Digitalisation drives inclusive growth

The software company SAP trains people as IT professionals at its sites in the Global South. Dr Caroline King, Global Head of Business Development at SAP, speaks about the company’s activities at locations including Africa, and explains what Germany can learn about digitalisation from this continent. King is part of ‘Team Transformation’, a group of five pioneering thinkers who work with the Partners in Transformation to promote sustainable economic and business practices.

Agency for Business and Economic Development (AWE): The digital transformation is an important driver of economic development in the Global South. What is SAP doing directly in these countries?

Dr. Caroline King: At SAP, we regard digital connectivity as a driver of inclusive growth and see ourselves as builders of bridges between development cooperation and the private sector. Of course, that isn’t purely altruistic. We need young talent. That’s why we’re especially committed to the initial and continuing training of IT professionals.

AWE: Could you give a rough idea of how many people benefit from these activities?

King: From 2019 to 2022, we trained over 7.6 million young people in digital skills in countries such as India, Turkey and Viet Nam. The original target was 1.7 million. We’ve exceeded that by a large margin. This shows just how high the demand is. Many young people don’t receive a proper education or training, or have a school-leaving certificate that doesn’t qualify them for the labour market. This is where development policy and its partners play a major role. For instance, together with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH we taught schoolchildren programming as part of the Africa Code Week initiative.

AWE: In which countries is SAP active?

King: We’re generally active in countries where we have office locations, and can make good use of our network – either our own SAP employees or our partners. For example, our Young Professionals Program (formerly Skills for Africa) trained around 1,400 people in 20 African countries as technical advisors in the period from 2013 to 2023 and created around 1,330 jobs with support from GIZ. 

African countries will determine where growth takes place on the global market in future

AWE: What specific role is the digital transformation playing in Africa?

King: Africa’s population is young, and this offers great digital potential. African countries will determine where growth takes place on the global market in future. Europe is at a disadvantage with its older population.

In Africa, we can see opportunities in the public sector as well as in the utilities industry, in manufacturing, oil, gas and energy, in banks and insurance, and in telecommunications and agriculture. However, it’s regrettable that German businesses invest more in the Czech Republic than they do in the entire African continent. This is a topic we’re working on directly with the German Federal Ministry for Economic Cooperation and Development (BMZ). I myself am active in a working committee on development policy and international affairs. 

Germany is one of the largest donors worldwide. But not that much flows back to the German economy. In my view, we need to focus on more targeted funding for digital projects. And in contract award procedures, we need to consider sustainability and social aspects like workers’ rights and worker protection. Contracts are still often awarded to bidders offering cheaper services. These are generally Chinese firms. We hope to see more growth and more German investment in Africa soon. Germany must do something. Otherwise, we will lose Africa to China.

AWE: What can Germany learn from the Global South when it comes to digitalisation?

King: Bureaucracy is probably still the biggest obstacle to digital development in Germany. Data protection is an important topic here. But we could use digital technologies to make lengthy processes more efficient and still ensure data protection.

In the public sector, we haven’t fully adapted to the cloud yet, and now artificial intelligence is coming into play. Then there’s also the issue of training. Staff members have to be trained to use AI tools. Perhaps Africa has an advantage here with its young population.

In many developing countries, we see agility, innovative strength and creativity in the use of digital solutions such as mobile payment systems and online learning platforms. We should combine our experience, expertise and financial strength and invest there if we want inclusive growth.