The Growing Somali Digital Economy: An Opportunity for the Youth

The Somali people are known to be an enterprising society with business ingenuity and a drive to excel in business, which is a cultural trait that has been sharpened by years of hardships and a continuous search for resilience. The migration of our people in the past 4 decades to the east, the west, and neighboring countries is a living testimony of how the Somali people’s entrepreneurial spirit has been inflamed by the need to survive. The sound business environments that exist in the destinations and host countries chosen by them have helped their efforts to bear the fruits they hoped for and more. In Kenya, which is our neighbor and an East African economic hub, the Somali people have established themselves as a successful business community that creates jobs in the real estate and financial services industries by starting and operating businesses that would mostly be categorized as small to medium-size enterprises (SMEs). In Europe, Somali entrepreneurs have emerged in the global startup scene by taking advantage of the internet and web technologies to start companies that have a multinational impact. A case in point is the myriad of remittance companies that have sprung up at home to connect diaspora members to the homeland, the latest success story of which is WorldRemit.

Many of these enterprises started by the Somali people have been born, incubated, and operated out of Somalia. Most of them were spawned by the major telecom operators who are known to be both the drivers and enablers of the Somali digital economy. The primary reasons for this, in my opinion, include the lingering digital divide in whichSomalia was on the side of those who had limited access to the connectivity and facilities needed to tap into the information-rich global network that is the internet; the scarcity of the skills and knowhow was also caused by limited financing opportunities and the much-needed role of the government in regard to promoting, shaping and transforming through effective policy development.

While the world continues to move on and achieve higher levels of digital transformation driven by artificial intelligence, the Internet of Things, blockchain technology, and many other ideas that are built on top of these trending yet impactful technologies, we still try to keep up despite the related challenges. From the early days when UHF radios were used to transmit information regarding remittances to today’s self-service, one-click transfers, we have tried to play ball with the rest of the world in keeping pace with the technological developments. Examples of these success stories are all around; however, there is one major issue that has not yet been addressed amid all these developments, namely, building the necessary skills and human capital to continue this trajectory of digital economy growth to create sustainable employment opportunities for our youth. The digital economy requires that the people, in general, become digitally literate, while the creators and builders of the digital economy are vessels that need well-rounded skill sets that not only enable them to build enterprises but also to sustain and promote businesses. The consequences of not creating sufficient employment opportunities—both economic and social—are now in our hands, while we are still trying to figure out a way to treat the symptoms while avoiding any discussion about the real issues, i.e., building a critical mass of human capital to propel Somalia into the knowledge-based digital economy era.

The enterprises that we mentioned as examples earlier, even if they tried their best to create employment opportunities for the youth, could only cover an insignificant portion of the current job market demand. Equipping our youth with not only the necessary skills to create jobs for themselves and others but also with the right mindset to do so is more critical today than any other intervention. The youth have previously not had a greater opportunity to become more for both themselves and the nation than they currently have today. The reasons why are as follows:

Self-paced online courses that help youth develop their digital skills are available at no cost.
Universities have started integrating skill development courses within their curricula, such as the case of the integration of SIMAD University’s Coursera program into the curriculum. Access to connectivity and internet technologies have improved across Somalia. Although there are no concrete data irrelevant studies regarding internet penetration, it is safe to say that every urban household now has at least 3 smartphones connected to the internet. The startup movement has reached Somali youth, with the universities driving such initiatives. The SIMAD Innovation Lab, previously known as IITE institute, has been at the forefront of the Somali startup scene by encouraging youth to create solutions and start businesses that address socio economic issues while giving them and their colleagues a chance at self-employment.The financial services industry has matured and now offers a wide range of financial instruments to support the growing digital economy.

With all the changes that have happened in the past 30 years, it is not very difficult to see what tomorrow will look like for the Somali youth. We see that products and services will disrupt industries, similar to how EVC, ZAAD, and E-Dahab have disrupted the financial services industry. While many of our youth might be discouraged and overwhelmed by the incumbent giants, which make them believe that the market is already saturated and that there are too many barriers to entry, they need to be reminded continuously that there is always room for creativity and improvement, as there will always be better ways to do things. This reminds me of the most recent social media platforms that have been introduced,even though there was already a plethora of them dominating the market. The case of Clubhouse’s recent market entry success is a good lesson that there is always an innovative angle and entry point into any seemingly saturated market.

All the youth need today is the sheer will to create employment opportunities for themselves and the skills to create, market, and sell products and services that address customer needs and wants. Technology, being the economic equalizer, has created a level playing field for economic growth and wealth creation for youth. Opportunities ranging from a solopreneur who wants to sell his or her skill and talent on gig economy sites such as Fivver and Guru to digital marketing startups that do business with clients across the globe to innovators with disruptive ideas that change the education, health care, financial services, and the telecom sector have been made possible by the proliferation of technology and access to it.

Local digital economy ecosystem players ranging from telecommunications powerhouses such as Hormuud, SomTel, Telesom, and Golis Telecom to smaller IT companies such as Tabaarak ICT Solutions and Asal Solutions and startup incubators in Hargeisa, Mogadishu, and Garowe such as IRise, Harhub, and SIMAD Innovation Lab all have stories that are worth learning from. Our youth could benefit greatly from their stories by engaging founders in networking events or coming to human library events such as those organized annually by SIMAD University. In conclusion, our youth need to know that there is no such thing as luck in this world. A wise man once defined ‘luck’ as where preparedness meets opportunity. The opportunity is out there in the open; are you ready to seize it? Are you bold enough to capitalize on it?

Dahir Hassan Abdi, Rector, SIMAD University