Technology-Driven Job Creation in Africa through Micro- and Small-Enterprises K. Donaldson, M.J. Fisher, S. Sheppard

Addressing the Need for Jobs in Africa Why MSEs? Dearth of formal sector jobs Formal sector growing slowly Why Technology? Technology drives long-term economic growth, productivity, and improvement in living standards. Manufacturing offers the highest potential for creating jobs through forward and backward linkages. Innovation in MSEs can expand/create markets with more efficient production, higher quality, and/or by introducing new (appropriate) products.

Maximizing Job Creation in MSEs Technologies should be: labour-intensive low-cost, small-scale within a local capacity a means to process a raw material into a useful intermediary or final product sustainable

MSEs have Significant Constraints No resources for... market research technology development advertising risk-taking … a “corporate approach” Other obstacles poor marketing channels poor transportational infrastructure lack of enforceable patents NGOs aim to fill in gaps.

Case Study of ApproTEC’s Micro- Irrigation Pumps Overview of NGO Job-creation model-used Technology and impacts Lessons learned

ApproTEC - Appropriate Technologies for Enterprise Creation Mission: To promote sustainable economic growth and job creation by developing and promoting technologies which can be used by dynamic entrepreneurs to establish small enterprises. Technologies: micro-irrigation pumps, oil seed press, building blocks, roofing tiles, carpentry tools, and more. Funding sources: USAID, DFID, EU, and cost recoveries Headquarters: Nairobi, 65 fulltime employees

ApproTEC’s 5 Step Process 1. Market research to identify small-scale business opportunities 2. Technology development for new business 3. Recruitment and training of manufacturers and distributors 4. Promotion and advertising of new technologies 5. Impact monitoring

ApproTEC’s Job Creation Model Hierarchy of jobs primary: owner and users secondary: those involved with inputs and outputs tertiary: jobs created through technology development Definition of job: 1 job = 5 hours/day for 150 days/year Impact measurement of primary targets only Three assumptions

Technology: Manually-operated Micro- irrigation Pumps Primary target: “Farmerpreneurs” irrigating less than 1 acre of land Product family Competition: bucket KENYA 78% below $2/day GNP/capita = $360 Agriculture sole income for most people

Impacts of MM and SMM Acreage increased: 3x-9x Growing seasons per year increased: 2.34x Estimated income impact: 5.5x (average) Income per growing season Jobs created: 1.6 per pump 91% in use 72 % managed by women

Cost of Impacts Income generation Benefit-cost = ~30 (will continue to increase) Job creation Cost/job = ~$50 (will continue to decrease)

Four Central Lessons Learned from Technology Projects 1. Strong Technical unit required engineering staff skilled fundis (artisans) workshop for prototyping 2. Importance of advertising and demonstration marketing and retail infrastructure must exist utility needs to be demonstrated 3. Donors and other NGOs should not donate or sell technologies at discounts. 4. Four preconditions must pre-exist

Four Pre-conditions required for a Sustainable Technology Project 1. Market-driven demand for technology and outputs 2. A capacity to design high quality technology for the local environment 3. Local manufacturing capable of mass production and quality control. 4. Effective private sector distribution networks

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