Emerging economies are experimenting with modern technologies and shaping the regulatory landscape, but digital access is still highly unequal.
Large-scale investment in infrastructure and innovation is crucial for building an inclusive digital future. COVID-19 has highlighted the need for international collaboration and a joint approach to global challenges, tapping the power of the Fourth Industrial Revolution.
Since the start of the COVID-19 pandemic, our lives have shifted further into the digital realm. For many of us, it is hard to imagine what life would have been like this year without the ability to learn, work and socialize online. But as lifesaving as modern technologies have been during the pandemic, they also pose a risk. Unequal access to them may worsen the gap between rich and poor. Concerns over safety and privacy have grown in parallel with the widespread adoption of digital tools.
In emerging economies, the promise of these technologies shines particularly bright. They offer the hope of skipping entire stages of conventional development, spreading knowledge and prosperity faster than ever before. Emerging economies are also experimenting with new technologies and finding alternative ways of regulating them, offering inspiring perspectives that influence the rest of the world. Here are four major digital trends happening in emerging economies that could shape lives all over the world for generations to come.
Boosting digital infrastructure
Internet usage has soared during the global pandemic. In the months since the start of the outbreak, internet usage has increased by 70%, use of communication apps has risen by 300%, and video streaming services have grown almost 20-fold. However, not everyone has been able to switch to the digital world when physical spaces were shut down. After all, only 53% of the global population has internet access.
Without massive investment in infrastructure, this digital divide will continue to widen. Less developed regions risk being left behind. Of the 25 least connected countries in the world, 21 are in Africa. A lack of digital access in turn hampers growth. Many small and medium-sized enterprises, which make up between 40 – 90% of GDP across emerging economies, are struggling for survival because they have not been able to digitize their services quickly enough or at all.
To help close this gap, the International Telecommunication Union (ITU), the World Bank and other multilateral and regional bodies are encouraging investment in digital capabilities across the developing world. The World Bank’s Digital Moonshot Initiative, a $25 billion USD fund to support the African Union’s Digital Transformation Agenda 2030, is a prime example of such a vital investment. Its aim is to digitally connect every individual, business and government in Africa by 2030. This would allow Africans to not only access the services and opportunities the Internet offers, but also transform the digital space with their own innovations.
Digital tools for education and re-skilling
This year, schools and universities all over the world have been forced to teach their students online. In China alone, around 200 million school-aged children pursued their studies virtually during the height of the pandemic. This is out of approximately 1.3 billion school-aged children globally. Unsurprisingly, most of these digitally connected children live in advanced economies. Even in those economies, many children from poorer communities found their education severely disrupted due to a lack of computers or Internet access at home.
The challenge of online learning has fostered creative solutions in emerging economies. Nigerian start-up uLesson is helping bridge network connectivity gaps and addressing high data costs by offering a non-streaming option for their pre-recorded secondary school education content. In Latin America, Peruvian start-up Crehana, an on-demand learning platform for creative and digital professionals, has reported 40% growth in user numbers since the start of the pandemic by offering free daily online courses to learn new skills during the lock-down.
Closing the educational gap also means re-skilling existing workers. There are some concerns that the growing use of technology and automation could push humans out of the workplace and increase unemployment. By 2025, more than half of all work tasks are expected to be performed by machines. However, this risk has to be balanced against the opportunities created by new technologies, especially in areas where they facilitate enormous developmental leaps, lift the skill level across the entire workforce and boost local innovation.
Leapfrogging and innovating
The Fourth Industrial Revolution, which merges the digital and physical worlds, has empowered emerging economies to experiment with new technologies in creative and unconventional ways. This has allowed them to leapfrog over conventional stages of development and set their own priorities for innovation. Often, these homegrown innovations are then adopted regionally and internationally.
For example, Rwanda has developed the largest civil-operated drones network in the world. Since 2016, it has embraced the use of commercial drones to deliver vital medicines and blood for transfusions all over the country, even to rural communities in areas with little infrastructure. It also uses drones to deliver health supplies to neighboring countries. The strategy has been so successful that other African countries have started using drones in their fight against COVID-19. Similarly, these successes have also been scaled in advanced economies with Chinese retailer JD.com using drones to support COVID-19 contact tracing and delivery efforts in rural China. In April 2020, the US Postal Service collaborated with drone developer Matternet to become the first approved drone prescription delivery service in the US.
This growing trend of African innovation is strengthening the continent’s profile as a hub of local ideas with global potential. It builds on success stories such as M-PESA, a mobile money transfer service in Kenya, which is credited with sparking the boom of mobile money in Africa. Services like this drove the move to a greater use of phone-based services from payments to medical advice all over the world.
Innovation flourishes when we are able to embrace our differences, individuality, and ability to think in unique ways. However, to fully realize the potential for research and development in emerging markets, more investment is needed. This is where an enormous gap still exists between different regions.
In 2019, the total annual investment in technology start-ups came to $258 billion in China, $130 billion in the US and $122 billion in Europe. India lagged far behind with a total tech investment of $14.5 billion that year. Africa was even further behind, with an investment of $1.3 billion across the entire continent. Such vastly different funding pools will widen the digital divide rather than close it.
Pushing for privacy
When it comes to data protection and privacy, some emerging economies are taking a more cautious and protective approach than advanced economies. They are increasingly making their voices heard and shaping the global regulatory landscape.
China, Europe and the US tend to be seen as the world’s major technological innovators in areas such as artificial intelligence (AI), with the rest of the world acting mostly as recipients or consumers of these innovations. This has led to some dramatic power imbalances. A handful of global players are using their user platforms to collect data to better inform their AI and Machine Learning programmes.
In response, a number of emerging economies have adopted more conservative approaches to technology governance. For example, Indonesia, India and South Africa refused to sign the G20 Data Free Flow Osaka Track launched in Japan in 2019, which aimed to create regulations to facilitate the cross-border flow of data.
These emerging economies initially pushed for a greater element of data privacy and safeguards against data exploitation and also advocated for data localisation, meaning all data, including that of multinational companies, must be kept on servers in the country where it is collected. For example, the draft of India’s Personal Data Protection Bill prohibits the processing of sensitive and critical personal data of Indian citizens outside of India. However, some nations have subsequently retreated from their earlier stances on data localisation and the Osaka Track.
Governments in some emerging economies are clearly signalling that regulations should not follow a “one size fits all” model. They are taking a forceful stance against the monopolization of the world’s data by a handful of advanced economies and corporate entities headquartered in their jurisdictions. Their arguments and proposals have sparked an overdue discussion around the danger of digital colonialism. As this conservative approach gains traction, countries are increasingly demanding more control over information on them and their citizens, including how this data is collected and governed.
An inclusive digital future
Overall, these trends show the overwhelming potential of emerging technologies to help us improve the state of the world. Emerging economies are not just using technology to catch up with more developed countries, or to access existing products and services. Instead, they are using the digital world as a source of ideas, creativity, and as raw material for their own unique contributions to global progress. Be it through the development of practical, affordable solutions such as delivery drones, or through innovative regulatory models for greater privacy and data protection, emerging economies are adopting new technologies to suit their specific needs and goals. Often, these ideas then cross borders and inspire entrepreneurs and consumers in other countries.
This wealth of talent and ideas shows why it is so important to cooperate on a global scale. Technological progress is often presented as a race or competition, where the most powerful countries and companies vie for total domination. But to truly harness the power of the Fourth Industrial Revolution, we need all countries to collaborate. This has become even clearer during the COVID-19 pandemic, which has shown how interconnected we are as a global society.
All countries have something to offer, and all deserve a seat at the table. Not just that, but wealthier countries can learn valuable lessons from those they may deem less developed. If we succeed in pooling our collective ingenuity, creativity, resources and ambitions, we can build a world that is truly prosperous for all.
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