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IS ETHIOPIA’S SCIENCE, TECHNOLOGY, AND INNOVATION POLICY LANDSCAPE
EFFECTIVELY CREATING JOBS AND FOSTERING SKILLS FOR THE YOUTH?
African Technology Policy Studies Network (ATPS)TECHNOPOLICY BRIEF NO. 63
Nicholas Ozor
Alfred NyambanetĞŶƚůĂŶĚDƵŚĂƟĂŚ

IS ETHIOPIA’S SCIENCE, TECHNOLOGY,
AND INNOVATION POLICY LANDSCAPE
EFFECTIVELY CREATING JOBS AND
FOSTERING SKILLS FOR THE YOUTH?

Nicholas Ozor
Alfred Nyambane
Wentland Muhatiah

African Technology Policy Studies Network (ATPS)AFR IC

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The African Technology Policy Studies Network (ATPS) is atransdisciplinary network of researchers, policymakers, private
sector actors and the civil society promoting the generation,dissemination, use and mastery of Science, Technology andInnovations (STI) for African development, environmental
sustainability and global inclusion. In collaboration with likeminded institutions, ATPS provides platforms for regional andinternational research and knowledge sharing in order tobuild Africa’s capabilities in STI policy research, policymaking
and implementation for sustainable development.

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Published by the African Technology
Policy Studies Network (ATPS)
P. O. Box 10081, 00100- GPO,
Nairobi, Kenya©2024
ISBN: 978-9966-124-73-9

Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth?

Table of Contents
About the Project ......................................................................... iv
About Africa Technology Policy Studies Network (ATPS).............. v
Acknowledgement........................................................................ vi
Key Messages............................................................................... vii
1. Introduction ............................................................................ 1
2. Rationale for STI application in Youth Employment ................ 2
3. Methodology .......................................................................... 3
4. Major Findings......................................................................... 4
4.1 STI Policies and Programmes for Youth Employment inEthiopia............................................................................. 4
4.2 Key Institutions and Stakeholders Promoting Youth
Employment in Ethiopia ................................................... 5
4.3 Challenges and Opportunities for Youth Employment inEthiopia ............................................................................. 7
4.4 Best Practices and Impacts for Youth Employment inEthiopia ........................................................................... 11
5. Conclusion.............................................................................. 17
6. Policy Recommendations........................................................ 18
References............................................................................... 21
ATPS TechnoPolicy Briefs Series............................................... 22

Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth?

iiiAbout the ProjectThis project was launched amid Africa’s burgeoning youth population,offering immense potential for productivity and inclusive economic
growth. However, a significant portion of this demographic faces
unemployment challenges exacerbated by the COVID-19 pandemic,
necessitating sustainable solutions through effective policy
interventions and institutional strengthening. Focusing on Ethiopia,
Ghana, Kenya, Nigeria, Rwanda, Senegal, Uganda, and Zimbabwe, theinitiative reviews Science, Technology, and Innovation (STI) policies
to understand the current landscape, identify successes and failures,and provide evidence-based insights for decision-making in criticalsectors for youth employment and wealth creation. Aligned with
continental strategies such as the Agenda 2063 and initiatives suchas the Mastercard Foundation’s Young Africa Works Strategy andthe Afreximbank’s campaign for young people’s participation in theimplementation of the African Continental Free Trade Area (AfCFTA)and youth mainstreaming in policy engagements and cross-regional
dialogues among others, the project aims to inform policymaking
and foster stronger linkages among stakeholders to address youth
unemployment, skills development, and entrepreneurship. Throughrigorous research and stakeholder engagements, the project iscatalyzing evidence-based policy discussions and contributing to
the formulation of effective strategies for job creation and youth
empowerment across Africa.

iv

Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth?

About Africa Technology Policy Studies
Network (ATPS)
The African Technology Policy Studies Network (ATPS) is atransdisciplinary network of researchers, policymakers, private sector
actors and civil society promoting the generation, dissemination, use
and mastery of Science, Technology and Innovations (STI) for African
development, environmental sustainability and global inclusion.
ATPS has over 5,000 members and 3000 stakeholders in over 51
countries in 5 continents with institutional partnerships worldwide.
We implement our programs through members in national chaptersestablished in 30 countries (27 in Africa and 3 Diaspora chapters inAustralia, the United States of America, and the United Kingdom). In
collaboration with like-minded institutions, ATPS provides platforms
for regional and international research and knowledge sharing inorder to build Africa’s capabilities in STI policy research, policymaking
and implementation for sustainable development.

Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth?

v

Acknowledgement
The African Technology Policy Studies Network (ATPS) takes
this special opportunity to thank the Mastercard Foundation,
Afreximbank, and other national partners for partnering with us andsupporting this study. The ATPS and partners also wish to appreciate
all the respondents led by the ATPS National Chapter Coordinator for
Ethiopia for their contributions to this study.

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Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth?

Key Messages• The Ethiopian government recognises the key role of Science,
Technology, and Innovation (STI) in the development of technologies,
skills, youth employment, and entrepreneurship in the country.
It has therefore enacted various STI policies over the years andestablished institutions, strategies, and programmes across the
key priority sectors to provide opportunities for the youth as wellas encourage economic growth. However, Ethiopia spends about
0.51% of its Gross Domestic Product (GDP) on STI which is below theAfrican Union’s (AU) recommended target of 1% for STI spending.
• Several stakeholders participate in the STI ecosystem in Ethiopia,
with the nature of participation ranging from policy development,
regulation and implementation of STI programmes, initiatives, plansand projects. The different stakeholders have different mandates
and exert different levels of power and influence across the STI
landscape.
• Implementation of some programmes and initiatives has beensuccessful leading to increased opportunities for the youth andthe marginalised groups. The Empower Youth for Work (EYW)
Initiative, for instance, used various innovative strategies to ensurecompliance amongst the youth beneficiaries by ensuring that youth
groups were organised and developed their technical and soft skills
before accessing funds.
• The private sector’s contribution to skills development and youth
employment in Ethiopia is still very low due to the unconducive
enabling environment. Only 10% of employers in Ethiopia provide
training to their employees according to the Ethiopian Development
Research Institute. This is significantly lower than the average of
30% for sub-Saharan Africa (SSA). This is exacerbated by the factthat the economy is largely reliant on the agriculture sector hence
limiting the job opportunities available for the youth but offering
new opportunities for the application of STI in the developmentof the sector. In 2020, private sector financing accounted for only
8% of total STI spending which is also significantly lower than the
average of 25% for SSA.
Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth?

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viii Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth?

1. Introduction
Youth unemployment is a significant challenge in Ethiopia. Data
from Non-governmental Organisations (NGOs) estimate that youth
unemployment, in rural areas in particular, is significantly higher.
The youth unemployment rate for 2021 was 5.72%, a 0.78% increase
from 2020 (World Bank, 2023). Ethiopia’s economy is still largely
agricultural based (70%), with the service sector (20%) and industry(10%) making up the next largest portions. Agriculture constitutes
over 50% of the Gross Domestic Product (GDP), accounts for over
85% of the labour force and earns over 90% of the foreign exchange.
According to the Ethiopian Central Statistical1 Agency, 54.8% of young
people aged 15-35 worked in the agricultural sector in 2018.
Ethiopia has designed and implemented a number of STI policies toenhance technological innovation, job creation, skills development,
and entrepreneurship across different priority sectors. The agriculture
sector is dominated by small-scale farmers who practice rain-fed
mixed farming, employing traditional technology and adopting a lowinput and low-output production system. Further, the country stilllags behind in the introduction and utilization of digital technologies
such as e-commerce to be competitive internationally. Ethiopia needs
to take advantage of STI to fully unlock its potential in creating andavailing decent jobs for the youth by engaging different stakeholders
to invest in and support its development. However, this is hampered
by low investment in STI.
Ethiopia’s gross domestic expenditure on research and development(GERD) as a percentage of GDP was 0.27% in 2017 and increased to
0.51% in 2018 (UNESCO, 2021). At present, there is low adoptionof e-commerce across the key sectors and fully-fledged e-commerce
has not yet been achieved (Gelata et al, 2022). NGO-led programs toteach specific skills can support informal employment but do not comewith formal credentials and recognition (World University Service ofCanada, 2019). The launch of the 10-Year Perspective Plan (20201 Ethiopian Central Statistical Agency’s (CSA) 2018 Ethopian Labour Force Survey

Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth?

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2030) was a key statement from the government to support efforts
towards creating employment opportunities for the youth. It solely
focuses on industries such as mining, tourism, urban development
and innovation and technology hence offering opportunities toenhance entrepreneurship and create employment for the many
youths in the country. The government also revised the STI Policy
in March 2022 to focus on creating a favourable ecosystem thatenhances the role of STI in wealth creation, employment generationand the growth of GDP.

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Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth?

2. Rationale for STI application in
Youth Employment
Estimates suggest that more than 2 million youth are entering thelabour market in Ethiopia every year. There is a need to create 14
million jobs between 2020 and 2025 to absorb the new entrants to thelabour market and the current backlog of unemployed2. Women andyouth face particular structural challenges when transitioning to workand tend to suffer from a systemic and persistent gap in accessing thelabour market when compared with men and adults. In January 2020,
unemployment among urban youth (15–29) was estimated at 25.7%,
and 31.7% among urban women, compared with 18.8% among young
urban men above the age of 303. The economy, however, is unable
to meet the demand. In Sub-Saharan Africa, it is generally estimatedthat around 96% of youth are affected by informal labour practices
and unstable incomes (ILO, 2020). The Ethiopian labour market is nodifferent. It is characterized by high levels of subsistence employment,
widespread (and minimally productive) self-employment, and very
low levels of wage employment. Given that Ethiopia’s economy ispredominantly agricultural, there are only limited job opportunities
in non-agricultural sectors (ILO, 2017).
The issue of skills mismatch is very pronounced, whereby young
people lack the necessary skills and training to participate in themodern job market. In 2020, there were over one million students
enrolled in Science Technology Engineering and Mathematics (STEM)
programs at all levels of education in Ethiopia. Of these students,
over 500,000 were enrolled in STEM programs at the tertiary level.
The number of students enrolled in STEM programs is increasing
at a rate of over 10% per year. Unfortunately, this is not enough.
Ethiopia’s youth unemployment rate is high, with many young people
2 Job Creation Commission, Plan of Action for Job Creation (2020–2025), 2020.
3 The Federal Democratic Republic of Ethiopia, Central Statistical Agency, Key Findings on the 2020 Urban Employment

Unemployment Survey, 2020.

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still struggling to find work despite their qualifications. The skills of
the youth need to be developed in order to engage in other sectors
such as manufacturing, tourism, digital economy etc. For instance,
manufacturing contributed 5% of jobs in Ethiopia in 2020 andscaling this to 15% by 2030, the sector will add 5 million new job
opportunities for young people. To address these challenges facing
youth employment, STI has been touted by various sources to provide
viable solutions so long as there is a significant investment in it.

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3. Methodology
This policy brief was developed from a comprehensive study thatdelved into STI policies, institutions, stakeholder mapping, and ananalysis of youth employment within the realm of technologicalinnovation, skill enhancement, and entrepreneurship development.
The study was conducted across seven Sub-Saharan African (SSA)
countries, namely Ethiopia, Ghana, Kenya, Nigeria, Rwanda, Senegal,and Uganda. The study adopted a mixed-methods approach, whichenabled the collection of both qualitative and quantitative data. The
data-gathering process commenced with thorough desk studies ofexisting literature and secondary data. Subsequently, key informant
interviews (KIIs) were conducted, involving 20 carefully selected
respondents, to obtain primary data that encompassed both
qualitative and quantitative aspects. To further enrich the dataset
and cross-verify information obtained through other methods, focus
group discussions (FGD) were carried out.
The study engaged participants from a diverse range of stakeholder
categories, including government officials and policymakers,
representatives from the private sector and industry, members of civilsociety and non-governmental organizations (NGOs), researchers,
development partners, and individuals from the media. Special
attention was given to ensuring inclusivity and gender balance in theselection of respondents, with a particular focus on representing thevoices of youth and other marginalized groups.

Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth?

54. Major Findings
The key findings of the study are presented in the following sections
highlighting policies, plans and programmes as well as the efforts
made by different stakeholders in implementing them. Best practices,challenges, and opportunities for STI implementation to enhanceskills development, technological innovation, youth employment
and entrepreneurship are also highlighted.
4.1 STI Policies and Programmes for Youth Employment in Ethiopia
The STI policy landscape in Ethiopia has evolved since 2009. The
latest revised STI Policy of 2022 focuses on creating a favourable
ecosystem that enhances the application of STI in wealth creation,
youth employment generation and GDP growth. The STI policies
recognize the importance of entrepreneurship and encourage thecreation of new businesses that can provide job opportunities foryoung people. The policy aims to increase investment in STI from
0.51% of GDP in 2018 to 1% of GDP by 2030. This will be done througha combination of public and private sector investments. It also
aims at improving the quality of education and training, enhancing
research and development (R&D) capacity, and creating an enabling
environment for innovation and entrepreneurship.
The impact of these policies has been significant, with a growing
number of technology-based startups and young entrepreneurs in
the country. Other support policies include the 2022 Education andTraining policy that targets 70% enrolment in STEM by 2030. It is
designed to address the growing demand for STEM skills in Ethiopia.
The new policy aims to address the shortage by increasing the numberof students enrolled in STEM programs and by improving the qualityof STEM education. The Technical and Vocational Education andTraining (TVET) Proclamation of 2004 directs how junior, middle leveland basic vocational training programs provide citizens with relevant
training considering the country’s development strategy and the
local needs for trained manpower. The Patent Regulations of 199756https://mastercardfdn.org/ethiopia/

Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth?

has the sole mandate of regulating inventions, minor inventions,
utility models and industrial designs originating from the country.
In recognition of this worldwide, and more specifically continental
digital economy development trend, the government of Ethiopia
approved a national digital transformation strategy in June 2020.
Aligned with home-grown economic reform agenda, including
the Ten-Year Development Plan (2020-2030), as well as someinternational commitments such as Sustainable Development Goals
and the African Union’s Continental Digital Strategy, the “Digital
Ethiopia 2025- A Digital Strategy for Ethiopia Inclusive Prosperity”
lays out an inclusive digital economy approach that catalyses therealization of Ethiopia’s broader development vision. The governmentof Ethiopia has set an ambitious goal of creating 14 million jobs over
five years4. Out of those, 300,000 jobs are expected to be digital.
While the ICT sector has yet to contribute more to creating jobs, asa result, the digital strategy recognizes that this requires a skilledworkforce, efficient labour market facilitation and an enabling
business environment.
Through the Digital Ethiopia Strategy 2025, the Ethiopian government
has acknowledged the importance of ensuring basic digital literacy
for its citizens. It has also taken steps to equip the workforce,
especially young people, with advanced skills to prepare for futurejobs. The Ministry of Innovation and Technology (MInT) has alreadyestablished a separate directorate, the Technology and Knowledge
Expansion and Management Directorate, tasked with introducing
digital programs and aiding more Ethiopians to become digitally
literate by 2025. Other key STI-related policies and programmesthat support skills development and employment for the youth arehighlighted in Table 1.
4.2 Key Institutions and Stakeholders Promoting Youth Employment
in Ethiopia
Several actors in the STI ecosystem play various roles in theregulation and implementation of STI programmes, initiatives, plans
4 Job Creation Commission, Plan of Action for Job Creation (2020–2025), 2020

Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth?

7and projects. These are meant to address the youth’s employment
and entrepreneurship, low access to quality education and training
limiting t heir opportunities, la ck of ac cess to fin ance for young
entrepreneurs to start and grow their businesses, lack of market
linkages to sell their products and services and lack of a culture ofinnovation and entrepreneurship. The National Science, Technology
and Innovation Council (NSTIC) u nder t he P rime Minister’s officeis the regulatory body for Ethiopia’s STI policy and action p lan. It
establishes and coordinates the general strategy and framework fordeveloping STI in the country. NSTIC is supported by key ministries,
departments, and agencies (MDAs). The Council monitors andevaluates the performance of STI activities across the country.
These MDAs closely work with public research institutions and thinktanks in assessing the policies created by NSTIC. The ministries
also act as key funding agencies for public research institutions
and intermediaries in the national research framework while otherfunding is sourced from international donors w ho m ainly fundresearch activities in universities, private research institutes, private
think tanks, and international research institutes in the country. The
research input and outcome affect employment, especially amongst
the youths and women, either directly or indirectly.
The Ethiopian Job Creation Commission (JCC) was formed in 2018
and is aligned with the government’s Plan of Action for Job Creation(PAJC), which aims to create 14 million jobs by 2025. The PAJC
identifies STI as a key sector for job creation, and the JCC is playing
a leading role in implementing the PAJC’s STI-related interventions.
The JCC’s work is also aligned with the Mastercard
Foundation’s Young Africa Works strategy which targets tocreate 10 million jobs by 2030 in Ethiopia5. JCC has partneredwith the Mastercard Foundation in “Enabling Ethiopia Project,”which is creating jobs and economic opportunities for about
50,000 women and young people over the next five years. The
JCC has a number of programs that provide financial andtechnical assistance to youth and women who are interested instarting or growing STI businesses. These programs include the
Youth
Revolving Fund (YRF) and the Women and STI
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Entrepreneurship Support Program (WESSIP). It has also partneredwith the private sector and CSOs in many other initiatives aimed at
advocating for policies that support youth and women in STI andthe creation of job opportunities. JCC is actively participating in
identifying and addressing the challenges that youth and womenface in accessing STI education and employment; promoting publicprivate partnerships to support STI innovation and entrepreneurshipand building the capacity of government officials and otherstakeholders to support youth and women in STI.
Other key stakeholders such as civil society and NGOs also play various
roles in the ecosystem ranging from knowledge dissemination,
skills development, and advocacy among other roles as mandated.
They have different levels of power and influence thus, impacting
differently in the overall performance of the STI ecosystem. Some ofthese key institutions in Ethiopia are described in Table 2.
4.3 Challenges and Opportunities for Youth Employment in Ethiopia
The main challenges to youth employment in Ethiopia are highunemployment rates, poor infrastructural development especiallyin rural areas, underutilization of skills due to lack of relevant
employment opportunities especially among the youth, limitedaccess to education and skills training, rural-urban migration,
inadequate diversification of the economy and overdependence
on agriculture and gender inequities especially in the rural areas.
However, there are also significant opportunities to address thesechallenges and improve youth employment outcomes. These
opportunities include investing in education and skills training,
fostering entrepreneurship, advancing agribusiness and ruraldevelopment, engaging with the private sector, and promoting
digital literacy and tech competencies. Addressing these can unlock amore favourable environment for youth employment and empowerits youth to reach their full potential. Several variables indicate that
there have been improvements that have led to a considerable
number of young people gaining employment. According to theUnited Nations, Ethiopia’s median age is 19.7 years. This suggeststhat a large number of young individuals are joining the labour force.
Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth?

9The government has established several STI institutes and isinvesting in STI as part of its Growth and Transformation Plan. The
country’s economy is rapidly developing, creating a demand forskilled individuals in a variety of industries, including manufacturing,
agriculture, and information and communications technology.
The Ethiopian Innovation Network and the Youth Innovation and
Entrepreneurship Council are two programs that are working toencourage STI and entrepreneurship among Ethiopian youth. As
a result, the advancements in the STI landscape may help a large
number of Ethiopian youth. However, it is crucial to recognize that
there are a lot of obstacles that could prevent young people fromfinding dignified and meaningful jobs in this field. These include a lackof sufficient capital to fund R&D and new ideas, a lack of technicalhelp and mentorship, and a lack of facilities to enable technology
development. Some efforts have been made to solve some of the
difficulties, such as the establishment of start-up incubators including
the Blue Moon- a business start-up incubation centre founded in2017. The hub provides a venue for young people to create new
business concepts.
The incubator strategy entails experienced entrepreneurs andconsultants coaching and mentoring entrepreneurs. The strategy
facilitates learning and idea exchange among peer groups andcorporate networks. The providence of a convenient workspaceequipped with ICTs, continuous coaching and mentorship, andnetworking and interaction with peers and investors for six months
greatly help the beneficiaries. Established business incubation
centres (BICs) are mostly owned by the Ministry of Innovation andTechnology (MInT) and public universities. However, only one outof the five incubation centres owned by MInT is reportedly active.
Addis Ababa, Hawasa and Bahir Dar universities are the only ones
to have BICs. There is also a growing presence of private BICs in the
country. Apart from BlueMoon, the other major ones are Iceaddis,
xHub, IBA Ethiopia, GrowthAfrica, and iCogs Lab. Privately owned
BICs have not been able to spread very far outside the capital andoften rely on donors for funding.
10 Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth?

Although it is challenging to find national figures for the state ofdigital literacy in Ethiopia, experts indicate that it is relatively low.
While the literacy rate is below 60%, that of digital literacy is much
lower at 9.9% according to the Global Digital Skills Index 2021 by
the International Telecommunication Union (ITU). One of the main
challenges facing Ethiopia in terms of digital literacy is the need formore infrastructure. With a relatively nascent digital economy, theProclamations, or pieces of legislation that regulate businesses in
the country do not have specific provisions for digital companies.
Digital platforms are often faced with regulatory provisions that do
not fit their operational structures and models.
Taxation and licensing issues present challenges since there is
uncertainty around the application of existing tax laws to the digital
economy. Licensing has also stood out as a key challenge for firms inthe space, with companies having to find various sectors they fit into
instead of being classified as strictly digital platforms. Labour laws
do not account for workers who rely on digital platforms for income,leaving them without mandatory social benefits such as healthcare
and pensions. Poor access to affordable credit is reiterated by all
stakeholders as a predominant impediment to the growth of thedigital economy. Young people lack understanding about the data
they create and matters of privacy, security, and how to search for
information.
Although the ITU-led Digital Capability Coalition (DCC), launched in
2020, assists countries in developing digital capabilities and bridging
the digital divide, more needs to be done to reach marginalised
groups, particularly in Ethiopia’s rural areas. The DCC proposes
bringing together government, private sector entities, and NGOs/
CSOs to work on programmes that promote digital inclusion and skill
development. To satisfy the job needs of a digital economy, embraceinnovation, and maintain a competitive edge, current and future
workers (in particular the youth) must possess digital skills. This isa difficulty for Ethiopia, which is ranked 137th in ICT adoption and100th in digital skills among 141 countries in the World Economic
Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth? 11

Forum’s 2019 Global Competitiveness Report6. The country’s digital
economic hub, Addis Ababa, is currently experiencing a surge indemand for digital personnel. In general, job creation in the ICT sector
has been slow, however, it has increased in recent years. According
to interviews with local private businesses, the most common wayof hiring IT staff is through referrals from within the organisation or
network members. A digital economy is built on robust connectivity
and affordable internet access. Historically, these obstacles have
impeded Ethiopia’s digital progress. Only 44% of the population
currently has access to electricity, with a goal of reaching 100% by
2025.
The Ethiopian telecom sector is presently dominated by a single
state-owned carrier, and internet access is limited and relatively
expensive. Internet access is especially scarce, expensive, and ofpoor quality among socially disadvantaged groups such as children
and the elderly, women, the disabled, low-income earners, and ruralcommunities. However, in 2021, the Ethiopian government moved
to liberalise the telecom sector, awarding a new telecom licence toa coalition of private firms. Mobile banking is a major opportunity
for enhancing youth employment and is rapidly evolving, withbanks providing mobile wallet solutions to approximately one million
previously unbanked customers. There are still substantial barriers inthis area, including low internet penetration, high data prices, poor
mobile penetration, limited access to formal financial services, a lackof understanding of existing digital financial services, and a Fintech
industry in its early stages of development. However, digitisation has
also had a significant effect on jobs, especially for untrained or unskilled
youth.
E-commerce activities in the country are very limited due to theaforementioned challenges but this is gradually changing as thecountry is actively investing in the necessary infrastructure and humanresource capacity. To give access to data and cloud services, somepublic and commercial enterprises have constructed in-house data
centres. However, a lack of data centre regulation and certification
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institutions leads to inadequate management, notably in terms ofphysical security, which ensures that data is protected from theft or
damage caused by natural disasters and environmental variables.
The country is becoming more cognizant of the importance of theinnovation systems approach as a policy tool for knowledge-based
development. The creation of a national education and researchsystem, as well as the strengthening of the business sector, is seen asa key tool for knowledge accumulation and development. However,the formation of a network among these innovators has come to a
halt. Collaboration and links between universities and industries arebanned. As a result, there is a misalignment between the knowledge
and abilities of university graduates and the knowledge and skills
required by the private sector. Because of this issue, as well as low
academic staff quality and restricted educational facilities, lowquality graduates with low employability have resulted. Because
university research is not centred on industry demands, the resultscannot be applied to industrial operations. Aside from a lack of college
connections, the industrial sector faces a variety of other challenges
and constraints.
Micro and small enterprises (MSEs) confront a range of innovation
hurdles that limit their ability to create and market new items, services,or processes. Limited access to funding and an underdeveloped
entrepreneurial culture are among the reasons limiting the country’s
MSEs’ creative performance.
Table 1 lists some of the important policies, programs, andorganizations that are promoting skill development, youth
employment, and entrepreneurship.
4.4 Best Practices and Impacts for Youth Employment in Ethiopia
The STI policies and institutional landscape have set the stage for
Ethiopia to contribute more as far as skills development, youth
employment and entrepreneurship are concerned. For instance, theGrowth and Transformation Plan II (GTP II), which was launched in2015, set a target of increasing STI spending to 1% of GDP by 2025, while
the establishment of the Ethiopian Innovation and Entrepreneurship
Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth? 13

Council (IEC) in 2018, is coordinating and promoting innovation andentrepreneurship in the country. Further, the government set up the
Ethiopian Technology Startup Fund, which was launched in 2019 toprovide funding to technology startups. The enhanced cooperation
between the public and private sectors is helping policymakers comeup with robust plans that are all-inclusive.
For instance, MInT announced its Start-up Strategy centred on the“2222 plan” from a robust interaction with the private sector andwas able to come up with a sustainable plan that can seed 2000 new
technology-based start-ups that will be able to create over 20,000 jobs
across the country within two years countrywide (UNCTAD, 2020).
Evaluation of the impact of this programme to establish its impacts on
youth employment has not yet been done. Some programmes andinitiatives have emerged leading to increased opportunities for the
youth and marginalised groups.
The Empower Youth for Work (EYW) used various innovative
strategies to ensure compliance amongst the youth beneficiaries.
For instance, the project ensured that youth groups were organised
and developed their technical and soft skills afterwards. These
preparations made the beneficiaries ready to be linked with financial
institutions that facilitated their business start-ups. The capacitiesof youths were developed to increase access to funds in the Youth
Revolving Fund. They were trained in business management, record
keeping, and entrepreneurship; thereby averting the risk of themspending the funds received on non-related ventures. The program
also incorporated and effectively used local authorities and religious
leaders to reach the beneficiaries.
The government and private sector are working together to provide
technical and vocational training, as well as university education
in STEM fields, to help equip the country’s workforce with thenecessary skills for the job market. Ethiopia has been developing
entrepreneurship as part of its effort to support economic growth andreduce poverty. The government has put in place various programs
and policies to help entrepreneurs access finance, training, and otherresources they need to start and grow their businesses.

14 Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth?

This includes establishing a regulatory framework that makes it
easier to start and register a business in the country.
Development partners and private Foundations have also beenplaying a vital role in creating opportunities for the Ethiopian
youth. Strengthening Ethiopia’s innovation and entrepreneurial
ecosystem, for example, has been UNDP’s strategy for transforming
and creating an inclusive economy. The private sector’s ability
to become an engine of economic growth and offer job
opportunities for the country’s young and expanding population is
critical to establishing the revolutionary change required toaccomplish the country’s development goals. The UNDP began its
ecosystem support in 2015 with the formation of theEntrepreneurship Development Center and has since expanded toprovide direct assistance to startups and SMEs in the digital
ecosystem7.
The UNDP’s support for Digital Entrepreneurship corresponds to its
larger focus on supporting homegrown solutions and enhancing theircontribution to the Digital Ethiopia 2025 Strategy. Also, the work
done by the Mastercard Foundation as mentioned before, inpartnership with the government, the private sector, academic
institutions, and young people, together with the JCC is expected
to have a great impact on job creation in Ethiopia. So far, theFoundation has made an initial USD 300 million five-year
commitment to implement this strategy in Ethiopia.

7

https://www.undp.org/ethiopia/blog/startup-marketplace-reflecting-ethiopias-digital-innovation-ecosystem

Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth? 15

16 Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth?
Has started streamlining
the implementation of STI
across all priority sectors.
Its full impacts are yet to bemeasured or felt.

Has the mission of creatinga favourable ecosystem thatenhances the role of STI in wealthcreation, youth employment
generation and GDP growth.
Recognizes the importanceof
entrepreneurship
andencourages the creation of new
businesses that can provide job
opportunities for young people.

Recognizes that there should be
an appropriate nexus between
education, training, research,anddevelopment
throughcoordinated participation among
the relevant actors. The policyemphasizes on making higher
education research-oriented andenabling students to become
problem-solving
professional
leaders in their fields of study
and in relation to overall societal
needs.

Revised STI
Policy of 2022

The Education
and Training
Policy of 1993

The policy emphasized theneed to address genderdisparities in education andpromote gender equality. As aresult, the enrolment of girls
in primary schools increased
from 35% in 1993 to 50% in
2020. The number of children
enrolled in primary schools
increased from 5 million in
1993 to 24 million in 2020.

Impact on youth
employment

Roles in skills development andyouth employment

STI Policies andProgrammes

Prioritize efforts to improve
the quality of education,
including teacher training,
curriculum development, andassessment practice as well as
promote equitable distributionof educational resources,
particularly in rural areas andamong disadvantaged groups.

Building the capacity of theimplementing
institutions
and providing the necessary
tools and equipment for the
institutions will highly improve
implementation. There is agrave implementation gap
across public institutions either
because of capacity constraints
or misallocation of resources.

Remarks

Table 1: A summary of key STI Policies and Programmes enhancing youth employment in Ethiopia

Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth? 17

Supports the development of
The Ethiopian
innovativeand entrepreneurial
Youthskillsamong
young people byInnovation andproviding training, mentorship,
Entrepreneurship
Program (EYIEP) and financial support.
of 2019

Efforts to increase access tofinance should be prioritized,
including the development of
new financial products andservices tailored to the needsof entrepreneurs and SMEs.

-EYIEP has contributed tothe creation of new jobs
through the support ofyoung entrepreneurs andinnovators, creating over
2,500 jobs in its first year.

Developing new financial
products and services tailoredto the needs of young
entrepreneurs and facilitating
marketaccess,throughthe development of value
chains and market linkages,-Has
supportedthe e-commerce and other digitaldevelopment of innovative platforms will greatly increase
solutions in sectors such opportunities for the youth.
as agriculture, healthcare,and renewable energy andprovision of funds.

regulatory reform, access to entrepreneurs have been
finance, business development able to start and grow theirservices, market access, and businesses.
entrepreneurship education andtraining.

-The NES focuses on five of SMEs accessing financekey pillars: policy and has increased, and morecountry.
As a result, the number

The NES has facilitated thedevelopment of a rangeof financial instruments,
includingloans,
equitysupporting the growth of financing, and venturesmall and medium-sized capital, to support the growthenterprises (SMEs) in the of SMEs.

National-NES is a government-led
Entrepreneurship initiative established in 2019atpromoting
Strategy (NES) of aimed
entrepreneurship
and
2019

18 Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth?

Roles in skills development and youth
employment

Ministry ofLabour and Skills

Ministry ofInnovation andTechnology(MInT)

andyouth

Promoted youth entrepreneurship as a means ofcreating new job opportunities for young people.
Established the Youth Entrepreneurship Fund, which
provides financial support to young entrepreneurs
to start or expand their businesses. As of 2021, thefund has supported over 5,000 young entrepreneurs.
Working to improve the enforcement of labour laws,
particularly in the informal sector, where many young
people are employed.

development

Establishes a system for technical andvocational training, labour, employment
and skill development. Responsible forcreating policies and programs aimed at
improving the country’s labour market
and reducing unemployment, particularly
among young people.

skills- The ministry has played a critical role in driving
the country’s technological transformation andeconomic growth.
- Since its establishment in 2018, created EYIEP thathas supported over 2,000 young entrepreneurs andhas created over 5,000 jobs.
- In addition to EYIEP, MInT has also supported thedevelopment of other youth-focused programs andinitiatives, including the Ethiopia Jobs Compact,which aims to create job opportunities for young
people in the textile and garment industry, and the
Tech-Preneurship program, which provides training
and mentorship to young people in the technology
sector.

Impacts on
employment

Enhances the participation and role ofthe private sector in the developmentof innovation and technology sector
and creates a conducive environment
for the implementation. Establishes andimplements a system for the grant of awards
and incentives to individuals and institutions
contributing to the advancement ofinnovation and technological development
works.

Governmen Actors: Ministries, Departments and Agencies (MDAs)

STI Institutions

Table 2: Summary of key STI institutions, their roles and impact on youth employment in Ethiopia

Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth? 19

Civil Society Organizations (CSOs) /Non-Governmental Organisations (NGOs)
Facilitates the realization of the entrepreneurship
Entrepreneurship development goals of the government throughSupported the creation of new job opportunities
Developmentbuilding the institutional capacity of government by providing training and financial support toand private sector institutions which have aInstitute
stake in entrepreneurship and private sector entrepreneurs and SMEs. According to data from EDI,
development and youth empowerment to help the organization has helped create over 6,000 jobs inthem improve the business environment for Ethiopia since its establishment in 1999.
enterprise and private sector development.

Growth Africa

While the IES does not have a direct focus on youth
employment, its activities have had some positive
impacts on young people in Ethiopia, particularly inthe areas of skill development, quality assurance, andexport competitiveness.

The council has contributed to policy formulation,
coordination of STI activities, promotion of researchand development, capacity building, and economic
development.

Since its establishment in 2011, IceAddis has supported
more than 150 startups in Ethiopia, many of whichhave gone on to create jobs.
In 2019, IceAddis was recognized as the top startup
incubator in Ethiopia by Startup Grind, a global startup
community.
Provides experience and expertise in designing Has supported more than 140 businesses which haveand delivering activities and programmes for gone on to create over 3,000 jobs, with many of these
Ethiopian entrepreneurs.
jobs being held by young people

It also encourages a collaborative mindset, torealise the potential of its young technology
community and enable active participation inchanging their local environment and gaining
economic empowerment.

Develops national standards for local products
and services so as to make them internationallycompetitive.
Private Sector

Institute of
EthiopianStandards (IES)

Private Sector
IceAddisEstablished in 2012 to coordinate and promote
STI in the country. The council is responsible
for setting policies and strategies for thedevelopment of STI, as well as coordinating
and monitoring the implementation of thesepolicies.

National Science,
Technology
and Innovation
Council (NSTIC)

5. Conclusion
This study aimed at flagging areas of intervention for the Ethiopian
government and other critical stakeholders in Ethiopia in addressing
youth unemployment through STI. This was done through asystematic and comprehensive methodology. The findings reveal that
the Ethiopian government has attempted to enhance its STI sector todrive economic growth and development by encouraging technicalinnovation, youth employment, and entrepreneurship. This includes
investing in R&D, building technology parks, and encouraging theformation of startups and new businesses. There has been somesuccess in the STI sector, particularly in software development and
ICT. However, the country continues to struggle to develop enoughhigh-skilled jobs to fulfil the demands of its fast-growing population.
Improving Ethiopia’s economy requires the development of skills foryouth employability. Many challenges remain for the government andother ecosystem actors such as academia, international development
partners, and entrepreneurial support organizations to address.

20 Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth?

6. Policy Recommendations
To enhance skills development, youth employment andentrepreneurship in Ethiopia, the following recommendations areproffered:
Recommendation 1: Support infrastructure development andenabling environment for STI especially in the rural areas ofEthiopia: In addition to having the country increase investments
in R&D in line with the recommendations of the African Unionand UNESCO of up to 1% of GDP, stakeholders need to invest in
infrastructure development to stimulate technological innovationand job creation for the youth. This will improve the competitivenessof Ethiopia’s industries considering the overreliance on agriculture
as the major economic activity. This will likely lead to the creation of
R&D centres or the promotion of collaborations between industry,
academia, and government in order to advance the development of
new technologies.
The government can also in collaboration with all stakeholders
work towards enacting and implementing more effective policies
to support and encourage investment in entrepreneurship, such asby providing increased access to financial resources, training, andmentorship programs. This could also be done by encouraging thevarious actors in the ecosystem to open up access to infrastructuresuch as laboratories, data and equipment that young researchersand entrepreneurs can utilise to develop their technologies andinnovations. It is also critical that the government reduces theregulatory burden on small businesses because they make it difficult
for young people to start their own businesses. This can be done bystreamlining licensing requirements and simplifying tax procedures.
While it might not be possible to resolve all infrastructure issues atonce, collective effort can create opportunities for further progress.
By fostering initiatives that encourage collaboration, business models
can be established to set up infrastructure in areas that currently
lack it. The government should incentivize individuals and private
Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth? 21

organizations to be more involved in creating innovative solutions
that can tackle these issues.
Recommendation 2: Stakeholders should focus more on capacity
building for young entrepreneurs: Although efforts are being made tobuild the capacity of young people to be more entrepreneurial, moreneeds to be done to fill the huge gap in starting and running businesses
among the youth in Ethiopia. This may be in the line of improving
the ease of doing business among the youth, reducing bureaucratic
processes and requirements for registration of businesses as well as
providing tax incentives for businesses that create opportunities forthe youth. The government should encourage the creation of more
opportunities for public-private partnerships and collaborations
that will enhance the capacity building of young entrepreneurs
to increase their chances of success in their new ventures. Other
stakeholders such as the private sector, civil society organizations,and development partners could commit more to the provision of
capacity building in the STI for the youth. This will include specialised
training and mentorship as well as the provision of much-needed
infrastructure. For instance, initiatives such as the Blue Moon, aprivate sector initiative have managed to support many youths andled to the development of successful businesses. One initiative thatshould be emulated is the Digitruck project8, implemented by iCog
Labs. This mobile technology lab travels to different locations inEthiopia to provide free coding and robotics sessions to students.
The program aims to enhance digital literacy skills and prepare
students for careers in technology, focusing mainly on granting
access to technology and education to underserved communities
in Ethiopia. With enough skills, the youth will require resources toestablish businesses.
Recommendation 3: Increase opportunities for access to credit
among young entrepreneurs: Given the fact that there is a huge gap
in financing the youth, especially in rural areas, it is critical to develop
strategies to bridge this gap. Access to capital for funding start-ups
8

https://shega.co/post/digitruck-ethiopia-to-equip-ethiopian-students-in-remote-areas-with-21-first-century-skills/

22 Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth?

can significantly transform the youth employment landscape as
already trained/educated youth in Ethiopia are finding it difficult to
get jobs, especially in the formal sector. The government can improveaccess to credit by providing microfinance loans and by working withbanks and other financial institutions to offer more favourable terms
to young entrepreneurs.
Recommendation 4: Create all-inclusive Policies that enhancestronger linkages among stakeholders to bridge the disconnect
between the different actors in the ecosystem: Policies n eed tobe created that align the different already existing platforms forengagement into one central platform. This will significantly enhance
better communication amongst stakeholders and provide an avenue
to air out concerns that can be looked at collectively and findsolutions that will have lasting effects on youth employability. Moreoften, the government is usually accused of developing policies
that sometimes do not auger well with the private sector or civilsociety hence causing undesired effects during implementation.
A collaborative and interactive platform can eliminate such
issues and lead to the development of favourable policies for all
actors and support in implementation through the developmentof implementation plans with solid monitoring and evaluation
frameworks to measure implementation and the effectiveness of
the STI policies and programmes. An example of such a platform
is the EdTech Mondays, launched by the Mastercard Foundation,and Shega Media & Technology, which facilitates criticalconversations on using technology for teaching and learning in
Ethiopia.
Information collected through these processes can be used tomake improvements and adjustments as needed. The public
sector’s role cannot be underestimated in developing a thriving
innovation ecosystem. The sector’s mindset and understanding of
the creation of youth employment is crucial to designing theregulations and services that address their need. There must be
horizontal collaboration and public-private partnerships at thecentre of the ecosystem which does not currently exist.
Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth? 23

Recommendation 5: Encourage economic diversification throughfostering private sector partnerships: Considering the over-relianceon the agriculture sector, the government needs to open up the
economy to venture into other more productive sectors. This will
require a significant shift in strategy and financing of ventures which
may adversely affect resources available for other competing priority
areas such as infrastructure development and health. This therefore
calls for the provision of policy incentives that would encourage
private sector investment to unlock opportunities for the youth.
In 2020, private sector financing accounted for only 8% of total STI
spending which is also significantly lower than the average of 25% for
SSA. This needs to change in order to expand the base for resources
available in setting up other productive sectors.

24 Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth?

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United Nations Educational, Scientific and Cultural Organization[UNESCO], (2021). UNESCO Science Report: The Race Against
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Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth? 25

ATPS TechnoPolicy Briefs Series• University-Led Ecosystems for Sustained Innovation and
Entrepreneurship Development in Kenya (ATPS TechnoPolicy Brief
No. 62)• Eco-innovation Policies for Sustainable Development in Africa(ATPS TechnoPolicy Brief No. 61)• Institutional Landscape for Eco-innovation Development in Africa(ATPS TechnoPolicy Brief No. 60)• Policy and Institutional Framework for Ecological Organic
Agriculture in Benin (ATPS TechnoPolicy Brief No. 59)• Institutional Framework for Ecological Organic Agriculture in
Kenya (ATPS TechnoPolicy Brief No. 58)• Policy and Institutional Framework for Ecological Organic
Agriculture in Senegal (ATPS TechnoPolicy Brief No. 57)
Advancing Ecological Organic Agriculture in Nigeria (ATPSTechnoPolicy Brief No. 56)• Policy and Institutional Framework for Ecological Organic
Agriculture in Rwanda (ATPS TechnoPolicy Brief No. 55)• Bridging Climate Information Gaps to Strengthen Capacities for
Climate Informed Decision (ATPS TechnoPolicy Brief No. 54)• Embracing Open Contracting in Africa (ATPS TechnoPolicy Brief
No. 53)• The Digital Revolution, Open Science, and Innovation for OpenScience Development in Sub-Saharan Africa (ATPS TechnoPolicy
Brief No. 52)• Nouvelles approaches de fi nancement de la recherché et deL’innovation en Afrique (ATPS TechnoPolicy Brief No. 51)• New Approaches for Funding Research and Innovation in Africa(ATPS TechnoPolicy Brief No. 50)• Towards Effective Public-Private Partnerships in Research andInnovation: A Perspective for African Science Granting Councils(ATPS TechnoPolicy Brief No. 49)• Innovative Practices and Policies for Promoting Biodiversity
Informatics in Sub-Saharan Africa (ATPS TechnoPolicy Brief No. 48)
26 Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth?

• Improving the Relevance of University Training to Labour Market
Demands in Africa (ATPS TechnoPolicy Brief No. 47)• Developing Policies for Biodiversity Informatics in sub-SaharanAfrica (ATPS TechnoPolicy Brief No. 46)• ICTs role in Agricultural Development: Prospects of Land Potential
Knowledge System (LandPKS) (ATPS TechnoPolicy Brief No. 45)• Mainstreaming Gender in the National Science, Technology andInnovation (STI) Policy of Kenya (ATPS TechnoPolicy Brief No. 44)• Social Innovation: An Untapped Resource for Inclusive Green
Growth (ATPS TechnoPolicy Brief No. 43)• Policy Axes that can uphold Agricultural Innovations for Climate
Change Adaptation and Food Security in Central Africa: Case of
Cameroon, Equatorial Guinea and Central African Republic (ATPSTechnoPolicy Brief No. 42)
Frameworks for Intellectual Property Protection of Traditional
Knowledge in Tanzania (ATPS TechnoPolicy Brief No. 41)• Assessment of Possible Intellectual Property Protection Options of
Traditional Knowledge System in Ethiopia (ATPS TechnoPolicy Brief No.
40)• Towards influencing National Legislation, Policies, Strategies andProgrammes for appropriate Protection and Benefit-Sharing ofTraditional Knowledge (TK) with and by Traditional Herbalists in
Uganda. (ATPS TechnoPolicy Brief No 39)• Traditional Healers and their Provision of Mental Health Services
in Cosmopolitan Informal Settlements in Nairobi, Kenya. (ATPSTechnoPolicy Brief No. 38)• Policy Implications for Intellectual Property Systems for Traditional
Healers in Lesotho. (ATPS TechnoPolicy Brief No. 37)• Incidence of Indigeneous and Innovative Climate Change
Adaptation Practices for Smallholder Framers’ Livelihood Security
in Chikhwawa District, Southern Malawi. (ATPS TechnoPolicy Brief
No.36)• Machobane Farming System and its Relevance to Climate Change
Policy in Lesotho. (ATPS TechnoPolicy Brief No. 35)

Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth? 27

28 Is Ethiopia’s STI Policy landscape effectively creating jobs and fostering skills for the youth?

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policymakers, private sector actors and the civilƐŽĐŝĞƚǇƉƌŽŵŽƟŶŐƚŚĞŐĞŶĞƌĂƟŽŶ͕ĚŝƐƐĞŵŝŶĂƟŽŶ͕ƵƐĞĂŶĚŵĂƐƚĞƌǇŽĨ^ĐŝĞŶĐĞ͕dĞĐŚŶŽůŽŐǇĂŶĚ/ŶŶŽǀĂƟŽŶƐ(STI) for African development, environmentalƐƵƐƚĂŝŶĂďŝůŝƚǇ ĂŶĚ ŐůŽďĂů ŝŶĐůƵƐŝŽŶ͘ /Ŷ ĐŽůůĂďŽƌĂƟŽŶǁŝƚŚ ůŝŬĞͲŵŝŶĚĞĚ ŝŶƐƟƚƵƟŽŶƐ͕ dW^ ƉƌŽǀŝĚĞƐƉůĂƞŽƌŵƐĨŽƌƌĞŐŝŽŶĂůĂŶĚŝŶƚĞƌŶĂƟŽŶĂůƌĞƐĞĂƌĐŚĂŶĚknowledge sharing in order to build Africa’sĐĂƉĂďŝůŝƟĞƐ ŝŶ ^d/ ƉŽůŝĐǇ ƌĞƐĞĂƌĐŚ͕ ƉŽůŝĐǇŵĂŬŝŶŐ ĂŶĚŝŵƉůĞŵĞŶƚĂƟŽŶĨŽƌƐƵƐƚĂŝŶĂďůĞĚĞǀĞůŽƉŵĞŶƚ͘

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