Mobile Entrepreneurship and Employment

Given its strong recent growth, the global mobile industry is now a major source of employment opportunities. Mobile industry jobs can be categorized into direct and indirect ones, with a diverse labor force supplying each category. Direct jobs are created by mobile operators and manufacturers in professions that range from engineers to managers to sales support staff. The International Telecommunication Union (ITU) estimates that around 1.5 million people are directly employed in the industry worldwide (ITU 2011). The total number of jobs fitting this narrow “direct” description may begin to decline as the industry becomes commoditized. Indirect jobs, however, show strong potential for growth, in professions related to mobile application development, content provision, and call center operations. Indirect jobs can be created by mobile operators and manufacturers, as well as by third-party content and device producers, including entrepreneurs. In some emerging markets, outsourcing of mobile content development also creates significant numbers of indirect jobs. In India, the mobile industry is expected to generate around seven million indirect jobs during 2012 (COAI 2011). This report argues that faster mobile networks and more capable smartphones make mobile communications a platform for innovation across different sectors (such as health, agriculture, and financial services), supporting overall employment numbers in an economy. The greatest potential for employment growth derives from demand for services enabled by mobile phones.

For many entrepreneurs in developing countries and rural areas, a mobile device is a tool not only for contacting customers and accessing the internet, but also for making financial transactions, establishing a client database, or coordinating just-in-time supply-chain deliveries. Such critical business functions can enable small firms to thrive in locations where accessing markets or selling new products would otherwise be impossible. It is difficult to estimate the number of people establishing new companies or the employment generated as small and microenterprises expand, but mobile phones increasingly contribute to this process. It is also difficult to say with certainty how much the mobile communication sector has contributed to employment and entrepreneurship to date, because no global count exists. It seems clear that the sector is a net generator of jobs, however, even though it can occasionally eliminate employment opportunities. For example:

• • In the United States alone, the mobile app industry provided an estimated 466,000 jobs in 2011, with annual growth rates of up to 45 percent from 2010 to 2011 (TechNet 2012).

• • In Canada, a large proportion of mobile apps are games. The gaming sector is expected to expand by 17 percent over the next two years, driven by increasing mobile broadband access; as a result, mobile games are likely to generate a significant number of employment opportunities. Of the 348 gaming companies in the country, 77 percent expect to hire new graduates in 2013 (Secor Consulting 2011).

• • Mobile money schemes have generally proved to be net generators of jobs. Safaricom’s M-PESA system supports 23,000 jobs for agents in Kenya alone.¹ Airtel Kenya, the second-biggest mobile operator, plans to recruit some 25,000 agents for its mobile money service, Airtel Money.²

• • By boosting access to information about market demand and prices, mobile phones can also improve conditions for entrepreneurship.³ A number of recent studies have shown that cell phones make entrepreneurial ventures less risky, mainly by reducing information search costs.⁴

This report showcases some of the mechanisms by which the mobile sector can support entrepreneurship and job creation, with the aim of informing policymakers, investors, and entrepreneurs themselves. Some of these approaches share similarities with traditional donor initiatives, but many are novel ideas for which the “proof of concept” has been demonstrated only recently. In an industry evolving as quickly as the mobile sector is today, it is vital to tailor support to the local circumstances and to evaluate impact regularly. As a framework for entrepreneurial activities, this article examines open innovation and considers one particular way of supporting entrepreneurial activity in the mobile industry, namely, specialized business incubators, or mobile labs. The article also reviews mobile microwork and the potential of the virtual economy, and considers mobile phones as...