The Role of Big Tech in the Future of Work
There is a perception that there's a tech talent shortage in the African tech ecosystem, and that it's hard to find high-quality local talent.
There has been lot of conversation around the impact and role of Big Tech in the equation, which many felt were also culprits in driving up the price of talent in local marketplaces. In an environment of talent scarcity, there's been an upward pressure on salaries for talent of a certain caliber - which Big Tech can more readily afford compared to startups.
And while the supply-demand equation may be changing a bit in the context of recent market downturns and layoffs, this talent question is an important one for the continued development of the tech ecosystem.
So while we hear a lot from startups and founders in this episode, we're going to get a different perspective from the Big Tech companies themselves.
00:00 - Intro, there is a perceived talent scarcity problem in the African tech ecosystem.
04:37 - We start with Google, and their Managing Director for Sub-Saharan Africa, Nitin Gajria.
05:38 - Google is investing $1 billion in Africa over 5 years.
08:16 - Catherine Muraga is the Managing Director of the Microsoft Africa Development Centre in Nairobi.
11:49 - Talent scarcity and compensation.
13:59 - The competition for talent is global.
Justin Norman: We hear a lot about talent scarcity in the African tech ecosystem.
Nitin Gajria: We know that we have fewer developers today than the ecosystem needs. I know of many startups that outsource development work to other countries outside of Africa, which hopefully over a period of time they'll have very good reason to change that approach.
Justin Norman: That's Nitin Gajria, he's the Managing Director of Sub-Saharan Africa for Google. But don't just take it from Nitin. We also heard it earlier this season from Africa Leadership Group's Fred Swaniker.
Fred Swaniker: There's 50 to 80 million jobs in the world that need people with technology skills. And Africa today has only 2 percent of the world's software engineers, yet we are going to be 40 population of the world's population. So all those numbers didn't make sense.
Justin Norman: We heard it from Catherine Muraga, the Managing Director of Microsoft's Africa Development Center in Nairobi.
Catherine Muraga: If you look at a 2020 report by IFC stating that around 690,000 professional developers in Africa, you compare that to California alone, that has an estimated 630,000. So yes, we do have a developer shortage in Africa.
Justin Norman: There is a perception that there's a tech talent shortage in the African tech ecosystem, and that it's hard to find high-quality local talent.
In an environment of talent scarcity, there has been an upward pressure on salaries for talent of a certain caliber.
So the problem is two-fold - there's a shortage of talent, and high-quality talent is expensive.
At the height of the market, there was a lot of conversation around the impact and role of Big Tech in the equation, which many felt were also culprits in driving up the price of talent in local markets.
And while the supply-demand equation may be changing a bit, in the context of recent market downturns and layoffs, this talent question is an important one for the continued development of the tech ecosystem.
So while we hear a lot from startups and founders, in this episode we're going to get a different perspective - from the big tech companies themselves.
Justin Norman: Before we start, we'd like to thank MFS Africa for their sponsorship of the entirety of season 4 of The Flip.
Last week, The Flip launched its second show, a crypto-focused show called crypto@scale, which I'm co-hosting with MFS Africa's head of crypto, Gwera Kiwana. So I took the opportunity to talk to Gwera about MFS Africa's exploration of the blockchain space, from a cross-border payments perspective.
Gwera Kiwana: Our mission at MFS Africa is to make borders matter less. And by definition, crypto is borderless, it is 24 hours, it is non-discriminatory about where you're from, your background. So it really is the next frontier for African innovation.
So right now, global money movement, even though MFS Africa, makes it look very easy, kind of like a duck, floating over water, we're kind of kicking like hell beneath. And we've spent the last few years building some really great solutions and infrastructure and rails that facilitate cross-border payments and make it really easy for our partners to plug in and have access to our 400 million plus more money wallets.
But crypto presents an opportunity that leverages decentralized blockchains to move money across borders without really needing too many intermediaries. So if you think of a cross-border payment right now, there's a lot of points at which it touches different bodies and intermediaries, banks, payment switches, before it gets to the end user. What stablecoins enable right now is wallet-to-wallet transfers. And we're seeing a lot of adoption of that specific use case in parts of Africa, to use the technology, the underlying technology and the new innovation, stablecoin to run under the hood, making cross-border payments cheaper, faster, but also without having our end users to have the heavy lift of understanding web3 and crypto, in general. We want people to use the technologies that they're used to, the methods of sending money they're used to, but bring that cost significantly down.
Justin Norman: Welcome back to The Flip. I'm your host Justin Norman.
Global organizations like Google and Microsoft and Meta and Amazon have opened offices across the continent in cities like Cape Town and Lagos and Nairobi and Accra. Big Tech has both invested considerably in the development of the ecosystem and hired considerably from it.
So in the context of perceived talent scarcity and rising salaries, I wanted to get the perspective of the Big Tech companies making bets on the continent.
Nitin Gajria: I'm Nitin Gajria, Managing Director for Google in Africa.
Justin Norman: A few years ago, Google, together with the IFC, published the e-Conomy Africa 2020 report, which I've linked to in the show notes, which better quantified the state of the ecosystem.
Nitin Gajria: And the objective of that was to quantify how many developers do we really have in Africa? What kind of work are they doing? What is their expertise? Where are they? What is their profile? And the intention of research like that was to have a sort of a base, like a starting point, and to work with the developer ecosystem and to inform some of the initiatives that we are doing with the developer ecosystem.
Justin Norman: Here's what the report found.
Nitin Gajria: So what we've understood is that there are slightly north of 700,000 developers on the continent. When you compare that on a number of developers per thousand of population, this is a tiny fraction compared to what we see in the US or even in an ecosystem like India. So clearly what that signals to us is there is a lot of work to be done in terms of growing the developer ecosystem and just having more excellent developers on the content.
Justin Norman: Google is playing a central role here.
Nitin Gajria: The best way to sort of summarize all the work that we're doing on the continent now is to look at our commitment that we made to invest $1 billion in Africa's digital transformation over a period of five years.
Justin Norman: That commitment is focused on four key areas. Access, including the Equiano subsea cable in an effort to bring better and more affordable internet to the continent. Then there's supporting entrepreneurship, which they're doing through their growth-stage African Investment Fund and its early-stage Black Founders Fund, as well as scholarship programs for developers. There's partnerships with non-profits. And finally, there's the commitment to build localized products for the African context. So Google's both investing in talent and hiring talent for their own purposes.
Nitin Gajria: How do we build great products for the next billion users that will come online, and a significant chunk of them will be in Africa.
So at Google are lucky to have a really fantastic stable of products, whether you look at search, YouTube, maps, and so on and so forth. But how do we make sure that they're working especially well in the African context? How do we make sure that we are working in local languages? How do we make sure that the search experience is fit for purpose in the African context?
Justin Norman: So while a lot of the technology used in Africa was developed outside of the continent, we know that it doesn't always work for the local context, which is where localization and hiring teams on the ground becomes particularly important.
Nitin Gajria: If you look at things like Plus Codes, which is a great innovation on addressing systems, it's a solution that works incredibly well in this part of the world and there are many other such innovations that have been built for the continent from outside the continent. So can it be done? Of course, it can be done. But I think one of the things I'd love for us to be able to do is increase Google's intuition for the region. And I think for that it's important to have at least a reasonably sized cohort of developers, engineers, UXRs, UXDs based on the continent.
Justin Norman: This is what Google's talent footprint across Africa looks like today.
Nitin Gajria: We currently have four offices in Sub-Saharan Africa, in Johannesburg, Lagos, the product development center in Nairobi, the AI Research Center in Accra. I'm really excited about the product development center in Accra. We're looking to hire roughly a hundred people, and these are gonna be full-stack product teams building great products, not just for Africa, but also for the world. And I'm really excited about that because it amps up our intuition for what needs to be done for users on the continent. How do we build more helpful products for users on the continent? So that's really the central thesis of setting that up.
**Justin Norman: **So Google has hired hundreds of employees across these offices, with plans to hire more. So too do other big tech companies plan to hire more - Amazon is one, with the headcount of its AWS office in Cape Town in the thousands and growing. And another is Microsoft.
Catherine Muraga: My name is Catherine Muraga, the Managing Director at Microsoft Africa Development Center in Nairobi.
Justin Norman: The Africa Development Center is a...
Catherine Muraga: We are an engineering hub. We are around 500 and our core business is software development.
Justin Norman: Catherine was proud to share some of the global products to which the team at the ADC contributed.
Catherine Muraga: You look at the talent pool here at ADC, it ties very well to some of the things that we continue to do and are aspiring to do across the continent. We have teams here that work on Microsoft security capabilities, identity management, some of the engineering behind that is done right here at the ADC. Another component that is also done here is what we call Microsoft 365. A whole bouquet of products from Office capabilities to SharePoint, how you are able to find documents or find people within an organization, some of that is done right here at the ADC.
Justin Norman: But the ADC is also inward looking on the continent.
Catherine Muraga: With regards to Africa, we have the Microsoft Africa research team and one of their core mandates is to look at the Africa continent and say, where is the opportunity, to continue to partner with universities and from a research approach and conceive products that are really unique to this market that can scale across the continent, or where is your opportunity to use some of the existing Microsoft products and tweak them for use within the continent, fully appreciating that the continent has also its unique nuances.
Africa has very unique challenges and we see an opportunity for a skilled workforce that then crafts solutions that are unique to this continent, or what you'd call a homegrown approach. So our vision for Africa, in a nutshell, is a young, well-skilled continent that can solve its own problems and push the global development agenda forward.
**Justin Norman: **When we come back - more on this demand-supply equation of tech talent. But before that, here's another word from our sponsor, MFS Africa.
Earlier in the show, we heard from MFS Africa's Gwera Kiwana on the opportunity to use stablecoins under the hood to reduce the cost of cross-border payments in Africa, but without necessarily asking users to adopt new payment methods or experiences altogether. Gwera's a particular proponent of what's known as the DeFi Mullet - or fintech in the front, crypto in the back. It's an inherent approach for MFS Africa to take, as well.
Gwera Kiwana: The Defi Mullet, is basically a riff on the haircut of the mullet, which is, business in the front and then party in the back. So the DeFi or crypto mullet it's a prediction that I stand behind strongly, that mass adoption of crypto it's going to be driven by fintechs like ourselves, MFS Africa, using fintech in the front. So, great user experience, really great products, and being able to build good products on top of that, but in the backend powered by DeFi or crypto. So fintech in the front, crypto in the back. And what I mean by this is, really the crypto is under the hood, it's abstracted completely from the user experience, and really just marrying two things that do really well in their own right. So fintech is really, really good at UX, so user experience, building things that people actually use and like and want, and meeting customers where they are. So the fintech in the front, crypto powering the backend is kind of a killer use case that we think is going to be driving adoption.
Justin Norman: So, let's go back to this tech talent scarcity problem.
Nitin Gajria: So clearly what that signals to us is there is a lot of work to be done in terms of growing the developer ecosystem and just having more excellent developers on the content. And I think the entire ecosystem needs to be working towards that.
Justin Norman: The ecosystem needs more developers. We get that. And throughout this season, we've spoken to many of the players working to help make that happen - training initiatives like Andela and AltSchool, accredited universities like Kibo School, and so on.
But what are the near-term implications?
We spoke earlier about how talent scarcity has driven the cost of talent up. It's a function of this supply and demand equation.
Catherine Muraga: I think if we approach this from a scarcity perspective, then talent wins. It's an open market to begin with and it's more about willing buyer, willing seller. But having said that, one of our approaches as Microsoft, and I'm sure also for other tech companies, is to get into our market and exist in a viable manner.
Justin Norman: Nitin shared a similar sentiment from Google's perspective.
Nitin Gajria: I think the market determines that, which is why I think the whole discussion around demand and supply within the talent ecosystem is incredibly important. And I think the demand forces already exist at this point, as we stand currently, we have fewer developers than are needed in Africa. So at the moment, there needs to be more sort of supply pressure coming through. And I think market forces will determine the right way to compensate these developers.
Justin Norman: It raises the question - is this a good thing? For startups that might not be able to afford talent, probably not. But what about for talent? Or for those who can afford talent? Or for the ecosystem?
Nitin Gajria: Is it good that there is an upward pressure on salaries as we are looking to hire talent? Of course. We should all be competing for this talent. And this talent deserves better. So if at the end of the day, the outright winner here is young talent in Africa, great.
Now, having said that, the counterbalance to that if you will is what are we doing to continue to grow the talent ecosystem, rather than just take away from the talent ecosystem?
So, I think both sides of that equation can be true at the same time. How do we contribute to further talent building, ecosystem development? And at the same time, how do we create more demand for the incredible talent that we have on the continent?
Justin Norman: This goes back to an episode we spoke about earlier in the season, episode three on remote work. Talent demand isn't just local - local startups in Nairobi aren't just competing with Google in Nairobi for talent. They're increasingly competing globally. And this may be bad in the short term. But in the long term, this current pressure to further develop the ecosystem from a talent perspective is unquestionably going to pay dividends.
Nitin Gajria: What's really cool is, African developers are in demand, not just within Africa from large companies like Google and startups, but they're also in demand overseas. So we are seeing a significant outflow of great tech talent, from the content now which, you know, in the short term is obviously a bad thing for the ecosystem.
But I do feel like in the long run, I mean, when you look at other similar ecosystems and how they've evolved in the long run with more creation of opportunity, with more VC money coming in, with more successful startups on the continent, with more unicorns on the continent, you'll start to see talent coming back. We've seen this in India. We've seen this in Indonesia. We've seen this in other ecosystems. You see an initial outflow because, “I have better opportunities out there.” And then you start seeing people come back home because suddenly the opportunity is immense.
**Justin Norman: **That's it for this episode of The Flip. If you enjoyed this episode, we'd be very grateful if you considered sharing with a friend or a colleague who you think may enjoy it as well. For more from The Flip, you can follow us on social media @theflipafrica or subscribe to our newsletter on our website, theflip.africa
Thanks as always for listening, and we'll see you next time.