Over the past year, we all noticed more family members, friends, and colleagues adopting gig-work as a lifebuoy to cope with the pandemic’s consequences. The market landscape expanded to reach different professions and sectors, offering both workers and businesses, help to absorb shocks. It is totally reasonable to expect that, since the pandemic impacted all economies, it also had a considerable impact on the supply and demand of Gig Platform’s market. However, the nature of this impact remains subject to debate. A study conducted by Mastercard in 2019 sized the gig economy market at $248.3 billion with a projected annual rate of 17.4%. The market is forecasted to reach $455 billion by the end of 2023. With 40.7 million freelancers on digital platforms across the globe that generate $193 billion in gross volume and $127 billion in disbursements to freelancers. From a demand point of view, analysts expected the COVID-19 pandemic to have two opposing effects on demand for online gigs, depending on the companies’ behavior towards emergency strategies. It can cause a reduction in demand if companies are cutting their use of Gig Work platforms to protect and show more loyalty towards coworkers. And on the other hand, companies might now favor online workers hired through platforms to cut costs. The iLabour project (the first online gig economic indicator, from Oxford internet institute) shows a fluctuation between both hypotheses. In fact, the pandemic affects gigs’ categories differently. But all faced a serious decrease last year (compared to 2019 & 2018, charts bellow), before recovering to previous optimistic levels. These findings indicate that while the demand clearly soared due to a distancing effect, it also strongly disturbed the market’s seasonal pattern. In fact, in the previous years, demand used to slightly drop during the year-end holiday season, and then rises again from February up to May. Since the pandemic, the market experienced stronger volatility, suggesting that many online gig-workers will need urgent financial support to get through these crises. The Online Labour Index (OLI) [caption id="attachment_5581" align="aligncenter" width="553"] The index is tracking all projects posted on the five largest English-language online labour platforms (70% of the market by traffic)[/caption] The demand of online labour 2018-2020 [caption id="attachment_5582" align="aligncenter" width="522"] Source: Online Labour Index.[/caption] Software development and tech gigs are taking the lead: The market’s rebound is mainly due to software development and tech jobs that are currently most in-demand on Gig Work platforms, such as: Blockchain developers, AI engineers … As the US represents the top player in Gig Economy, OLI’s project presented the evolution of its supply and demand during the first months of 2020, to track the pandemic’s impact. The charts below are showcasing the considerable and fast increase of the software segment, especially during the period where all remaining professions were affected. This category’s wages are also making the difference as they ranged during 2019, in Upwork for example, from $31 USD to more than $115 USD per hour. US contribution to the online labor supply and demand by category According to the Online Labour Index, US is leading by far the category with 37.3% of vacancies posted, followed by the UK and Canada (9% and 7%). While Africa is only representing 3.2%, even though digital skills count for 44% of its demand, which highlights the overall small contribution of the continent. The supply of software development and tech gigs is led by Asian countries (75%) with India and Pakistan at the top. Followed by Europe (17%), North America (3%) and Africa (3%). This category only represents 26% of the African offering. Even if Egypt and Kenya are both in the top 15 suppliers of the online platform market, the technology segment account for only 39% and 8% of their offering, compared to 79% in Russia. The findings above suggest that complete opposed outcomes are possible for each country since the future of business is still unstable. In the best-case scenario, the demand would increase and lead to higher revenue and more job security. However, the number of online workers is also increasing, which might lead to critical competition for jobs, employment uncertainty, and lower earnings. One thing for sure, the coronavirus pandemic aggravates the risky nature of online gig work. Besides the income stability issue, COVID-19 is now highlighting the importance of the overall financial health and unemployment protection. Platforms are conducting positive changes to assure workers’ financial health: It goes without saying that the main services required by gig workers are access to loans and insurance, to manage their income and face future unforeseen situations. For this matter, all stakeholders should partner and work together to increase the penetration of financial products and services. Financial institutions, governments, and gig work platforms all have an important role to play in strengthening this market. Some players, mainly in the shared-driving and food delivery market, have been working on this issue, targeting 2 major solutions: Platforms partnering with financial solutions providers: Income protection insurance and access to loans are 2 pillars for gig workers’ financial health. Unfortunately, financial institutions rarely consider lending to this category. The lack of earning traceability is a serious obstacle. Thereby, some platforms are stepping forward to help track the worker’s employment history: Uber signed a partnership with AXA in 2018 for a Partner protection insurance to protect workers from lost earnings. In Southeast Asia, Grab is partnering with insurance company Chubb that offers medical and accident insurance to drivers. Mobymoney, a fintech start-up, is teaming up with FastJobs to provide an interest-free credit line. Careem has partnered with MicroEnsure to facilitate Careem captains’ health insurance in Pakistan IOTalent collaborates with GigaCover that brings income protection insurance solutions designed for freelancers. Platforms offering new integrated financial solutions: GoGet Malaysia is offering savings, insurance and financial management tools on its platform. Grab offers a package of financial services, including micro-credit, personal accident insurance and insurance against critical illness. Uber launched Uber Care in 2018 to provide easy access to micro-loans, life insurance, and family health insurance to drivers. In addition to platforms and financial institutions’ initiatives, many governments are taking the lead to harmonize and regulate the Gig-Work Platform market landscape. The International Labour Organization’s Global Commission on the Future of Work is discussing the implementation of an international governance system for digital labor platforms. And many countries are currently studying the implementation of an online gig worker’s digital ID, to enhance safety and security, and regulate taxation. If all stakeholders put effort into developing this market, will the online gig work become the next norm? References: The iLabour Project – Oxford Internet Institute 2021 Mastercard study highlights the digital divide that needs to be addressed to power gig economy growth in East Africa Sources: Fabian Stephany, Michael Dunn, Steven Sawyer, Vili Lehdonvirta (2020), “Distancing Bonus or Downscaling Loss? The Changing Livelihood of US Online Workers in Times of COVID-19”, Oxford Internet Institute. Cutean, A., Herron, C., Quan, T. (July 2020). Loading: The Future of Work: Worldwide Remote Work Experimentation and the Evolution of the Platform Economy. Information and Communications Technology Council (ICTC). Ottawa, Canada The UN Capital Development Fund, “The Gig Economy and Financial Health A snapshot of Malaysia and China”, December 2020. Techwire Asia, “Grab upgrades its finance stack with micro-loans for consumers, and more”, August 2020 https://iotalents.com/blog/income-protection-for-freelancers/ Uber, Partner Protection Insurance with AXA XL Technologytimes, “Careem Announces Captain Support Initiatives In COVID-19 Pandemic”, April 2020 The Hindu Businesses line “Uber helps driver partners with Rs 35.6 crore micro-loans”, February 2020 SAS, “Top Trends: Why Tax Administrators Are Adopting New Data and Analytics Strategies”, 2020 ILO, G20 Employment Working Group, “Policy responses to new forms of work: International governance of digital labour platforms”, April 2019
With a valuation of around $1 billion at IPO, Jumia’s listing in 2019 in the New York Stock Exchange has confirmed Africa’s first ‘now failed’ unicorn. The term ‘’unicorn’’ was coined in 2013 by Aileen Lee, a Silicon Valley venture capitalist, to describe a privately held, fast-growing startup. In detail, a unicorn refers to a technology non-listed company, in place for less than 10 years with a valuation greater than or equal to $1 billion. Initially, the term has been used to emphasize the rarity of these startups as only.07 percent of venture-backed startups were able to reach that valuation in a decade or less. Yet, amid an increase in the numbers of startups coupled with an influx of investments, the number of unicorns has significantly increased. To give an illustration, while it took more than four years for the number of unicorns to grew to 250, this number has doubled in the past two years. In Europe alone, the number of billion-dollar companies has almost quadrupled since 2014 with a total value of $ 416 bn, almost five the valuation in 2014. In 2020, despite the economic repercussions of Covid-19, a total of 89 companies gained unicorn status globally, many of which operate in the e-commerce and health care sectors. In other words, what was initially a club of 39, now counts more than 500 members. According to CB Insights and as of January 2021, there are 537 unicorns around the world with a total value of $ 1 636.18 bn. The USA and China are home countries for ~ 70% of global unicorns. Now, what about Africa? With a maturing technology and entrepreneurial ecosystem emerging across Africa, investors’ interest in the African tech ecosystem remained strong in 2020, despite the implications of the health crisis of Covid-19. According to the sixth edition of the annual African Tech Startups Funding Report, 2020 released by startup news and research portal Disrupt Africa, 2020 was a record year for investment into the African startup ecosystem. The report points out that a total of 397 African Startups have raised a fund equivalent to US$701.5 million in the same year, attesting to an increase of 42.7 percent over 2019, compared to $334.5 million raised in 2018. Kenya, Nigeria, and South Africa stand out as the main destinations of capital with 89.2% of the total amount of funds invested on the continent and account the vast majority (77%) of the deals concluded. While surpassing the $700 million mark in funding is lauded by many watchers of the African Tech space, this “achievement” is maybe not significant enough to compensate for the fact that in a global context Africa is still lagging behind, in terms of funds received. It is believed that unicorns indicate a venture capital ecosystem that is ripe for investment, with very few African unicorns it is then safe to assume that investors’ confidence in Africa is not yet matured enough to allow them to give an African startup a $1 billion valuation. According to CB Insights, Africa has generated zero unicorn in the past 2 years. In 2018, only three African unicorns have made it to the list. These three unicorns are Nigeria-based Africa Internet Group (Jumia), South Africa- based Promasidor, and South Africa- based Cell-C. Founded in Lagos in 2012, Jumia operates multiple online verticals across Africa. In 2016 the company became the first African startup unicorn, achieving a $1 billion valuation after a funding that included Goldman Sachs, AXA, Rocket Internet, and MTN. In April 2019, the African e-commerce giant became the first African unicorn to list on the New York Stock Exchange (NYSE). On its opening day, the shares have traded at $14.50, valuing the company at $1.1 Bn. Shortly afterward, the shares have peaked at $49.77, valuing the company at nearly $3.8 billion. However, and in light of allegations of fraud and concealed losses, among others, Jumia’s shares sunk hitting an all-time low to the $2 range in the following 12 months of its IPO. This has been said, Jumia serves as a good reminder that unicorn status does not protect a company from a sudden drop in its value nor is a guarantee of the performance of the company. For some African investors and startup owners, the African ecosystem is unparalleled internationally, as it comes with its own complexity and challenges, hence the ambiguity of forcing international success examples on it. They suggest instead letting African startups come up with their own success metrics that would better translate to the African marketplace. As explained by Xavier Helgesen, in markets where there is a venture capital shortage, macroeconomic uncertainty, a lower tolerance for risk, less acceptance of entrepreneurship as a career, or limited enabling infrastructures and policies, the Silicon Valley model fails. He goes on to suggest that instead of African companies striving to become the likes of Silicon Valley unicorns, they should instead focus on raising camels- organizations that can capitalize on the opportunity but also can survive on drought. The same idea has been reiterated by the Senegalese Venture capitalist Marième Diop. Silicon valley’s unicorn IPO model might not be right for African startups as these, face a vastly different macro business environment. Mrs. Diop suggested lowering revenue expectations and have African startups list on local exchanges to raise capital from IPOs. In this way, Africa can count more “gazelles” than unicorns “abroad”. A gazelle at home could be a company valued at $100 million or more and generating revenues of $15 to $50 million, according to Diop. In conclusion, be it unicorns, camels, or gazelles, African startups need to take advantage of the opportunities currently present to them (e.g. the rise in digitization, the increase in investment funds,…) and rewrite the rules to better align with their reality. Again, while African countries can use international benchmarks for inspiration, they should maybe refrain from making them a blueprint for future developments. Nouha Abardazzou - Senior Associate Sources: https://www.cbinsights.com/ https://www.cnbc.com/2020/01/23/era-of-mega-funded-money-losing-unicorns-is-coming-to-an-end.html https://www.forbes.com/sites/korihale/2020/04/23/jumia-africas-failed-unicorn-is-hemorrhaging-millions/?sh=670c187b64e4 https://asia.nikkei.com/Business/Startups/Unicorns-surge-to-500-in-number-as-US-and-China-account-for-70 https://www.boursorama.com/boursoramag/actualites/start-up-les-licornes-francaises-sur-le-devant-de-la-scene-1862f79b14758c16746c95f65adcbeb5 https://ventureburn.com/2019/12/10-reasons-why-2019-was-a-hot-year-for-africas-tech-startup-opinion https://www.howwemadeitinafrica.com/camels-not-unicorns-how-entrepreneurs-in-africa-are-rewriting-the-rules-of-silicon-valley/66953/ https://blog.usejournal.com/top-10-african-startups-to-watch-in-2020-341622c30928 https://outline.com/BftRtGhttps://disrupt-africa.com/2021/01/21/african-tech-startup-funding-passes-700m-in-record-breaking-2020/ https://zoom-eco.net/a-la-une/afrique-les-startups-africaines-ont-leve-7015-millions-usd-en-2020-soit-un-taux-daugmentation-de-427/ https://www.theguardian.com/business/2020/jul/17/african-businesses-black-entrepreneurs-us-investors
Morocco will be hosting the 22nd edition of the Conference of the Parties on November 2016, an event considered as the most important rendez-vous on climate change effects. This event comes at a time when the country is embarking on ambitious projects related to the fight against climate change: Morocco is expecting to raise its share of renewable power energies to 52%[1] by 2030 The country is also willing to reduce its greenhouse gases emissions by 32%[2] by 2030 The “Noor” project’s solar power plant, considered one of the world’s biggest, is being built with a capacity of 580 MW[3] by 2018 Besides the environmental considerations, the organization of the Conference of Parties implies some financial matters. Opportunities for the private sector Currently, the most important contract for the COP22 is related to the event’s organization: preparation and management of the site (the Bab Ighli area in Marrakech). The tender’s value is estimated at € 64million (MAD 700 million[4]). Three criteria[5] were retained for companies willing to submit their bids: 1 – Average turnover of MAD 500 million during the last 3 years 2 – Organization of at least 2 events on behalf of the United Nations Organization (similar to the COP in terms of size) 3 – Completion of at least one civil engineering project during the last five years To overcome the constraints related to turnover and experience capitalized in the organization of such events, local players partnered with international ones. Partnerships between Moroccan and international event agencies Three groups formed by Moroccan companies and international event agencies were shortlisted[6]: Capital Events (a Moroccan events management agency), GL Events (a Euronext-listed company, organizer of the previous COP in Paris and Lima), Agence Publics (a France-based communication and event agency), etc. Groupement MaroCop: Richard Attias & Associates (New York-based consulting firm), Alomra Group International (Moroccan company in business risk management), the Moroccan architect My Abdelouahed, Derichebourg Maroc (Facility management company), Maroc Telecom, Valyans Consulting, etc. La Nouvelle Avant-Scène (Moroccan event communication agency), Finatech Group (a subsidiary of the Moroccan holding company Financecom), URBAGEC (Moroccan company operating in the civil engineering sector), etc. Some other well-known business owners like Vincent Bolloré (through his event company, Havas Event) has initially shown his willingness to be among the bidders. Besides, the British public relations company Henley Media Group is also willing to be in charge of the organization of the Sustainable Innovation Forum, an important business-focused event held alongside the COP meeting. The 6th Sustainable Innovation Forum during the COP21 was organized by the same media group. A subsidiary of Henley Media, Green Media Ltd has already booked the domain name “cop22marrakech.org”. Green Media’s core business is to provide business insights to its clients and establish partnerships between the private sector, governments and NGOs involved in sustainable development and “green economy”. The organization was in charge of the public relations of the COP21. Other contracts related to the COP22 The technical control of the site’s construction (Socotec Maroc and Bureau Veritas Maroc have been shortlisted), the accommodation and transportation services Projects in Marrakech: to be in the spirit of the event, some projects are initiated Introduction of electrical buses powered by solar energy: the project’s cost is estimated at MAD 200 million Set up of a recycling plant: for an approximate cost of MAD 100 million A MAD 70 million-contract[7] for the installation of green lighting solutions In a world where economies need to distinguish themselves in order to be more competitive, Morocco can develop expertise and an edge on the whole ecosystem related to renewable energies. By doing so, the country will be able to play an important role in the “Environmental diplomacy” domain. Fatou, Analyst at Infomineo. Know more about Fatou. [1] Usine Nouvelle - http://www.usinenouvelle.com/article/climat-le-maroc-se-met-en-ordre-de-marche-pour-la-cop-22-de-marrakech-en-novembre.N378986 [2] Jeune Afrique - http://www.jeuneafrique.com/284667/societe/maroc-hakima-el-haite-cop22-faut-deja-reussir-cop21/ [3] Noor Ouarzazate - http://noorouarzazate.com/ [4] Huffington Post Maghreb - http://www.huffpostmaghreb.com/2016/03/15/cop22-maroc_n_9470796.html [5] L’Economiste - http://www.leconomiste.com/article/984730-plus-gros-que-le-gatt-le-cahier-des-charges-de-la-cop22 [6] At the moment when the article is written, the name of the group to organize the event is not disclosed yet. [7] L’Economiste - http://www.leconomiste.com/article/985009-comment-marrakech-se-prepare-la-cop22
After a four-year civil war that ended in 1994 and that has thrown Rwanda into a deep crisis, the country is engaged in a new momentum of economic development. In fact, the government has launched in 2000 a long-term development strategy “Rwanda 2020”. The goal of this program is to transform the country from a low-income agrarian economy to a medium income export-oriented and knowledge-based economy. So far, some reassuring economic signals are showing that the Government is engaged in a growing path: (more…)