Innovation has moved forward the development of new digital technologies, improvement of older models of software or hardware, and research and development for even more, keeping up with the growth of the digital economy. There are many new digital technologies, but for this paper, we have selected a few key ones that are critical in enabling the digital economy and serve as the building blocks and backbone of the digital world.
1. Blockchain technologies
Blockchain technologies are a form of distributed ledger technologies that allow multiple parties to engage in secure, trusted transactions without any intermediary. It is best known as the technology behind cryptocurrencies, but it is also of relevance for many other domains of importance to developing countries. These include digital identification, property rights and aid disbursement.
This technology has also allowed for secure, faster and more convenient ways of wiring or transferring money. The popular example is an app called Venmo which allows the user to send funds from their funds via Venmo and also allows them to accept transfers from other Venmo users.
2. Internet of things
Internet of things (IoT) refers to the growing array of Internet-connected devices such as sensors, meters, radio frequency identification (RFID) chips and other gadgets that are embedded in various everyday objects enabling them to send and receive various kinds of data. It has wide applications, including in energy meters, for RFID tagging of goods for manufacturing, livestock and logistics, for monitoring soil and weather conditions in agriculture, and for wearables.
3. 5G Mobile Broadband
Fifth generation (5G) wireless technology is expected to be critical for IoT due to its greater ability to handle massive volumes of data. 5G networks can process around 1,000 times more data than today’s systems (Afolabi et al., 2018). In particular, it offers the possibility to connect many more devices (e.g. sensors and smart devices). Some companies have already launched this.
Again, though, as things go faster where there already is internet and connectivity, what about the places in the world that do NOT even have access to the internet? Half of the world’s population are still offline and if anything is to advance there, investments need to be made to install infrastructure, cables, wires, computers, smart phones and more importantly, sharing of knowledge to the population. Empowering the population with the access and the know-how.
4. Cloud Computing
Cloud computing is enabled by higher Internet speeds, which have drastically reduced latency between users and far away data centres. Data storage costs have also plummeted. The cloud is transforming business models, as it reduces the need for in-house IT expertise, offers flexibility for scaling, and consistent applications rollout and maintenance (UNCTAD, 2013). Some free cloud services provide of ce-like application tools that are useful for micro, small and medium- sized enterprises (MSMEs). This is particularly useful for countries where the cost of licensed software can be an obstacle to creating applications and providing services. However, in many developing countries, high costs of additional international bandwidth to access overseas servers and data centers still limit the uptake of cloud services.
Cloud computing is changing the world of the storage of files and making it possible for colleagues who are in different countries, work together in real time as they access their documents from where they are. And while there are still things to improve such as security of the digital storage in the cloud, several ideas and proposals have been coming in to better this technology.
5. Automation and Robotics
Automation and robotics technology are increasingly used in manufacturing, which could have significant impacts on employment. There are concerns that such technologies may constrain the scope for developing countries to adopt export-led manufacturing as a path to industrialization (UNCTAD, 2017c), and that the more developed economies may increasingly use robots to “reshore” manufacturing jobs. According to the International Federation of Robotics (2018), global sales of industrial robots doubled between 2013 and 2017. The top ve markets (China, followed by Japan, the Republic of Korea, the United States and Germany) represented 73 per cent of the total sales volume of robots in 2017. Robots are mainly used in the automotive, electrical/electronics and metal industries.
This development poses the greatest threat to employment. As corporations continue to find tasks that can be given to robots, human employees are then deemed redundant and or fired. Robots after all, cannot form unions and demand decent work and living wages.
6. Artificial intelligence and data analytics
Developments in AI, including machine learning, are enabled by the large amounts of digital data that can be analyzed to generate insights and predict behavior using algorithms, as well as by advanced computer processing power. AI is already in use in areas such as voice recognition and commercial products (such as IBM’s Watson). It has been estimated that this general-purpose technology has the potential to generate additional global economic output of around $13 trillion by 2030, contributing an additional 1.2 per cent to annual GDP growth (ITU, 2018b). At the same time, it may widen the technology gap between those that have and those that do not have the capabilities to take advantage of this technology. China and the United States are set to reap the largest economic gains from AI, while Africa and Latin America are likely to see the lowest gains.
This is probably the most controversial of the new technologies; there are many warnings of the dangers of Artificial Intelligence and how it can play a role in the replacement of human employees or analysts. While all these technologies are innovative and being constantly improved on, AI in particular is getting the most attention. The big players such as the US, the EU and China, along with Big Tech are all investing large amounts of money and manpower into developing the most advanced and best Artificial Intelligence (AI). This is because the logic is that the winner of this space race to have the best AI will have strategic advantage with its ability to control data, analytics, and all the other related digital technologies. However, there are already troubling reports that some recent reviews on developments in AI indicate that some of these AI have shown bias and even racism
Note: comments not in italics were made by author. Text in italics are definitions listed by the UNCTAD.
Source: United Nations (2019) “Digital Economy Report: Value Creation and Capture: Implications for Developing Countries 2019” United Nations Conference on Trade and Development UNCTAD. New York, New York. https://unctad.org/en/PublicationsLibrary/der2019_en.pdf