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Africa gradually transitioning towards the gig economy

Africa gradually transitioning towards the gig economy

Early-stage entrepreneurs and funders increasingly favour on-demand services as opposed to more traditional jobs boards - which signals Africa's gradual transition into the gig economy.

This is according to the Future of Work: Exploring the African Digital Work Landscape Report 2018 released by Disrupt Africa.

According to the report, 180 startups in operation across Africa are "changing the face of the continent's work and employment landscape."

Gabriella Mulligan, co-founder of Disrupt Africa said, "Africa faces significant unemployment issues, with 16 of the world's 30 highest unemployment levels belonging to African countries. In its tech space, however, the answers could be found. Startups are coming up with increasingly innovative ways of connecting all kinds of professionals with work, and investors are seeing the potential."

The report also found that Africa's startup community has fully embraced the digital workplace, with evidence of a thriving "future of work" ecosystem on the continent evidenced by a sudden boom between 2015 and 2017, a period in which almost 75% of the now active startups were launched.

Though the initial growth in the space was attributable to the establishment of startups applying tech to the traditional jobs board approach, by allowing employers to advertise jobs to prospective employees online, the sector is gradually maturing.

Increasingly, more mature solutions aimed at freelance, one-off or project-based work are taking centre stage.

Tom Jackson, co-founder of Disrupt Africa, says the continent is moving towards the on-demand economy at pace. "Everyone from domestic cleaners, to teachers, to artisans now has the opportunity to access work via various marketplaces and on-demand platforms across Africa. These solutions are putting power into the hands of individuals - be they workers or customers - and are ensuring more and more Africans are able to access opportunities. It is an exciting time for the space."

On-demand platforms now account for a greater percentage of the market (35%) than recruitment services and marketplaces, a share that is increasing over time.

These services are identified in the report as being active across a variety of vertical markets, most notably logistics, transport, education and home services.

The report also established that as on-demand solutions increasingly come to the fore, investors have focused their attention on this space whereas the three major sub-sectors - recruitment, marketplaces, and on-demand - secured similar total amounts of funding in 2015, with the latter increasingly asserting itself as the leader by raising over US$14.5 million in funding in the last 3.5 years.

Nigeria and South Africa are the continental leaders when it comes to digital work startups according to the report, with the former hosting 58 startups active in the space, and the latter contributing a further 47.

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