The growth of the sectors offering services in Africa is going on the high side. This is in contrast with what is happening in East Africa where manufacturing transformation is leading the pace.
As Africa heads towards an integrated global economy, some factors have been laid bare; demonstrating the importance of economic development in African Countries. These industries, better described as “Industries Without Smokestacks (IWOSS) include ICT-based industries, Tourism, and Transport. The presence of these industries illustrates the importance of IWOSS to be able to grow, address unemployment rates, and create jobs. That is not the only issue, as the question of whether the job market presented by this sector will be accessible by African Youths still remain.
Thus said, on the initiative of Brookings Africa and its partners, a working paper was undertaken on the job creation potential of IWOSS. In the paper, Brookings Africa presents a methodological framework that demonstrates how IWOSS can be used to assess Youth unemployment and create jobs in individual countries. The paper also addresses existing skill gaps in Youth population that needs to be attended to, to reach employment potential.
Two components have therefore been presented:
- Estimating the demand of a particular skill
- Looking out for skill gaps in the targeted youth population. On the labor demand strata, the framework looks at the skills required for a sector to reach full employment potential. A question therefore became the derivative: Do the skills to meet the demand in the sector exist in the population? If NO, where do the gaps exist?
Methodological Framework Presented
The first step according to Brookings, is to estimate the employment potential of IWOSS sectors. This can be done in 2 ways:
- Measuring the labour force intensity of a sector using the parameter of labour-value-added ratios and employment elasticities.
- Global value chain-based approach that projects what future employment in a sector would look like, compared to the projected employment. This approach needs extensive sectoral research and the use of surveys to arrive a good conclusion.
This framework emphasizes the occupational requirements of a sector. Occupational requirement profile will be presented after considering some methods.
Using the first (a above) method, Brookings Africa proposes using the distribution of trends in the occupational sector to get a distribution of occupations for projected employment.
Using the second (b above) method, the results of a survey can be used to adjust the occupational profile of the sector, and obtain a list of occupations in the sector, and the number of individuals required for each occupation identified.
Using any of the methods above, a skill requirement profile will emerge. This profile will then provide the set of occupations required to make a sector attain its employment potential for a skill. This skill could also be measured using an Occupational skills mapping standard, such as the Occupational Information Network (O*NET).
For the final step of the framework, the skill requirement profile for each sector will then show whether the necessary skills are existent in a youth’s population, or not. If they lack, how are the skill gaps identified?
- A sectoral skill gap which show which skills are available in the population, and the set of skills actually in demand.
- Occupational skill gap which identifies the skill requirement for a particular occupation, and tries to tally it with the skill level the unemployed youth already has.
Either way, a skill deficit will be prominent, and appropriate steps can be taken from the right angles to bridge the gaps.
IWOSS presents employment opportunities for countries with high unemployment rates. This framework by Brookings presents how the employment opportunities therein can be fully utilized to create employment, and fill skill gaps.
For more insight, Foresight Africa’s 2020 Essay on: “Exploring New Sources of Job Creation: The Potential Role of Industries without Smokestacks” may be of interest.