Digital literacy plus “sharing economy” platforms can offer formal employment for African youth

By | July 15, 2016

Back in February of this year, I made a note on the inherent potential of Uber (and related apps) to deliver the data necessary for the informal taxi sector in Kenya to clamber onto the path to formalization. Today, I came across an article reflecting on the potential for formalization in India that quotes Nandan Nilekani:

“…once a taxi driver becomes part of Ola, then in fact he becomes part of the formal economy. He is able to use data, get a loan, buy a car and start paying taxes.”

Tracing the original cover story by Nilekani led to his observation that simply  providing these platforms were not enough. Literacy and numeracy were the deal breakers, and a necessary ingredient for the magic of employment, income, and more regulated economy. From his op-ed on India’s domestic future:

Among the government’s first priorities should be the improvement of literacy and numeracy for everybody. Because for one to participate in this [platform based aggregation of microSME services] economy, you require basic literacy and numeracy. For example, if you have a taxi driver on Ola, he should be able to read a message from you or his map and reach where you are. All the other countries that grew rapidly, whether Korea, China or Japan had already achieved universal literacy before their rise.

There are many countries on the African continent which have a headstart on English literacy and numeracy among their youth, due to history and cultural development, especially the Church. Kenya’s literacy and English language facility is easily ahead of India’s by double digit percentage points among her youthful population. Yet there are few locally beneficial platforms that have successfully managed to aggregate – Nilekani’s insight on job creation offers a glimmer of light, and thus opportunity. Look:

The era of large companies as we knew them is also over. It will be a world of platforms that aggregate small companies. Amazon and Flipkart will aggregate goods made by lakhs of vendors and provide a platform to sell them. Similarly, Ola or Uber will aggregate millions of drivers who will work on the platform, Practo will aggregate doctors and patients and so on. Aggregation by platforms is the way that jobs creation will happen. This platform aggregation will also lead to formalisation of the economy.

Ironically, the technologists aiming at the African continent seem to have grasped only the basic element of this opportunity – Digital literacy needs to come first before financial inclusion – as megadonors and funders throw their weight behind their pet projects skewing the emphasis of development directions. But financial inclusion cannot arrive without viable, feasible, and desirable pathways to formalization i.e. economic inclusion. And, logic dictates that its inclusion that empowers.

What if we take a leaf from India’s book for transforming Africa ? Nilekani is not only one of the cofounders of India’s transformational technogurus – Infosys of Bangalore – but also the man who led the Aadhar project – the world’s largest biometric ID system. As the first article observes:

All this is possible because of the enabling circumstances: a young population—65% of India is less than 35 years of age—of which a greater proportion are more literate than the older age-groups; growth; adoption of mobile-based apps; and a push towards a cashless economy.


What all of this is doing is creating an information technology highway seeking to connect over 1 billion people. This is the key to the vision Nilekani espouses. As a result, a generation of small businesses and micro entrepreneurs can now be part of the platforms that are springing up on this national IT highway. Surely, this integration of the informal into the formal economy can only augur well for India and its denizens.

A country like Kenya should be on this pathway too, in fact, even faster than India due to the presence of the very same enabling circumstances, and then some. What has been missing is the vision that Nilekani so generously provided us – that of considering platforms as aggregators, and as aggregators, stronger than scale of any one singular organization.

Harambee, they call it, can be digitized. Harambee, as an app and/or a digital platform aggregating micro entrepreneurs, service providers, wholesale and retail traders et al, can provide that same facility for the integration of the formal and the informal. It can transform the nation, and change the entire East African economic landscape, auguring just as well as for India and her denizens.

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