Digital Labor Markets Assuaging Unemployment, Forex Burdens

As much as Ethiopia is commended for the number of universities built and students graduated over the past several years, one cannot say the same about employment opportunities available to these young jobseekers. As the world, and hence Ethiopia, goes more digital with each passing year, online labor markets are presenting themselves as an alternate means of employment. With more and more Ethiopians tapping into jobs over the internet, digital labor markets could ease unemployment and forex burdens, writes EBR’s Addisu Deresse.

Born in Adama, Abel Tsegaye, 25, is a graduating student in the Bachelor of Software Engineering program at Addis Ababa University. The would-be engineer has built various applications currently available on the Google Play store. He was a second-year student when he built his first application named Ethiopian Newspapers which provided access to all licensed Amharic-language newspapers published in Ethiopia. The app currently has more than 10,000 installations.

After building up his name in the digital world, Abel got a shot at an international project on media literacy with student researchers from Sweden. He then went on to create two more applications which sought to ease schoolwork management for teachers and students.

“I haven’t earned any income from these works,” Abel told EBR. Fortunately, his story gets much better.

Having published apps on Google Play, he was hired by a US-based but Ethiopian-owned company after which he would then join a team of developers in the US to work on a big project called Nebab–a social reading platform for Ethiopians. The project was part of a unique movement focused on building an educated and enlightened community and also connected Ethiopians across the world to discuss books and ideas. While attending university in Ethiopia, Abel also worked for a UK-based company called Eri2Eri, as a part-time mobile application developer which helped him earn a little additional side money.

Abel, also co-Founder of a startup called Eskalate, was hired by Solomon Kassa, the tech personality and television show host. As part of Solomon’s startup called 1888 EC, Abel worked as a developer of Triopia, an Ethiopian travel guide application.

“I earned around USD500 per month, working on projects for various companies for the two years since I was a 3rd-year student,” said Abel, sharing his story with EBR. He didn’t stop there and his career kept on progressing.

Once a 4th-year student, a program called Africa to Silicon Valley (A2SV) came to Abel’s campus looking to recruit top students with offers of training opportunities in data structures and algorithms. A potential job at Google was even in the offing. He was selected to attend an internship in Amsterdam, which he completed in October 2021. His performance at the internship was too good to let him go and Google offered him a full-time job at its London office.

Of course, and unfortunately, Abel’s story doesn’t transcend across to all who engage in digital platforms. Yet, less valuable but still important opportunities are popping-up ever more for young men and women.

Tinsae Zelalem, a 25-year-old Medical Doctor, is a graduate of Addis Ababa University School of Medicine at Black Lion Specialized Hospital and is currently working at We Care Digital Health–an initiative working to introduce an application that connects medical doctors to patients. While at Black Lion, Tinsae was not just a student. She was rather a young woman with a keen interest in turning her digital skills into earnings.

“As a second-year medical student, I developed a website for the sharing of medical information,” Tinsae told EBR. “I bought website themes using money attained by developing a couple of other websites.”

She has an online site to sell her website development services as well as a personal blog, lifeasmd.com, where she shares her experiences as a health professional. As she keeps pursuing her education and sideline money-making opportunities, she one day would learn on Google about freelancing for foreign companies. As she kept educating herself on the digital freelancing market, she came across Fiverr, created her profile, and got her first job or gig as it’s called. The platform is a marketplace of freelance services for individuals and businesses founded in 2010.
“I first got a social media management job for USD100 for two months,” Tinsae explains. “I then wrote 500-word articles for a Jamaican employer for USD5 per article.”

Fiverr serves as an e-commerce platform for freelancers and those willing to employ them for gigs. The founders came up with the concept of a marketplace that would provide a two-sided market for people to buy and sell a variety of digital services typically offered by freelance contractors. Its services start at USD5 and can go up to thousands of dollars with gig extras. In 2012, the platform was hosting 1.3 million gigs.

An early February search for Ethiopian freelancers on Fiverr displays a result of more than 97 engaged in freelancing from the comfort of their homes in the country—almost doubling from 50 in mid-December. From a middle-aged woman that goes by the profile name bethmaharie, who teaches East African dancing for USD15 to a young man that goes by the profile name of eyobedtho, who records professional guitar sounds for the same price, Fiverr is filled with Ethiopians taking advantage of the opportunity. Fiverr does not display earnings.

One platform that does display freelancers’ earnings is Upwork. The merger of two tech companies in 2015, Elance and oDesk, gave birth to the company. The biggest online labor market with more than 12 million registered freelancers shows over 3,800 under a search for Ethiopian talent. In 2017, Upwork has already platformed jobs worth USD1 billion worldwide. It allows clients or employers, who want to hire freelancers from any corner of the world, to interview and hire talent—either specific individuals or from a pool of applicants. After completing their work through agreed-upon rates, hours, and deadlines, freelancers are paid directly to their given bank account.

When searching Ethiopia in the Upwork website, there’s a list of Ethiopians actively engaging on the platform to make money as freelancers with the first page displaying 10 Ethiopians who have made a combined USD211,000, though the time period isn’t clearly stated. Individuals have earned between USD20 to 200,000 with multiple jobs through the platform. Most of the jobs are translations of English to and from Amharic, Tigrigna, and Afan Oroomo, among others.

The top earner of the first 10 individuals goes by the account name of Miheretab A., who has earned USD200,000 through a total of 141 jobs taking more than 9,000 hours. This equates to around USD46,000 per year when calculating upon full-time employment of 40-hour weeks. Miheretab, Software Engineer by profession, works 30 weekly hours and responds within 24 hours to freelance service requests, according to his profile on the platform.

Upwork allows freelancers to directly link their Ethiopian bank accounts to which the platform relays payments whenever a certain threshold amount is reached. Fiverr, on the other hand, doesn’t allow its global freelancers to directly link their bank accounts. It employs a linkup with Payoneer, a digital payment transaction system, after which freelancers receive the money through Mastercard or a transfer to an Ethiopian bank account.

“If both individual freelancers and the government take the matter seriously, it could be a significant source of dollars,” Tinsae argues. “We earn in dollars, but banks give us in local currency.”
Tinsae advises for the localizing of services. Translations of foreign languages into local ones could be a profitable service, as well as voiceovers and transcriptions, according to him.

In 2018, Ethiopia witnessed its first digital freelancing platform. Freelance Ethiopia is a Telegram channel and bot, developed by Masero Advertisement and Technologies. The social media channel now has more than 141,000 subscribers with an average of five daily job postings.

“It was developed as a matter of necessity as our sister company was not able to find freelancers,” Semegn Tadesse, CEO of Masero told EBR. “The public’s interest was so immense that it eventually became a public channel.”

The Ethiopian government through the newly structured Ministry of Labor and Skills also seems to be arranging to take advantage of digital labor markets. Even though the ministry is yet to fully engage in many of its missions, there are early signs that its eyes are on the matter as it has set up a freelancing, outsourcing, and gig task force, according to a November 2021 official Facebook post.

A study document compiled by the International Labor Organization (ILO) in 2021, recognizes digital labor platforms as potential endeavors to ease unemployment burdens worldwide. The Covid-19 pandemic has played a role in accelerating technology usage and hence, digital labor contracts. The pandemic has forced remote working arrangements, giving rise to e-commerce, e-services, and online freelance work both in developing and developed economies, according to the document which is the first major attempt by ILO to capture the experiences of workers.

“Work is outsourced on these platforms by businesses in the global North, and performed by workers in the global South,” the ILO report reads.

The report involved tens of thousands of workers in 100 countries operating on 16 platforms. According to data collected from 200,000 projects on a major freelance platform for the year 2019, demand for such work is largely outsourced from Australia, Canada, Germany, New Zealand, the United Kingdom, and the United States. A large proportion of this work is performed by workers in developing countries. Indians take the lion’s share of USD26 million, almost 20Pct of the total market, followed by the Philippines at USD16 million, and Ukraine at USD13 million. The volume of transactions has increased and almost all countries now have a higher share of domestic employers outsourcing tasks on these platforms. Hence, online labor markets are dispersed around the globe.

But the new opportunity is not without challenge. The platforms are like brokers that manage the entire transaction between workers and clients using algorithms. These platforms allow the managing of work without having to invest capital assets or hire employees. This, in turn, could create a struggle to find sufficient and well-paid work to earn a decent income, hence, creating what the ILO document refers to as work poverty. The issue of social protection for workers is too ideal a variable to practice in contracts over these platforms.

In response to the challenges, governments are taking regulatory measures to protect the safety of workers and ensure the consideration of health standards and social protection. As various governments are responding in their own unique ways, it is still difficult to ensure quality work environment at a global level.

As much as Ethiopia has been complimented on the number of young men and women joining higher education, the same cannot be said on the number of former students that join the workforce. Young graduates without jobs and others doing jobs that are not related to their fields of study have made headlines for a decade, if not longer. As the challenges of unemployment remain, a glimpse of hope by any means is only a plus for young Ethiopians. EBR

10th Year • Feb 2022 • No. 104