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As part of its deepened engagement in the Democratic Republic of Congo, the World Bank Board of Directors approved last week a $250 million development policy operation for foundational economic governance reforms and $500 million to strengthen transport and connectivity in the Democratic Republic of Congo (DRC). Both projects are financed by the International Development Association (IDA)*.

These two operations represent a strengthened engagement and dialogue between DRC and all levels of the World Bank Group. This dialogue has enabled us to redefine and take our partnership to a new level which we hope will help improve the lives of more than 90 million people,” said Jean-Christophe Carret, World Bank Country Director for the Democratic Republic of Congo.

The Foundational Economic Governance Reforms operationthe first IDA financed budget support operation in the DRC since 2005will support the government’s program of reforms to address key governance challenges in public finance, market liberalization, and forestry aimed at accelerating a green, resilient and inclusive development. It will also support transparency, a prerequisite for enhanced government accountability, and the sustainable management of DRC’s vast rainforest, which is key to sustaining community livelihoods and represents a carbon sink of global importance.

After the signing of the two financing agreements today, Nicolas Kazadi, DRC Finance Minister, expressed satisfaction that the reforms undertaken by the Government of President Felix-Antoine Tshisekedi Tshilombo were bearing fruit: “The return of budget support after more than fifteen years is a sign of the Government’s commitment to improve governance, free the potential for economic growth in key sectors, and improve living conditions for Congolese people. It reflects the deepening of development cooperation with our technical and financial partners and should catalyze significant funding allowing the Government to address the immense development needs of DRC.”

The Transport and Connectivity Support Project is the first in a series of three projects designed to provide safe, resilient and sustainable transport and digital connectivity in and between the Kasai region and the eastern part of DRC, while also supporting strengthening of sector governance. It will support the government’s ambitious program of better integrating the country by re-establishing the East-West road transport link, modernizing key transport infrastructure, and improving digital connectivity. Specifically, it will finance the upgrading and paving of 440 kilometers of climate resilient roads in the Kasai and North Kivu provinces, while laying fiber optic infrastructure along the roads financed by the project.

The Transport and Connectivity Support Project includes measures to mitigate and address the risk of gender-based violence linked to the sudden influx of workers in construction areas. These measures include third-party monitoring, capacity building to train all project stakeholders, and partnering with civil society and other community-based entities to manage potential grievances. The project will also support climate-resilient infrastructure and strengthen forest preservation. Local communities will be supported on improved management of natural resources and the project will finance reforestation activities along road areas.

*The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 74 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.3 billion people who live in IDA countries. Since 1960, IDA has provided $458 billion to 114 countries. Annual commitments have averaged about $29 billion over the last three years (FY19-FY21), with about 70 percent going to Africa. Learn more online: IDA.worldbank.org. #IDAworks

  • The way people pay is undergoing rapid changes worldwide.
  • Payment systems used by banks around the world require a lot of energy, so part of the fight against climate change should consider the efficiency of these systems.
  • A new report draws on academic and industry estimates to compare digital currencies to one another and to existing payment systems.
  • Central bank digital currencies and some kinds of crypto assets can be more energy efficient than much of the current payment landscape, including credit and debit cards, the authors say.

Environmentally conscious design can make a major difference in the energy efficiency of digital currencies.

Most of the world’s central banks have already agreed they should help fight climate change, a critical challenge that necessitates reductions in both energy consumption, which is our focus here, and the carbon emissions associated with the energy consumed.

To meet these aims, it’s important to pay attention to the energy used by the payment systems that central banks regulate and oversee. Monetary authorities now have a unique opportunity to improve efficiency as the way people pay is undergoing rapid changes worldwide. Digital currencies, from crypto assets to central bank digital currencies (CBDCs), can play a role in the transformation that policymakers envision.

With a desire to limit the energy consumption comes a need to understand what drives it. Policymakers confront researchers like us with several questions yet to be fully explored. These include how crypto assets compare with existing payment systems, what factors influence the energy use of the networks, and how new technology can make payments cleaner and greener.

News coverage of digital currencies and energy often spotlights Bitcoin, which is infamous for its reliance on raw computing power and electricity. Our new paper goes beyond these discussions by establishing the main components and technological options that determine the energy profile of digital currencies.

We draw on academic and industry estimates to compare digital currencies to one another and to existing payment systems. This research is at the intersection of digital currencies and climate change, two important subjects for policymakers, and the conclusions are especially pertinent for many central banks planning new digital currencies while also considering their environmental impact. Our research shows how the technological design choices for digital currencies make a major difference for their energy consumption.

Depending on the specific details of how they are configured, CBDCs and some kinds of crypto assets can be more energy efficient than much of the current payment landscape, including credit and debit cards. Credit and debit cards are important for comparison because they account for about three-quarters of cashless transactions, according to the most recent Red Book statistics from the Bank for International Settlements.

Deeper examination

Our conclusions about energy efficiency stem from a detailed look at the new technologies that are shaking up how global consumers make purchases and send money. Digital currencies often rely on distributed ledgers for validating and recording transactions. In those cases, how much energy they use mainly depends on two factors:

  • The first is how network participants agree on transaction histories. Some crypto assets like Bitcoin use a proof-of-work consensus mechanism that needs substantial calculation power, and energy, to obtain the right to update the transaction trail. Other crypto types use different approaches for their ledger updates that don’t require as much computing muscle.
  • The second is access to distributed-ledger systems. Some of these are permissionless, allowing anyone to join and validate transactions. Entry to others requires permission from a central authority, which offers greater control over key aspects of energy consumption such as the number of network participants, their geographic location, and software updates.

Our study of digital currencies’ energy use relies on academic and industry estimates for different processing technologies. The research shows that proof-of-work crypto uses vastly more energy than credit cards. Replacing proof-of-work with other consensus mechanisms is a first green leap for crypto, and using permissioned systems is a second. Together, these advances put crypto’s energy consumption well below that of credit cards.

How we can make more energy efficient payment choices. Image: IMF

But there’s more to payment systems than processing technologies. Total energy use varies by technology, payment-chain size, and other additional features.

Considerations like these resonate with central banks considering digital currencies. Many CBDC projects build on energy efficient distributed-ledger systems under which only permissioned institutions like commercial banks can join and validate without proof-of-work.

Other options that don’t feature distributed ledgers are also being considered, and some of these are seen as promising from an energy-consumption standpoint. That means CBDCs have the potential to reduce the power needs for digital payments, and even be more energy efficient than the credit card networks now widely used.

CBDCs are still in their early days, and it’s hard to know how far and how fast they might go, but it is clear that central banks will adopt new technologies that impact power use. Their energy-saving potential will depend on the use associated with other design features that may be added for compliance, to aid security and integrity, or to facilitate universal access.

For example, some central banks are considering whether CBDCs should be accessible through physical cards, like credit cards. Card payments use more energy than those with digital wallets, which is how most crypto transactions are made. But cards can help adoption and inclusion, particularly when digital literacy or mobile network connectivity are a concern.

As payment systems increasingly use distributed ledgers, there’s a clear case for those more energy-efficient options that are permissioned and don’t rely on proof-of-work mechanisms. And though the debate on the future of money is still in its early stages too, power use is just one among many considerations. Policymakers should weigh energy needs along with other benefits and risks when they design CBDCs or consider the regulatory environment for crypto.

UNCTAD integrates blockchain technology in its technical assistance, capacity-building and research programmes.

 

UNCTAD and five UN regional agencies on 28 June launched a four-year project on the use of blockchain to simplify and expedite import, export and transit procedures.

Blockchain can help ease trade in the wake of supply chain crises, such as those emanating from the blockage of the Suez Canal, the COVID-19 pandemic and the war in Ukraine, which have caused catastrophic trade disruptions, especially in developing countries.

“Given its potentially significant economic, social, political and governance impacts, blockchain technology is relevant to UNCTAD’s mandate of promoting beneficial and fair integration of developing countries into the global economy,” said Shamika N. Sirimanne, director of UNCTAD’s technology and logistics division.

“The rapid advances and uptake of blockchain technology add to the urgency for UNCTAD to examine opportunities and challenges for developing countries, facilitate intergovernmental consensus-building, and provide technical assistance to countries in this area,” she added.

Promoting blockchain together

UNCTAD will work with the UN Economic and Social Commission for Western Asia (ESCWA) and other UN regional commissions for Africa (ECA)Europe (ECE)Latin America and the Caribbean (ECLAC)Asia and the Pacific (ESCAP) on the project.

It will coordinate the collaboration of public and private sectors working on trade facilitation and blockchain, leveraging its expertise in trade, innovation and the role of blockchain and technological change in achieving the UN Sustainable Development Goals (SDGs).

UNCTAD will conduct training sessions on blockchain in trade facilitation for decision makers from developing countries and institutions during global, regional and national capacity-building workshops. It will also produce a global report on blockchain’s implications on trade facilitation performance and trade.

Funded by the UN Development Account at $663,000, the project is expected to benefit over 200 people engaged in trade facilitation in at least five developing countries, one from each region served by the UN commissions.

It will strengthen national innovation and technological capacities related to blockchain technology in customs and trade operations in the selected countries. The goal is to increase trade and enhance competitiveness in support of sustainable development, the SDGs and Agenda 2030.

Power of blockchain solutions

Blockchain-based solutions offer transparency, security, efficiency and predictability with fewer fees and less time. They provide real-time information on the movement and origin of goods, enabling better management of supply chains.

They can help tackle challenges and issues related to trade facilitation, such as the need for innovation and digitalization of trade procedures. They can also boost governments’ ability to exchange trade data across borders and enhance transparency to consumers.

UNCTAD encourages developing countries to design policies to promote knowledge-building, skills development in blockchain and foster an innovation ecosystem in their digitalization and trade compliance efforts to increase reliability and resilience.

The five advocates are successful women entrepreneurs and pioneers in the digital economy.

UNCTAD has appointed new “eTrade for Women advocates” to empower women in the digital economy and promote more inclusive e-commerce ecosystems.

Birame Sock from Senegal, Damilola Olokesusi from Nigeria, Lennise Ng from Malaysia, Mona Ataya from the United Arab Emirates and Pierangela Sierra from Ecuador are the third cohort of advocates since UNCTAD launched its eTrade for Women initiative in 2019.

“The global economic landscape has changed tremendously since we launched the eTrade for Women initiative almost three years ago,” said Shamika N. Sirimanne, UNCTAD’s director of technology and logistics.

“But the challenge remains the same: we need to take action to reduce a growing digital divide. The advocates can help us change the rules of the game to level the playing field for women,” Ms. Sirimanne said.

Bridging the gender divide in the digital economy

The advocates will help tackle gender disparities in the digital economy.

They will serve as role models, using their knowledge and experience to help other women digital entrepreneurs across the world overcome gender biases and grow successful businesses.

Studies by the International Finance Corporation show that women could add over $14.5 billion to e-commerce markets in Africa alone and $280 billion in South-East Asia, between 2025 and 2030.

A critical part of the advocates’ mandate is to bring the voice of women to the policymaking table and help create more and better opportunities in the digital space.

They will engage with policymakers to ensure the needs of digital small and medium enterprises are considered by governments when making policies and regulations on digital ecosystems.

Over 200 women entrepreneurs supported

UNCTAD’s advocates have supported over 200 women digital entrepreneurs across the globe since 2019.

Under their leadership, the initiative has held eight regional masterclasses in Latin America, West and East Africa, South-East Asia, the Balkans, and the Arab region.

They have also created eTrade for Women regional communities of women digital entrepreneurs in 34 countries.

Meet the advocates


Birame SockBirame Sock

Ms. Sock is the new eTrade for Women advocate for French-speaking African countries.

She is the founder and CEO of Kwely, a new business-to-business wholesale sourcing marketplace for products made in Africa.

She is also the founder and managing partner of Founder 5, Inc. a startup management group focused on developing and advising ventures in the United States and Africa in various areas.

Ms. Sock is a tech visionary with over 20 years of experience as a technologist, entrepreneur, and high-level executive in digital media.

READ HER FULL PROFILE


Damilola OlokesusiDamilola Olokesusi

Ms. Olokesusi is the new eTrade for Women advocate for English-speaking African countries.

She is the founder and CEO of Shuttlers, Nigeria’s leading technology-driven transportation startup.

Shuttlers is revolutionizing how professionals and organizations commute in some of Africa’s busiest metropolises.

She is also behind the initiative “Shemoves Shuttles”, an all-female shuttle service turning female professionals’ commute into learning time.

READ HER FULL PROFILE


Lennise NgLennise Ng

Ms. Ng is the new eTrade for Women advocate for South-East Asia.

She is the founder and CEO of Dropee, an artificial intelligence-based business-to-business marketplace that allows brands and distributors to better serve over 100,000 mom-and-pop stores across Malaysia and Indonesia.

She is on a mission to help digitize small and medium enterprises – especially women-led companies – across South-East Asia as a source of economic growth and development.

READ HER FULL PROFILE


Mona AtayaMona Ataya

Ms. Ataya is starting the second year of her tenure as the eTrade for Women advocate for Arab States.

She is the founder and CEO of Mumzworld, a leading online marketplace for products for mothers, babies, and children in the Middle East, based in the United Arab Emirates. 

She has received over 80 awards and is considered one of the most influential businesswomen in the Arab region.

READ HER FULL PROFILE


Pierangela SierraPierangela Sierra

Ms. Sierra is starting the second year of her tenure as the eTrade for Women advocate for Latin America and the Caribbean.

She is the founder and CEO of Tipti, the fastest-growing groceries e-commerce company in Ecuador and Panama.

She is also the director of the Ecuadorian-American Chamber of Commerce.

READ HER FULL PROFILE

 

 


UNCTAD’s eTrade for Women initiative is funded by the governments of the Netherlands, Sweden and Switzerland.

Sustainable social and economic development in the years ahead will depend on efforts to build networks and partnerships between big corporate players and the world’s innumerable micro, small and medium enterprises (MSMEs).

And just as important will be a global networking push among MSMEs themselves, according to an online panel hosted by the International Telecommunication Union (ITU) earlier this month ahead of Micro, Small and Medium-sized Enterprises Day (MSME Day).

Celebrated annually on 27 June, the day was initiated by the UN General Assembly in 2017 to recognize the crucial role of MSMEs in sustainable development.

As drivers of promoting innovation, creativity, and decent work for all, these enterprises are a crucial factor in the pursuit of the UN Sustainable Development Goals (SDGs) for 2030.

Small and medium-sized enterprises (SMEs) are typically defined as those with annual turnover up to about USD 50 million or employing up to 250 people. Recent years have shifted emphasis increasingly to the micro players, those employing up to 10 people or with turnover of USD 2 million or less.

Economic engines

Formal and informal MSMEs make up over 90 per cent of companies worldwide, accounting for 70 per cent of total employment and up to 50 per cent of global GDP, according to United Nations estimates. With their innate flexibility and knowledge of local markets, MSMEs can be uniquely well placed to solve market-specific challenges or meet emerging needs on the ground.

“This day is a reminder that tech micro, small, and medium-sized enterprises are the engine of today’s digital economy,” said ITU Secretary-General Houlin Zhao. “At a time when one third of humanity is still unconnected, MSMEs are essential to achieving the level of connectivity and digital transformation that countries are striving for.”

Over the last eight years, ITU has progressively increased its focus on the role of small businesses in the digital ecosystem, targeting small tech firms with knowledge-sharing and mentoring programmes, dedicated networking events, awards, and a discounted ITU membership category.

The ITU Telecom World SME Awards Programme, for example, has spotlighted innovations with the potential to change lives for the better using information and communication technologies (ICTs). The awards have also given small and medium enterprises (SMEs) a platform to connect with vital resources and partners for sustainable tech projects.

The winners of the 2021 ITU Telecom SME Awards Programme joined the MSME Day panel held as part of the World Summit on the Information Society Forum 2022, an annual gathering of the world’s ICT for development community.

Building the digital ecosystem

Receiving an award from the UN agency dedicated to ICTs boosts visibility and can help make early-stage projects bankable. The panel also highlighted the need for support from international organizations to forge and develop partnerships with large industry players, as well as local, regional and national governments.

“It was very important to win this award,“ explained Armando Aguirre, co-founder of Mexican connectivity provider and recent SME Award winner WIWI. “The follow up is to be able to work with ITU and other organizations to explain how important this is, to show authorities how connectivity benefits the underserved.”

Having claimed the top prize in ITU Telecom’s Connectivity category, WIWI is working to establish free, stable WiFi connectivity on public transport networks in cities across Mexico, enabling commuters who spend an average of two hours daily on a bus to connect to the Internet for free.

Another winner in the Connectivity category was China-based SME IPification, for a proprietary platform touting a unique blend of security, user experience, and privacy protection. Deployed in a telecom provider’s core network, the platform can identify and verify the user behind any given IP (Internet Protocol) address.

“The ITU award really helped put us on a global stage as our project depends on credibility,” said Stefan Kostic, Chief Executive Officer at the company. “The ITU and UN recognition put an additional stamp on our project and our company as a whole.”

The resulting plaudits and credibility boost have, in turn, helped solidify partnerships with 53 telecom operators covering 3 billion subscribers as IPification takes its solution to scale.

Bringing it to scale

While SMEs tend to be flexible and adaptable, they can benefit from aligning with large companies and organizations that can negotiate trade and development solutions worldwide to address regulatory restrictions. The advantages of such relationships flow both ways.

“Big companies can’t develop without small companies, and SMEs can’t grow without corporate support,” said Joaquin Patron, Executive VP of Urbit, Telecom award winners in the Digital Finance category and providers of fintech services to rural and underserved areas in the United States. “We are just one piece of the puzzle in serving underserved customers, so we need to find partners to grow and break the inertia of doing the same thing by taking a risk on innovation,” he added.

Secretary-General Zhao underlined how ITU’s SME-related initiatives help to foster this key component of sustainable development.

“I am delighted to see how this award has helped SMEs scale up and address societal challenges,” he said. “I encourage others to join ITU’s growing SME community and take a seat at the table alongside governments and larger businesses to address the world’s most urgent challenges and accelerate the achievement of the SDGs.”

The World Trade Organization (WTO) and the joint UN-WTO International Trade Centre (ITC) have also launched major initiatives to support MSMEs in the tech sector. These include ITC Global Trade Helpdesks and the WTO MSME platform, new online tools providing direct and practical support to tech entrepreneurs anywhere.

ITU’s support for small tech ventures continues to evolve. The organization’s recent World Telecommunication Development Conference in Kigali, Rwanda, affirmed the importance of enabling supportive environments where entrepreneurship-driven innovation can accelerate the achievement of the SDGs, with a new resolution: “Fostering telecommunications/ICT-centric Entrepreneurship and digital innovation ecosystems for sustainable digital development.”

The resolution calls on governments and ITU’s wider membership to:

  1. develop policies and strategies, and projects nurturing digital innovation at the national level,
  2. promote the uptake of entrepreneurship-driven technology-centric schools,
  3. ensure access to domestic procurement and international markets to allow small/new enterprises to test, validate and scale-up their innovations, and
  4. pursue multisector multistakeholder collaboration to support synergies in achieving these goals.

Are you an MSME interested in joining ITU? Learn more about ITU membership benefits for MSMEs.

The country’s support has helped build knowledge, capacity and consensus on how to harness the digital economy for development.

Sweden has committed 10 million Swedish krona (approximately $1 million) for research, technical cooperation, and consensus-building activities under UNCTAD’s e-commerce and digital economy programme  in 2022 and 2023.

The contribution will boost UNCTAD’s capacity to support member states in building inclusive digital economies – a shared challenge made more urgent by the COVID-19 pandemic and growing digital and data divides.

“The digital transformation opens great opportunities for inclusive growth, jobs and sustainable development around the world,” said Krister Nilsson, state secretary to the Swedish minister for foreign trade and Nordic affairs.

“The post-pandemic recovery must include support for the participation of developing countries in the digital economy,” he added.

Making digitalization work for all

Supporting countries with the lowest levels of readiness to take advantage of the opportunities and mitigate the risks presented by digitalization helps make digitalization a force for a more resilient, equitable and sustainable world.

“We are proud to welcome Sweden among the core donors of the e-commerce and digital economy programme,” said Shamika N. Sirimanne, director of UNCTAD’s division on technology and logistics.

She also noted that Sweden’s accession to the programme’s advisory board of core donors follows member states’ decision to strengthen UNCTAD’s mandate to support developing countries in digitalization.

Ms. Sirimanne said this is a welcome recognition of the results of UNCTAD’s work in this area, which were highlighted by a recent independent evaluation.

The evaluation, covering 2019 to 2021, found that activities undertaken under the programme’s technical cooperation pillar, particularly the eTrade readiness assessments, help to boost the e-commerce and digital economy agenda within beneficiary countries.

Partnerships for development

Such partnerships and stakeholder engagement initiatives contribute to a more holistic and collaborative approach to e-commerce and the digital economy for development.

A long-standing partner of the programme, Sweden’s generous support to date has made possible a number of initiatives under the programme, including work on measuring e-commerce and the digital economyeTrade for alleTrade for Women and eTrade readiness assessments.

The advisory board, which also includes Germany, the Netherlands and Switzerland, meets once a year after the release of the programme’s Year in Review.

It allows members to share experiences and lessons learned from supporting digitalization for development efforts and outline priorities for future support.

The COVID-19 pandemic has disproportionally affected poor urban communities and laid bare pre-existing inequalities – including a digital and social divide that has been further exacerbated by the pandemic. As per our recent study, only one of every 26 jobs can be done from home in low-income countries, and across the globe. Young, poorly educated workers and those on temporary contracts are least likely to be able to work from home and more vulnerable to the labor market shocks from COVID-19.  How can this digital divide be closed? The experience of a small team from the World Bank shows that efforts to collect data can offer opportunities to expand digital literacy in local communities.

In 2020, the World Bank team partnered with Slum Dwellers International (SDI) and Cities Alliance to collect geospatial data for the most vulnerable informal settlements (including access to basic services) in eight cities to improve and validate the COVID-19 contagion risk hotspot mapping. But what started as a data-gathering exercise became a larger pilot going beyond its original scope and leading to varied direct and indirect positive outcomes.

One such outcome was enhanced digital skills of local SDI affiliates  — support non-governmental organizations (NGOs) and urban poor federations – in five countries. The World Bank formed a small team of geospatial data experts and trainers to design and deliver these trainings, and, along with the broader SDI team, created an interactive seven-week virtual-training program. SDI country-based teams include mappers and urban planners with varying levels of geospatial skills (basic to semi-advanced). Therefore, we co-designed the content with SDI based on the existing skillsets of trainees and with their specific needs in mind.

Chart showing the process of data collection

The content of these trainings ranged from open data tools and mapping to remote sensing data tools, advanced geo-spatial data analytics, and data visualization tools. The team of trainers designed three modules, each six to seven hours and sub-divided into technical, demo, and practice sessions. We recorded and shared all trainings with trainees, and every week, we provided materials to practice tools offline. This interactive model allowed for a deeper level of understanding and better application of tools while making the transition from theory to actual implementation on-ground easier.

These capacity-building trainings came in handy for the local teams during field data collection and focus group discussions.  For example, the Open Data Kit (ODK) and Kobo toolbox was used to collect data more efficiently and accurately during the pandemic. Similarly, satellite imagery allowed teams to digitize, validate, and edit some of the data points while they could not travel to informal settlements due to lockdown and other mobility restrictions. Advanced QGIS tools helped in analyzing the data. By estimating the number of people using a public facility and network analysis to the proximity of these facilities. Lastly, story maps and other interactive visualization tools were helpful in SDI’s advocacy work.

Training community meetings in Nairobi, Kenya

The additional chain of people trained by the original cohort of trainees represented the positive spill-over effect. Each country team conducted a series of trainings for additional team members, traveling the field for data collection. For example, the SDI Kenya team of five trained 150+ mappers/volunteers/local community members within the course of a few weeks.

Focus group discussions highlighted a strong demand amongst local communities (especially youth) for digital skills trainings, as it can potentially improve their employability prospects.  As quoted by a Freetown resident during discussions, “we need more of these vocational training for our youth, as most of them are unemployed which leads them to steal and gamble for money.”

To conclude, community-led data collection can provide an entry point to engage with the community and deliver skills training, starting with geospatial skills to broader digital and vocational skills. This can have several collateral benefits for local communities in post-pandemic cities, from disaggregated data collected and owned by communities for evidence-based planning to improved skills for changing the job market, community empowerment, and opportunities to partner with cities in decision-making. The World Bank and SDI are jointly exploring avenues to scale up these trainings to a broader network of local mappers, volunteers, and community members in more cities.

SDI network brings together over a million informal settlement dwellers in over 30 countries across Africa, Asia, and Latin America, who work together through federations and support NGOs to collect city-wide data and information on informal settlements, and in this process, they train youth, volunteers, and slum residents on a recurrent basis and advocate for their rights.


The World Bank team included Swati Sachdeva (Urban Specialist); Nagaraja Rao Harshadeep (Lead Environmental Specialist and Global lead for disruptive technology), Yves Barthelemy (Senior Geospatial consultant), Nuala Margaret Cowan (Senior Geospatial consultant), Hrishikesh Prakash Patel (Geospatial consultant) and Isabel Maria Ramos Tellez (Geospatial Consultant).

Pioneering research by The MetLife Foundation, Cenfri, UNCDF, UNSGSA, FSDK, and FSDZ (among others) on financial health has significantly increased doubt that bank and mobile money accounts alone are particularly meaningful for most people in the developing world. Access to formal financial services is generally considered an intermediate step towards meaningful outcomes like an improved ability to cover daily expenses, deal with unforeseen shocks, and effectively manage debt.

However, the body of evidence on this is quite mixed from randomized controlled trials (RCT)s that show increased consumption and consumption smoothing as a direct result of using mobile money, to RCTs that show no increase in savings or reduction in poverty and surveys that show negative correlations between increased formal account usage and financial health.

The term financial inclusion has become so confused in the literature, that many have abandoned it and are redefining impact through terms like financial health and financial wellbeing that have arrays of indicators. While these indicators make sense from a developmental impact perspective, they are difficult to measure and cannot be assessed from the GSMA dataset. However, this supply-side data does offer a useful perspective on what people use mobile money for and how useful they find it. Deeper analysis requires demand-side data, which will be available in the forthcoming Global Findex and UNCDF hopes to revisit this topic then.

Three Out of Four with Access Do Not Use Mobile Money

The last global demand side study for financial services (Global Findex) was done in 2017 by the World Bank and showed that only 4% of adults globally had mobile money accounts after about a decade of sector expansion. Whether this statistic is high/low or meaningful, depends on the analysis one is conducting. It is not very meaningful for this discussion as adults in many countries do not need mobile money services as they have superior options, and half the countries in the world do not even have a provider that offers the service.

It is more useful to examine places where mobile money is used, and its highest use is in low-income countries, where 18% of adults had a mobile money account in 2017. The model for mobile money was forged in Kenya, and the service is really designed to integrate seamlessly into informal cash-based economies. Those are the places where customers have found it valuable. The GSMA data helps understand the degree to which mobile money is useful in the places where it is used.

Assuming registered customers have access to mobile money is reasonable. The GSMA data shows that consistently over the last ten years, on average, 73%-81% of customers that were registered for mobile money did not make a single monthly transaction. This insight needs to be interpreted in juxtaposition to the goal to extend access to finance for all. Often, access to finance alone is not enough to inspire usage.

And while it is true that many still do not have access to mobile money accounts, this shows that for approximately three out of four people who likely do have access, they either hardly ever or possibly never use it. This seems to counterpoint assumptions that mobile money, on its own, alleviates poverty, transforms lives or is a solution to a commonly held problem for most people. It is likely only a component of solutions that strive to improve market efficiency and resilience in informal cash-based economies.

Mobile Money Usage is Limited to Six Products

Despite services like mobile money not being for everybody, there were still almost 350 million customers active on a 30-day basis at the end of 2021. While we showed in the last article that this growth rate has slowed significantly over the past years, it is still quite positive and robust, and all these statistics should be lauded by the mobile money and financial inclusion communities that have worked so hard to achieve them. It is also important to evaluate what these 350 million people are using the service for, as it has implications from a revenue standpoint, a systems evolution angle, and an impact perspective.

This analysis uses both the number of transactions made (volumes) and the amount of money transacted (values) for each mobile money product to measure their relative importance to the system. Cash-in and cash-out (CICO) transactions, which are 28% of volumes and 42% of values are excluded as they are not product-level transactions. t is worth noting that after 15 years of product development there are still only six product lines, showing limited innovation in the ecosystem.

Further, the pie charts in Figure 2 show that from a volumes perspective there are only four products of note, and the top two, airtime and P2P together account for 72% of volumes. The story is similar from a values perspective since there are again only four significant products and P2P itself accounts for almost two-thirds of transaction value. However, from a values perspective, merchant payments and bulk payments have surpassed bill pay as a use case, which is notable.

Mobile Money Product Suite is Evolving, But Slowly

The importance of a product depends on why it is being analyzed. Some may be important from a profit perspective, but not provide much impact for customers or only for customers wealthy enough to benefit from it, limiting its impact from a financial inclusion perspective. Some products, like P2P, we expect to decline as the mobile money system evolves, while others like merchant payments will determine whether mobile money can remain relevant in the digital era. To visualize product suite evolution, the next charts present five-year snapshots over the last 10 years (2011, 2016, 2021). Figures shown are percentages of the product suite from the corresponding year.

From an evolution perspective, airtime volumes have declined significantly, as have P2P transaction values. These trends are likely to continue as 3rd party providers increasingly sell airtime, and other emerging product categories erode the relevance of the P2P as a ‘catch-all’ function. The small yet steady growth of bulk payments and merchant payments are encouraging. However, bulk payments must solve its unidirectional flow issue to scale. Mobile money is designed for balanced flows into and out of the system, and bulk payments are unidirectional flows, which break the liquidity balancing mechanisms. This system will likely need to be redesigned for significant growth.

Merchant payments are very important from a systems evolution perspective as they are the most common customer transaction type, but they still account for a very small proportion of mobile money transactions. Growth has begun as the value proposition for the merchant has been cracked in some cases. However, it is unclear how deeply into the MSME category merchant payments will penetrate beyond some select verticals like petrol stations and restaurants. Bill payments started with strong growth a while back but may have leveled off, and international remittances remain a frustratingly difficult product to scale.

From an impact perspective, much has been written about the ability of domestic remittances to increase financial resilience, for which there is supportive evidence. However, P2P is a generic tool that customers use to solve many different issues, and it has never been well teased apart. Many describe it as a mechanism for domestic remittances from cities to rural areas.

However, data from the Helix Institute showed that the float and cash needs of agents did not match that narrative, and astute observers and long-time users understand much of this category is payments for services in the informal economy, and settling accounts within families and friends. To really understand the impact of P2P, we must first better understand how people use it.

The same is true for bill pay and bulk payments (G2P), especially since we know a portion of these categories is gambling, but we do not understand how much. In theory, G2P payments certainly have a high potential for impact, as they could make the delivery of government services and subsidies to low-income populations much more convenient and cost-effective, but they have struggled to scale.

For bill pay, it is unclear why growth has decelerated over the last five years, but it could be because this product is mostly for urban working class and wealthier families that can afford to have utilities, and those populations are relatively small and now served. While bill pay may generally not be designed for low-income populations, it has supported the evolution of selected businesses models like Pay-as-you-Go (PAYG) solar and smart device financing as well as school fee payments, which do have real impact.

Similarly, merchant payments are currently not for most people. For most adults in the developing world that earn cash and spend cash in small amounts close to their residence, the value proposition of merchant payments has yet to be articulated. Lastly, international remittances have the potential to be impactful for the portions of adults in the developing world that use them, if mobile money systems can make them less expensive and more convenient. However, the above figures show that this is still being solved as the service is seldomly used.

In conclusion, most impact narratives for mobile money discuss P2P payments as an anchor product that allow providers to earn revenue, garner a significant customer base, and then evolve a more sophisticated suite of products. Over the last 15 years, that has happened to some degree, but innovation has been quite limited and growth in other product categories has been slow. This weakens the narrative that mobile money is a gateway to product offerings in other categories that could offer more impact to customers.

The landscape changes when we include products developed by technology companies that could be delivered through mobile money systems. However, innovation from these stakeholders has been limited by the difficultly of partnering with the very mobile money systems that stand to benefit from them and are needed to enable their scale.

Even Active Mobile Money Users are Not Very Active

The next level of analysis focuses active users. We previously discussed how mobile money is used, but it is also important to understand how frequently. Given most people make several transactions a day in their daily lives, how many are made on a mobile money platform? Just focusing on the product level transactions (i.e. excluding CICO transactions), a 30-day active customer makes just over ten mobile money transactions a month, which is about one transaction every three days.

Examining the data by product category, that amounts to an airtime top-up and a P2P transfer about once a week, a bill payment and a merchant transaction about once a month, a bulk disbursement about once every two months, and an international remittance about once every three years. Therefore, on average, even active users do not use the service very actively.

Thus, arguments that mobile money itself is alleviating poverty or transforming lives and deserves significant public sector investment may be overextended. It is still a helpful service for many, and UNCDF supports the continued development of these systems as they can be essential to enabling people to interact with the digital economy. However, we should be circumspect about its ability to have an impact in otherwise analog environments.

Large Average Transaction Sizes do not Indicate Impoverished Users

While the previous analysis focused on how services are used and to what degree, this final analysis examines what can be gathered about the demographics of the users from this supply side data. To do this, we analyze the value of the average transaction by product category. Again, we would have preferred to use median values to account for skewed distributions, but they are not available.

This analysis is important because the average size of the transaction may be a proxy for the income-level of the user. For small transaction values this is less likely to be true as even high-income people may make small purchases of items like airtime. However, for high value transactions it is unlikely that low-income people are conducting them, and the data reveals transaction values are surprisingly high. International remittances stand-out having an average transaction value of over US$130, indicating that on average the users are not at the bottom of the income pyramid.

Further, the average transaction values around US$30 for cash-in, cash-out, P2P, and bulk disbursements are also remarkably high. For example, in leading East African mobile money markets, this would be 45% of monthly GNI per capita in Uganda, 33% in Tanzania, and 20% in Kenya. In essence, the average adult could only afford to conduct two transactions a month of this size in Uganda, or five in Kenya. This leads to the assumption that the average mobile money user has a higher income than the average adult. This would be a different understanding than what is popularly believed in the financial inclusion community and deserves more research.

Mobile Money Improves Lives, Just Not as Much as Advertised

This analysis points out some major discrepancies in the mobile money impact narrative. Namely, it is used less, for fewer reasons, and likely by wealthier people than commonly assumed. It has also been slow to evolve. However, these are not indictments of the system. They are just reason to recalibrate our expectations of it. Mobile money has reached hundreds of millions of people who use it to make their lives easier in very tangible ways, and it is probably particularly helpful to increase resilience during disasters as money can reach the affected more easily.

The financial inclusion community should applaud these gains, and also not be satisfied by them as much work is left to do. It will involve a new cadre of builders that use technology to better customize products and integrate them into the digital economy, and it will require the financial inclusion community to embrace an improved set of metrics to measure their impact. Future solutions may ride on these mobile money payments channels or just be inspired by lessons learned from building them. Either way, mobile money has pioneered mass-market finance in many developing countries. Its legacy should be celebrated, and its impacts accurately understood to drive further innovation.

Note to Reader: This article is part of a #MobileMoney Mysteries series that uses the last 15 years of mobile money data provided by GSMA to reflect on progress in the sector and gauge where we are in answering some of the big questions still being debated.

The fifth edition of the EU-Africa Business Summit, which was organized by the European Business Summits (EBS) and which took place held in Brussels, provided for high-level panel discussions among around 100 physical guests and over 3,000 online participants who discussed the future of economic relations between the European Union (EU) and Africa.

“In a context of increasing challenges, digital is key for the resilience of businesses”, said Bernardo Calzadilla-Sarmiento, Managing Director for Digitalization, Technology and Agri-business of the United Nations Industrial Development Organization (UNIDO). “At the same time, Special Economic Zones (SEZs) have the ability to bring together public and private finance to create resilient ecosystems as they mobilize investments while creating jobs”.

In addition to an interview with news media Euronews, the UNIDO Managing Director also contributed to the roundtable discussion on “Investment climate and trade within EU-Africa relations”, which was co-hosted by David Clarnival, Acting Minister of Foreign Trade of Belgium. Other roundtable participants included Alan Kyerematen, Minister of Trade and Industry of Ghana; Solomon Adegbie-Quaynor, Vice President of the African development Bank; and Soha Gendi, Assistant Foreign Minister for African Organizations of Egypt.

The Summit also allowed for strategic discussions towards increasing international cooperation, including with Janusz Wojciechowski, EU Commissioner for Agriculture; Arnaud Thysen, Director of the European Business Summits; and Cécile Billaux, Head of Unit, Micro-economic analysis, investment climate and private sector & employment, DG INTPA.

According to Visa, one of the world’s biggest financial services corporations, digital equity and inclusion rely on three key assets: access, trusted convenience, and knowledge. A key partner in the UPU’s Financial Inclusion Technical Assistance Facility (FITAF) project, Visa believes that the Post can advance each of these pillars, paving the way towards more equitable and prosperous communities.

The COVID-19 pandemic accelerated three years of digital innovation into one, transforming how many of us live, learn, work, shop and sell. More and more occurs through mobile phones, the internet and digital financial services, from the accountant managing the books for a construction company in another country to drivers delivering food and rides around town to whole new businesses launched on digital data and social communications. The World Economic Forum predicts that 70% of new value created in this decade will be based on digitally enabled technologies.* The opportunity for communities is equally massive. With livelihoods and well-being increasingly determined by participation in the digital economy, this rapid transition can provide opportunity for everyone, everywhere.

This vision of digital equity and inclusion is one of the reasons Visa is pleased to partner with the Universal Postal Union on the Financial Inclusion Technical Assistance Facility (FITAF) since 2017 and with national post offices around the world for many more years. Everyone needs a way to pay for daily needs and services, and receive income and money. Post offices have often provided that service to citizens through postal banks or in partnership with financial institutions. Today, that means digital payments, whether through a card, a virtual account or a mobile app.

With all the opportunity, there are also challenges to deliver new technology and services that people rely on day in and day out. As a network of networks providing 206 billion payment transactions in the last year and 70 million places of acceptance globally, Visa’s vision is that we must focus on three things to advance digital equity and inclusion: access, trusted convenience, and knowledge.

Providing access is table stakes.

Post offices in Egypt, Viet Nam and Japan, for example, are opening up access to digital payments by leveraging their large footprint, capillary networks, and daily touch points with billions of people, including in peri-urban and remote areas. By delivering government payments and social welfare support, posts in South Africa, France and beyond introduce people to formal payments and, when designed well, promote responsible use of other digital financial services. Yet, despite significant gains, much of the adult world is still excluded from the opportunities of increased incomes, gig work, or secure receipt of money because they deal in cash** or because they are not well connected digitally. About 40% of people globally have never connected to the internet, a situation more acute in less developed countries*** and for women.

Beyond access, people also want trusted convenience.

Here, the neighborhood post office coupled with technological innovation and local insights can be a winning combination. For example, PostePay in Italy and the Egyptian National Post Organization (ENPO), with partners including Visa, the Italian Ministry of Education and PaySky in Egypt, launched the IoStudio (“I Study”) account and Yalla mobile app, respectively, putting digital payments and integrated services directly into the hands of youth. With PostePay Green in Italy, children ages 11 to 17 are able to pay digitally for lunch and other purchases, and parents have oversight through wallet controls in the app. Establishing reliability, security, and responsibility are essential.

Finally, people and small business owners need knowledge around new digital financial services.

This means reaching people with practical and easy to understand product information. It also means enabling individuals, businesses, and economies to thrive through literacy, numeracy and financial education efforts. As part of its digitization strategy, KazPost partnered with Visa to raise national awareness about cashless payments, how to use them safely and build financial skills. The project reached adults and youth through pop up booths at post office branches, seminars at universities, student financial literacy days, mass media and social media.

Partnering for innovation, scale, and impact

Collaboration among post offices, governments, and the private sector is a key tool of economic inclusion. When examining how to curate global solutions around innovation, scale and impact, postal partnerships are an opportunity to close the gaps in inclusion, allowing everyone to participate in digital platforms and the economy.


* World Economic Forum, Shaping the Future of Digital Economy and New Value Creation, World Economic Forum, 2021.
** The World Bank’s upcoming release of a new Global Findex will provide updated information on access to and use of digital payments and financial services. The currently available data referenced here is from 2017.
*** World Bank, World Development Indicators Database, 2020 data.

  • The IDB presents a study mapping the main gender gaps in digital transformation.
  • Women’s participation in digital transformation at their organizations is limited by a lack of digital skills and competencies.
  • Access to financing is among the main barriers for female entrepreneurs in digital fields.

An Inter-American Development Bank (IDB), IDB Invest and IDB Lab study reveals that 62% of representatives of major institutions and entities in the digital ecosystem in Latin America and the Caribbean think the digital gender gap is a problem in their respective countries. The same proportion believe that women have little participation in digital transformation processes because of a lack of skills and competencies.

According to the unpublished surveys and analysis of recent research in the study The Gender Dimension in the Digital Transformation of Businesses in Latin America and the Caribbean (only Spanish), governments in the region need to implement specific public policies to reduce the gender gap in digital business transformations.

The survey shows that women’s participation in digital transformation processes was less than 50% at approximately half of the organizations surveyed. These organizations pointed to a lack of necessary digital skills and competencies as a primary reason for this lack of participation.

The study maps the main gender gaps in companies’ digitalization processes and recommends that governments help solve this problem through public policies that increase women’s access to and use of digital technologies and reduce gaps related to women’s participation in digital jobs.

“We want digital transformation processes to be guided by strong public policies promoting greater gender inclusion. This will help our region accelerate its growth and promote equitable and fair development,” said Jessica Bedoya, Chief of Staff and Chief Strategy Officer at the IDB.

“This study provides a roadmap for governments to incorporate gender equity into their digital agendas. It reinforces the commitment set forth in IDB Group Vision 2025 to promote gender equity and advance the region’s digital transformation.”

Currently, two-thirds of Latin American and Caribbean countries do not include gender as a cross-cutting pillar when designing efficient public policies for digital transformation of business.

When asked about the main barriers faced by female entrepreneurs in digital spaces, most respondents (73.6%) mentioned access to financing. The survey also found the high burden of family responsibilities among women to be the most common reason why more women are not starting companies in the digital sphere (70%). Moreover, a large majority of respondents (80.2%) believe women-owned digital businesses receive less investment than male-owned businesses.

The survey data is based on responses from leaders of digital transformation agendas in 20 countries in Latin America and the Caribbean and on an analysis of digital public policies in 27 countries in the region. There was a total of 416 responses to the general survey questionnaire between October and November 2021.

Other gender gaps

In terms of access, more men than women have Internet access in over half of the region’s countries. There is also a higher share of men with mobile connectivity in 70% of Latin American and Caribbean countries. The primary demand-side factors contributing to this access gap are level of education, presence of children in the household, employment, and socioeconomic conditions. Meanwhile, the main supply-side factor is the affordability of telecommunications services and devices.

The study also indicates that women have less training on digital technologies and are less confident in their digital technology skills, which leads them to use these technologies less.

The study also warns that the gender gap in digital jobs is progressively widening, especially due to high levels of informal employment in the region, which, in turn, has been exacerbated by the COVID-19 pandemic. Women make up 32% of employees in the information and communications sectors in Latin America and the Caribbean.

Finally, the study concludes that women’s limited participation in digital transformation is also tied to behavioral biases among women themselves and in the digital sector, which is dominated by men. It can also be linked to the scarcity of women in decision-making positions within companies.

Public policy recommendations

The study recommends various public policy measures to boost female participation in the digital sphere. In general, the recommendations highlight the need to change the culture through awareness campaigns and equitable early education in science, technology, engineering and mathematics (STEM), as well as to foster a culture of self-empowerment and ongoing training in digital technologies.

For the public sector, the study suggests accelerating digital infrastructure projects and reducing gender gap in digital skills, especially in rural areas. It also recommends activity attracting more women to digital professions and raising awareness in the private sector about how much value it loses by not including female talent in processes for digitally transforming businesses.

The study recommends legal reforms to distribute family responsibilities more evenly among the capable adults in a household. When financing entrepreneurship projects through tendering processes, governments should strive to consider an equal number of proposals from men and women.

For the private sector, the publication recommends companies develop gender equality policies and use data analytics to design them. In terms of recruitment, companies should ensure that application processes for certain positions in the organization are fair and use blind resumes, without referencing the gender of applicants.

To increase career opportunities for women, companies should consider implementing flexible or hybrid work mechanisms, creating mentoring programs to encourage more women to develop their digital skills, and adopting upskilling and reskilling measures for women in digital fields.

Finally, the study recommends creating funds or programs specifically to help female entrepreneurs obtain financing. These programs should be designed to mitigate a possible undesired effect of excluding these women from normal financing circuits.

About the IDB

The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.

About IDB Invest

IDB Invest is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social, and environmental development in the region. With a portfolio of $14.8 billion in asset management and 376 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.

About IDB Lab

IDB Lab is the innovation laboratory of the IDB Group, the main source of financing and knowledge for development, focused on improving lives in Latin America and the Caribbean (LAC). The purpose of IDB Lab is to drive innovation for inclusion in the region, mobilizing financing, knowledge, and connections to co-create solutions capable of transforming the lives of vulnerable populations due to economic, social, or environmental conditions. Since 1993, IDB Lab has approved more than $2 billion in projects developed in 26 LAC countries, including investments in more than 90 venture capital funds.

This podcast episode explores labour market skills needs, and how education, training and lifelong learning can effectively skill and re-skill workers throughout their lives in an evolving and increasingly digitalized labour market.

 

 

Digitalization is changing the nature, mode, and pace of work. This means the skilling and re-skilling of workers will be essential if enterprises and entire industries are to maintain and increase functionality and productivity, effectively manage shocks, ensure, and sustain the well-being and livelihoods of workers, and create decent jobs. Understanding and anticipating the evolving skills needs is a crucial step that can guide the training of workers. This episode explores labour market skills needs, and how education, training and lifelong learning can effectively skill and re-skill workers throughout their lives in an evolving and increasingly digitalized labour market.

The future of work podcast series was created on behalf of the Ministry for Economic Cooperation and Development (BMZ).

GUEST:
Olga Strietska-Ilina
ILO Senior Skills and Employability Specialist, and Team Leader on Skills Strategies for Future Labour Markets

Under the theme “Global Gateway: building sustainable partnerships for a connected world”, the 15th edition of the European Development Days (#EDD22) was held in Brussels and gathered more than 4,000 participants from the development community.

Under the theme “Global Gateway: building sustainable partnerships for a connected world”, the 15th edition of the European Development Days (#EDD22) was held in Brussels and gathered more than 4,000 participants from the development community.

“Digital transformation requires innovative investments and funding as well as public-private partnerships and a strong focus on capacity building”, said Bernardo Calzadilla-Sarmiento, Managing Director for Digitalization, Technology and Agri-business of the United Nations Industrial Development Organization (UNIDO). “At the same time, the role of a twin transition to achieve development challenges – including gender equality, sustainable agriculture, or access to health services – must be highlighted”.

The UNIDO Managing Director spoke during the European Commission-organized high-level panel “Contribution of digital to Africa’s green growth and progress”, which also benefitted from the experience of representatives from, among others, Expertise France, GIZ, SES, Afrilabs, and other civil society organizations. As an immediate follow-up to the session, the discussion continued at the Digital4Developemnt (D4D) Hub stand where further digital cooperation opportunities were explored.

Bilateral meetings were also held with Jérémie Pellet, Director General of Expertise France; Thierry Barbé, Head of the Science Technology Innovation and Digitalization unit at the Directorate General for International Partnerships of the European Commission (INTPA); and Caroline Kamaitha, Vice President for Fixed Data Africa, Société Européenne des Satellites (SES).

UNIDO also contributed to the United Nations’ stand, which advocated for a stronger UN-EU cooperation to scale up efforts towards achieving Agenda 2030, in synergy with the EU Global Gateway. Within the EDD Global Village, a joint UNIDO-EU photography exhibition was also organized and its closing ceremony was attended by numerous high-level participants, including the UNIDO Managing Director; Escipion Oliveira Gomez, OACPS Assistant Secretary General; Malte Gallée, Member of the European Parliament; Nong Sakal, Ambassador of Cambodia; and Junior Tagne, one of the EDD Young Leaders.

“International cooperation is essential to achieve inclusive and sustainable industrial development and to empower young generations”, said Patrick Gilabert, UNIDO Representative in Brussels, speaking on behalf of the development partners during the closing ceremony.

For more information, please contact:

Patrick Gilabert
p.gilabert@unido.org

Flora Demaegdt
f.demaegdt@unido.org

  • Global trade has been disrupted by the war in Ukraine, COVID-19 and other supply chain blockages.
  • In the digital age, new tools and systems can help streamline global trade.
  • These include non-fungible tokens, digital IDs and digital trade agreements.
  • A single digital identity that could allow any organization to trade globally is the ideal, says the World Economic Forum.

Global trade is under pressure.

The war in Ukraine has led to worldwide disruption, with global output predicted to drop 1%. And that’s after COVID-19 triggered some of the biggest falls in global trade since World War II.

But the pandemic also showed us the power of digital technology to keep the world going. For international importers and exporters, digital trade systems and tools offer huge opportunities.

Here are three developments helping to make global trade smoother and safer.

Non-fungible tokens

Non-fungible tokens – NFTs for short – are a form of secure digital ownership. They are unique digital tokens that can be used to buy, own and sell digital or physical items online, according to business news website Business Insider. This might include real estate, art or music.

It might be an image, 3D model, document, or anything else, says FinTech Magazine. These digital signatures can’t be altered or faked in any way, meaning new possibilities for handling sensitive data.

NFTs can also streamline international trade by removing document fraud and the need for multiple regulations and human interventions along supply chains, FinTech adds.

In 2021, more than $17 billion of NFTs were traded globally, up 21,000% from $82 million in 2020, reports payments news site PYMNTS.com.

Digital IDs

Before trade can happen, businesses need to verify each other’s identity. Instead of using paper documents like passports and driving licences, digital IDs are a way of verifying identities remotely over digital channels, explains research specialist, McKinsey Global Institute.

The World Trade Organization (WTO) says digital IDs can apply to people, organizations or things. They’re now critical to a wide range of international trade transactions and processes. For example, drawing up contracts, exchanging data, bringing new suppliers or partners on board and complying with regulations related to the environment, counterterrorism, finance and other areas.

Digital ID systems are typically used by government agencies like customs and business registration.

But as trade becomes more digital, so does the need for a digital ID system that works globally across borders and not just in specific sectors, the WTO says. In its work on Global Trade Identity, the World Economic Forum explores the use of a single digital ID that could allow any organization to trade globally.

Digital systems can streamline international trade, improve security and reduce costs. Image: World Economic Forum

Digital trade agreements

Digital trade agreements are a package of measures between governments designed to make trade easier in the digital age.

In February this year, the United Kingdom signed a digital trade deal with Singapore that includes shared digital systems for e-invoicing, e-payments and other electronic documents, according to law firm Pinsent Masons.

The UK government said the deal would “end outdated rules” for exporters of goods and services, cut costs and “pave the way for [a] new era of modern trade”.

Singapore has also signed a digital trade agreement with Chile and New Zealand. The deal is designed to help trade flow between different regimes, with benefits including enhanced security, quicker cargo clearance and faster payment processing.

The World Economic Forum is working with partners to develop a unified set of global rules for digital trade. In a blog, Ziyang Fan and Mike Gallaher of the Forum’s digital trade team say: “Existing digital trade rules are outdated, complex and fragmented, if they exist at all.”

They argue that modernizing digital trade rules would advance digital trade, create more jobs, lower costs and reduce inefficiencies.

Nearly a quarter of the world’s top 150 digital technology companies are set to achieve carbon neutrality by 2030.

Thirty-eight of the world’s 150 leading tech companies are on track to become carbon neutral by 2030, with several aiming to be carbon negative soon after, according to a report by the International Telecommunication Union (ITU) and the World Benchmarking Alliance (WBA).

The new report, Greening digital companies: Monitoring emissions and climate commitments​, documents the greenhouse gas (GHG) emissions and energy use of 150 of the world’s leading tech companies.

The study strives to enable tech companies to adopt best practices, accelerate emissions reduction, and “green” themselves to eliminate carbon-dioxide (CO2) and other GHG output from their operations.

If other digital companies would emulate those currently leading in the quest for carbon neutrality, it could make information and communication technologies (ICTs) one of the greenest sectors of the global economy, the report asserts.

“Tech companies are an essential part of the global economy,” said ITU Secretary-General Houlin Zhao. “This new study serves as a roadmap to drive all these companies towards net-zero emissions. This is the way to ensure today’s digital transformation accelerates climate action – and to do so before it’s too late.”

Part of the solution

Operational GHG emissions among the 150 companies accounted for 239 million tonnes in 2020, equivalent to 0.8 per cent of the world total. Yet digital companies – defined as those that produce and sell ICT equipment, operate telecommunication networks, and provide software and other information technology services, including data centres and cloud computing – have also become prominent in the race to eliminate harmful emissions.

Gerbrand Haverkamp, Executive Director at WBA, said: “Digital companies and their innovative nature are indispensable drivers of change to build a future that is not only technologically connected, but also fair and sustainable for both people and the planet. This report is testimony that digital companies can and must play a notable role in the race to reduce greenhouse gas emissions and invest in solutions aligned to the Paris Agreement. We hope this research can incentivise companies themselves to learn from best practices, reduce their emissions, and improve their energy efficiency across all their operations.”

Ramping up climate response

From renewable power purchases and investments in carbon capture to issuing green bonds, these companies are at the forefront of global GHG reduction efforts. Digital companies accounted for seven of the top ten largest corporate purchasers of renewable energy in 2020, making up almost half of the renewables purchased globally that year, the report found.

Corporate energy sourcing is a crucial factor as countries strive to cut their emissions under the 2015 Paris Agreement, which seeks to limit the rise in average global temperatures at 1.5 degrees Celsius.

Doreen Bogdan-Martin, Director of the ITU Telecommunication Development Bureau, said: “It is no secret that as we increase our use of technology services, networks and devices, energy consumption and emissions increase in tandem. But digital technologies can be part of the solution, too. They can directly address challenges related to climate change, help scale up renewable energy markets, support smart power grids and smart metering for buildings, and of course enable emissions reductions from our work through solutions like video conferencing.”

Overall, the 150 tech companies covered by the study consumed 425 terawatt-hours (TWh) of electricity in 2020, around 1.6 per cent of the world total. Of that amount, around one third was renewable.

In many cases, companies purchase voluntary offsets to make up for unavoidable emissions. These offsets can support projects such as solar and wind farms in low- and middle-income countries, as well as the provision of environmentally friendly cookstoves and Pay-As-You-Go solar electricity services.

Renewable energy supply challenges

Low- and middle-income countries frequently face energy challenges, including limited electricity access or unreliable grids, resulting in over-reliance on dirty diesel-powered generator sets. To address such challenges, governments need to create favourable conditions for renewable energy use.

At the same time, tech companies are not always getting the renewable energy they pay for due to the design of electrical grids. In response, a multi-stakeholder group of energy buyers, energy suppliers, governments, investors and other organizations have partnered “to accelerate the decarbonization of electricity grids by adopting, enabling, and advancing 24/7 Carbon-free Energy (CFE)“, meaning that every kilowatt-hour of electricity consumption is met with carbon-free electricity sources, every hour of every day, everywhere.

About the report

The Greening digital companies: Monitoring emissions and climate commitments​ report draws on climate data published by tech companies themselves to uncover insights, assess where the industry will be by 2030, review climate performance by company and region, and highlight innovative practices to reduce the sector’s environmental footprint.

ITU’s work as the United Nations specialized agency for ICTs includes developing technical standards that provide guidance on achieving net zero emissions. This includes helping countries and the ICT sector meet the targets of the Paris Agreement and achieve the Sustainable Development Goals set out by the United Nations.

WBA is a non-profit organization that assesses and ranks the performance of the world’s most influential companies in terms of the UN Sustainable Development Goals. Among various benchmarks published by the organization, the Digital Inclusion Benchmark assesses the world’s 150 most influential tech and telecom companies through evidence-based metrics on digital inclusion and sustainable development.


About ITU

The International Telecommunication Union (ITU) is the United Nations specialized agency for information and communication technologies (ICTs), driving innovation in ICTs together with 193 Member States and a membership of over 900 companies, universities, and international and regional organizations. Established over 150 years ago, ITU is the intergovernmental body responsible for coordinating the shared global use of the radio spectrum, promoting international cooperation in assigning satellite orbits, improving communication infrastructure in the developing world, and establishing the worldwide standards that foster seamless interconnection of a vast range of communications systems. From broadband networks to cutting-edge wireless technologies, aeronautical and maritime navigation, radio astronomy, oceanographic and satellite-based earth monitoring as well as converging fixed-mobile phone, Internet and broadcasting technologies, ITU is committed to connecting the world. For more information, visit www.itu.int

Is this the golden age of innovation?

It has been said that we now find ourselves in the “Golden Age of Innovation.” While it is undeniably true that we live in a time when the pace of technological change is faster than ever before, from available new digital technologies to the data that fuels them the picture is not always as rosy as some would have it.

Unsurprisingly, the Digital Age of Accelerated Innovation brings with it both opportunities and challenges and nowhere more so than when it comes to data.  On the one hand, data has the potential to solve some of our most pressing societal challenges, from the pandemic to poverty to climate change. But that data can only be effectively leveraged if individuals and organizations trust those bodies that are responsible for handling it, rather than suspect that their privacy and wellbeing might be compromised without their knowledge or consent. This is where the challenges lie.

Where do we stand on trust?

Many organizations, including the World Economic Forum, note that “declining trust, prompted by unease at the way some organizations are using digital technology, could undermine the societal benefits of digitalization.” No one can deny that new innovative technologies have brought a commensurate wave of data breaches, tech industry scandals, a rise in cyberattacks, and a general lack of transparency regarding personal data use.  Whether the facts support it or not, a general sense of wariness accompanies every new request for personal data.

Organizations have a role to play to build and maintain trust in how they handle data.  Indeed, there is a pressing need to establish comprehensive practices for the development, design, and deployment of emerging technologies, such as Artificial Intelligence.  Without measured and responsible guardrails, heedless and irresponsible personal data collection threatens to run rampant. This project starts at home by setting high levels of Privacy and Information Governance. New privacy regimes are surfacing weekly across the globe to safeguard the protection of personal information, which is good news. However, trust is not a simple box-ticking exercise. This requires organizations to instill a culture of privacy and to invest in education and awareness at all levels. This translates into ethical commitments for a responsible data innovation system that safeguards and enhances privacy principles  – where people know and control what is being done with their data, how it is being used and shared, and how they are benefiting from these activities. Trust is an umbrella that, in data privacy terms, encompasses awareness, transparency, control, and security among others. Ultimately, this allows organizations to turn a heavy compliance obligation into a strategic imperative and business opportunity.

What’s next?

We are still at the start of our journey to re-establish trust in the digital era. Everyone – governments, industry, civil society, and academia – has a role to play in the collective effort needed to bring about real change. Therefore, the World Bank is so pleased to be working alongside Mastercard on a knowledge and thought leadership partnership to strengthen trust across the global digital economy.

Please view the replay of our Fireside Chat with Tami Dokken, Chief Data Privacy Officer, World Bank and Caroline Louveaux, Chief Privacy Officer, Mastercard which took place on June 21, 2022.

Nearly a quarter of the world’s top 150 digital technology companies are set to achieve carbon neutrality by 2030.

Thirty-eight of the world’s 150 leading tech companies are on track to become carbon neutral by 2030, with several aiming to be carbon negative soon after, according to a report by the International Telecommunication Union (ITU) and the World Benchmarking Alliance (WBA).

The new report, Greening digital companies: Monitoring emissions and climate commitments​, documents the greenhouse gas (GHG) emissions and energy use of 150 of the world’s leading tech companies.

The study strives to enable tech companies to adopt best practices, accelerate emissions reduction, and “green” themselves to eliminate carbon-dioxide (CO2) and other GHG output from their operations.

If other digital companies would emulate those currently leading in the quest for carbon neutrality, it could make information and communication technologies (ICTs) one of the greenest sectors of the global economy, the report asserts.

“Tech companies are an essential part of the global economy,” said ITU Secretary-General Houlin Zhao. “This new study serves as a roadmap to drive all these companies towards net-zero emissions. This is the way to ensure today’s digital transformation accelerates climate action – and to do so before it’s too late.”

Part of the solution

Operational GHG emissions among the 150 companies accounted for 239 million tonnes in 2020, equivalent to 0.8 per cent of the world total. Yet digital companies – defined as those that produce and sell ICT equipment, operate telecommunication networks, and provide software and other information technology services, including data centres and cloud computing – have also become prominent in the race to eliminate harmful emissions.

Gerbrand Haverkamp, Executive Director at WBA, said: “Digital companies and their innovative nature are indispensable drivers of change to build a future that is not only technologically connected, but also fair and sustainable for both people and the planet. This report is testimony that digital companies can and must play a notable role in the race to reduce greenhouse gas emissions and invest in solutions aligned to the Paris Agreement. We hope this research can incentivise companies themselves to learn from best practices, reduce their emissions, and improve their energy efficiency across all their operations.”

Ramping up climate response 

From renewable power purchases and investments in carbon capture to issuing green bonds, these companies are at the forefront of global GHG reduction efforts. Digital companies accounted for seven of the top ten largest corporate purchasers of renewable energy in 2020, making up almost half of the renewables purchased globally that year, the report found.

Corporate energy sourcing is a crucial factor as countries strive to cut their emissions under the 2015 Paris Agreement, which seeks to limit the rise in average global temperatures at 1.5 degrees Celsius.

Doreen Bogdan-Martin, Director of the ITU Telecommunication Development Bureau, said: “It is no secret that as we increase our use of technology services, networks and devices, energy consumption and emissions increase in tandem. But digital technologies can be part of the solution, too. They can directly address challenges related to climate change, help scale up renewable energy markets, support smart power grids and smart metering for buildings, and of course enable emissions reductions from our work through solutions like video conferencing.”

Overall, the 150 tech companies covered by the study consumed 425 terawatt-hours (TWh) of electricity in 2020, around 1.6 per cent of the world total. Of that amount, around one third was renewable.

In many cases, companies purchase voluntary offsets to make up for unavoidable emissions. These offsets can support projects such as solar and wind farms in low- and middle-income countries, as well as the provision of environmentally friendly cookstoves and Pay-As-You-Go solar electricity services.

Renewable energy supply challenges 

Low- and middle-income countries frequently face energy challenges, including limited electricity access or unreliable grids, resulting in over-reliance on dirty diesel-powered generator sets. To address such challenges, governments need to create favourable conditions for renewable energy use.

At the same time, tech companies are not always getting the renewable energy they pay for due to the design of electrical grids. In response, a multi-stakeholder group of energy buyers, energy suppliers, governments, investors and other organizations have partnered “to accelerate the decarbonization of electricity grids by adopting, enabling, and advancing 24/7 Carbon-free Energy (CFE)“, meaning that every kilowatt-hour of electricity consumption is met with carbon-free electricity sources, every hour of every day, everywhere.

About the report 

The Greening digital companies: Monitoring emissions and climate commitments​ report draws on climate data published by tech companies themselves to uncover insights, assess where the industry will be by 2030, review climate performance by company and region, and highlight innovative practices to reduce the sector’s environmental footprint.

ITU’s work as the United Nations specialized agency for ICTs includes developing technical standards that provide guidance on achieving net zero emissions. This includes helping countries and the ICT sector meet the targets of the Paris Agreement and achieve the Sustainable Development Goals set out by the United Nations.

WBA is a non-profit organization that assesses and ranks the performance of the world’s most influential companies in terms of the UN Sustainable Development Goals. Among various benchmarks published by the organization, the Digital Inclusion Benchmark assesses the world’s 150 most influential tech and telecom companies through evidence-based metrics on digital inclusion and sustainable development.

The global pandemic accelerated digital transformation by as much as 10 years, according to Rodney Taylor, Secretary General of the Caribbean Telecommunications Union (CTU), who spoke to the Universal Postal Union (UPU) about ICT and digitalization in the Caribbean earlier this month.

This is great news in terms of digital transformation, but in an increasingly digital world, companies, governments, and authorities are now even more at risk of cybercrime – a growing threat to organizations worldwide.

According to figures from the Identity Theft Resource Center (ITRC), data breaches caused by cyberattacks got off to a record start in 2022, following a record setting 2021. Q1 2022 data revealed that 90% of data breaches are cyberattack-related. Data breaches have increased for the third consecutive year.

Many Posts have suffered from cyberattacks in recent months. Hellenic Post in Greece, for example, was subjected to a serious cyberattack in late March, which brought down computer systems using malware. Meanwhile, in New Zealand, post offices were shut down by a cyberattack late last year. Other Posts including the Bulgarian Post, Correios Brazil, and Ukrposhta have all been impacted by cybercrime.

These recent events and rising cybercrime figures in general highlight the vital importance of Posts’ making cybersecurity a priority within their organizations. The CTU’s Rodney Taylor, who appeared in Episode 12 of the UPU’s Voice Mail podcast, believes that collaboration is key between countries, states, and organizations, to achieve cybersecurity.

“It is critical that we bring everyone together to cooperate on how cybercrime is addressed on a global scale,” he said. “We have leveraged this model in the Caribbean and developed an Internet governance policy framework to provide guidance to member states on various aspects of cybersecurity and policy guidelines.”

In the podcast episode, Rodney also highlighted the importance of raising the awareness of cyberthreats with the public and with governments to ensure that the right “legislative frameworks” are in place to deter cybercrime.

The UPU has developed several tools to help Posts tackle the challenge of cybercrime. Its .POST top-level domain, for example, provides a secure and trusted Internet space to serve the needs of the global postal community in the digital economy.

Furthermore, in May, .POST’s governance group launched a new tool to boost .POST members’ cyber resilience. The cybertrack.post solution is a fully automated, web-based dashboard tool, which provides real-time monitoring of .POST domains’ technical compliance with approved cybersecurity policies covering DNSSEC, secure e-mail authentication and secure online transactions. The tool supports access on an individual country basis, allowing nominated focal point(s) in this country receive email alerts in case of nonconformity events.​

Cybertrack.post also provides access to the .POST Learning Platform where the UPU will be hosting cybersecurity training and capacity building activities. A self-paced bootcamp in secure email authentication, which was developed by one of the UPU’s partners – the Global Cyber Alliance – has already been placed on the learning platform. The UPU has plans to work with partners to place additional materials on the platform over the next 6-12 months.

Tracy Hackshaw, .POST Projects Manager, who worked with the .POST Group to launch the new tool, said, “The tool is highly intuitive and requires minimal setup. Experience has shown that, even for high-level, executive, non-technical users, the onboarding process is done in minutes. All .POST domains are automatically added to the list of domains monitored in real-time by cybertrack.post.”

The UPU is currently working to onboard all the .POST Group members to use the tool. It will also be launching a series of webinars over the next 2-3 months highlighting and showcasing .POST Group members who have successfully launched solutions and services using .POST.

“We are also currently working on expanding the functionality of cybertrack.post in all aspects, including integrating elements of the .POST/UPU Cyber Incident Response Team (CIRT), DNS abuse/security threat reporting and monitoring and several other aspects designed to improve the cyber-resilience of .POST Group members, in particular, UPU members, and indeed, the global postal sector as a whole,” Hackshaw concluded.

The Commonwealth Digital Trade Hackathon was officially launched today at the Commonwealth Youth Forum (CYF 2022), held on the margins of the Commonwealth Heads of Government Meeting (CHOGM) in Kigali.

The Hackathon is a joint initiative between the Commonwealth Secretariat’s Connectivity Agenda (CCA) and the Commonwealth Telecommunications Organization (CTO).

At the Youth Forum, Commonwealth Secretary-General, the Rt Hon Patricia Scotland QC said:

“I am delighted that we are officially launching another important project for young people. We are asking you to lead the future charge in building resilient, sustainable and interconnected digital economies across the Commonwealth. We are asking you to take part in a unique HACKATHON: “Harnessing Technology to Transform the Digital Trade Economy”.

“This Hackathon will scout, select and support impact-driven teams with game-changing solutions – designed to harness the shift to digitalisation across the Commonwealth and beyond. Trade is a vital connection in our Commonwealth family, and this Hackathon will directly engage you to come up with fresh, innovative ideas to harness digital technology to facilitate trade and cross border paperless trade.”

 

Ahead of the launch, Secretary-General of the CTO, Ms. Bernadette Lewis said:

“There is no returning to December 2019 and while trade is recovering, there are many more opportunities for fostering digital trade. This Hackathon will challenge you to re-imaging trade – examine the existing barriers to digital trade and developing software solutions to overcome them. The Commonwealth Telecommunications Organisation is pleased to be a partner with the Commonwealth Secretariat to convene this Hackathon.

“This endeavour is part of our push to support The Commonwealth’s Connectivity Agenda, to explore and develop technologies that can facilitate cross border paperless trade. This project will bring together finance and technology innovators and major technology institutions. The winner of the Commonwealth Digital Trade Hackathon will receive a cash prize as well as entrepreneurial support.”

Game-changing solutions

The Commonwealth Digital Trade Hackathon’s theme, “Harnessing Technology to Transform the Digital Trade Economy”, will scout, select and support impact-driven teams with game-changing solutions that aim to address the shift to increased digital technology, as we strive to achieve a fairer and more frictionless international trade system across the Commonwealth and beyond.

This dynamic initiative  aims to develop  innovative solutions that increase the adoption of digital technology in the Commonwealth and beyond, the need for which has been accentuated by the COVID-19 pandemic. Proposed solutions will therefore seek to explore high-potential existing and new technologies that can facilitate trade and cross-border paperless trade.

The Commonwealth Digital Trade Hackathon is open to teams with scale-ready solutions that want to accelerate their impact. Among the solutions that this hackathon seeks to come up with are:

  • increasing accessibility to reduce barriers to trade through efficient digital infrastructure;
  • promoting inclusive growth, including experience sharing, digital skills development and industrial upskilling;
  • improving agricultural and fisheries connectivity; and
  • promoting business to business partnerships that support inclusive and sustainable economic recovery.

How to join

Unlike most Hackathons, the Commonwealth’s will feature scale-ready solutions. Teams will have 48 hours to prepare and present their exiting tech solution. Submission is through the Digital Hack Platform and hybrid presentation before the awarding in October. Workshops, mentorship and learning sessions are available throughout the event.

The delivery of the Hackathon is supported by Impact Hub. Sandra Akariza from Impact Hub Kigali, announced the timeline of the event. “This is a real opportunity for teams with proven solutions to make a huge difference to Commonwealth citizens by scaling their solutions internationally,” she said.

The winner of the Commonwealth Digital Trade Hackathon will receive exciting prizes and the unique opportunity to receive support to scale their solution across the Commonwealth.

E-mail the CCA team for more information about the Hackathon or to register interest in participating.

The creative industries contributed close to $3 trillion to global GDP in 2020, yet their ability to support inclusive and sustainable economic growth in emerging markets is often largely invisible ― especially compared to traditional sectors such as natural resource extraction, manufacturing, and financial services.

This happens largely because of the challenges in defining and measuring the creative industries and its impact, especially given that several of its development outcomes are intangible. By neglecting to capitalize on their rich cultural assets, emerging markets are missing major opportunities in pursuing economic diversification and promoting shared prosperity.

But now there are strong incentives for governments and the private sector to measure and invest in this industry. That is because new disruptive technologies, which have flourished since the onset of the COVID-19 pandemic, have the potential to create formal income-earning opportunities for hundreds of thousands of individual artists and generate economic growth for countries around the world.

A primer on creative industries

First, some background on creative industries.

These industries use creativity and culture as their main input to produce creative products. These products include music, film, fashion, and the visual arts, among others, and extend to a range of creative content production embedded within other sectors. The sector has the potential to constitute not only a source of cultural value, but also commercial value within emerging markets.

One good example is Nollywood, the Nigerian film industry, which contributes around up to 3 percent to Nigeria’s GDP. Nollywood provides around 300,000 direct and 1 million indirect jobs and generates around 10 percent of foreign exchange earnings from non-oil exports. Still, much of Nollywood’s commercial potential remains unharnessed, as piracy of films is thought to constitute 50 percent of potential profits.

Creativity also supports economic growth through fostering productivity, promoting industrial innovation via supply chain linkages with other sectors, and improving country branding for the tourism industry. Further, unlike other economic sectors, the creative industries provide a broad array of socio-cognitive benefits for individuals, as consumption of creative goods supports educational outcomes, health and wellbeing, and inclusion. These spill over at the country level in the form of nation building, social cohesion, and diversity.

However, emerging markets historically faced substantial challenges in formalizing and commercializing their creative wealth. Broken creative value chains paired with a weak enabling environment have created a fragmented landscape with high costs of production of creative products and limited local and global distribution and monetization channels for artists from emerging markets. The fragmented nature of the sector also means there is limited coverage and enforcement of institutional frameworks to protect creative assets (intellectual property), limited public promotion of the sector, and a lack of available infrastructure, financing, and skills to develop the industries.

Enter disruptive technologies

Partly triggered by the challenges that creatives faced in developing and marketing their products during the pandemic, the adoption of emerging digital technologies is opening new avenues to produce, distribute, and monetize content. Drastic reductions in the costs of media recording technologies, such as cameras and microphones, have also helped more artists purchase equipment.

Consumer-facing digital technologies such as music streaming (Spotify, Pandora), movie streaming and production platforms (Netflix, Amazon Prime), creator tech applications (YouTube, Instagram, Facebook), and e-commerce (Etsy) ― paired with mobile money solutions ― have similarly lowered barriers to entry for talent discovery, distribution, and drawing income from creative content.

For example, musicians in Kenya, Tanzania, and Uganda previously relied on live shows for most of their income earnings, but digital platforms such as Mdundo have enabled more than 90,000 artists in those countries sell their music to global audiences.

Importantly, disruptive technologies have enabled the creative industries to become an investable sector for the first time in many emerging markets. Digital platforms are enabling artists to track earnings and provide pathways for new forms of income generation, such as brand promotion and advertising. New technologies also support technological and legal barriers to production and thereby protect intellectual property.

Evidence about the potential effects of digitalization on protection of creative assets from developed markets highlights that appealing licensed streaming alternatives can thwart piracy rates. Non-Fungible Tokens (NFTs), a relatively nascent blockchain technology that tokenizes and records digital assets on a digital ledger, help enforce copyright protections and enable artists to be rewarded for their work. These technologies also enable data generation on the creative industries, helping governments to understand the relevance of the creative industries and develop evidence-based policies to promote them.

The next frontiers

We are seeing the emergence of several pockets of excellence with the creative industries and the role of digitalization in amplifying them, or creating entirely new creative industries in emerging market. They include:

  • The re-emergence of Latin music has been driven largely by digital streaming and was spearheaded by a proactive private sector that sought to digitalize and address international demand. Latin music accounted for 5 percent of the total $12.2 billion recorded music revenues in 2020 in the U.S. market, achieving its highest revenues since 2005. The rise of Danny Ocean, a Venezuelan musician whose songs “streamed [their] way onto the airwaves,” is a case in point on how digital tools lower the barriers to entry for musicians to market their creative products.
  • Digitalization also created entirely new creative industries, such as the creator economy ― a software-facilitated economic ecosystem that allows digital content creators to earn revenue from their creative products. Leveraging affordable production technologies and creator tech applications, creative entrepreneurship has become a viable source of living and resulted in a number of economy-wide effects. Taking the example of the creator tech application YouTube, which directly and indirectly contributed around $875 million to GDP in India, and $710 million in Brazil, in 2020. YouTube also supported around 700,000 jobs in India and 122,000 jobs in Brazil. Creator tech applications have facilitated the emergence of new digital startups that support the creator economy, such as One Impression in India, a marketing platform for influencers that automates the brokerage of brand promotion contracts between creative entrepreneurs and businesses seeking to advertise their products.

The multiple benefits of developing a creative industry, paired with the unprecedented potential provided by digitalization, present opportunities for the sector to be transformed from a forgotten industry into a focal industry that supports economic growth and development. Yet much needs to be done to fulfill such promise. The industry needs a combination of investment by private and public stakeholders, including development finance institutions, and integration of the creative industries into the development ambitions of emerging markets. This could eventually help spur growth of their creative economies, create jobs, and in a broader sense lead to greater economic diversification.

WTO members welcomed at a meeting of the Committee on Trade and Development on 20 June the decision taken by the 12th Ministerial Conference (MC12) to reinvigorate activities under the Work Programme on E-Commerce, with the aim of increasing the participation of developing countries and least-developed countries (LDCs) in digital trade. The Committee also received updates on initiatives to increase capacity-building training activities in these countries and on the preferential treatment extended to LDC exports.


Participation of developing countries in e-commerce

WTO members expressed their readiness to reinvigorate the development aspect of the Work Programme on Electronic Commerce, as instructed in the decision that ministers adopted at MC12 on 17 June. The decision also extends the current practice of not imposing customs duties on electronic transmissions until the 13th Ministerial Conference.(1)

WTO members continued discussing a paper entitled “Global Electronic Commerce for Inclusive Development” tabled by India and South Africa in November 2021. The need to intensify discussions on ways of boosting the participation of developing countries in digital trade was emphasized by many members. India shared its experiences in creating a public digital infrastructure and invited other members to follow suit.More information on the paper can be found here.

Capacity-building activities for developing countries

The WTO’s Institute for Training and Technical Cooperation (ITTC) presented its 2022 WTO Technical Assistance Annual Report, outlining how the WTO Secretariat delivered training activities to developing countries, LDCs and observer governments in 2021 despite the constraints posed by the COVID-19 pandemic.

Beneficiaries were able to improve their understanding of WTO activities, the report notes, and to play a more active role in the multilateral trading system. The number of women and government officials from LDCs taking part in training activities bounced back after a decline caused by the pandemic. The report can be downloaded here.

In addition, after a year with almost no face-to-face activities, ITTC said it was able to hold in early June the first in-person training course for government officials from developing countries and LDCs since the onset of the pandemic in 2020.

Preferential treatment for LDC exports

India said that it is providing duty-free access to LDC exports for 94.2 per cent of its tariff lines. India is the fourth most important destination for LDC exports, it added.

China noted that it would continue to work for the early entry into force of its improved duty-free treatment for 98 per cent of its tariff lines for LDC products, as announced in December 2021.

Regional trade agreements

WTO members took note of the notification by Seychelles of its accession to the Common Market for Eastern and Southern Africa (COMESA) at the Committee’s dedicated session on regional trade agreements, which was also held on 20 June.

Future work

The Development Committee chair, Ambassador Usha Chandnee Dwarka-Canabady of Mauritius, informed members of her intention to consult with them on how to make progress on the work of the Committee. This includes fully implementing the Committee’s mandate to act as the focal point for the WTO’s development work. It also includes implementing a “Monitoring Mechanism” to centralize, within  the WTO, the analysis and review of the use of special and differential provisions for  developing countries. Detailed information on the work of the Committee is available here.

Date of the next meeting

The next meeting of the Committee is scheduled for mid-November.

  1. WTO members will hold consultations in the WTO’s General Council to decide on the date and venue of the 13th Ministerial Conference. back to text

Binta sells vegetables at a Dakar market to support her family. By using a low-cost tablet as a simple point-of-sales application, she learns to think more strategically and improves her management skills. She reduces the inventory stocks of what doesn’t sell and orders more of what sells well. She identifies her best customers and prints receipts to keep their loyalty. Fast food and laundry shops owners use the app to keep track of who already owes them money to collect on their next visit. Sellers such as Binta no longer need to keep this valuable information in their head or write it down on a piece of paper. As a result, their confidence grows and their business expands. Above all, digital technology enables continued learning, improves skills, increases earnings, and the hiring of more workers.

“Digital Senegal for Inclusive Growth: Technological Transformation for Better and More Jobs” presents new data on enterprises and households adopting and using digital technologies. Senegal is the first country to implement the Firm Adoption of Technology survey developed by the World Bank.  Enterprises were asked about the range of technologies they use for specific tasks such as planning stock levels relative to sales or preparing farming land, and which technology they used most frequently for each business task. The data shows strong links between the use of technologies and higher sales, and better and more jobs.

Adopting technology yields significant benefits. Where mobile Internet is available to households, consumption levels increase by 14 %, and extreme poverty decreases by 10 % – and more jobs with higher earnings are created.  Enterprises using better technologies have higher productivity, generate more jobs, and have more unskilled workers on their payroll. Using more sophisticated technologies, such as a software application, rather than writing accounting or inventory control by hand, generates a 14-% increase in the number of workers on average. For informal microenterprises, using a smartphone per se does not create more jobs. What makes a difference is the specific use of digital technologies such as inventory control and point-of-sales software for oversight and planning, and having access to electricity and a loan.

Small, medium, and large enterprises in Senegal seeking to upgrade their technologies face three key obstacles: 1) financial constraints, making them unable to pay for digital technologies; 2) lack of skills and technical capabilities; 3) lack of demand, because of lack of information, and technology not adapted to user needs and skill levels.

What stops Senegalese firms from adopting more sophisticated technologies

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What stops Senegalese firms from adopting more sophisticated technologies

To support enterprises in creating better and more jobs, governments can play an important role in three areas.

Technology and skills upgrading policies: Access to information and technical assistance can support enterprises in adopting technologies and developing capabilities. Informal microenterprises willing to use these technologies should have access to government support programs. By filling out the Firm Adoption of Technology survey, enterprises can benchmark themselves against others of their size in their business area and assess the technologies and skills most useful for them. By using technologies appropriate for their skill level, workers can learn as they work, improve their skills, and increase their earnings.

Business environment policies: The competitiveness of specific value chains should be strengthened by improving coordination and promoting market access. Policies should focus also on improving conditions for entrepreneurs who create tools accessible to all, including to lower-income workers, such as apps using local languages and voice-activated apps for illiterate workers. Rather than requiring workers to upgrade their skills for difficult-to-use technologies, apps should be designed to meet current skill levels and allow workers to build them up.

New financing mechanisms: By tracking users’ spending history, digital technologies can facilitate the delivery of financing in smaller amounts, without burdensome collateral requirements. Larger amounts can be provided progressively based on a track record of on-time payments. Micro, small and medium enterprises that previously would have been denied credit can be financed with partial credit guarantees and new forms of equity investments. These types of financing are critical to generate more sales, and better and more jobs.

What is the promising good news? These findings have helped Senegal design its national program to accelerate the competitiveness of small and medium enterprises and job creation. The World Bank is supporting this program through its “Senegal Jobs, Economic Transformation & Recovery Project.”

Efficient public policies require an ongoing process of learning from experimentation. Share your thoughts on how to improve support for digital technologies to create better and more jobs!

WTO members successfully concluded the 12th Ministerial Conference (MC12) in Geneva on 17 June, securing multilaterally negotiated outcomes on a series of key trade initiatives. The “Geneva Package” confirms the historical importance of the multilateral trading system and underlines the important role of the WTO in addressing the world’s most pressing issues, especially at a time when global solutions are critical.

 

Round-the-clock negotiations among delegations produced the “Geneva Package”, which contains a series of unprecedented decisions on fisheries subsidies, WTO response to emergencies, including a patent waiver for COVID-19 vaccines, food safety and agriculture, and WTO reform.

“The package of agreements you have reached will make a difference to the lives of people around the world. The outcomes demonstrate that the WTO is, in fact, capable of responding to the emergencies of our time,” said WTO Director-General Ngozi Okonjo-Iweala. “They show the world that WTO members can come together, across geopolitical fault lines, to address problems of the global commons, and to reinforce and reinvigorate this institution. They give us cause to hope that strategic competition will be able to exist alongside growing strategic cooperation.”

DG Okonjo-Iweala expressed her conviction that “trade is part of the solution to the crises of our time” and noted that the WTO “can and must do more to help the world respond to the pandemic, tackle environmental challenges and foster greater socio-economic inclusion.”

The package adopted by members include:

  • an outcome document (WT/MIN(22)/W/16/Rev.1);
  • a package on WTO response to emergencies, comprising:
    • a Ministerial Declaration on the Emergency Response to Food Insecurity (WT/MIN(22)/W/17/Rev.1);
    • a Ministerial Decision on World Food Programme (WFP) Food Purchases Exemptions from Export Prohibitions or Restrictions (WT/MIN(22)/W/18);
    • a Ministerial Declaration on the WTO Response to the COVID-19 Pandemic and Preparedness for Future Pandemics (WT/MIN(22)/W/13); and
    • a Ministerial Decision on the Agreement on Trade-related Aspects of Intellectual Property Rights (WT/MIN(22)/W/15/Rev.1)
  • a Decision on the E-commerce Moratorium and Work Programme (WT/MIN(22)/W/23)
  • an Agreement on Fisheries Subsidies (WT/MIN(22)/W/22).

In addition, ministers adopted two decisions – on the Work Programme on Small Economies (WT/MIN(21)/W/3) and on the TRIPS non-violation and situation complaints (WT/MIN(21)/W/4) – and a Sanitary and Phytosanitary Declaration for the Twelfth WTO Ministerial Conference: Responding to Modern SPS Challenges (WT/MIN(22)/W/3/Rev.3).

Ministers also agreed on a process for addressing longstanding calls for reform of the WTO.  The Ministerial Declaration (WT/MIN/(22)/18) commits members to an open, transparent and inclusive process overseen by the WTO’s General Council, which will consider decisions on reform for submission to the 13th Ministerial Conference (MC13).

All documents can be found here.

Acknowledging the “vital importance of agriculture,” DG Okonjo-Iweala noted that differences on some issues, including public stockholding for food security purposes, domestic support, cotton and market access “meant that we could not achieve consensus on a new roadmap for future work.” However, she added, “members found a renewed sense of purpose: they are determined to keep at it on the basis of existing mandates, with a view to reaching positive outcomes at MC13.”

Her full remarks are here.

The WTO’s 12th Ministerial Conference was held in Geneva, Switzerland, from 12 to 17 June 2022. Initially scheduled to end on 15 June, the ministerial gathering was extended by two days to allow more time for negotiations and reaching agreements. Co-hosted by Kazakhstan, the Conference was chaired by Timur Suleimenov, First Deputy Chief of Staff of the Kazakh President.

In his closing remarks, Mr Suleimenov thanked the DG for never giving up. “Her determination, her leadership, her perseverance made all the difference. Dr Ngozi, the WTO owes you a great debt.”

He told members: “This week, you have all contributed to making what seemed impossible come to fruition. We have all engaged in frank and sometimes very difficult conversations. We may have not achieved everything that we set out for, but we have delivered, and this is something that all of us should be proud of.”

“Congratulations to you all. Congratulations on going beyond your national interests and looking to the common good that the WTO embodies, and in doing so, carrying out our shared responsibility to restore confidence in this organization. It is so much needed in these difficult times,” he added.

MC13

The Ministerial Conference requested the General Council to hold consultations with a view to deciding on the date and venue of the 13th WTO Ministerial Conference (MC13). The Chair recalled that the Decision on the Work Programme on Electronic Commerce contains an understanding that MC13 should ordinarily be held by 31 December 2023. Two proposals – by Cameroon and the United Arab Emirates – have been received to host the ministerial gathering.

Bishkek-based sewing enterprise expands its business worldwide through ITC support.

For almost three decades, “Sabrina-Amika”, a Kyrgyz sewing company, has been producing women’s clothing under the brand “DiSORELLE “and successfully distributing it in the Eurasian Economic Union.

DiSORELLE’s team, along with 200 other Central Asian small businesses, has gained new e-commerce and business skills by participating in the International Trade Centre’s e-commerce training programme under its EU-funded Ready4Trade project.

Since its rebranding in 2016, DiSORELLE’s progress has been gradual and constant, producing around 5,000 ready-to-wear units monthly.

“We want to create a thriving, expanding, and profitable business that brings success to all around us,” says Nevena Bondarenko, the CEO of the company. “We have implemented the ISO quality management system, our products are consistent in quality and have been successfully sold in the Eurasian Economic Union,” she adds.

Before joining the Ready4Trade project, DiSORELLE had experience with selling their products online, mainly on marketplaces Wildberries and Lamoda.   Thanks to ITC’s e-commerce coaching, DiSORELLE was able to optimize their website, create new social media accounts on YouTube and Instagram, and improve their listings.

DiSORELLE also was also able to create an eBay store as part of the eBay Central Asia Hub, a joint initiative with USAID, and started selling to the European Union and US markets.

Kirill Bondarenko, DiSORELLE’s business development director, says: “The special rates provided by DHL for project participants are a magic wand for the entrepreneurs in Kyrgyzstan. Standard shipping rates are significantly higher.”

He adds on the overall coaching experience: “Prior to the start of the project, we had limited e-commerce activities. Through individual support, we reviewed our business, starting from website photos and digital materials to packaging, shipping and delivery. The ITC Trade Map tool is also very useful to understand our export potential. It was a pleasant surprise to realize that we, as a Kyrgyz garment producer, have a zero rate for exports to the EU.”

“No doubt, our participation in the Ready4Trade Central Asia project was noteworthy as we could expand our online sales channels and explore new potential markets, especially when you consider the financial losses caused by COVID-19 pandemic,” Nevena explains.
About the project

The Ready4Trade Central Asia project is a joint initiative of the European Union and the International Trade Centre. It aims to contribute to the overall sustainable and inclusive economic development of Central Asia by boosting intra-regional and international trade in the region. Beneficiaries of the Ready4Trade Central Asia project include governments, small and medium-sized enterprises, in particular women-led enterprises, and business support organizations.

Leaders at landmark ITU meeting in Kigali adopt roadmap for digital transformation in line with UN Sustainable Development Goals.

The World Telecommunication Development Conference (WTDC) concluded today with the adoption of a forward-looking agenda to address the global connectivity gap that has kept 2.9 billion people around the world from using the Internet.

Organized by the International Telecommunication Union (ITU) between 6 and 16 June, WTDC welcomed 2,152 participants in total, representing 150 Member States and 340 Sector members and partners, with 1,304 delegates present in the Rwandan capital, and another 848 joining the meeting remotely. The focus of the event was ‘Connecting the unconnected to achieve sustainable development’.

The Kigali Action Plan agreed at the conference charts a course for digital development that aligns closely with the Sustainable Development Goals (SDGs) set out by the United Nations for 2030. It also defines the workplan of the ITU’s Development Sector (ITU-D) until the next WTDC.

Public-private partnerships were at the forefront with the conference’s Partner2Connect Digital Development Roundtable; since its launch, the Coalition has to date mobilized 418 ground-breaking connectivity pledges worth an estimated USD 25.05 billion, with more pledges still coming in.

“Having this conference take place in Rwanda is an important milestone,” said ITU Secretary-General Houlin Zhao. “Let’s build on this momentum to strengthen the image of ITU as a UN specialized agency not just for technology but also for development – and to accelerate digital transformation for all, here in Africa and the rest of the world.”

In her closing address, Rwanda’s Minister for ICT and Innovation, Paula Ingabire, who chaired the conference, told delegates, “I want to thank all delegations for the zealous effort, spirit of collaboration, consensus exerted towards making this WTDC-22 a success and all the contributions made towards the Kigali Action Plan that will move us forward to bringing connectivity and its benefits to the unconnected over the next four years…I hope we can report positive results at the next WTDC.”

Committed to connectivity

In the wake of the COVID-19 pandemic, the conference set out to reinvigorate progress on SDGs and put digital uptake at the forefront for the remaining seven years of the UN’s Decade of Action.

Adopting the Kigali Declaration, delegates underscored their collective commitment to universal and meaningful connectivity, and approved new Regional Initiatives. Also agreed were various new ITU-D resolutions and new sets of Questions to be investigated by the two ITU Study Groups focused on development issues.

“It has been an intensive two weeks, but thanks to the tireless commitment and hard work of our delegates we have succeeded in finding consensus and building the solid global agreement on core principles to drive connectivity that has been the great talent of ITU for more than 155 years,” said Doreen Bogdan-Martin, Director of ITU’s Telecommunication Development Bureau.

Newly adopted resolutions aim to:

  • Ensure every school is connected to the Internet through the joint ITU-UNICEF Giga initiative (Resolution on Connecting every school to the internet and every young person to information and communication technology services)
  • Confirm the Partner2Connect Digital Coalition as the primary platform to foster new partnerships around meaningful connectivity and digital transformation globally, focusing on the hardest- to-connect communities (Resolution on The ITU Partner to Connect Digital Coalition (P2C))
  • Drive efforts to advance digital transformation for sustainable development, recognizing the enormous potential that ICTs have to create positive, meaningful and lasting change (Resolution on Digital transformation for sustainable development)
  • Create a thriving environment for entrepreneurship and digital innovation ecosystems to help accelerate the achievement of the Sustainable Development Goals (Resolution on Fostering telecommunications/ICT-centric Entrepreneurship and digital innovation ecosystems for sustainable digital development)

Regional Initiatives outlined in the Kigali Action Plan address specific needs for each major region of the world to advance and accelerate digital transformation. Broad themes across ITU’s six global regions include: infrastructure development; enhancing cybersecurity; nurturing enabling policy and regulatory environments; advancing digital skills development; and developing smart and sustainable cities.

Updated digital development questions

The latest ITU-D Study Group Questions aim to further support the achievement of global and regional development goals through collaborative discussions and technical engagement among diverse stakeholders.

The 14 Questions fall under two broa​d categories:

​-  Study Group 1: Enabling environment for meaningful connectivity

–  Study Group 2: Digital transformation

​These two ITU-D Study Groups are tasked with drafting reports, guidelines, and recommendations on a range of topics related to information and communication technologies (ICTs) in the context of digital development.

These include the use of telecommunications/ICTs for disaster risk reduction and management; economic aspects of national telecommunications/ICTs; consumer information, protection, and rights; sustainable smart cities and communities; enabling technologies for e-services and applications; and ICTs for the environment. See the full list.

New partnerships and engagement

WTDC featured ground-breaking events designed to mobilize new voices and partnership mechanisms.

The Generation Connect Global Youth Summit, held from 2 to 4 June, brought hundreds of young people aged 15-29 to Kigali’s Intare Arena, as well as engaging more than 5,000 virtual participants via 70 Generation Connect Hubs around the world. Key debate topics included the global digital divide, youth access to online education and digital skills, the digital gender gap, online safety, e-waste management, the future of work, digital entrepreneurship, and the role of technology in climate change.

The Partner2Connect Digital Development Roundtable from 7 to 9 June threw the spotlight on investment pledges from governments, the private sector and civil society to advance global connectivity, with commitments to be monitored transparently via a new ITU-hosted dashboard. Explore the pledges here.

ITU’s Global Connectivity Report 2022, released on 6 June, assesses the status of global connectivity and offers recommendations for accelerating progress. It notes that while easy, affordable access to fast broadband has become near-ubiquitous in most rich-world nations, vast swaths of humanity remain excluded from the immense possibilities offered by the online experience, stunting economic development and deepening global inequalities. The report calls for putting universal and meaningful connectivity – defined as the possibility of a safe, satisfying, enriching, productive, and affordable online experience for everyone – at the centre of global development.

A new Network of Women (NoW) for ITU-D programme supported women’s participation and professional development at the conference, with the goal of promoting better gender balance in national delegations and empowering women to take on more responsible roles as leaders of working groups and committees. In addition to dedicated in-person and online training sessions ahead of the conference, the programme featured a Women’s Lunch hosted by Qualcomm (9 June), a NoW Walk2Connect walkathon open to all delegates and Kigali citizens (12 June), and a Women’s Breakfast hosted by the Government of Australia (15 June).

WTDC registered delegates present onsite in Kigali included 64% male and 36% female delegates – an improvement over the previous WTDC in Buenos Aires in 2017 (74% male / 26% female), but still far from the gender-balanced conference that ITU is committed to achieving.

National Order of Honour conferred on ITU Secretary-General Houlin Zhao

Rwanda’s President Paul Kagame on 14 June conferred the Agaciro (National Order of Honour) medal on Secretary-General Zhao for “distinguished service as the leader of ITU during a very consequential period for the globalization of telecommunications technology.” The medal is awarded to high-ranking officials for promoting political, economic, and social welfare consistent with Rwanda’s interests at the national or international level.

Zhao said the award would “inspire and encourage all to tackle digital development challenges and ensure no one is left behind, adding: “I would like to take this opportunity to pay my respects to President Kagame for his vision for the digital future, as well as his capable leadership in ICT adoption to transform Africa and facilitate global ICT development.”

Discover what others are saying on social media and join the conversation by searching and posting with the hashtag #ITUWTDC

Resources

WTDC: 

WTDC Newsroom

WTDC – World Telecommunication Development Conference | Trello

WTDC – Opening Video | Youtube

WTDC – Highlights Video | YouTube

WTDC | Photos on Flickr ​​

Global Connectivity Report:

Global Connectivity Report 2022 | Trello

Partner2Connect:

Partner2Connect | Trello

Partner2Connect Highlights Video | YouTube

Partner2Connect Digital Development Roundtable | Photos on Flickr

Generation Connect:

Generation Connect | Trello

Generation Connect Global Youth Summit Highlights Video | YouTube

Generation Connect Global Youth Summit | Photos on Flickr

  • The creative industries contributed nearly $3 trillion to global GDP in 2020.
  • The adoption of emerging digital technologies is opening new avenues to produce, distribute and monetize content.
  • These technologies can create formal income-earning opportunities for thousands of artists globally and generate economic growth for countries.
  • But the industry still needs further investment by private and public stakeholders to help spur growth, create more jobs and create greater economic diversification.

The creative industries contributed close to $3 trillion to global GDP in 2020, yet their ability to support inclusive and sustainable economic growth in emerging markets is often largely invisible ― especially compared to traditional sectors such as natural resource extraction, manufacturing, and financial services.

This happens largely because of the challenges in defining and measuring the creative industries and its impact, especially given that several of its development outcomes are intangible. By neglecting to capitalize on their rich cultural assets, emerging markets are missing major opportunities in pursuing economic diversification and promoting shared prosperity.

But now there are strong incentives for governments and the private sector to measure and invest in this industry. That is because new disruptive technologies, which have flourished since the onset of the COVID-19 pandemic, have the potential to create formal income-earning opportunities for hundreds of thousands of individual artists and generate economic growth for countries around the world.

A primer on creative industries

First, some background on creative industries.

These industries use creativity and culture as their main input to produce creative products. These products include music, film, fashion, and the visual arts, among others, and extend to a range of creative content production embedded within other sectors. The sector has the potential to constitute not only a source of cultural value, but also commercial value within emerging markets.

One good example is Nollywood, the Nigerian film industry, which contributes around up to 3 percent to Nigeria’s GDP. Nollywood provides around 300,000 direct and 1 million indirect jobs and generates around 10 percent of foreign exchange earnings from non-oil exports. Still, much of Nollywood’s commercial potential remains unharnessed, as piracy of films is thought to constitute 50 percent of potential profits.

Creativity also supports economic growth through fostering productivity, promoting industrial innovation via supply chain linkages with other sectors, and improving country branding for the tourism industry. Further, unlike other economic sectors, the creative industries provide a broad array of socio-cognitive benefits for individuals, as consumption of creative goods supports educational outcomes, health and wellbeing, and inclusion. These spill over at the country level in the form of nation building, social cohesion, and diversity.

However, emerging markets historically faced substantial challenges in formalizing and commercializing their creative wealth. Broken creative value chains paired with a weak enabling environment have created a fragmented landscape with high costs of production of creative products and limited local and global distribution and monetization channels for artists from emerging markets. The fragmented nature of the sector also means there is limited coverage and enforcement of institutional frameworks to protect creative assets (intellectual property), limited public promotion of the sector, and a lack of available infrastructure, financing, and skills to develop the industries.

Enter disruptive technologies

Partly triggered by the challenges that creatives faced in developing and marketing their products during the pandemic, the adoption of emerging digital technologies is opening new avenues to produce, distribute, and monetize content. Drastic reductions in the costs of media recording technologies, such as cameras and microphones, have also helped more artists purchase equipment.

Consumer-facing digital technologies such as music streaming (Spotify, Pandora), movie streaming and production platforms (Netflix, Amazon Prime), creator tech applications (YouTube, Instagram, Facebook), and e-commerce (Etsy) ― paired with mobile money solutions ― have similarly lowered barriers to entry for talent discovery, distribution, and drawing income from creative content.

For example, musicians in Kenya, Tanzania, and Uganda previously relied on live shows for most of their income earnings, but digital platforms such as Mdundo have enabled more than 90,000 artists in those countries sell their music to global audiences.

Importantly, disruptive technologies have enabled the creative industries to become an investable sector for the first time in many emerging markets. Digital platforms are enabling artists to track earnings and provide pathways for new forms of income generation, such as brand promotion and advertising. New technologies also support technological and legal barriers to production and thereby protect intellectual property.

Evidence about the potential effects of digitalization on protection of creative assets from developed markets highlights that appealing licensed streaming alternatives can thwart piracy rates. Non-Fungible Tokens (NFTs), a relatively nascent blockchain technology that tokenizes and records digital assets on a digital ledger, help enforce copyright protections and enable artists to be rewarded for their work. These technologies also enable data generation on the creative industries, helping governments to understand the relevance of the creative industries and develop evidence-based policies to promote them.

The next frontiers

We are seeing the emergence of several pockets of excellence with the creative industries and the role of digitalization in amplifying them, or creating entirely new creative industries in emerging market. They include:

  • The re-emergence of Latin music has been driven largely by digital streaming and was spearheaded by a proactive private sector that sought to digitalize and address international demand. Latin music accounted for5 percent of the total $12.2 billion recorded music revenues in 2020 in the U.S. market, achieving its highest revenues since 2005. The rise of Danny Ocean, a Venezuelan musician whose songs “streamed [their] way onto the airwaves,” is a case in point on how digital tools lower the barriers to entry for musicians to market their creative products.
  • Digitalization also created entirely new creative industries, such as the creator economy ― a software-facilitated economic ecosystem that allows digital content creators to earn revenue from their creative products. Leveraging affordable production technologies and creator tech applications, creative entrepreneurship has become a viable source of living and resulted in a number of economy-wide effects. Taking the example of the creator tech application YouTube, which directly and indirectly contributed around $875 million to GDP in India, and $710 million in Brazil, in 2020. YouTube also supported around 700,000 jobs in India and 122,000 jobs in Brazil. Creator tech applications have facilitated the emergence of new digital startups that support the creator economy, such as One Impression in India, a marketing platform for influencers that automates the brokerage of brand promotion contracts between creative entrepreneurs and businesses seeking to advertise their products.

The multiple benefits of developing a creative industry, paired with the unprecedented potential provided by digitalization, present opportunities for the sector to be transformed from a forgotten industry into a focal industry that supports economic growth and development. Yet much needs to be done to fulfill such promise. The industry needs a combination of investment by private and public stakeholders, including development finance institutions, and integration of the creative industries into the development ambitions of emerging markets. This could eventually help spur growth of their creative economies, create jobs, and in a broader sense lead to greater economic diversification.

On Friday, 6 May 2022, UN Capital Development Fund (UNCDF) with United Nations Development Programme (UNDP) launched the Rapid Financing Facility that will enable women entrepreneurs to access affordable digital financial products and services.

The Rapid Financing Facility takes a multi-pronged approach to address various barriers women entrepreneurs face in the formal and informal sectors. This includes supporting women entrepreneurs to:

  • Enhance their business capacity skills
  • Understand requirements to pitch at innovation funds
  • Know requirements to be able to sell on E-commerce platforms
  • Understand process and requirments to gain access to financial products.
  • The launch saw the signing of the performance-based grant funding agreements with five partners under two UNCDF Funds; the ‘Women’s
  • Entrepreneurship Capacity Building Fund’ and ‘E-Commence Support Fund’. Emstret Holdings, PNGX Markets, Tok Stret Consulting,
  • Westpac and Agbook were selected through a competitive process.

UNCDF Country Lead Jagdeep Dahiya said that “5,000 women entrepreneurs will benefit from digital and financial literacy training before the end of this year.” Mr. Dahiya added that “partners are expected to contribute at least 20% of the total project cost to ensure the services are well developed and embedded in their businesses.”

The project seeks to support the development of digital and financial literacy solutions targeting women-led MSMEs and women entrepreneurs to enhance their financial management and business skills in the country.

UNDP Resident Representative Dirk Wagener said that “the Rapid Financing Facility supports women entrepreneurs by working with financial service providers to promote solutions that are both fitting, suitable and affordable in terms of financial products and services”.

“We know that the informal sector is a large sector that drives the economy, primarily dominated by women here in Papua New Guinea. These women need access to those digital solutions and financial services to suit their needs. And the pandemic has disproportionately impacted women, youth, poor households, informal and self-employed workers and MSMEs who were not ready to meet some of the challenges presented to them”.

Acting Governor of Bank of Papua New Guinea (BPNG), George Awap said, “with the COVID-19 pandemic we all witnessed how important it is to leverage technology and digitization to keep us ticking and bring in new means and ways of doing business. These new things should trickle down to the women and entrepreneurs in the formal and informal sector, which are critical players in our economy”.

Small, Medium, Enterprise Corporation (SMEC) Chairman, Mr. John Pora said, “the MSME space has got a lot of room for growth, and that room for growth will be defined by how we make relevant the programmes, the re-architecture of what building and constructing looks like in terms of citizen participation”.

“Access to finance is one of the difficult areas, and it’s not only the responsibility of the government to provide money or our development partners to facilitate development funds, but it also requires our citizens to step up”.

Additional interventions are planned as part of the project for the year 2022, including the first-ever portfolio guarantee and innovation fund for digital financial services adoption by women entrepreneurs of Papua New Guinea.

 

On 10 June 2022, the Lesotho Revenue Authority (LRA) held an inauguration ceremony to announce the official launch of a new electronic tariff platform, developed by the LRA in partnership with the EU-WCO Programme for Harmonized System in Africa (HS-Africa Programme), funded by the European Union.

At the invitation of the LRA Commissioner General Mr. Thabo Khasipe, the event was attended by senior representatives of the Ministry of Trade and Industry, SACU Secretariat, the European Union (EU) Delegation to Lesotho, the WCO and a wide audience of stakeholders, including private sector. The WCO Secretary General Dr. Kunio Mikuriya delivered remarks at the opening of the ceremony.

In his opening remarks, Dr. Tseko Nyesemane, Deputy Commissioner Customs expressed his appreciation to the WCO, the EU and the e-tariff technical team of the LRA, stressing that the new platform would contribute to the automation and digitalization of Customs clearance processes. He pointed out that the initiative would enhance the efficiency of LRA services to stakeholders. He recalled the ongoing transformation of the revenue system in Lesotho emphasizing that the e-tariff platform would be an important achievement in the context of this process, contributing to modernization of revenue service across the country.

Congratulating the LRA on the inauguration of the electronic tariff platform, Dr. Mikuriya stressed that as the world was recovering from the COVID-19 pandemic, the importance of digitalization of Customs procedures towards paperless trade could not be overemphasized as it contributed substantially to the ease of doing business. He recalled that the WCO theme of the year 2022 was “Scaling up Customs Digital Transformation by Embracing a Data Culture and Building a Data Ecosystem”, welcoming the new tariff platform as an important step towards that objective. He pledged continued assistance for Africa under the HS-Africa Programme, thanking the EU for its financial support.

In her welcoming address, Ms. Tsireletso Mojela, Deputy Principal Secretary at the Ministry of Trade and Industry, thanked the WCO and the EU for their assistance in the implementation of the electronic tariff platform. She commended the LRA on the success of the project, stressing that trade facilitation work was high on the agenda of the government in Lesotho, with the National Trade Facilitation Committee coordinating the implementation of various initiatives with the relevant stakeholders. She stressed the key role of WCO standards, such as the HS and the Revised Kyoto Convention, in the modernization of Customs work, and reiterated her administration’s sustained interest in strengthening that work further.

Speaking on behalf of the EU Delegation in Lesotho, Mr. Tomás Pallás Aparisi, Trade and Private Sector Development correspondent, welcomed the successful implementation of the new electronic tool in Lesotho. He pointed out that the EU would be keen on supporting such initiatives as they contributed to facilitating international trade, and trade was creating jobs, reducing poverty and furthering economic development. He expressed his confidence in the success of the new tool, which would help remove trade barriers and contribute to the creation of the continental free trade area in Africa.

After a demonstration of the new platform, other speakers took the floor to welcome the implementation of the tariff platform, stressing that it would help bring Lesotho into a better alignment with international standards of the WCO, the WTO and the AfCFTA. The inauguration ceremony was preceded by a series of workshops to explain the functioning of the new tool to Customs officials. The ceremony concluded by activating the electronic tariff platform on the LRA website and making it fully operational.

For more details, please contact hs@wcoomd.org.

The South Centre provided its comments to the OECD Inclusive Framework’s Task Force on Digital Economy (TFDE) on the Tax Certainty Framework for Amount A. These rules are part of the overall OECD project on the taxation of the digitalized economy known as Pillar One. They determine the amount of a Multinational Enterprise’s (MNE) profits that will then be partially redistributed to market jurisdictions, which are expected to be largely developing countries.

The Tax Certainty Framework is a central element of the new tax architecture. It seeks to create a multilateral mandatory and binding dispute prevention mechanism for the first time in the history of international taxation.

The South Centre’s comments have been reproduced below.


I. Background

The South Centre is the intergovernmental organization of developing countries that helps developing countries to combine their efforts and expertise to promote their common interests in the international arena. The South Centre has 54 Member States coming from the three developing country regions of Africa, Asia, and Latin America and the Caribbean. It was established by an Intergovernmental Agreement which came into force on 31 July 1995. Its headquarters are in Geneva, Switzerland.

The South Centre in 2016 launched the South Centre Tax Initiative (SCTI). This is the organisation’s flagship program for promoting South-South cooperation among developing countries in international tax matters.

The South Centre offers its comments to the OECD Inclusive Framework’s Task Force on Digital Economy (TFDE) on the Tax Certainty Framework for Amount A.

II. Specific Comments

 

  1. Excessive power and discretion with Lead Tax Administration

The framework provides excessive power and discretion to the Lead Tax Administration (LTA), which in most cases is likely to be from the developed countries where the in-scope MNEs are headquartered. It generates a potential conflict of interest, as it is in the interest of the developed countries to cede as little tax as possible to other countries. It is a zero-sum game, as less revenues for the market jurisdictions imply more revenue for the headquarter jurisdiction. Hence, if they are able to decide whether companies are in scope and how much tax they have to pay, the outcomes will likely be unfavourable to the market jurisdictions which are largely the developing countries.

Recommendation: As a matter of principle, the role of the LTA must be restricted to that of a purely coordinating entity. It must have the least amount of discretionary power possible. By default, scope certainty, advance certainty and comprehensive certainty must be decided by Review Panels rather than the LTA. Throughout the text, wherever it is mentioned “Review Panel or Lead Tax Administration”, the option of the Review Panel must prevail. The power must be dispersed and distributed among multiple actors rather than be concentrated in the very country which has the most incentive to ensure that the tax paid is as little as possible to other countries.

  1. Unfilled Places on Scope Review and Review Panels

Paragraphs 11 and 12 of Section I.1 and Paragraph 6 of Section II.2 state that unfilled places on the Scope Review and Review Panels will remain unfilled if no Affected Party expresses interest.

Given the great disparity in capacity between the developed and developing countries, a likely outcome of such an approach will be that the developed countries will express interest and developing countries may not always do so, with the result that the Panels may end up being dominated by the developed countries, affecting the outcome in their favour. This scenario must be avoided.

Recommendation: It must be ensured that there are no unfilled places on the Panel. If there is a shortage of Affected Parties expressing interest, a randomized selection of Affected Parties can take place, only from a pool of developing countries, to fill the slots.  This is because the entire Amount A architecture is meant to redistribute taxes to market jurisdictions which, as noted, are largely the developing countries, and thus it is only fair that they be given the priority in participation in the Panels.

An added benefit is that such participation will help these countries build capacity.

  1. Panel Composition

The framework provides various options for the composition of the Review and Determination Panels and the Expert Advisory Group. The discussion is whether independent experts should be included or not.

Including ‘independent’ experts would exponentially inflate the costs, which would be prohibitive for developing countries. These processes are also likely to last years, despite efforts to minimize the time involved, and the longer it takes the more the costs would escalate. This would deter developing countries from pursuing claims and force them to give up valuable revenue. This will be an unfair advantage to the developed countries.

It would also hand over an essential element of State sovereignty to unaccountable private individuals. Further, the reality is that ‘independent’ experts may be biased in favour of the MNEs, on whom they may be professionally reliant. This is reflected in the rules themselves which make blatant exemptions for those who provide tax advisory services to MNEs, such as in Paragraph 6(e) of Section III.6. (Option A) and paragraph 5(e) of Section III.6. (Option C).

By contrast, having the relevant bodies comprised only of government officials, State sovereignty can be retained over the process, and the costs will be minimized, levelling the playing field for all countries. This will bring an essential element of democratic control over the power of the mega-corporations in scope of Amount A.

Analysis by the South Centre[1] shows that Amazon’s gross revenues in 2020 would make it the world’s 43rd largest economy if compared to countries by nominal GDP. If the Google-Apple-Facebook-Amazon-Microsoft (GAFAM) companies are taken as a collective, they would be the 19th largest economy in the world. This asymmetry in economic power also has political ramifications, and it is hence imperative that the multilateral system strengthen democratic control over these companies through appropriate State participation.

Recommendation: It is recommended that all the bodies involved in the tax certainty framework, including the Panels and the Expert Advisory Group, comprise exclusively of government officials.

  1. Determination Panel Composition if Independent Experts are included

In the event that it is decided to include Independent Experts in the Determination Panel, there are many aspects of the rules which need modification.

  1. Candidates for Standing Pool

Paragraph 4(i) of Section III.6. in both Option A and Option C provides, in part:

… If more than [two-thirds] of the Parties do not object to the addition of a candidate to the Standing Pool within [30] days, the candidate shall be added to the Standing Pool for a period of [five years] …

This means even if just less than 1/3rd of the Parties have an objection, that candidate will still be added to the Standing Pool for five years. This is very problematic.

Recommendation: A better approach would be if just one Party objects to a candidate, then that candidate should be removed from the draft roster of the Standing Pool. It is crucial that all parties should have trust in all the members of this Pool. Only if confidence in the system has broken down would such a veto be used to hinder its operation, and it should be designed to create mutual trust, not on the assumption that this is lacking.

  1. Independent Expert Status: International Organizations

Paragraph 6(f) of Section III.6. (Option A) and paragraph 5(f) of Section III.6. (Option C) refer to an unstated list of international organisations to be added to the Convention.

This poses the risk that a ‘whitelist’ will be created of international organizations that may not fully take into account and pursue the interests of developing countries. Their technical expertise maybe used to further support the interests of developed countries in the Determination Panel, on the argument that they have been included in the Convention and have been approved by the Parties. This may also mean that a de facto ‘blacklist’ may be created and used to exclude international organizations in which the developed countries do not have decisive influence. They will be prevented from supporting developing countries in the Determination Panel.

Recommendation 1: The option of including ‘independent experts’ from international organisations should be removed altogether.

  1. Independent Expert Status: Tax Advisors

Paragraph 6(e) of Section III.6. (Option A) and paragraph 5(e) of Section III.6. (Option C) refer to Limited Tax Advisory Services, which are defined based on whether they are less than a percentage [30 percent] of the individual’s total annual income. An individual may conduct such Limited Tax Advisory Services and still qualify as an Independent Expert.

Independent Experts will seldom, if ever, be truly independent if they have previously worked for or consulted with any MNE clients.

Recommendation: Independent Experts must exclude any individual that has conducted any work for or has received any compensation during the prior five years from any MNE (whether in-scope or not), or who has been an employee of any MNE or a partner, associate or employee of a consultancy, law or accounting firm that has provided services to any MNE during that period.

  1. Existence of Independent Expert Conflict

Paragraph 3(b) of both Section III.6. (Option A) and Section III.6. (Option C) include a definition to determine when an Independent Expert has a conflict of interest in relation to a particular Relevant Group. However, the rules proposed are too narrow and likely to be ineffective.

Recommendation: Any individual who has provided any services to any MNE within an extended period such as the last five years must be considered having a conflict of interest, and only those who do not meet this criterion should be considered.

  1. Financial Burden of Determination Panel Participation

Paragraph 2 of Section III.6. (Option B and C) provides, in part:

The Tax Certainty Secretariat shall invite Affected Parties covered by paragraph 1 to submit an expression of interest for a Government Official nominated by an Affected Party to participate in the Determination Panel …. An Affected Party should only express interest in participating in a Determination Panel if the person nominated by it is committed to taking an active role on the Determination Panel and the Affected Party concerned would apply sufficient resources to ensure this is possible. [Emphasis added.]

Placing the financial burden on the Affected Party would be detrimental to developing countries and deter them from participating in this process. It is also unjustified, as the entire process is triggered by a MNE, which is provided a “service” in the form of tax certainty. It is unclear why the provider of the service rather than the user should pay the cost. The very foundation of the economy is that the user pays for the goods and services consumed. Thus, since tax certainty is essentially a service provided to the MNEs, the entire cost should be borne by them.

Recommendation: The entire cost of the tax certainty framework should be borne by the concerned MNE.

  1. Composition and number of members in the Expert Advisory Group

The proposal is the Expert Advisory Group (EAG) consist of the LTA and two members from the Affected Parties. However, given the important role the EAG is likely to play, this number should be expanded.

Recommendation: The EAG can consist of six members, with the LTA and five from the Affected Parties. It should be ensured that in any event at least half the composition is from the developing countries. As mentioned earlier, EAG membership should be restricted to Government officials.

  1. Scope of Determination Panel

Para 7(e) of Section III.5 of the rules propose to give the MNE an opportunity to justify its position before the Determination Panel. This is unjustified and unnecessary, as the MNE has ample opportunities in the Review Panel and prior stages of the tax certainty framework to do so.

Recommendation: The MNE should not have yet another opportunity to provide additional explanations and justifications to the Determination Panel. Para 7(e) of Section III.5 should be deleted.

  1. Inclusion as Listed Party

Paragraph 5 of Section I.1 of Part Two and footnote 1 within that Section indicate that the Inclusive Framework has not yet reached agreement on whether a specific Party, which was not included in the Listed Parties submitted by a Coordinating Entity, can require that it be treated as a Listed Party or whether that status is subject to a determination process if the Coordinating Entity does not agree to that Party’s inclusion.

Recommendation: Any Party that desires inclusion as a Listed Party should automatically be added.

  1. Protection of Listed Parties in Event of MNE Group Withdrawal from the Scope Certainty Process

Paragraph 6 of Section I.1 of Part Two requires all Listed Parties to suspend all domestic compliance activities with respect to the calculation and allocation of Amount A and the elimination of double taxation, as well as the administration of Amount A to the Group for the Period specified in the request, for the duration of the Scope Certainty Process.

Since the timing for some of these procedures may take much longer than expected; perhaps years, that would mean countries will have to forgo tax collection during this time.

Recommendation: An automatic mechanism must be included that will also suspend each Listed Party’s statute of limitations so that adequate audit checking and enforcement is possible in the event that an MNE Group withdraws its request for Scope Certainty.

Paragraph 4 of Section II.2. of Part Two makes the same requirement of all Listed Parties in connection with a Covered Group’s request for a Comprehensive Certainty Review. Paragraph 8 of Section II.2. of Part Two extends this to non-Affected Parties. The recommendation applies in these cases as well.

  1. Defined Time Periods for Required Actions – Slow or No Actions Taken

Paragraph 14 of Section I of Part Two, for example, and numerous other paragraphs throughout the Public Consultation Document provide time periods in which certain actions must be undertaken by a Lead Tax Administration, a Scope Review Panel, etc.

Recommendation: If the applicable tax administration or other body is not timely in its actions, then there needs to be clear redress or guidance for affected persons including Affected Parties, the affected Group, etc. If the delay comes from the Group itself, there must be financial penalties on the Group for wasting the time of the involved bodies despite having initiated the request for certainty. This will also deter the Group from malicious requests aimed at delaying the eventual payment of tax.

  1. Limitations on Competent Authority of an Affected Party Regarding Certainty Reviews

Paragraph 32 of Section II.3. of Part Two provides materiality limitations on the Competent Authorities of Affected Parties concerning Certainty Reviews. While including materiality limitations is understandable, the present form of these limitations in paragraph 32 is problematic for many jurisdictions and will have the practical effect of silencing the voices of many developing countries and preventing them from raising objections.

Recommendation: At a minimum, Paragraph 32(b) of Section II.3 which provides the materiality limitations should be deleted.

  1. MNE withdrawal of request and/or refusal to accept the outcome

If the MNE withdraws its request from either the Review or Determination Panels, it would mean a massive waste of time and money. If the Panels are comprised wholly of Government officials, as it should be, then it would also mean a waste of taxpayer money.

Recommendation: The MNE must bear the entire cost of the process with added financial penalties if it chooses to withdraw the request or refuses to accept the outcome.


[1] Forthcoming South Centre Policy Brief.

THE IDB PRESENTED THREE STUDIES ON BRAZIL’S DIGITALIZATION PROGRESS AND ITS POTENTIAL IMPACT ON ECONOMIC GROWTH.

 

Brazil’s great strides in digitalization in recent decades have positioned it well to bolster its exports and participation in global trade. This was the message shared by Mauricio Claver-Carone, President of the Inter-American Development Bank (IDB), in his opening address at the Brasil Investment Forum (BIF) 2022 on Tuesday.

The BIF is organized by the IDB, ApexBrasil (the country’s export agency), and the Brazilian government. Now in its fifth iteration, the event has become the largest private investment forum in Latin America and the Caribbean. It is being held in São Paulo on June 14 and 15th and highlights opportunities in the Brazilian economy, such as its advances in digitalization.

“The IDB has been working tirelessly to boost Brazil’s exports, improve its participation in global trade, all while creating more jobs and inclusion by leveraging its digital readiness,” said President Claver-Carone. “We offer our technical and financing capacity to the public and private sectors to transform Brazil’s potential into opportunities,” he added.

Recent IDB-sponsored studies show that Brazil leads Latin America and the Caribbean in hiring via LinkedIn and in number of fintech companies. The country also holds $9.5 billion in broadband investment potential, according to an analysis performed by the IDB with Anatel, Brazil’s telecommunications authority.

Shaping policies that accelerate digital transformation is one of the strategic pillars of Vision 2025 and a driver of infrastructure growth, job creation and higher revenue.

Three specific digitalization achievements in Brazil

Recent IDB studies highlight Brazil’s good performance on digitalization:

  • Brazil has had the highest rate of hiring via LinkedIn in the region since the start of the pandemic, and it also has the broadest technological skill penetration, according to the study LinkedIn in Latin America and the Caribbean: a rapid transformation of the labor market due to the pandemic.
  • The third edition of the study Fintech in Latin America and the Caribbean: A well-established ecosystem for recovery, conducted by the IDB, IDB Invest, and the innovation company Finnovista, highlights the boom of the fintech industry in Latin America and the Caribbean, which grew 112% from 2018 to 2021. The COVID-19 pandemic drove digitalization processes and supercharged the uptake and maturation of digital finance. Brazil leads the region in number of fintech platforms (31% of the total), followed by Mexico (21%) and Colombia (11%).
  • In the third study, under preparation, the IDB, IDB Invest and the National Telecommunications Agency of Brazil (Anatel) found that Brazil has potential for $9.5 billion in broadband Internet infrastructure investments. The report also estimates that expanding broadband penetration could trigger GDP growth of 2.4%.