Chris Barbin, CEO & Founder, Tercera.
AI may be taking up all the mindshare these days, but when it comes to designing, developing and delivering technology (especially AI), people will always be part of the equation. Which is why tech and tech services leaders need to have their pulse on where global talent is.
Tariffs and geopolitical issues may be weighing on the world’s businesses and influencing investment decisions, but great talent will always be needed. And that talent is increasingly global. So, where is the next up-and-coming global talent destination? If you guessed Southeast Asia or Latin America you were wrong. I believe it’s Africa.
Africa poses enormous potential for IT services, especially as companies go on the hunt for data scientists and AI engineers. With wages on the rise in traditional hotspots like Latin America, Canada and Eastern Europe, leaders are starting to explore Africa as another option.
Africa boasts one of the world’s youngest, fastest-growing populations, which is projected to nearly double in the next quarter century. By 2050, the UN estimates that Africans will make up a quarter of the global population and more than a third of the world’s 15 to 24 year olds, most of whom are growing up as digital natives. Africa’s growth, the continued graying of workforces in more mature economies and the rising need for data and AI talent will make Africa harder to ignore.
My firm has made understanding Africa’s talent ecosystems a priority. We’ve researched which markets make sense for our portfolio companies, and which have homegrown firms that can support next-generation IT services. We’ve conducted dozens of meetings with founders and investors, university leaders, VC-backed start-ups and organizations focused on building talent. We’ve met leaders from Nigeria, Ghana, Senegal, Kenya, South Africa, Egypt, Rwanda, Côte d’Ivoire, Ethiopia, Tunisia and Mauritius.
While these efforts have only scratched the surface of understanding this unique, diverse continent, here are a few of my early takeaways.
A Boom In Tech Training That Is Outpacing Job Supply
Africa is experiencing an explosion of tech-focused bootcamps. Corporate and government-sponsored training programs and tech-focused boot camps are supplementing universities to produce professionals with the technical and business skills firms seek. In Kenya, for instance, tech-staffing firm Tana equips entry-level tech talent with in-demand skills, offering international clients a sustainable way to scale. And across the continent, the ALX Foundation trains people on Salesforce, data, AI and other skills.
This is partly to counteract the soaring unemployment across the continent. More than 8 million African youth will enter the labor market annually in the coming decades, yet only about 3 million formal wage jobs are being created each year. For Africans aged 18 to 35, unemployment tops the list of problems they want their governments to address and national leaders are under intense pressure to compete for business opportunities and create jobs.
Today, trained resources still far exceed available jobs. Nonetheless, these programs will pay dividends in the long term, especially as they shift focus to training and staffing the “missing middle”—those mid-level roles with the technical and soft skills needed in the AI era.
Tech And Professional Services Firms Already Moving In
A steady flow of tech giants, accounting firms and global systems integrators (GSIs) have already moved operations onto the continent. Microsoft and Amazon were some of the first big tech companies to invest in the area.
It was a team in South Africa that helped develop what became AWS cloud computing. Google launched an AI research center in Ghana in 2018, and more recently opened up a product development center in Kenya. And ServiceNow, which has seen tremendous growth, is in the early stages of exploring how it builds out a base of certified talent there and investz in services businesses in the region.
As for large services firms, we looked at a representative sample of 25 GSIs and found that 16 had an Africa presence—including Accenture, Deloitte, PwC, EY and Infosys. Ten had offices in multiple countries. The African markets with the most GSIs are South Africa, Morocco, Egypt, Kenya, Nigeria and Tunisia.
If Looking To Build, Know Where To Play
Companies looking to build out their talent base in Africa should consider the distinct nuances of the different countries. On one end of the spectrum are countries like South Africa, Egypt and Kenya that have mature tech ecosystems and economies that I believe can more easily support new entrants. In the middle are countries like Nigeria, Ghana, Rwanda and Senegal that have growing economies and large young workforces worthy of investment, but where navigating regulations, economic factors, language and cultural differences may require deeper investment and a more nimble local partner.
On the other end of the spectrum are countries like Cameroon and the Democratic Republic of Congo (DRC) that harbor fast-growing populations of talented young people, but may also have political, security and infrastructure challenges that might hinder immediate investment.
As always, when investing in any new area, it’s important for leaders to know how a regional investment fits into the broader business and operational strategy. To go in with eyes wide open—to fully understand the opportunities and risks.
Certain technical and soft skills may be scarce, given the younger and less-developed status of the labor market in parts of Africa. And leaders tell us that once individuals have been trained to an internationally competitive level, keeping them engaged in the local market can be challenging.
A Look Ahead
Africa won’t be the answer for every firm, nor will it be the only region where companies look to find scarce technical talent in the AI era. For example, I fully expect India to see a surge in investment as well, especially from U.S. companies looking to navigate a growing trade war in other areas of the world. However, those firms that can get into the right market early, with the right level of oversight, may just outpace their competitors that play it safe.
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