Africa

Africa’s Unemployment Crisis: Effective Intellectual Property System Is The Panacea For 1.44 Billion U-25, Experts Say

By Akanimo Sampson

With estimates suggesting that by 2050 Africa’s population will double from 1.2 billion today to 2.4 billion, policymakers in the continent will be facing the challenge of how to tackle the menace of worsening unemployment among young people.

This is so because over 60 percent of people of the continent are projected to be under the age of 25. This implies over 1.44 billion people. Such a large young population certainly presents significant opportunities and challenges to African leaders.

Some concerned experts are however, pointing to an effective Intellectual Property (IP) system as the potent medicine the continent needs to cure the unemployment scourge.

Analysts however, say with a higher proportion of economically active people, African countries could benefit from accelerated economic growth on the one hand, and on the other, low levels of industrialisation in most of her countries, and associated high youth unemployment, are of growing concern.

How can policymakers in therefore, ensure inclusion of Africa’s youth in the global economy? What initiatives are needed to develop the requisite skills and expertise for the youth to participate in innovation and tomorrow’s knowledge-based economy? What should governments in the continent do to accelerate the transition from natural resource-intensive to knowledge-based economies? And how can policymakers promote innovation through better understanding and greater use of Intellectual Property (IP) rights to boost the competitiveness of African businesses and put the continent’s economy on a sustainable footing?

For the Executive Director of African Centre for Technology Studies and Chairman of the Kenyan National Commission for Science, Technology and Innovation, Professor Tom Peter Migun Ogada, and the Managing Director of Bigen Global Limited based in Harare, the capital city of Zimbabwe, McLean Sibanda, economic diversification is a priority for African countries, especially in sectors with the potential to create employment and produce high-value outputs.

Over the past two decades, countries in Africa have achieved rapid and sustained economic growth rates. Projections by the International Monetary Fund (IMF) and African Economic Outlook 2019 suggest that this trend will continue.

Uganda, Benin, Kenya, Tanzania, Senegal, Ivory Coast, Ghana, Rwanda, Ethiopia and Libya are set to enjoy growth rates ranging from six percent to 11 percent. High demand for African exports and relatively easy access to finance as well as microeconomic reforms, and improvements in the business environment are important drivers of this growth.

The concern, however, is that the number of jobs available to the expanding working-age population – projected to be almost 1.00 billion by 2030 – has not kept pace with this economic growth.

Data for 2017 show that unemployment rates (7.5 percent) in African countries are well above the global average (4.3 percent). Only 40 percent of the workforce is engaged in productive employment, of which 70 percent are in vulnerable employment.

Most employment opportunities (65 percent) arise within the agricultural sector, which represents over 15 percent of the continent’s GDP, followed by services, particularly financial services and telecommunications.

Close to 80 percent of jobs are found in the informal sector. However, manufacturing – the sector with the greatest scope to add value to raw materials – accounts for just 6.5 percent of jobs. This is not surprising given the low levels of industrialization in African countries compared to the rest of the world.

Unemployment is a big issue in Africa, especially given the size of its young population, which is disproportionately higher than most developed economies where the population is aging. Policymakers, therefore, need to find ways to increase industrialisation, enhance manufacturing capabilities and productivity, and improve business competitiveness.

In so doing, the aim is to reduce the dependence of African countries on the export of primary raw materials. Such dependence leaves them vulnerable to volatile commodity markets and fluctuations in the global economy. Economic diversification is therefore a priority for African countries, especially in sectors with the potential to create employment and produce high-value outputs.  

History shows us that an environment in which innovation and use of the IP system thrive creates opportunities for employment and socio-economic development. The experiences of countries such as Japan, the Republic of Korea and, more recently, China, attest to this.

Ogada and Sibanda are arguing that if African countries are to compete in the global knowledge economy, the development of vibrant innovation ecosystems supported by balanced and effective IP systems is essential. ‘’This is a critical step in fulfilling the aspirations of African countries to become producers of high-value knowledge-based goods and services. Only then will it be possible to succeed in reversing existing trends – where Africa imports most of what it consumes – and for African countries to start adding value to the products they export. Innovation and IP lie at the heart of this process’’, they said.

According to them, ‘’investment in Research and Development (R&D) and innovation supports the production of new and improved technologies to address local needs, while creating opportunities for business growth and employment. The IP system also facilitates effective transfer, adaptation and assimilation of technologies developed elsewhere to African countries. Countries that have robust innovation ecosystems underpinned by a balanced and effective IP system have benefitted in terms of increased economic growth, employment, tax revenues and foreign direct investment, as well as access to high-end technologies through technology transfer agreements.

‘’An effective IP system is an integral part of a thriving innovation ecosystem. It provides incentives to invest in R&D and other innovation and enables firms to commercialize and monetise their innovations, and to justify and sustain R&D investments. 

‘’Companies use IP rights strategically to develop, trade in, and secure income from their innovative products and services. These rights help companies gain and maintain a competitive advantage in markets at home and beyond. Firms with an effective IP strategy generally enjoy a stronger negotiating position, achieve greater success and have a higher market value than those that do not.

‘’This is particularly so in a highly competitive global market where cross licensing is increasingly prevalent, especially within the pharmaceutical, automotive, and information and communications technology sectors.

‘’IP awareness is particularly important among small and medium-sized enterprises (SMEs) as these companies generally drive economic growth and job creation. Those that embrace IP rights tend to fare better in terms of growth, income and employment than those that are unaware of how IP can support their business.

‘’Consumers and society as a whole also stand to gain. IP rights support the process of bringing a product to market, thereby providing consumers with access to an expanding range of innovative products and services. Of course, IP rights also safeguard consumers from counterfeit and pirated goods. Such illegal activity undermines legitimate businesses and their ability to invest in product development. It also puts consumer health and safety at risk.

‘’Broader understanding of the benefits that can flow from innovation and access to an effective IP system will help ensure that Africa’s inventors, creators and entrepreneurs can readily and effectively protect and harness the value of their IP assets and thereby create opportunities for employment, wealth creation and economic growth.’’