Digitalisation and Sectoral Employment Dynamics in Ecowas: An Empirical Analysis

Oluwasola Oni; Clementino Ogbebor; Diyeli S. Aigbe; Stanley Eze

Oluwasola Oni Department of Economics, Caleb University, Lagos, Nigeria https://orcid.org/0000-0003-4951-2480
Clementino Ogbebor Peoples' Friendship University, Moscow, Russia
Diyeli S. Aigbe Department of Criminology, Peace, Conflict and Security Studies, Caleb University, Lagos, Nigeria
Stanley Eze Nigerian Army, Abuja, Nigeria

Keywords: Digitalisation, Employment Outcomes, ECOWAS, Sectoral Employment, Fixed Effects Model, Pooled Regression, Random Effects Model

Abstract

The digital transformation process presents an opportunity to create more stable and secure jobs in both the primary and tertiary sectors. Understanding how digitalisation can improve job availability in African households is essential for promoting equitable economic growth and reducing unemployment rates across the continent. Given this, the study investigates the influence of digitalisation on employment in the agricultural, industrial, and service sectors within the Economic Community of West African States (ECOWAS). A balanced panel dataset from 13 ECOWAS countries was considered; we applied three estimation techniques - pooled regression, fixed effects, and random effects models - to examine the impact of key digitalisation indicators (Mobile Cellular Subscriptions (MCS), Individuals Using the Internet, ICT Service Exports, and Fixed Broadband Subscriptions) on sectoral employment. The study results indicate that the digitalisation process has an industry-specific influence on employment. There is a negative relationship between growing internet usage in agriculture and employment, meaning that as internet usage increases, employment decreases. On the other hand, the export of ICT services and the number of broadband connections benefit agricultural employment. Within the industrial sector, the introduction of MCS hurts employment in all models, but implementing IUI demonstrates a direct effect. The service industry exhibits heterogeneous outcomes, where digitalisation has a favourable impact in certain circumstances but a negative impact in others, contingent upon the particular digitalisation metric and estimation approach. The study suggests that digitalisation can lead to increased employment in specific industries. However, it also emphasises the importance of taking a careful and detailed approach to preventing job losses in other sectors. This highlights the necessity of implementing customised policy measures to maximise the advantages of digital transformation in the ECOWAS region.

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