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Wednesday, November 23, 2022

African Creator Economy: A Socioeconomic Renaissance of the Continent?

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Ciugu Mwotia

Debating Ideas aims to reflect the values and editorial ethos of the African Arguments book series, publishing engaged, often radical, scholarship, original and activist writing from within the African continent and beyond. It offers debates and engagements, contexts and controversies, and reviews and responses flowing from the African Arguments books.

Credit: Made in Africa

The creator economy may well be a global phenomenon but to me, Africa is positioned to profit the most from it compared to other continents. This sentiment is informed by a confluence of factors that are shaping the future of Africa’s labour markets. One such factor is the fact that African demographics are predominantly made up of young people. Statistics show that in over 40 African countries more than 50% of the population is under 20. In my country of origin (Kenya), 75% of the population is aged 35 and below.

Africa Median Ages

The implications of this discovery cannot be understated. The burgeoning youth population brings with it a promising shift in modes of thought. According to the African Youth Survey 2020, there has been a rising Afro-optimism among the continent’s youth who are driven by a strong sense of individual responsibility, post-colonial mindset, entrepreneurship and confidence in a shared African identity. Ostensibly, this demographic would be the biggest adherents and beneficiaries of the African creator economy.

Another factor that makes a strong case for the African creator economy is the cascading effects of the pandemic on our economies. We are witnessing almost all fronts rising cases of inflation, supply chain disruptions, unemployment, job insecurity and even civil unrest in countries where living conditions became untenable. What we are seeing today may well be the opening salvos to a very dark and perilous decade for Africa if we don’t act fast.

Historically speaking, when the 2007/08 global financial crisis shook the world, sub-Saharan Africa was able to make it out relatively unscathed.  The reasons for this according to the IMF are threefold: 1) African governments had sound economic policies characterised by low dependence on external debt, high foreign reserves and low deficits; 2) Africa was the least globally integrated region financially and was therefore insulated from the shock; and 3) China rolled out the biggest stimulus package after the recession which benefited resource-rich regions the most, i.e. Africa, thereby helping to keep them afloat.

That was more than a decade ago and a lot has changed since then. Africa is now more financially integrated with the rest of the world making it vulnerable to even slight disruptions. Africa is also currently neck-deep in foreign debt. And while Africa was previously able to weather the global recession by servicing emerging and frontier markets, this option may prove to be elusive now. We can ascribe this to lower trade and investment from China in the immediate term, limited trade elsewhere caused by the disruption of global supply chains and a looming food crisis caused by climate change.

Clearly, commodity-driven growth models are currently not very reliable for Africa’s post-Covid economic recovery. We need to pivot towards an information-based economy while working to resuscitate dying streams on the side. An accelerated digital transition will allow the continent to make the most of undervalued and underutilised wealth creation avenues such as the African creator economy. This would be the pragmatic play to make given our circumstances.

Creator economy, a historical background

The creator economy has been defined as “an economy where independent creators leverage the full force of the internet to earn a living while also fulfilling the need to express themselves as humans.” The animating principle behind it is the belief that the nexus between tech, creativity and global economics, as expressed in the ability to create, access and circulate intellectual capital has the potential to generate income and jobs while simultaneously promoting social inclusion, cultural diversity and human development.

There’s a good chance that even with this definition the modalities of the creator economy are still unclear to many; here I attempt to break it down even further. The creator economy is, in the real sense, just a small part of a larger microcosm known as the gig economy. Within the gig economy also exists the passion economy. A simple equation that denotes the relationship between these three economic models is thus expressed: Gig economy > Passion economy > Creator economy.

The gig economy, which sits atop this pyramid, is defined as “A labour market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs.” In this arrangement, a skilled individual provides labour with no expectation of standard employee benefits and protection like in an office job. Examples of gig economy workers are plumbers, tutors, electricians, mobile hairdressers, Uber drivers, food delivery agents, etc.

The second tier of this pyramid is the passion economy. The passion economy is contextually similar to the gig economy except for one significant twist – it is centred around the notion of making money from doing what you love, i.e. your passion. This is antithetical to the prevailing belief that an individual can either follow their passion or go for a “practical” career – never both. Examples of passion economy workers are freelance writers, performance artists and more generally now activism work.

The third and final tier of this pyramid is the creator economy, which we already defined earlier. The creator economy appears strikingly similar to the passion economy, but the two are distinguished on the basis of their scope of application. The passion economy is a broader, more generalised model, while the creator economy is limited and specific to the internet. Examples of creator economy workers are podcasters, vloggers, online course creators, virtual teachers, digital artists and so on and so forth.

There is an element of semantic vagueness in the definition of these terms among the masses, so you will often hear “passion economy” and “creator economy” being used interchangeably. Discourse on this subject may also conjure up something known as the “sharing economy”. This is an economic model in which individuals and families rent out assets they possess to customers, typically via the internet. A classic example of the sharing economy is Airbnb. Additionally, there also exists an “attention economy” – a concept that I will be discussing below.

A.C.E Venn Diagram

9 to 5 versus creator economy

The focus of this piece is the creator economy as I believe it surpasses both the traditional 9 to 5 job and the gig economy models in its potential to revolutionise the African labour marketTo validate this assertion, I will highlight the problems facing the two latter models and then show how the creator economy holds up in comparison.

For traditional office jobs, the biggest grievances are lack of passion, lack of freedom, hostile work environments and fixed salaries without prospects for upward social mobility amidst inflation in a rapidly marketised and liberalised economy. The instinctive solution to all these grievances has become for one to quit their job and strive instead for self-employment à la gig economy. The “quit and become your own boss” tag has become a common rejoinder that is usually presented as a panacea for rising cases of unemployment and job insecurity. Both of these perspectives speak to a fundamental ignorance of the realities and challenges encumbering gig workers in the 21st century.

The problems plaguing gig workers include a lack of standard employee benefits and protection, inconsistent incomes, exploitation, irregular work hours, burnout and lack of a solid professional identity to anchor them in the way organisations do for their employees. The debate around formality and informality and workers’ relationship with the state and implications for the social contract is also ongoing and heated.

Undoubtedly, the most insidious problem facing gig workers worth exploring in-depth is the issue of exploitation. Many an employee has quit their job thinking that they will find liberty on the other side of the corporate fence, only to find out that their escape from cubicle nation into gig work was like trading one jail cell for another. The plight of Uber drivers the world over is a clear example of this.

According to a report by the Business & Human Rights Resource Centre in London, large gig economy platforms like Uber and Deliveroo are mislabelling workers as “independent contractors” instead of employees in order to avoid paying them minimum wages, and overtime and sick leave. Uber also sets the cost per trip for the majority of the rides and takes a commission out of them, making the notion of financial freedom for workers a mere illusion. These unfavourable terms of service mean that a large number of Uber drivers have unwittingly signed up to become slaves for Uber while deluding themselves that they are free and in control of their own lives.

Exploitation in the gig economy also manifests itself through middlemen and gatekeepers who intercept value chains and unjustly profit from them. Some use their insider status to ask for kickbacks in return for jobs. Others delegate their own job functions to desperate gig workers on the cheap and then get paid for doing zero leg work. Freelancer sites like Upwork, Fiverr and the like are notorious for facilitating this kind of exploitation.

These sites have given rise to a sad trend where the most horrific, traumatising and mind-numbing work is outsourced to the global South where cheap labour is abundant. Gig workers doing these jobs earn pennies while the executive “slave owner” class pockets pound. Gig work in the digital age has therefore become a race to the bottom, where these virtual sweatshops are portrayed as promising escapes from corporate bondage and unemployment to gullible, frustrated workers.

Having outlined the above concerns associated with the 9 to 5 gig economy models, how exactly does the creator economy propose to overcome them? In brief, I would say that it does so by offering African creators three key things: freedom, ownership and stability. Each of these factors is discussed in detail below.

On freedom

Through the creator economy, African creators are now able to leverage their own unique aptitudes and passions to forge a livelihood on their own terms. Compared to conventional office jobs and gig work, creators have much more latitude and agency: latitude to earn a living doing what they love instead of pursuing “practical” careers and agency to choose how they spend 24 hours in a day. This satisfies both the human need for meaning and material security.

On ownership

In event of its success, the creator economy will mark an important watershed in the history of work because of its ability to cut out the middleman and allow creators to engage directly with their clients. A good sign of our advancement towards this reality is the slow and quiet demise of the “attention economy” – a phenomenon I mentioned earlier in passing.

The attention economy is the ad-based revenue model that has dominated creative industries in the 21st century and made companies like Twitter, YouTube and Facebook some of the richest in the world. Ponder this: nobody pays to join and use these sites, so how exactly did they become so rich? The simple answer is that users of these platforms are commodified and sold off to advertisers. Markedly, the axiom “if you aren’t paying for a product, then you are the product” rings true, especially for the attention economy. Ever since creators became aware of this dynamic, they began making efforts to take back their power.

Creators with large social media followings have begun moving to platforms where they can earn directly from their audiences instead of enriching platform owners. Think about it: why write think pieces on Twitter and Facebook all day for free when you can put your thoughts behind a paywall and make people pay you for access? This exact move is being facilitated by platforms like Substack, where the top 10 highest paid writers collectively earn $20,000,000 a year from newsletter subscriptions. Of course, the platform takes its cut for facilitating the whole process. That notwithstanding, this new model makes infinitely more sense than making the Zuckerbergs and Agrawals of this world richer for free.

Another example of the creator economy in action is Podia, the online course and digital product platform, where some creators earn as much as $100,000 a year. This is by far a more sensible alternative to posting tutorials on YouTube just to earn pennies. Business savvy YouTubers with large followings are therefore funnelling their audiences into these alternative platforms, where they can directly earn from them instead of waiting for meagre pay-outs from YouTube. Some of the affected tech companies have picked up on this slow migration and incorporated virtual tip jars in their platforms to stop the bleeding (tip jars are digital provisions for audiences to send money to their favourite creators).

Blockchain’s role in facilitating the creator economy

Despite all these positive developments, all is not rosy in the creator economy. A new enemy threatens to undo all the progress made so far. That enemy is companies purporting to be freeing creators from middlemen only to become the new middlemen themselves. Indeed, the companies claiming to be democratising creative expression and entrepreneurship may eventually end up establishing monopolies and oligopolies of their own once their place in the new creator economy is cemented. The oppressive reign of Silicon Valley tech companies will then continue indefinitely until somebody or something intervenes. Thankfully for us, the transition to Web 3.0 facilitated by blockchain technology should take care of that. Web 3.0 here refers to the third generation of the web.

Web 1.0, the first generation, was the read-only version of the web where the role of internet users was limited to passively consuming content produced by content producers. Web 2.0, where we are currently, is the version of the web where reading, writing and creating are possible. Interactions are now a two-way stream. Web 2.0 is the social-media iteration of the internet where Facebook, Twitter and the YouTubes of the world reign supreme. These companies own the platforms and servers where all our data is kept, giving them unmitigated power over the content. The quandary presented by this dynamic is that when they set the rules, we have no choice but to play by them.

Proponents of Web 3.0 posit that the next generation of the internet will be the opposite of Web 2.0. Everything will be decentralised and no one single entity will have control over platforms and servers as they do now. Web 3.0 is therefore the version of the web where reading, writing, creating and individual ownership are made possible. Individual creators will now be able to operate freely without being at the behest of Silicon Valley tech companies. This reality will be facilitated by blockchain technology – a topic that warrants its own separate article.

On stability

The creator economy counters the precarious nature of gig work – where you get a job today not knowing where your next one will come from – by leveraging the power of audiences and communities. An easy way to think of this is to picture creators being transformed from random, interchangeable hawkers into familiar stall owners that customers can always return to. This is unlike traditional gig platforms, where creators are unable to differentiate themselves from a sea of homogenised avatars.

A clear example of the power of differentiation in leveraging audiences is the platform Outschool. Outschool is an online marketplace for live video classes where instructors are mostly former schoolteachers and stay-at-home parents. Instructors on the platform are able to develop their own curricula or browse lists of courses in demand by users. The platform’s user interface also helps teachers to differentiate themselves from one another beyond subject matter by emphasising each teacher’s background, experience and self-description. Parents and students can also message teachers directly.

Another added advantage of the creator economy is that it manages the content oversupply problem by facilitating a global transition from mass production to mass customisation. The constant tussling and fighting that has come to define capitalism become less pronounced when the base is widened and different people get to compete in different niches.

This treatise won’t make the mistake of declaring ipso facto that this is the singular solution to all our problems although I am convinced it is a good place to start. Indeed, the immense potential of the African creator economy can be realised in full through concerted efforts between tech geeks, investors and public intellectuals leading to a socio-economic renaissance of the continent.

In summary, the principal argument in favour of the African creator economy is that it challenges existing norms that dictate that the only option for modern workers is being a wage slave trapped in a suffocating 9 to 5 routine or a gig serf bumbling from one project to another without knowing where your next job will come from. This nascent model is a valiant attempt at liberating humanity from their stifling corporate jobs while simultaneously insulating them from the precarious nature of gig work.

Ciugu Mwotia

Mwotia Ciugu is a PR and Communication strategist based in Nairobi.

 

 

 

 


 

 

 

 

 

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