For Transregional Research on Private Sector Development, Digitization and Disruptive Technologies

The development of a competitive private sector, and the spreading of innovative technologies, are among the most valuable tools at the disposal of policymakers to fuel job creation and economic growth, and to improve service delivery. Moreover, the role of the private sector in spreading widely new technologies is central. Yet, these crucial avenues for development are exactly the ones that are most likely to be misused in autocratic counties. Control over the private sector, and the use of technology to repress more effectively, are among the main tools used by autocratic governments to consolidate their hold on power by excluding firms and individuals that risk supporting the opposition to their rule. This creates a double tax on development. Not only is the potential for progress through inclusion forgone, but also moreover, these tools are misused to oppress and exclude. Clarifying the existence of this double tax, and the opportunity for very large social gain associated with political change is most important in countries on the cusp of political change.

Two research clusters addressing timely questions and creating much needed knowledge for the Northern and Sub-Saharan Africa regions and that have strong policy implications related to job creation. The first research cluster examines the nature of state-business relations, cronyism and the role of the private sector in three select countries, namely: Algeria, Sudan and Ethiopia, and how these might evolve in light of their changing political setting and economic transformations.

The second research cluster addresses the inter-regional comparison for the implications of digitalization and disruptive technologies for sustainable growth, poverty, inequality, women and the youth in North Africa and Sub-Saharan Africa. In this cluster, in addition to the three country cases in the first cluster, two to three North African countries (such as Egypt, Morocco, and Jordan) and four Sub-Saharan countries (South Africa, Senegal, Kenya and Ethiopia.

Both research clusters, together, address major concerns that is of jobs and productivity. Cronyism reduces job creation by reducing growth, making it too capital intensive, and the same applies for disruptive technologies but with bias against low-skilled workers and in favor of the more skilled and educated workers.

ERF acknowledges the generous financial contribution of the Carnegie Corporation of New York.