Jobtech and MSD for employment: competing approaches or perfectly paired?

The world of work is changing, and with it development actors are trialling new approaches to youth employment programming. 

This is driven partly by the need to keep up with changing economies and a rapidly developing technology landscape, and partly by a growing body of evidence that suggests conventional labour market interventions are not as effective as it was once believed they would be^₁.  

In recent years, two of the biggest changes to youth employment programming are:

• a keen and ever-growing interest in how established systems change methodologies can be applied to labour markets
• the emergence of the field of Jobtech – the use of of technology to enable access, deliver jobs and improve worker productivity

Mercy Corps has invested heavily in both these innovations – but how do they relate to each other?

Market systems development for employment (MSD4E)

Market systems development for employment (MSD4E) is a way of designing employment programming to achieve sustainable systems change. It involves analysing the systems that impact jobseekers’ and workers’ employment experiences, identifying opportunities to change these systems – to make them more inclusive and competitive – and developing interventions that catalyse those changes. 

We do this by nudging private sector, government, and civil society actors to change their behaviour in ways that both benefit marginalised people, and also align with their own incentives (and which they are therefore motivated to sustain). We partner with these actors to overcome the blockers to these ‘win-win’ changes that unlock employment opportunities. 

Opportunities encompass a wide range of contexts, spanning various market system functions and rules. An MSD4E programme might work on building labour market demand, on job-matching services for gig workers or jobseekers, on building linkages between entrepreneurs and customers, or on functions and rules that affect access to work, such as childcare facilities for employees who are parents, technical skills training for jobseekers, or government policies on refugee work. 

Jobtech

Applying a Jobtech approach to employment programming involves the innovative use of digital technology to facilitate access to quality work opportunities, enable delivery of work, and improve workers’ productivity. 

In recent years, technology has been one of the biggest disruptors to employment in rapidly-growing economies, with both positive and negative outcomes for marginalised workers and jobseekers. Whether or not development actors keep up, digital technology is increasingly playing a major role in multiple labour market functions and rules in emerging and even crisis-affected economies.

Given this context, Jobtech often represents an opportunity to address the very underperforming functions and rules MSD4E programmes have identified as critical for unlocking employment opportunities.

For example: 

• if technical skills are a key constraint to employment access in a targeted sector, e-learning might offer a more flexible, accessible and affordable form of training than traditional classroom TVET courses. In other cases both models can be complementarily used side-by-side.
• if access to niche markets is a critical constraint to micro-enterprise growth, e-commerce platforms may enable entrepreneurs to connect with higher-value customers.
• if labour-market information is fragmented, and expensive to access in-person, online job-matching, gig-matching and recruitment platforms might enable workers more equal access to available opportunities. 
• if there aren’t enough jobs for the number of skilled workers in a region, online platforms for the delivery of online work may enable young people to access remote markets with higher labour demand. 

As the images below show, Jobtech is not, in itself, a supporting function of labour markets – it is a pathway to potentially unlock opportunities across numerous functions that impact on labour market performance. 

Jobtech is made up of five distinct subsectors:

Each of these subsectors can address a supporting function or rule that affects the way labour market systems function for young people. For example, innovations in micro-enterprise digitization might address a lack of accessible and affordable business management tools, e-commerce platforms, or marketing tools:

Here innovations in other jobtech subsectors address underperforming supporting functions and rules in a given labour market system:

As these examples show, Jobtech has wide ranging applications – but its particular use will depend on the contextualised system a programme is working in. In some cases, a programme will find one or multiple applications depending on the functions it is planning to intervene in.

Despite the potential power of Jobtech, previous evidence suggests that digital technology can both enhance opportunities for workers and jobseekers but at the same time further exclude them. By including Jobtech in MSD4E programmes, programmes have the opportunity to steer jobtech towards solutions which benefit rather than harm marginalised workers.

One way to harness this potential is to to  pull Jobtech expertise into MSD4E teams at the early stages of intervention design, enabling teams to both spot opportunities early and ensure that interventions are designed in a viable and inclusive way.

Incorporating a systemic lens

Meanwhile, practitioners more familiar with the Jobtech approach, can benefit from MSD4E expertise in two ways:

• Jobtech interventions in any programme can, by applying MSD4E principles, move beyond focusing on the one solution a Jobtech platform offers in isolation, to understanding how that solution could address a critical function in a wider system, why that Jobtech solution hasn’t worked to date, and what would be needed to ensure that its impact is sustained and scaled across the system. The LIWAY programme in Ethiopia is doing just that with job-matching  and gig work platforms for women and youth.
• the Jobtech ecosystem itself remains fragmented and characterised by multiple early-stage solutions that are yet to scale. By applying MSD4E principles there is an opportunity to shape Jobtech as a sector,, and put guardrails around its development to increase its sustainability and inclusivity. The Jobtech Alliance is doing this in Africa. 

Overall, Jobtech presents a novel way of improving employment outcomes for youth in developing economies - both by complementing and enhancing existing ways of providing market system functions and by responding to the transforming landscape of the future of work - but it is most effective when it is used as part of a systemic approach.

Whatever your starting point, understanding how Jobtech fits into the systems that most impact young people’s employment outcomes opens up more opportunities to identify sustainable ways to improve impact at scale.

This is part one of a two-part blog. Part two will lay out practical approaches to integrating Jobtech in MSD4E programmes.
 

_{¹For example see McKenzie 2017, https://openknowledge.worldbank.org/bitstream/handle/10986/26352/}