Business Education in Sub-Saharan Africa: Job-Taking Vs. Job-Creating

July 2016

Dan LeClair: [00:09] Tell us more about the differences that you expect to see between schools as they merge in developing worlds, versus developed worlds.

Guy Pfefferman: [00:19] Let me say two things. One is being a late starter, like schools in Africa, for example, while it makes things difficult, also is on the other hand a huge advantage over schools that have taught the same kinds of things for 50 years or for, in some cases, 100 years.

[00:44] Those schools are so well rounded institutionally that it's very difficult for them sometimes to innovate, and to break out of the mold, and to do something different. Change is very difficult in Europe and in America, for example, very slow.

[01:02] If you're a, what I'd call, an embryonic school, you have degrees of freedom which are unimaginable here. For example, if a school were approached by a health care organization that said, "Well, we really need to improve the management skills of our workforce," they could immediately focus on this. Never mind that the standard MBA doesn't include this. They would focus on that. They could respond to market demand very nimbly, because they're really startups, if you will.

[01:42] The second thing is the point that you touched on, which is fundamental. Namely, that in the industrialized world, most people who earn a living have jobs. They are employees of some company or other.

[02:03] In Africa, I saw very recently a World Bank report on Kenya which came out in March, which showed the composition of the labor force, and the change in that labor force in the case of Kenya for the last 30 40 years.

[02:20] The striking thing is that wage employment is only 10 percent or so of the total, which means that one person out of 10 has a paid job. About half of those are probably working for government. The other half, for companies.

[02:37] What do the other ones do? They're farmers. They sell small stuff at the street corner. They're entrepreneurs. They're what they call the informal sector. Usually, they live below the radar screen of the tax people, and so on.

[02:56] That is what the bulk of the population in Africa, and in most other developing countries depend on for a living. It sounds negative, but the positive side is that this opens the doors to entrepreneurship. There are GMAC studies, for example, of Africa which show that more African graduates aspire to become entrepreneurs than anywhere else in the world. It's a reflection of the lack of formal jobs and companies.

[03:30] From a business goods point of view, if your objective is to improve society, and create jobs, and enable people to earn good livings, you won't necessarily follow the pattern of the traditional European or American school, and have MBAs, and so on, because the demand for employees in the formal sector is very limited.

[04:00] Consequently, in all of Nigeria, you have one top school. It's not very large. It's called Lagos Business School. It's a superb school, but it alone supplies quite a bit of the demand for top quality managerial employees, leaders and managers.

[04:21] What do the other ones do? They have to be taught either how to become entrepreneurs, which is extremely difficult, or which has proven to be very successful when it's done well, take people who already have two or three employees, who are running errands.

[04:46] They're selling fruit juice, or something like this. Teach them how to grow their little enterprise. This is what Ban Ki is doing in Lagos. It has been tremendously successful. We've done follow up studies of alumni.

[04:59] It's extraordinary. These people have doubled, tripled their turnover, their employment, their benefit to society, within three or four years.

LeClair: [05:10] Oh my! It sounds amazing.