Why it matters
SDG 8 concentrates on promoting sustained, inclusive and sustainable economic growth, full and productive employment, and decent work for all. While global real GDP per capita growth has increased by around 2% in recent years, with comparable increases in labour productivity, the COVID-19 pandemic has abruptly and profoundly disrupted the global economy, pushing the world into a recession. Those who are hardest hit include workers in the informal sector, the self-employed, SMEs, and daily wage earners.
The industry contribution
In addition to its direct economic contribution, mobile technology contributes to SDG 8 by allowing firms, especially MSMEs, to become more efficient, access more customers and sell more in non-local markets, which creates jobs for local communities. Mobile can also increase trade and competition by providing consumers with better access to information on products and making it easier to connect them with firms.
Technological advancement for efficient productivity
As a general-purpose technology, mobile improves the utilisation of labour and capital and increases productivity. Studies by the ITU have shown that a 10% increase in mobile broadband penetration causes a wider 1.5–2.5% increase in GDP. The economic impact of mobile also increases when technologies upgrade from 2G to 3G and 4G. In 2019, mobile technologies and services generated nearly 5% of global GDP, equal to $4.1 trillion of economic value added.
In addition, 5G technologies are expected to contribute $2.2 trillion to the global economy between 2024 and 2034. Crucial sectors such as manufacturing/utilities (particularly in China) and professional/financial services (especially in MENA and North America) will initially benefit the most from the 5G. The deployment of IoT infrastructure drives further innovation and increases productivity and revenue while reducing costs for enterprises. In 2019, enterprises globally generated $343 billion in IoT revenue as automation and data-driven decision making unlocked productivity gains, increasing worker safety and energy efficiency.
Mobile technologies also enable the formalisation of the informal sector and boost productivity. For example, mobile financial services can facilitate more effective monetary policy by shifting currency and assets into the formal financial system. Transferring resources from the informal to the formal economy makes monetary tools more effective and supports efforts to achieve macroeconomic stability.
China: harnessing IoT sensors for cost reduction and productivity
The production of strawberries in China is highly competitive and prices are sensitive to the quality of fruit and the time of season. Profit margins are also affected by the amount of labour required and the quantity of water and fertiliser used. The challenge for greenhouse producers is to maximise yield and quality, such as by bringing the first harvest forward to extend the growing season, while minimising the environmental impacts.
China Mobile worked together with LinkDotter, a specialist agricultural tech firm, and a strawberry producer. Using IoT sensors, data was collected about the growth environment and sent via a mobile network to a cloud-based software-as-a-service (SaaS), giving farmers the ability to view and control air and soil temperature and light, water, CO2 and nutrient levels.
As a result of this system, the greenhouse’s harvest started 20 days earlier than the traditional greenhouses, allowing for produce to be sold at a premium price – making a key difference to farmers’ incomes. Across the season, the harvest increased by 100%, water and fertiliser use reduced by 50% and profit increased by 75%, compared to traditional farming. Labour costs were reduced by 50% per kg of strawberries and the system paid for itself in the first year. The solution not only drives value but also decreases environmental impacts and production waste. It is also applicable to other crops and can be adapted to any greenhouse production.
Supporting employment and micro and small businesses
Target 8.3: Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalisation and growth of micro-, small- and medium-sized enterprises, including through access to financial services.
In 2019, mobile operators and the wider mobile ecosystem provided direct employment to 16 million people across the world; in addition, the industry indirectly supported another 14 million jobs by stimulating employment in other sectors. Access to mobile internet and mobile-enabled platforms, such as mobile money and application-based platforms, also supports productive activities, creates jobs and facilitates entrepreneurship by connecting workers to employers and customers. In Nigeria, increased labour force participation and employment were one of the main benefits of mobile broadband connectivity, particularly among women.
In Sub-Saharan Africa, the lack of quality formal employment is a big challenge for younger populations (The International Labour Organisation (ILO) estimates over 75% of all non-agricultural employment in 2018 was informal) (95% of youths aged 15–24 years are employed in the informal sector), as underdeveloped social security systems force them to take up any form of employment to meet basic living standards. In 2018, the mobile industry employed 1.2 million youths, of which around two-thirds were in the informal sector and a third in the formal sector. The industry is expected to create 300,000 new jobs by 2025.
Mobile money also creates an opportunity for individuals to partner with operators to manage agent outlets, generating an additional source of income. The GSMA estimates that the number of agent outlets has doubled since 2015, reaching 7.7 million in 2019. For example, the eSewa mobile money platform in Nepal can be accessed either through a mobile application or via 47,000 eSewa agents or ‘points’. These agents use eSewa as a key business and revenue source, and the service is also encouraging a more digital economy in Nepal with over a million people transacting digitally.
Zambia: Improving MSME infrastructure and creating youth employment
While young people make up almost two thirds of Zambia’s working-age population, almost 25% are unemployed. Meanwhile, local small businesses and shops face simple infrastructure challenges, such as the timely delivery of packages and inventory.
Musanga is a delivery service for packages in Lusaka. Packages are delivered within one to three hours and instant proof of delivery is provided. It enables small businesses and shops to lower their logistical costs and enables informal micro-entrepreneurs – including young people with underutilised assets such as motorbikes, bicycles or trucks – to fulfil last-mile deliveries through Musanga’s mobile platform and to earn extra income. Indirectly, it also facilitates the formalisation and growth of micro enterprises. Through a collaboration with MTN, Musanga is also aiming to offer its customers and drivers access to a set of mobile financial services.
Between April and October 2018, over 48,000 kilometres have been driven by Musanga’s network of drivers and bicycle riders (whose average age is under 28) to complete deliveries through the platform.
Maximising impact by 2030
Enablers that could help maximise the mobile industry’s impact on SDG 8 include the following:
- Integrating IoT business service solutions specific to vertical needs into core connectivity.
- Increasing the use of mobile-enabled services and platforms for applying and searching for jobs in markets where mobile is the primary access technology.
- Increasing digital funding and raising awareness of existing funding opportunities among SMEs to help achieve scale.
- Increasing the proliferation of diversity in the workforce and in leadership.