The United Nation Conference on Trade and Development (UNCTAD) has said that governments, especially in emerging markets have a critical role in shaping the digital economy by defining the rules of the game.
According to UNCTAD, this involves the adaptation of existing policies, laws and regulations, and the adoption of new ones in many areas.UNCTAD in its first-ever Digital Economy Report 2019, said a smart embrace of new technologies, enhanced partnerships and greater intellectual leadership are needed to redefine digital development strategies and the future contours of globalisation.
It recommended that policy responses need to consider increased difficulties of enforcing national laws and regulations with respect to cross-border trade in digital services and products.The UN body said governments in the region should explore new pathways for local value creation and capture, and structural transformation through digitalisation.
According to it, national development strategies should also seek to promote digital upgrading (value addition) in data value chains, and to enhance domestic capacities to “refine” the data.“Digitalisation affects different countries in different ways, and individual governments require policy space to regulate the digital economy to meet various legitimate public policy objectives,” the report stated.
Furthermore, UNCTAD said concerted global efforts are required to spread the rapidly expanding digital economy’s gains to the many people who currently reap little benefit from it.
While noting that wealth creation in the digital economy is highly concentrated in the United States and China, with the rest of the world, especially countries in Africa and Latin America, trailing considerably far behind, UN Secretary-General, António Guterres, stressed that efforts must be harnessed to close the digital divide, where more than half the world has limited or no access to the Internet.
UNCTAD Secretary-General, Mukhisa Kituyi said: “We need to respond to the desire of people in developing countries to take part in the new digital world, not just as users and consumers, but also as producers, exporters and innovators, for creating and capturing more value on their path towards inclusive prosperity.”
According to UNCTAD, developing countries risk remaining providers of raw data. It pointed out that the dominance of global digital platforms, their control of data, as well as their capacity to create and capture the ensuing value, accentuates concentration and consolidation rather than reducing inequalities between and within countries.
It warned that developing countries risk becoming mere providers of raw data, while having to pay for the digital intelligence generated using their data.“If left unaddressed, the yawning gap between the under-connected and the hyper-digitalized countries will widen, and inequalities be exacerbated. Breaking this vicious circle requires out-of-the-box thinking. One way is to consider finding an alternative configuration of the digital economy that leads to more balanced results and a fairer distribution of the gains from data and digital intelligence.
“At the same time, several policy challenges associated with value creation and capture in the digital economy can only be effectively addressed at the regional or international level, with the full involvement of developing countries. This includes competition, taxation, cross-border data flows, intellectual property, trade and employment policies,” it stressed.
To secure a digital future for the many, rather than the few, UNCTAD said domestic and international policies should go beyond enlisting more developing-country users and consumers online; they should also enable the building of domestic capabilities to create and capture value.
According to the report, the development community in this context needs to find more comprehensive ways to support countries that are trailing in the digital economy.It recommended that more assistance should aim at reducing the digital divides, strengthening the enabling environment for value creation and building capacities in the private and public sectors.
Further, policy actions should seek to enhance trust by supporting the adoption and enforcement of relevant laws and regulations to promote value creation and capture in the data-driven digital economy.