What I aim to share is positive, possibly hopeful – and comes from the blowing tech winds of change. Much of what I talk about we have felt in our business, and I’m sure you will feel it in yours.
There is a $40B property opportunity on Africa’s horizon… Picture this:
It’s the year 2025. The majority of African citizens have equal opportunity to their European counterparts. We are seeing an explosion in wealth, and a plummeting youth unemployment rate – accompanied by ballooning disposable income. Driven by this new generation of younger, wealthier consumers, there is a surge in the demand for decentralised office space, and supporting growth in residential, retail and industrial assets.
How do we achieve this? Simply solve unemployment, educate the youth, fix social inequalities, get tech tools into peoples’ hands, and resolve toxic cultural beliefs. Easy huh?
The good news:
At a macro level we have the following
This is made worse or due to generally incompetent or corrupt government
These are problems that affect African countries and societies as a whole – and hold her citizens back from advancement. Your average African feels these challenges on a very real, day-to-day basis.
Let’s imagine two people, equally bright and ambitious, but with one difference. Africa Jane is born in Uganda, and Europe Jane is born in Sweden.
Africa Jane lives with her family in a 2 bedroom house in a rural area, 2 hours’ drive from the nearest city, and 1 hour’s walk from school. She sees her parents once a year, as they work in the city, and she’s taken care of by a distant relative. Europe Jane lives in an urban area, and her parents are professionals. She lives with them.
Africa Jane’s quality of schooling is low compared to Europe Jane. What’s more, she spends 2 hours a day walking to and from school, and, in her spare time, she is required to help as a labourer on her relative’s farmland. The supply of electricity is erratic.
Europe Jane’s parents have money for university, and after university there are countless job opportunities that pay good salaries. She can save and invest money each month and secure a comfortable future. African Jane is not in the same position.
If African Jane graduates from school, there are no jobs where African Jane lives. To find work, she will have to leave her town and head to a city. Without qualifications, if lucky, she will get a low-paying job like a cleaner in a restaurant kitchen or as a domestic worker. There’s not a lot of opportunity for upskilling once she’s in the workforce. She will live month-to-month.
What if I told you that Africa Jane’s problems can be solved with tech? That these solutions create can indeed create opportunities for a brighter future ? And what if the commercial real estate sector could not only play a part in this, but profit from it?
Yes technology and change is scary. But technology is also a force for good, and a reason for hope. Technology, when aligned with human incentives, is a disruptive force that is capable of solving big problems, fast.
Africa has an education and skills problem. For Africa to advance in a knowledge worker age, this problem needs to be addressed. How do we turn Africa’s potential workforce into gold?
Technology is disrupting many things. The old, centralised suppliers of services like govt are out. Power plants – now solar, state media – now social media, … and telecomms – now private sector telcos.
Education is undergoing the same tech disruption…
Gone are the days of having to study at a cost of $4K per year for a minimum of 3 years at a major urban university to get a chance at formal employment.
Even the successful and cheap Unisa (Africa’s largest distance learning university) is becoming out of date.
Provided you have access to an internet connection and a feature phone, you can reach the finest teacher of any subject, anywhere in the world.
Now, for-profit education tech startups enable teaching at scale – significantly cheaper, and at higher quality.
You have probably heard of Coursera with over 3K courses, giving online education from the likes of Stanford, Yale, UPenn and Duke.
Another option, Udemy boasts 32,000 courses and 18,000 lecturers.
There are 19 other education tech startups each worth over $1B globally, who teach for a profit. India’s BYJU’s has 35M registered learners. China’s Yuanfudao, with a business value in excess of $15.5B, has taught over 200M learners.
At Lambda school, if accepted, you get to study for free, and pay later once you have a job earning > $15K / year. You also get a chance to be hired by one of the businesses who work with Lambda.
In our business, our engineers use Stackoverflow for answers, while I make use of YouTube, Wikipedia and Google. Online communities have sprung up that share knowledge and coach members for free. The cost of this all: internet data.
Given the will, for the first time in history, the opportunity exists for a generation of people to educate themselves, fast, at low cost, in the professions they are interested in, in their own time. Unlike before, those access barriers to high-earnings jobs have been lowered.
As an additional point, the emergence of Low Code and No-Code, “drag and drop” technologies like Airtable, Bubble, Shopify, Webflow, Wix, WordPress, allow junior knowledge workers to be technically productive without huge levels of code experience or skill.
So, on top of education, these advancements in simpler tech tools are bringing barriers to technology jobs down even lower.
Businesses are needing more skilled, tech-savvy workers. This means more job opportunities for those who can upskill.
The following four forces are great news for Africa’s unemployment problem:
Firstly, with increasing intensity, the world is facing a shortage of skilled technical software workers. 97M more knowledge worker jobs will be created by 2025. To put this number into perspective, it’s like creating 10 times South Africas’ existing workforce.
By the end of 2021, Gartner says that 51% of all knowledge workers are expected to be working remotely, up from 27% in 2019. Why is this good for Africa? If a job can be done remote in Europe, there is no reason it can’t be done in Africa.
Remote work is great for employers, and it’s great for employees too:
By way of incentives, remote worker jobs deliver cost savings for the employer. At the same time, workers enjoy reduced child care and travel costs, and savings in travel time.
Finally, the internet has created new ways of working – with platforms, like those in the image, for employers and employees to connect
Africa, with high unemployment and the lower cost of living, is well positioned with the humans at a lower price point to fill modern jobs needs.
How is tech unblocking the problems of access to this incredible array of online education and work opportunities?
On the internet front, private sector internet providers are penetrating Africa fast.
475M people (out of Africa’s 1.2B population) will have mobile connectivity by 2025. This will result in more people, with more access to better internet. In this way, both ideas, education and knowledge worker jobs can go deeper into rural communities.
According to Statistica, the average cost for 1GB of mobile data in Africa is now less than $5, and coming down.
Moving on the hardware front, the phones of today are more powerful than the strongest computer in 1995. Technology is delivering increasingly powerful phones at ever-lower price points. So learning can happen on phones – and soon phones can be used as alternatives to computers.
Where access to computers, screens or keyboards is needed , the private sector appears to be coming to the rescue. Telcos, skilled at selling phones, are now selling computers – with financing, available from $50 / month.
So, if you can’t buy your computer for cash, you can get it on financing.
The populations of Africa and India are roughly similar: 1.4B each. It is estimated (for 2019/2020) that only 2% of Indians don’t have access to electricity. For Africa, as of the same date, the estimate is at 50%. Again technology, particularly solar, is solving this. However, the shortage of consistent power is a real challenge.
So let’s weave the cost of Udemy, mobile internet costs and computer financing together. It will cost a potential knowledge worker about $90 / month to upskill. The lowest UpWork freelancer salary is represented to be $40K. As is hopefully obvious from the image above, on this data it will take ⅓ of a month to earn back the money taken to study for a year.
The traditional barriers to work and school entry are no longer.
Now the critical question around culture and role models. How to influence the sacrifice and dedication required for education? How to change mindsets so that youth can see there can be a way out?
The youth growing up in under-privileged African environments don’t generally have healthy role models as mentors. Largely they look up to corrupt and thuggish politicians, hustlers resorting to crime, or the unattainable talents of sportsmen and women.
Globalisation and media is changing culture. Youth have access to information and role models from other countries. The youth are thinking differently about their opportunities and their futures, and removing limiting beliefs. With new thinking comes action, and with action comes results.
1. World class accelerators are now looking at Africa. Venture capital funding flows are increasing. If we compare Africa to South East Asia and North America, the shortfall is obvious. The re-rating increase is almost inevitable.
Africa now has seven tech unicorns .These businesses have created huge wealth for their African founders and larger founder teams, and created a ripple effect of jobs in Africa.
As more businesses explode, local heroes will be made. These stories will inspire African Janes that it can be done.
2. Already, knowledge workers with access to tech are working remotely and earning stable, good incomes and are role models at a grassroots level.
Whether these workers are working for foreign companies, or now cash flush, venture backed local businesses, these dollars end up in communities.
For your bright and ambitious African Jane, these stories provide hard and inspiring evidence of a way out. And this way out doesn’t require genetics, illegal activities, or politicking.
So, we’ve solved Africa’s fundamental problems with the power of tech, and more of the youth and working class have access to quality education, and the means and skills to earn real incomes.
Where will this newly skilled workforce work? It is very difficult to work from home in your average African house. Distractions for successful knowledge work are high, security is uncertain, unused rooms are uncommon, and access to high quality internet and power is erratic.
A solution is needed.
This brings us to the property specifics. Now that we understand the potential demand, how will this play out. Who will be the likely property winners and losers? What type of office product will be needed by this new legion of tech-enabled, tech-empowered African workers?
We picture a polar opposite to WeWork, IWG (Spaces, Regus), Industrious Office), – forget about community, cosmetics and comforts. Forget about the frills of baristas and concierges.
This new bulge of knowledge workers entering the system don’t want WeWork. But they do want a property product that enables them to work reliably, safely, and at low cost,
This is functional office space, serving needs at the very bottom of the worker’s Maslow’s hierarchy of needs pyramid.
In order for workers to do their jobs at a level required by serious tech employers, their work environment needs the following:
Great add ons will be transport, child care facilities, computers to rent, and canteens
Cost is key, and thus such accommodation is most efficiently provided at scale. The offering, initially, will be spartan and practical. Think rudimentary warehouse-style offices.
Where? According to Statistica, as of 2019, 46% of Africa’s population is deurbanised. Residents are also settled.
We will likely see a proliferation of working facilities in areas where there is high unemployment and a reasonably high geographical density of learners/knowledge workers. The locations will be either rural areas, or lower-income areas in cities, where land/existing built structures are cheap.
(Investors will prefer those regions where there is respect for the rule or law, for a business-friendly operating environment).
What will the ripple effects be? The next iteration could see more luxurious office. It is likely that high density, community-orientated residential may mushroom closer to these working facilities.
Retail would spring up to service the higher density of dwellers and workers with disposable income, and less free time.
The other likely outcomes
Online education and the creation of African role models are going to improve and drive education in Africa. The shift to remote is going to create jobs in Africa (and similar labour-rich, low cost of living geographies). This is going to be supported by the proliferation of mobile internet, improved availability of hardware and the commercial real estate industry coming in to provide office.
Why this article? I am an African. Like many of you, looking at the problems on this continent, it’s easy to feel helpless and hopeless. I’m passionate about sharing this with you, and I hope I have done a good job, because there is hope. The answer is technology – it promises to disrupt Africa’s recurring problems, forever.
Now we just, collectively, need to get it done.
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