Poor nations should invest in data-driven digital economy

By Guardian Reporter , The Guardian
Published at 10:55 AM Apr 03 2024
THE fourth industrial revolution (4IR), which is typified by a fusion of fast-emerging digital technologies.
Photo: File
THE fourth industrial revolution (4IR), which is typified by a fusion of fast-emerging digital technologies.

THE fourth industrial revolution (4IR), which is typified by a fusion of fast-emerging digital technologies, has ushered in a new digital era in which data analytics, artificial intelligence (AI), blockchain, Internet of Things (IoT), cloud computing and other information communication technology (ICT) services are increasingly used.

Proficiency in fast-emerging technologies is highly needed for better participation in the global digital economy and labour market. Realising this need, developing nations are highly encouraged to invest in digital education starting from quality early childhood education and care (ECEC), including pre-primary education, so that children grow up being conversant with exponential technologies. 

Tanzania is on track in this regard, but more needs to be done. This translates into increasing investment in digital education and in the up-skilling and reskilling of teachers and employees to cope with the rapidly-evolving global digital economy and labour market.

The United Nations High-level Panel on Digital Cooperation (2019) suggests that: “Many types of digital technologies and content – from data to apps, data visualisation tools to educational curricula – could accelerate the attainment of sustainable development goals (SDGs). 

When they are freely and openly available, with minimal restrictions on how they can be distributed, adapted and reused, we can think of them as ‘digital public goods.’”

It recommends that “a broad, multi-stakeholder alliance, involving the UN, creating a platform for sharing digital public goods, engaging talent and pooling data sets, in a manner that respects privacy, in areas related to attaining the SDGs.” Digital public goods, according to UNCTAD, refer to data for social value, and for developing more open infrastructure and platforms to support development.

Autor et al. (2020) in their research “The Work of the Future: Building Better Jobs in an Age of Intelligent Machines” suggest that “Technological change is simultaneously replacing existing work and creating new work. It is not eliminating work altogether.”

Expounding on this the authors say “the impact of robotics and automation on workers will not be benign. These technologies, in concert with economic incentives, policy choices, and institutional forces, will alter the set of jobs available and the skills they demand.” 

This means that in the future it is not that there will be no jobs, but that there will be jobs that need new skills and competencies and people who lack those new skills and competencies will bear the brunt of automation.

Furthermore, the authors say, “this process is both challenging and indispensable. Inventing new ways of accomplishing existing work, new business models, and entirely new industry drives rising productivity and new jobs. Such innovations bring new occupations to life, generate demands for new forms of expertise, and create opportunities for rewarding work.”  

They, therefore, highlight four institutional dimensions for the work of the future. These are 1) investment in education and training, including adopting innovative new approaches to skills development throughout a worker’s life, 2) improvement in job quality, particularly traditionally low-paid jobs, through strengthening labour market institutions and workers’ voice, 3) expanding and shaping innovation, including rebalancing the tax system to bring taxation of wages and capital investment closer to parity and 4) strengthening the critical role employers and managers play in fostering higher productivity, which translates into higher emoluments.

UNCTAD in its “Digital Economy Report 2021: Cross-border data flows and development - For whom the data flow” says some developing countries – most notably China, but also others, such as India and Indonesia – have growing digital prowess.

Yet, “this is not the case for many other developing countries, which lag far behind in terms of preparation for the data-driven digital economy.” It is in light of this that UN Secretary-General António Guterres proposes in this report that “a holistic global policy approach has to reflect the multiple and interlinked dimensions of data and balance different interests and needs in a way that supports inclusive and sustainable development with the full involvement of countries trailing behind in digital readiness.”

The report suggests that as the data-driven digital economy evolves, a data-related divide aggravates the digital divide. “In this new configuration, developing countries may find themselves in subordinate positions, with data and their associated value capture being concentrated in a few global digital corporations and other multinational enterprises that control data. [In this way] they risk becoming mere providers of raw data to global digital platforms, while having to pay for the digital intelligence obtained from their data.”

Thus, the report says, fragmentation in data-driven digital economy reduces business opportunities, as the access of users and companies to supply chains become more complicated, and data flows across borders is restricted. This creates obstacles to global and regional collaboration. “With data and cross-border data flows growing more prominent in the world economy, the need for global governance is becoming more urgent.”

Thus, according to UNCTAD, data-driven digitalisation creates global opportunities and challenges that require global solutions to harness positive and mitigate negative impacts. “Effective global data governance is a prerequisite for data to support the attainment of the economic, social and environmental objectives of the 2030 Agenda for Sustainable Development.”