Unlike when it was common to see Kenya’s workforce every morning heading to the office, there is an emerging new employee under the gig economy. Many a time, they work from home or informal sectors.
This is well explained in the lives of young Kenyans who entered entrepreneurship after university armed with a Bachelor’s degree in economic science, for instance. Then decided to open a secondhand shop in Nairobi.
Often referred to as the ‘Jua Kali’ sector, it has been able to meet the financial needs of the majority of Kenyans, contributing more than 50 percent to the economy, according to the World Bank. A report by the World Bank also reveals that only 17 percent of Kenya’s workforce works in the formal sector.
The informal sector spans different industries, including semi-skilled artisans, beauty and wellness, construction, and manufacturing.
These sectors have over the years proved appealing to a young workforce grappling to get formal jobs despite achieving tertiary education and amassing skills to make them competitive in the labour market.
A recent report by the Kenya National Bureau of Statistics says more than 5.34 million young Kenyans or 38.9 percent of 13.78 million people in this bracket are jobless. But with the entry of the digital economy, this is changing the narrative.
The growth of digital platforms that connect workers and traders to potential customers is changing how informal workers access work opportunities.
A report by Mercy Corps on the gig economy is showing how it is gradually changing the nature of Kenya’s workforce through access to jobs. It is also shifting the source of work opportunities from informal labour to digital platforms.
Findings of this study show that the Kenyan online gig economy is valued at $109 million and employs a total of 36,573 workers. It is estimated to grow at an annual rate of 33 percent, with the total size reaching $345 million and employing 93,875 workers by 2023.
While this trend started globally and has been driven by large technology companies, in Kenya, this is increasingly being driven by a new subset of uniquely modelled start-up tech companies that are creating hyperlocal solutions targeted at addressing the unemployment challenge.
Over the last decade, young Kenyan innovators are turning to technology to revolutionise Kenya’s jua kali sector.
For instance, Andrew Miller, a young Kenyan identified a gap in the logistics and boda boda.
By combining crowdsourcing technology and a deep understanding of the dynamics of Kenya’s informal transport sector, Andrew now has more than 300 riders on his platform.
He has used technology to reduce the riders’ operational costs, create more professional services, and provide more predictable rates to the market.
Sky Garden is another such platform that has focused on ‘out of the box’ solutions that provide individualised URLs to traditional traders, hence unlocking online markets for them. By providing the digital infrastructure, the solution builds a virtual space that allows traders to trade from the comfort of their mobile phones.
Such local platforms are streamlining and professionalising the informal sector by bringing in structures, and technology infrastructure, and providing additional services to workers, including financial services, insurance, and digital payments.
The platforms allow previously obscured workers to now develop digital channels in which their work and enterprises can now get a digital footprint.
Other platforms like Lynk focus on connecting local artisans to a larger pool of clients. By understanding, the dynamics of how fundis operate, Lynk has embedded technology that now provides ‘LinkedIn profiles equivalent’ to local technicians and opened up the middle-class market to such artisans.
In the next decade, local tech solutions are predicted to transform how workers will deliver services in Kenya. From blue-collar workers to e-commerce platforms, artisans in low-income areas, can now access customers in affluent neighbourhoods, a market they could not easily access before.
As Kenya sustains her gains in digital innovation, it will be vital for the government to build the right regulatory environment that supports local innovators.
Rosemary Okello-Orlale, Director Africa Media Hub- Strathmore University Business School
Gituku Ngene, Post investment and Learning Advisor, Youth Impact Labs