The formula for economic development isn’t a secret. For a country to rise up into the ranks of developed nations, it must:
● Nurture an industrial economy centered around low-skilled manufacturing,
● Then use the profits to build out the nation’s infrastructure and human capital,
● And then, finally, transition to a consumption-based economy dominated by high-skilled, service sector jobs.
To be fair, this process usually takes many decades (and involves many more factors).
But it’s the same process that the US followed after its independence from the UK, that Europe followed after WWII, and that China has followed with amazing success since the early 1980s.
However, some economists worry that Africa is at risk of losing out from this development process.
The thinking is that as developed nations master AI-powered robotics by the 2030s, they will manufacture goods cheaply and without the need to use outsourced human labor from developing nations.
Think about it, if a developed nation can build a factory of robots that work 24/7, why outsource at all? You can also save on shipping costs and better protect your intellectual property.
If this happens, economists worry that developing nations, including those in Africa, may see their economies stall and become forever dependent on Western nations.
Fortunately, I see another path forward.
Through effective governance and the proper application of new, disruptive technologies, African nations have the opportunity to leapfrog over the industrial economy stage altogether and build out an economy that supports itself entirely upon infrastructure and service sector jobs.
Let’s look at some examples:
Internet penetration. By late-2020s, Internet penetration will reach over 80 percent worldwide. In Africa, that means close to a billion people will gain access to high-speed Internet. As a result, the internet revolution that modernized the West will sweep through Africa with equal (and I believe, greater) force. This access alone will drive the creation of new local industries and economic development.
Decentralization. Western nations have developed all parts of their infrastructure, governance, and culture around centralized institutions and planning—Africa can choose a better path.
For example, new solar and battery tech can allow African nations to avoid costly national power lines; wireless broadband is already allowing us to avoid costly national phone cables; new fintech (financial technology) services are allowing the poor and small businesses access to digital payments and credit.
Infrastructure jobs. Africa’s booming population can either be a disaster in waiting or, with proper governance, a major opportunity. Why? Because a population boom (in this case, an extra 400 million Africans by 2030) will require the creation of an entire generation’s worth of jobs that develop national and urban infrastructure and green energy projects.
Service jobs. Just as in the West, service jobs can replace manufacturing jobs in the much of Africa. These are good-paying, local jobs that can’t be outsourced and can’t be easily automated. Whether that’s healthcare or nursing jobs, entertainment, education, these jobs will multiply as African Internet penetration and civic freedoms expand.
On the whole, how quickly and how effectively African governments can adopt these leapfrogging investments and strategies depends on their competence and how well they can invest into tomorrow’s opportunities.
Thankfully, the revolutions of tomorrow are abundant and already on their way to positively impact every single African citizen.