Over the course of history, there are certain key technologies that have redefined entire economies, acting as a catalyst for widespread innovation and growth. Consider electricity, which revolutionised every sector it touched. Each industrial revolution has been driven by a general-purpose technology (GPT) like electricity, setting the stage for unparalleled economic development.
Jeffrey Ding, a professor at George Washington University, highlights a critical insight: the true driver of economic growth during an industrial revolution is not leading in innovation but in widely adopting key GPTs across the economy. If a technology is to change every part of the economy, then the country that benefits the most will be the one that successfully diffuses it across every area of the economy. This was evident with electricity in the United States, where widespread adoption spurred GDP growth. The same principle applies globally, including in African countries. To succeed, we must harness the full potential of general-purpose technologies.
Looking ahead, it’s almost certain artificial intelligence (AI) will be regarded by economists as the next great GPT. Already McKinsey places the global opportunity at around $4.4 trillion. However, for AI to impact every part of the economy, the necessary skills must also exist across all parts of the economy.
Africa has a unique role to play in creating this pool of skilled young people to power the advancement of AI, not just in local economies, but in the global economy too. In fact, it’s estimated that by 2030, 42 percent of the global youth population will be African.
Africa’s digital services sector is expanding rapidly, with innovations in fintech, e-commerce, and mobile technology. Over the past decade alone, the African tech ecosystem has increased almost tenfold in transactions and funding, with approximately $20 billion invested in around 3,000 deals, 68 percent of which occurred in the last three years.
It’s clear the opportunity has never been greater for Africa, not simply to leverage AI to drive productivity gains and solve major societal challenges, but also to become a more significant player in the global AI economy. To realise this vision, it’s essential that the continent drive investments that will enable broad and sustainable adoption of AI across the economy.
To drive progress, nations must implement both short-term and long-term strategies, mastering four essential components, including technology, economics, skilling, and social acceptance. Two of these components have been crucial points of focus for Microsoft’s major investments in Africa over the last three decades, and are key success factors in building an AI economy.
New investments to develop critical infrastructure and nurture key skillsets
The company’s recent investment announcement in South Africa, for example, speaks to the world-class technology infrastructure needed to drive growth and innovation across the economy. During Vice Chair and President Brad Smith’s visit to the country, Microsoft announced that the company plans to spend ZAR5.4 billion by the end of 2027 to expand its cloud and AI infrastructure in South Africa to meet the growing demand for Azure services in the region. This investment builds on the company’s ZAR 20.4bn investment over the past three years to establish the nation’s first enterprise-grade datacentres in Johannesburg and Cape Town.
Additionally, Microsoft’s broadscale investment in skilling is transforming the African workforce for a future driven by AI. Through the recent AI Skills Initiative, Microsoft is empowering one million South Africans, one million Kenyans and one million Nigerians with essential AI and cybersecurity skills. Recognising that beyond breadth, depth of skills is also needed to drive significant economic impact, Microsoft has now announced that it is expanding its digital skills initiative in South Africa, funding 50,000 individuals to achieve “Microsoft Certified” status in high-demand fields such as AI, Data Science, Cybersecurity Analysis, and Cloud Solution Architecture. This initiative will directly translate to job opportunities and economic growth, solidifying a tech-savvy workforce for the future.
Leveraging more than 30 years of progress
Microsoft’s strategic investments provide a blueprint for developing a thriving AI economy. The company’s approach underscores the importance of mastering the four essential components discussed earlier in this article, starting with the technology itself. At its core, every GPT relies on a structured tech stack, which is fundamentally divided into three essential layers: infrastructure, the platform, and applications.
The infrastructure layer is crucial, and it’s what Microsoft is currently focusing on with ongoing investments in South Africa and across the continent. Just as electricity relies on power plants, AI depends on datacentres and robust infrastructure. Cloud computing democratises access to advanced AI technologies, fostering an environment of innovation and collaboration. Microsoft, as the first hyperscale cloud provider to launch an enterprise-grade datacentre region on the continent, has invested heavily in a robust technology ecosystem, promoting economic growth in Africa. Partnerships, such as the recent collaboration with G42 to develop yet another datacentre region in East Africa, are further bolstering the technological infrastructure required for AI advancements.
The platform layer is the engine room of AI innovation. Here, data is transformed into powerful models through extensive training. Microsoft is helping lead efforts in developing these critical software components, positioning itself and its partners to drive the future of AI. It’s all for one reason – to enable people to get to work and drive innovation at the applications layer.
Already, the company is working with African startups to create innovative applications. South Africa’s Lelapa AI has developed InkbubaLM, Africa’s first multilingual AI small language model, which is designed to support and elevate low-resource African languages such as Swahili, Yoruba, isiXhosa, Hausa, and isiZulu. By providing capabilities for translation, transcription, and other natural language processing tasks, InkubaLM addresses the digital underrepresentation of these languages, empowering African communities and ensuring a stronger presence in the global digital space. Kenyan startup Zendawa, is transforming pharmaceutical operations in East Africa by providing online access to medicines and financing solutions for small pharmacies. And it’s not just startups driving progress in this space. Major corporations such as Access Holdings in Nigeria are leveraging AI tools like Microsoft Copilot to enhance productivity and streamline operations. Government entities like the South African Revenue Service are using AI to optimise revenue collection and improve citizen services. This collaborative AI-driven approach is rapidly transforming industries across Africa.
Skilling will play an essential role in Africa’s success
One of the other cornerstones of a thriving AI economy, is skilling. Historical trends show that industrial revolutions are powered by skilled workforces. England’s success in the first industrial revolution stemmed from its technical institutes and apprenticeships in ironworks. Likewise, without a skilled workforce, new technologies cannot be effectively implemented.
That’s why Microsoft has invested significantly in skilling, upskilling over four million young Africans in five years. In Kenya, for instance, the African Centre for Women, Information Communication and Technology (ACWICT), funded by Microsoft Philanthropies, aims to train over 300,000 youth in digital skills and job readiness, particularly within the agri-food sector. Leveraging Microsoft tools such as Office 365, Teams, and Azure, and supported by a $600,000 grant, this partnership not only enhances youth employment but also fuels economic growth.
Similarly, in Nigeria, Microsoft’s partnership with Wootlab Foundation is bridging the ICT skills gap by enhancing digital and AI competencies. Together, the organisations are implementing various programmes designed to equip participants with the skills necessary to thrive in the digital economy.
Partnerships play a pivotal role in the success of skills development initiatives, acting as catalysts for widespread and sustainable impact. Microsoft’s strategic collaborations in Africa exemplify this synergy, driving substantial progress in digital skills training across the continent.
Bridging the gap between skills development and employment
In 2024, approximately 11.2 percent of African youth aged 15-24 faced unemployment, with Southern Africa experiencing an alarming 47.5 percent. These historic challenges in bridging the skills development and employment gap are complex and multifaceted. They are driven by economic, social, and structural factors that impede job creation and skills development efforts.
Strategic partnerships, such as the collaboration between Microsoft and the Youth Employment Service (YES), are pivotal in driving digital skills development among South African youth. By training 300,000 young individuals, this initiative not only fosters a culture of employability but also bridges the gap between education and meaningful employment.
In the words of Ravi Naidoo, CEO of YES: “Training without practice is incomplete; knowledge is truly embedded through application. The Youth Employment Service ensures young people can apply their learning in real-world settings, turning theoretical knowledge into practical skills. With 1,800 companies involved, youth gain invaluable job experience.”
“AI will impact all sectors and jobs, hence the importance of the collaboration between Microsoft and YES to incorporate training around essential AI technologies such as Microsoft Copilot, to help create a talent pipeline vital for the African economy.”
The tailored training materials developed by YES and Microsoft address diverse levels of AI and computer science exposure, ensuring a comprehensive skill-building pathway from novice to expert. This innovative platform democratises access to AI education, empowering participants to not only understand the transformative potential of AI but also to envision and pursue careers in this rapidly evolving field.
Young people, such as Banele Mazibuko, who have passed through the YES programme, have not only enhanced their AI and coding skills, but also key soft skills such as effective communication and networking.
“The programme significantly enhanced my SQL skills, taking me from intermediate to advanced. It also improved my presentation abilities, making demos and daily standups far easier than before. I gained confidence through hands-on experience and developed vital networking and communication skills that benefit both my work and personal ambitions. In fact, the money I earn now is helping me build capital for my own business,” says Mazibuko.
Before joining YES, he was unemployed for a year and a half. Now fully employed, Mazibuko is not only able to help out his mother and siblings financially, but is also inspiring unemployed young people in his community to believe that they too can find employment. “With programmes such as these providing youth with both corporate and entrepreneurial skills, our young people can ignite innovation across the continent, driving economic growth and transforming the future.”
Driving access to skills across the far corners of South Africa
Another pivotal partnership with Deviare seeks to extend skilling programmes to the often-overlooked rural and peri-urban regions of South Africa. Recognising that a significant portion of Africa’s burgeoning youth population resides in these areas, this initiative addresses a critical gap. Issues such as unreliable electricity and lack of internet access are formidable barriers to modern education and training. Consequently, rural areas face disproportionately high unemployment rates compared to urban centres.
Microsoft’s partnership with Deviare is helping to overcome many of these challenges through the Mobile Computer Lab project, which has impacted more than 1,800 Microsoft-sponsored trainees to date. These labs, powered by solar energy and microwave connectivity, provide essential digital skills, while ensuring access to devices and connectivity. Key initiatives include skilling programmes, internships and learnerships, significantly impacting youth employment and startup creation. By equipping students and unemployed youth with Fourth Industrial Revolution skills, the programme is bridging educational gaps and fostering economic growth in underserved regions.
Lubabalo Dyantyi, Co-founder and Director of Deviare says of the collaboration: “It’s not just about training individuals; it’s about ensuring they are employable and can effectively deliver services. With Microsoft launching Copilot and new AI services, there’s a need for people who can harness this technology and integrate it into every aspect of the workplace, ultimately benefiting the entire economy and society at large.”
Charting a way forward
Mastering all four aspects of a successful AI economy requires an enormous amount of collaboration, stability, and investment.
The question is, how does Africa achieve all this?
The answer lies in inspiration, which has two parts. First, it’s essential to draw inspiration from the incredible advancements AI is making, such as improving precision agriculture and predicting weather and natural disasters.
However, it’s equally important to draw inspiration from the challenges and failures of the past. Over 140 years ago, Thomas Edison lit up lower Manhattan, yet today, 43 percent of Africa’s population still lacks access to electricity. The resulting economic division between the Global North and Global South serves as a cautionary tale, urging current generations to do better.
As Smith so eloquently puts it: “At Microsoft, alongside the business community, government, and non-profit organisations in Africa, we can dream bigger and be bolder. We can pursue goals that even Thomas Edison never imagined. By focusing on the development of a strong AI economy, Africa can become a continent that not only consumes AI but also helps produce it for the rest of the world.”
Main image caption: From left to right: Lillian Barnard, General Manager, Microsoft Africa, H.E. Cyril Ramaphosa, President of the Republic of South Africa, and Brad Smith, Vice Chair and President of Microsoft at the announcement of Microsoft’s additional ZAR5.4 billion investment in South Africa.