early exposure to the building blocks needed to solve problems. With technology, all that you need is a laptop, a coding framework, and an idea.
   Educational institutions must develop curriculums that support the data revolution and the expected ecosystems that grow around it. Then, schools must educate and train the workforce to take up the myriad of jobs that will be created in the digital economy. As we train our young ones to pick up the challenges of making digital economy a major contributor of the economy, we build the necessary technological human capital needed to support similar efforts around the world. This again is a win-win proposition. Train, execute, and share the experience for economic growth of the country.
8. Business-to-Business (B2B) relates to commercial transactions that exists between wholesalers, manufacturers and retailers, but not consumers/customers. Combining B2B and eCommerce allows room for expansion, collaboration and innovation, once again opening the doors to more job opportunities.
9. Internet of Things (IoT) refers to the network connectivity of everyday objects such as freezers, cards, air conditioners, alarm systems etc.  IoT enables data exchange between these devices without human intervention. With the increase in the second hand devices in the country, this IoT provides an opportunity for economic growth.

The mainstream and the downstream sub sectors of the digital revolution will perpetually create new data that must be displayed, transmitted, stored, and archived on hardware. In a nutshell both sectors will create thousands of job opportunity in the technology service providers space, education space, as well as in the public sector. Several sector of the traditional economy will be impacted therefore strong and credible leadership with a political will to make a difference is critical.

Upstream - Data Creation, Storage, Processing and Access

The upstream sector consists of jobs related to the creation and maintenance of technology infrastructure such as hardware, processors, operating systems, telecommunication, and network equipments. The upstream sectors of the digital economy contribute directly to the macroeconomic growth in sectors such as investment in digital equipments, data centers, softwares, and businesses. The upstream job growth also includes the building of datacenters and the establishment of physical and virtual security protocols to limit access to the facilities to only authorized personnel. The importance of this subsector is driven by household consumption of digital devices such as laptops, smartphones, tablets as well as private investment and public spending on digital infrastructure.

Even though storage technology changes over time, the data objects stored on these technologies do not degrade over time. The longevity of the data objects depend on the continued availability of contemporary media through which digital objects can still be consumed. The persistence of old digital objects creates another job opportunity that focus on the transformation of digital works from one medium to more contemporary media. The second job functions associated with the longevity of digital object is the continuous maintenance of the old technology.

After declaring the mainframe on life support in the mid 1990s, there were, and still are, engineers that continue to maintain mainframe technologies services. The tangential jobs associated with the longevity of digital object is the need to record, archive, and display the progress of technology in the country. The creation of a museum associated with the arrival and evolution of technology in the country will definitely serve as a source of inspiration and education for the students. Finally, the presumed immortality of digital objects require statutory ownership, patents, and copyright laws need to be revised accordingly.

With the expected exponential growth of data and the associated opportunities for thousands jobs, the government must put in place policies to grow the technology manufacturing base of the country. Out of a population of 24 million, the current penetration of mobile phones in Ghana stands at 120%. That is about 30 million devices in circulation. On average mobile phone users change phones every 5 years. There is clearly a demand for mobile phones. In order to maximize the opportunities that data revolution brings to the country, the government must provide the right tax incentives, energy policies, and labor laws that will encourage the establishment of at least two major mobile phone manufacturers in the country. The combination of the right incentive and competition will make smart mobile phones affordable for the average Ghanaian. The availability of a smart mobile phone to the average Ghanaians will force the rapid growth of other data sets and will also force the telecommunication companies to upgrade their infrastructure for speed and reliability.

In Conclusion

It must be noted that the mainstream, downstream, and upstream jobs associated with the data revolution are in addition to the existing ICT related jobs that seek to make organizations more efficient by increasing performance through process improvement. These existing ICT jobs seek to reduce administrative costs, transaction costs, increase well being at work and make employees more productive. To ensure that organizations stay up to date with the data revolution, each organization must have a Chief Information Officer whose role will be to participate in the data revolution effort and also identify ways to leverage the identity data for the benefit of his or her organization. We must challenge our technologist beyond just purchasing and distributing laptops or tablets but rather identify cost cutting or profit making initiatives. We must become a technology country, with technology cities and technology organizations with a license to operate a business or improve the lives of our people.

We must not just sing and talk about ICT, we must recognize it as a strategic sector with a weight that is substantial to economic growth. Currently, Information Technology does not register as a contributor of the GDP. Current contributors are agriculture, manufacturing, industries, government services, etc. This must change and requires the right kind of leadership with a focus on the multiplying factors of the ICT.

In terms of direct employment, digital economy must employ 10% of the workforce and creates almost equivalent indirect jobs in the activities related to the user sectors of the digital goods and services. We should expect the growth of online transactions and Business to Business (B2B) transactions. Consumers will enjoy gains in purchasing power through lower prices online and access to free online services.

As African countries continue to trade among themselves, Ghana can significantly increase its trade surplus if it takes leadership in the data revolution. Ghana increases its surplus by increasing its production of virtual commodities (from the mainstream, upstream, and downstream of its digital economy) that can easily be exported and used in other African countries. Three clear opportunities present themselves: (a) the substantial part of digital content on the internet does not include content about and for Africa, (b) social interactions across Africa follow practically the same collectivistic patterns, and (c) rapid permeation of mobile technology across the population. As a result, a huge opportunity for trade surplus for Ghana to exercise a clear political will to increase its production of virtual commodity and sell it to other African countries. It is therefore important for a PPP for the establishing of an evolving social platform and an ecosystem of solutions that take advantage of the three opportunities.

Looking at a competitive labor market across Africa, it is imperative for businesses to take advantage of the autonomous achievement spirit, work ethics, and technology focused education. The market with cheap labor that provide technology services stand a chance of increasing its employment rate. Therefore, we must not just be consumers of technology goods but we should be producers of technology knowledge that can be tapped into to achieve specific goal. It is a momentous task and require strong political will and vision.

Related books:

• Digital Labor: The Internet as Playground and Factory  by Trebor Scholz
• Digital Disruption: Unleashing the Next Wave of Innovation  by James McQuivey
• The Critique of Digital Capitalism: An Analysis of the Political Economy of Digital Culture and Technology  by Michael Betancourt
• Labor in the Global Digital Economy: The Cybertariat Comes of Age by Ursula Huws

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