Virtually every pitch deck I’ve seen for African tech startups includes some version of the following: Africa’s 1.4 billion population is not only huge, but it's the youngest and fastest-growing continent. Its population will double by 2050. Its urban population will triple. Its young population is increasingly tech-savvy and will lead to a massive uptake in digital solutions in the years and decades to come, as not only the population but the middle class grows.

In the next 80 years, the global population will grow by 3 billion people. 2.7 billion - 87% of the global population growth - will come from sub-Saharan Africa.

This is all purportedly a good thing, from a market size perspective, in particular. But is it?

The official statistics - courtesy of multinational organizations like the World Bank and domestic sources like Nigeria’s National Bureau of Statistics - tell us that unemployment is high. In major economies like Nigeria and South Africa, it’s around 30 percent. And youth unemployment is even higher - upwards of 50 percent in both countries.

Rising population growth could be a good thing. But when it’s coupled with an already staggeringly high youth unemployment rate, it could be a catastrophe.

Where are the jobs going to come from?

Last year, 18 million young people entered the labor force in Sub-Saharan Africa, but only 3 million formal sector jobs were created, according to Mercy Corps. 

We know that the so-called formal sector isn’t going to create enough jobs. But if the majority of work is informal, are jobs even the right metric to track? Perhaps a better question is: where are the earning opportunities going to come from? And what is the future of work going to look like?

We hear talk about agriculture and manufacturing and gig economy platforms and the digitization of Africa's informal sector and coding schools. What about the creator economy and DAOs and the metaverse? How should the proverbial "we" be thinking about the future of work?

A journey of discovery

I map my exploration of this question to the journey of my understanding of informal markets across Africa.

In a season three episode of The Flip podcast, Problem-Solving for Fragmented Retail, I asked various founders of B2B commerce platforms if we can expect retail consolidation at the last mile. I reasoned that big box stores have greater purchasing power and therefore can help reduce the cost of goods in African markets, which are upwards of 50% of total income in some countries.

What I learned was that African markets look the way they do for a variety of reasons: high rates of urbanization with commensurately low infrastructure development has led to a rise of informal settlements. Informal retail shops and corner stores pop up to serve consumers in these fragmented environments and become especially important considering comparably low rates of car ownership and purchasing power.

A consumer’s shopping experience doesn’t - and won’t - look like driving to a big grocery store, parking their car, and buying a week or two’s worth of groceries. Instead, it looks like going to a corner shop for affordable, everyday needs.

As we acknowledge that this is what African cities look and will continue to look like, we’ve seen a wide range of innovators building within the confines of these structures. It started, perhaps, with mobile money agent networks, and has extended to B2B commerce platforms that, in the words of Twiga Foods’ CEO Peter Njonjo, “bring in modern supply chain, modern demand planning…  the back office in a Walmart or in an Amazon to thousands of retailers across the continent."

Given the crucial role these informal stores play in the daily lives of African consumers, there has been an increasing amount of infrastructure built to further enable their utility and to layer digital services on top of a physical footprint.

So, in the context of retail and commerce, people are building accordingly. But what about work?

A global perspective

In the west, the past ten-plus years have brought about a gradual shift in the nature of employment, as more individuals earn a full-time living outside of the traditional organization.

It started, perhaps, with the gig economy and the proliferation of “Uber for X” marketplaces. And it’s evolved into the so-called passion economy, in which individual monetization opportunities are enabled by digital tools and platforms.

Li Jin calls this the “enterprization of consumer”, in which SaaS tools aren’t for enterprises but “pre-enterprise” individuals. The line between consumers and SMEs is increasingly blurred, especially considering the nature of the work and the increasing ability to build a sustainable business as a solo enterprise.

Whereas an “Uber for X” marketplace might give its labor jobs - for which the platform takes a cut of every transaction and in which labor is commoditized - enterprization of the consumer has manifested into tools like Substack. Substack doesn’t give you subscribers, but makes it easier and cheaper than ever before for newsletter writers to launch a subscription to their existing audience.

This represents an unbundling of employment - if SaaS-based platforms can offer the services that a traditional employer offers, many entrepreneurial-minded people are choosing to go the indie route, either due to greater flexibility, greater earning upside, or both.

And it’s the aforementioned digital tools (including and especially Web3 applications) that reduce transaction costs and/or increase ease of coordination across this newfound fragmentation. This enables, for example, a solo creator to not only make more money going at it alone, but also to build a media brand (at a much lower cost basis) to rival a traditional media platform.

But there are also problems - the most glaring being that the traditional financial infrastructure was not set up to service this type of worker. In the US, formal underwriting - for a home mortgage, for example - is built around the W-2 and the wages earned from an employer. It’s not set up to service the indie creator whose revenue comes from brand partnerships and YouTube and Substack and the sale of NFTs.

So as this class of workers grows - aided and abetted by various tools - it’s created an opportunity for a new set of tools. Platforms like Stir or Creative Juice allow creators to manage their fragmented and irregular earnings all in one place, and avail financial services to those who are underserved by traditional financial institutions. Or platforms further along the web3 spectrum, like Opolis, which gives independent workers payroll and benefits as part of a virtual cooperative.

Fragmented and irregular earnings… underserved by traditional financial institutions… cooperatives… Sound familiar?

The evolving global perspective looks a lot like the African perspective

As the west experiences this unbundling of work, in which everything becomes more fragmented and decentralized, I can’t help compare to African markets - which are already fragmented and decentralized. The future of work in the US might look a lot like… how work in African markets looks today!

As Mercy Corps’ JobTech Alliance writes,

Rather than being ‘employed’ or ‘unemployed’ in a binary form, most young people where Mercy Corps operates earn their living through a ‘mixed livelihood’ or ‘portfolio of work’ which includes a combination of informal and formal wage labour, self-employment, agricultural and/or unpaid family work.

To address this youth employment and future of work question, Mercy Corps last year launched the JobTech Alliance, whose mission is to build out the jobtech ecosystem in Africa. They define jobtech as “the integration of technology into products and services by companies and other market actors which enable, facilitate, or improve people’s productivity and ability to access and deliver quality work.”

And, once again, when we accept that work in African markets is going to remain decentralized and fragmented it informs how people build within this framework.

One example sits within professional identity - in what Mercy Corps calls the worker mobility layer. Knowing that last-mile mobility drivers work across multiple platforms, what services could allow these users to “carry their earned reputation with them across different platforms”?

The open banking movement - and the network of APIs connecting data across a fragmented ecosystem - play an important role in collating earnings, for example. So what about open identity and credentialing?

Another crucial element, of course, is skill-building. According to the World Economic Forum, “65% of children entering primary school today will ultimately end up working in completely new job types that don’t yet exist.” What are the skills of the future and are Africans going to be well equipped to operate in perpetually nascent economies?

And if we go back to the premise of this discussion - rapidly rising population growth in an environment of high joblessness. Where are the earning opportunities going to come from?

Enter Web3

Some global venture capitalists think the future of work isn’t for a company, it’s for “DAOs and crypto networks”.

From a16z’s Future,

This new future of work is enabled by the networks that form around crypto protocols, which are emerging as new ways of coordinating, measuring, and rewarding contributions to complex ecosystems.​

Traditional corporate employment is rapidly becoming outdated as a means for coordinating activity in the Information Age — we already see this in the emergence of alternative forms of earning such as influencers, contractors, creators, gig economy participants, and more. These ways of earning don’t necessarily feel like “work,” but they are all examples of people participating as individual value providers in complex networks, and earning income for their contributions.

The future of work opportunity is as much grounded in nascent technology as it is a function of the shortcomings of the traditional employment paradigm. From Collaborative Fund’s crypto arm, Collab+Currency,

45 years ago, economists Jensen and Meckling famously wrote: “It is important to recognize that most organizations are simply legal fictions which serve as a nexus for a set of contracting relationships among individuals.”

The “nexus,” whether it be a corporation, LLC, non-profit, or government, has been required in order to coordinate all of these contracts, and in particular, operationalize the movement of resources between individuals, according to the contractual terms.

Much of the aforementioned unbundling of work, in the global context, is made possible and/or further accelerated by Web3. The infrastructure is enabling and accelerating decentralization and fragmentation. Smart contracts - enforced by code, rather than intermediaries - enable trust and coordination previously not possible with traditional organizations. And the open, permissionless nature of public blockchains and smart contracts as a coordination mechanism means that, theoretically, anyone, anywhere in the world can participate.

In the context of work and earnings, whereas the traditional paradigm has been work-to-earn, Web3 has enabled new “X-to-earn” models.

Play-to-earn games like Axie Infinity, where rural Filipinos are earning $200-300 per month from gaming; participate-to-earn across a variety of DAOs (where a contributor’s work is viewable on chain); create-to-earn models like NFTs, in which anyone can participate and earn in a global market; learn-to-earn models funded by e.g., DeFi protocols that recognize education is a crucial part of consumer adoption. (For more depth on these models, I recommend the aforementioned Collab+Currency piece.)

For the sake of this discussion, the particulars are less important than the notion that these new models require a new skill set (which is precisely why learn-to-earn models exist in the first place, by the way); a skillset that those in the Global South can benefit as much if not more from having as their counterparts in more developed countries.

Now, I recognize that it may seem crazy to suggest that the future of work in African markets is crypto games and DAOs. How many Africans are really going to work in the metaverse? The answer depends, I think, on the extent to which these opportunities are embraced, training and development initiatives are built, and localized experiments are implemented.

So perhaps that's the point - the future of work can look however we want it to look when building accordingly and intentionally. It's going to be all of the above.

But if we overlay these secular technological trends and work trends with the rapidly rising population growth in an environment of underemployment, it becomes especially important to embrace any nascent technology that has the potential to create earning opportunities at scale.

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✌️ Justin