News
- | February 2, 2023
A defining feature of the post-pandemic world is the digital transformation that has permeated every aspect of our lives. In the words of UN Secretary-General António Guterres, “…as we recover and rebuild, digital technology will be more prominent and important than ever.”
However, the “digital divide” means that the less privileged are often excluded from opportunities to benefit from the digital economy. What policy measures can countries in Asia and the Pacific take to address this challenge?
A compendium, based on a survey of G20 member states and jointly prepared by ESCAP, the G20 Indonesia Presidency and Griffith Asia Institute, sheds light on policies which have successfully enhanced the meaningful participation of women, children, older persons, rural communities, persons living with disabilities and micro, small and medium enterprises (MSMEs) in the digital economy. The key policy recommendations, highlighted below, can provide guidance to countries beyond the G20.
Design and implement “targeted” policies
Policymakers need to acknowledge the diversity and intersectional needs of the targeted groups. Policies and initiatives must reflect the challenges of the digital divide caused by lack of access to technology and affordability of digital devices. For example, the Be Connected programme in Australia includes a flexible online learning option, supported by geographically dispersed and diverse network partners. This has proved a successful approach to engaging learners with little or no experience with digital technology. In Indonesia, Women in Digital Entrepreneurship aimed to increase the awareness among women entrepreneurs to enhance their use of technology and digital devices for business development.
Improve digital infrastructure and connectivity
Stable and speedy digital connectivity is a prerequisite for accessing and benefiting from the digital economy, and G20 members have taken various measures to enhance connectivity in rural areas. For example, in China, 10 ministries and government agencies are jointly implementing an Action Plan for Digital Village Development which aims to develop e-commerce and drive modernization of agriculture and rural areas in China
Broaden consultations
In order to take into account the specific needs of vulnerable groups, policymakers need to adopt the “nothing about us without us” model for co-creation of policies. Furthermore, policymakers need to undertake multi-sectoral consultations to achieve the various objectives that relate to the entire digital ecosystem. In Canada, the government recognizes the diversity and intersectional needs of persons with disabilities and has been actively engaging in consultations with the disability community to ensure their participation in the design, delivery and evaluation of policies.
Take a whole-of-government approach
Policymakers need to adopt a whole-of-government approach in designing, implementing and evaluating policies. Collaboration with all levels of government and locally placed agencies reduces the risk of fragmentation and redundancy.
Build partnerships
To obtain greater support in the implementation of targeted policies and programmes, policymakers should leverage public-private partnerships and take advantage of the synergies between different stakeholders, such as the government, private sector, academics and practitioners. Furthermore, policymakers should promote the integration of available resources (such as schools, libraries, associations and digital facilitation points), as well as the communications opportunities offered by radio, television and the web, to support the target groups.
Monitor and reform policies
As the saying goes, “if it cannot be measured it cannot be managed”. Measurement of policy effectiveness is always difficult to undertake, but it is essential to ensure that the most suitable policy is developed and introduced. In the Republic of Korea, for example, the government measured the digital competency of trainees before and after training. It was found that the training programme increased participants’ digital competency by nearly 30 per cent.
Implementation of any policy needs to be contextualized and tailored to the national situation. Nevertheless, experience and lessons learned from the G20 countries, as documented in this compendium, can guide policymakers in the region in reviewing their national policies and taking effective measures to support the less privileged and vulnerable groups of people to participate in and benefit from the digital economy.
- | February 2, 2023
STORY HIGHLIGHTS
- Financial accounts give people a safe way to make payments, store and save money, and access loans. As a result, financial inclusion facilitates investments in education and job opportunities, and increases resiliency to shocks.
- Data from the Global Findex—launched in 2011 as the world’s first and only source of data collected from users of financial services on financial account ownership, usage, and financial resilience based on nationally representative surveys of adults—show a 50 percent increase over the past decade in the worldwide share of adults with an account.
- Key gaps still remain, however, based on gender, income, and education level.
The COVID-19 pandemic catalyzed a rise in financial digitalization, demonstrated by millions of adults using digital payments in lieu of cash-based payments for the first time.
At a recent Policy Research Talk, World Bank Lead Economist Leora Klapper presented key findings from the Global Findex 2021—a nationally representative survey of adults that has taken place roughly every three years since 2011 and quantifies financial account ownership and usage in economies around the world. Initially delayed by the outbreak of the COVID-19 pandemic, the Global Findex 2021 captured data from more than 128,000 adults in 123 countries—bringing the global total of survey participants to more than half a million adults since 2011.
The talk spanned subjects such as the impact of mobile money on financial inclusion and equity in Sub-Saharan African and other economies; how COVID-19 influenced changes in financial usage patterns, particularly for digital payments; new insights on financial resilience; and how focused policies and well-designed products can help close remaining inclusion and usage gaps.
In the aggregate, the Global Findex 2021 shows much cause for celebration among financial inclusion advocates. Since the first Global Findex survey in 2011, the share of adults worldwide with a financial account rose from 51 percent to 76 percent. In developing economies, account ownership has increased by 30 percentage points, bringing the total account ownership for adults in developing countries up to 71 percent. Digitalization facilitated that increase, as millions of adults opened accounts and began using them.
“Financial inclusion means that adults have access to appropriate financial services and can effectively use them to safely manage their money, save, and invest in their financial wellbeing,” said Klapper.
An impressive array of research has tallied the many benefits of financial inclusion, including enabling greater investments in businesses, increasing control over money (especially for women), reducing fees and increasing the security of money, and helping households cope with shocks through savings and insurance.
The trends driving increased account adoption and usage were already underway when the COVID-19 pandemic struck and catalyzed remarkable digital payment adoption as a work-around during lock-downs and other restrictions.
Three key messages emerged from the Global Findex 2021
To paint a picture of the current global situation surrounding financial inclusion, Klapper summarized three key messages from the Global Findex 2021 data and accompanying report.
The first message highlights the importance of technology-enabled accounts. Digital financial services such as mobile money, cards, e-wallets, and direct account-to-account payments have driven tremendous growth in account ownership and account usage around the world.
The second message emphasizes the way in which increases in financial inclusion have gone hand-in-hand—at least at the global level—with reductions in the account ownership gender gap. On average in developing economies, the gap between men and women in account ownership fell to six percentage points for the first time in the past decade.
The third message is that the COVID-19 pandemic accelerated the use of digital payments. During the pandemic, digital payments helped governments transfer money to those who most needed it, supported consumers when the use of cash was not possible, and became a lifeline for many small businesses.
The impact of digital financial services on account adoption and usage
Mobile money accounts offered by telecom and fintech companies have been a key enabler of financial inclusion as well as a major contributor to the increase in account ownership in Sub-Saharan Africa, as well as in select economies such as Bangladesh and Peru (Figure 1).
“Mobile money accounts, which are easily accessible and offered through companies already familiar to the user, can be less intimidating and more convenient,” said Klapper. “Mobile money is also designed for small, high frequency transactions—which is exactly what they are being used for.”
Figure 1: Visualization of Mobile Money Accounts in Africa for 2017, 2017, and 2021Mobile money accounts have increased dramatically since Global Findex data collection began.
Note: Figure shows adults with a mobile money account (%)
The gender gap has narrowed, though there is still room to prioritize equity
Despite recent advances, key gaps in account ownership still exist based on gender, income, and education levels (Figure 2). While social norms undoubtedly play a large role in the gender gap, more resolvable regulatory and technical issues are also at play. For example, men in some countries are more likely than women to have valid documentation such as government-issued IDs, which people need to open a financial institution or mobile money account as well as to purchase a mobile phone and SIM card.
“In Pakistan, for example, 88 percent of men have their own phone, compared to 42 percent of women,” said Klapper. “This presents a barrier for financial and digital inclusion as well as e-commerce opportunities, online education opportunities, and more.”
Figure 2: Three Key Gaps in Financial Inclusion
Account Ownership in Developing Economies by Gender, Income, and Education
Adults now use a variety of financial services—and COVID-19 catalyzed wider adoption of digital payments
Digital payments are the most popular financial service. Fifty-seven percent of adults in developing economies made or received a direct payment in 2021, compared to only 35 percent in 2014.
One type of payment that has been enabled by account adoption is domestic remittances. In many countries across Sub-Saharan Africa, mobile money accounts were originally marketed as an option for domestic remittances (both sending and receiving). Now, mobile money account holders use them for a variety of financial services, including saving. More broadly, saving in any kind of account saw a boost in 2021—for the first time, more than half of adults who chose to save did so through a formal account, whether provided by a bank or similar institution or a mobile money provider.
Payments are a gateway for further financial inclusion
Governments and other actors can leverage the trends in digital payment adoption to further spread the benefits of financial inclusion to the approximate 1.4 billion adults worldwide who still lack a financial account. Digitizing payments is a start.
One third of the adults who receive government payments still receive them in cash or through some method other than directly into an account. Government-led policies could help put more of these payments into accounts and thus enable safer access and usage.
“The goal of financial inclusion is to design the right financial products and digitize payments in a way that enables people to alleviate their biggest worries, like saving for emergencies, making sure they can pay their bills, and having a secure place to keep their money,” said Klapper. Addressing the remaining barriers for adults in opening financial accounts and achieving financial security remains a key priority area for research and policy.
- | February 2, 2023
AI is essential for productive transformation and job creation in developing countries.
F. Scott Fitzgerald1 said that the “test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function”. This statement holds true with reference to today’s lopsided debate on Artificial Intelligence (AI). The negative perceptions of AI are associated with potential privacy violations and the spread of disinformation, the erosion of human rights and the replacement of labour, leading to unemployment and further inequality.
Yet AI is emerging as one of the critical technologies of the Fourth Industrial Revolution (4IR), and large corporations as well as small and medium-sized enterprises (SMEs) in developing countries could benefit considerably from using AI to improve their level of productivity. To drive the productive transformation in SMEs in developing countries, three factors need to be considered: (i) the changing nature of productive activities beyond manufacturing; (ii) the exponential growth of digitalization and AI; and (iii) the practical use and applications of AI in productive activities.
Artificial Intelligence beyond manufacturing
AI refers to the ability of a system, computer or robot to learn and carry out tasks that are usually performed by humans who have the capacity to reason and act. Typical examples of AI applications are production robots, smart assistants, self-driving cars, automated financial analyses and investments and travel booking agents, just to name a few. One key feature of such technologies is their combinatorial effects and the exponential growth they imply.
When used in manufacturing, AI contributes to cost reductions for firms, simplifies their processes, streamlines supply chains and saves resources. Moreover, it enhances predictive machine maintenance, minimizes scrap, increases defect zero yields, forecasts components demand and estimates inventories. AI is also revolutionizing customer service – chatbots can be used to provide 24-hour customer support and to predict individual customers’ needs.
In manufacturing, AI contributes to cost reductions for firms, simplifies processes, streamlines supply chains, and saves resources.
Although the role of manufacturing in development has been key from a historical perspective, attention is increasingly shifting towards the potential role of services for growth in developing countries. The question therefore arises whether ‘platformization’—the combination of the production of physical goods with services and digital platforms—could accelerate productivity in developing countries (e.g. by providing local firms access to technologies and markets).
In manufacturing, AI contributes to cost reductions for firms, simplifies processes, streamlines supply chains, and saves resources.
The need for speed
Technology is developing at an exponential rate and the use of AI in production activities is on the rise worldwide. China is one of the leading AI users in a range of industries, from production, and distribution to urban planning2; in Brazil, Alice Assistant, which was developed by a start-up, is used in farming and agriculture to improve harvesting processes3; in Nigeria, RxAll has developed an application to identify counterfeit drugs.
Planning for digitalization, technological upgrading and the use of AI in production or supply chain activities pose a major challenge for SMEs in developing countries45, due to the lack of adequate technological knowledge and financial resources, skills, absorption capabilities, availability of technologies as well as proper legal frameworks. Although SMEs in high-income countries face similar challenges, the use of AI is not necessarily indispensable if they occupy a niche in the market and produce highly specialized goods not offered by others, but most of the developing world need to accelerate the catching up on AI capacities (see figures below).
AI players worldwide, 2009-2018
Source: European Commission, Joint Research Centre (JRC) (2020): AI TES Dataset 2019. European Commission, Joint Research Centre (JRC).
As AI presses forward, understanding its potential and how it can improve firm productivity is crucial. Hence, SMEs in developing countries need to be made aware of the potential of digital tools and of the availability of global and regional technologies. Failure to do so could intensify the AI divide between industrialized and developing countries where advancements based on basic research and science cannot be absorbed due to weak ecosystems and lack of effective innovation policies.
Think in potentials
New technologies can become a source of competitiveness and contribute to the achievement of the SDGs.
AI and digital transformation can help find solutions to global problems such as climate change and environmental degradation, energy efficiency, food production and urban-rural disparities. Although some jobs will become redundant, AI will create new ones that require both decision-making skills and creativity. If used smartly, new technologies can become a source of competitiveness and contribute to a decrease in inequality and the achievement of the Sustainable Development Goals (SDGs).
One option for SMEs in developing countries is to design and implement technologies that do not require access to complex neural networks and basic science, and that can use imported advanced sensors and actuators. Examples include the implementation of a digital twinning system for remote manufacturing operations; sensors and actuators that enable virtual improvements of production systems prior to physical installation; the use of AI-forecast-fed parts and components of end-of-life vehicles to produce equipment needed locally, such as incubators for premature babies, dialysis systems, cooling equipment, etc.; applying a Geographic Information System (GIS), big data and analytics to analyse agricultural field health and improve yields in agribusiness-related activities; and designing and locally 3-D printing defective parts in production machinery rather than purchasing replacement parts in local or international markets and importing them.
AI R&D activity score, worldwide, 2009–2020
Ideas for better policy design based on practical uses of AI
Because firms and the technologies they use differ considerably depending on the region, industry and business environment they operate in as well as their income level, we must redouble our efforts to gain a better understanding of the context for digitalization and AI. Countries’ innovation ecosystems must be continuously developed and strengthened. One way to achieve this is by establishing smart manufacturing centres to train firms in digital technology applications, thereby expanding countries’ innovation ecosystems. Upgrading skills and spreading knowledge among firms in developing countries is crucial if they are to learn how to use more complex technologies such as AI for production. In Tunisia and Côte D’Ivoire, for example, training in smart manufacturing is being provided to youth with the objective of nurturing an entrepreneurial ecosystem.
New technologies can also be used to address global challenges, in particular the environmental and food security dimensions. A UNIDO project provides support to start-ups and SMEs that apply frontier information and communication technologies to contribute to a clean energy transition and to climate change mitigation through the Global Cleantech Innovation Programme (GCIP). A model to support an aquaculture transition in the Mediterranean towards sustainable and circular practices is currently being developed as well. AI enables the optimization of the FCR (Feed Conversion Ratio), a key parameter for resource-efficient aquaculture. Using underwater 360° cameras, the system analyses fish behaviour and satiety, based on which input signals are provided to automatic feeders to optimize feed rations, thereby reducing the dispersion of foreign substances in marine ecosystems. UNIDO6 also supports the design and implementation of National AI strategies, an initiative that started with the Government of Jordan and will be extended to other countries.
Although the leading industries in many developing countries, namely agriculture, mining and fishing, are considered to be unsophisticated, they could represent a potential source of growth when new technologies are implemented. In Namibia, for example, satellite imagery technologies are being used to fight invasive species and to thereby improve food security. AI can also be used by farmers as a yield predicting tool. In the mining industry, Chile’s copper giant, Codelco has upscaled its production with robotics, AI and big data, and has improved cybersecurity and procurement processes, thus scaling efficiency.
The bottom line
Countries’ innovation ecosystems must be continuously developed and strengthened.
While the end game is uncertain, the advancement of digital transformation and AI is inevitable. What is indisputable, however, is that efforts to effectively promote innovation and national AI initiatives for industries in developing countries need to be stepped up and new technologies for productive transformation implemented to transform the digital divide into digital opportunities.
References
- American author, F. Scott Fitzgerald.
- AI Startups China https://www.ai-startups.org/country/China/
- Brazilian Agriculture Technology Startups https://www.nanalyze.com/2019/08/brazil-agriculture-technology/
- Industrial Development Report 2019 and 2022 https://www.unido.org/
- Digital Economy Report 2021 https://unctad.org/
- Jordan presents its AI Strategy and Implementation Roadmap, 2022. Jordan improves its position in Government AI Readiness Index, 2023.
- | February 1, 2023
Thursday, January 19th, marked the closing of the first United Nations Capital Development Fund (UNCDF), European Union (EU) and Organisation of African, Caribbean and Pacific States (OACPS) “Advancing Digital Payments & Financial Inclusion Across the Eastern Caribbean” Technical Workshop Series. The three-day technical workshop brought to the region through the UNCDF-EU-OACPS Global Partnership on Digital Finance for Resilience, took place in Port of Spain, Trinidad and Tobago. The Workshop was supported by the United Nations Development Programme (UNDP) whose Trinidad and Tobago Multi-Country Office hosts the UNCDF Eastern Caribbean Regional office and helps facilitate on-the-ground operations across the region.
The partners recognize the commitment of the Government of Trinidad and Tobago in advancing its digital finance agenda and were thrilled to have had the opportunity to launch the Workshop Series in Trinidad and Tobago. As such the technical workshop was opened with a keynote address by the Minister of Finance from the Government of the Republic of Trinidad and Tobago, the Honourable Mr. Colm Imbert.
The Keynote Address provided global perspectives on financial inclusion as well as insights on Trinidad and Tobago’s approach to developing a cashless society, including the country’s establishment of new entities to lead the cashless agenda and strong political will to develop an enabling environment for digital finance.
“Financial Inclusion is an integral part of the global development agenda, and is recognised as an enabler of many things, such as economic growth and economic health to agricultural development, educational advancement, development of robust and sustainable businesses, increased savings, consumption, investment opportunities, and specially designed financial instruments and solutions to support and empower vulnerable groups,” Minister Colm Imbert said in his Keynote Address.
Furthermore, Minister Colm Imbert noted that financial inclusion is at the heart of financial sector transformation and economic recovery.
The workshop was attended by the Government of the Republic of Trinidad and Tobago’s Minister of Digital Transformation, Senator Honourable Hassel Bacchus as well as the Minister of National Security, the Honourable Fitzgerald Hinds. Regulators and related stakeholders from Trinidad and Tobago as well as the Eastern Caribbean states were also in attendance, which underscored the commitment of the Eastern Caribbean to digitally transform their financial sector and build a digital economy.
The Regional Workshop Series was launched in response to regional requests, and this first workshop focused on:
- regulating, licensing and supervising E-money and fintech; and
- cybersecurity for mobile and digital payment services.
The event, which was attended by over 80 in-person participants and over 150 people virtually, provided participants with lessons learned from leading experts from across the world and mapped possible solutions to responsibly enable digital finance for regulators in the region, focusing on harmonization and collaboration.
Ambassador of the European Union, Peter Cavendish, commented:
“More than ever, digital technologies have a central role to increase access to and usage of affordable financial products and services that meet people and business needs as well as accelerate economic recovery from the coronavirus pandemic. Cooperation on digital technologies is therefore very important and the reason that it is one of the EU’s new pillars of support with partner countries. I am happy that I was able to join the Workshop’s very informative presentation and extremely satisfied with the successful outcome of the three-day workshop. The takeaway for all participants is that ‘no one should be left behind in the digital age’.”Escipión Oliveira Gomez, Assistant Secretary General for the Secretariat of the Organisation of African, Caribbean and Pacific States noted:
“OACPS was created, among others, to promote the integration of African, Caribbean and Pacific countries into the global market with a view to contribute to the eradication of poverty. That is exactly why peer exchanges like this are so important. They ensure that we learn from each other and find the best solutions for the islands of the Eastern Caribbean.”
UNCDF Programme Manager Bram Peters explained:
“In the fast-changing digital economies, where the playing field constantly evolves, policies and regulations need to guide the growth of a robust and inclusive digital economy, while at the same time protecting its users. It has been very encouraging to see how representatives of regulatory bodies from across the region have contributed to the discussions these last three days as they have a key role to play in designing effective frameworks. At UNCDF, through the Digital Finance for Resilience Programme, we are committed to leaving no one behind in the digital economy and look forward to continuing collaboration with Trinidad and Tobago and the Eastern Caribbean Islands States to ensure this.”
UNDP Resident Representative Gerardo Noto stated:
“This is a pivotal time for Trinidad and Tobago and the Eastern Caribbean, and policymakers have demonstrated strong commitment towards crafting solutions and approaches to responsibly enabling digital finance. At the UNDP, we believe digital finance and financial inclusion is a key enabler that contributes towards the Sustainable Development Goals and is a pre-requisite to building a strong digital economy. We are thrilled to have the opportunity to host the UNCDF Eastern Caribbean office and jointly expand our remit to support Governments across the Eastern Caribbean to reach their digital finance and financial inclusion goals”.
- | February 1, 2023
UN tech agency brings the latest in artificial intelligence and robotics to Geneva
Artificial intelligence (AI) and robotics innovators—and their high-tech creations—will join humanitarian leaders in Geneva, Switzerland, 6-7 July, for the latest edition of the global summit advancing AI to drive sustainable development.
The two-day AI for Good Global Summit organized by the International Telecommunication Union (ITU) will demonstrate how new technologies can support the UN Sustainable Development Goals (SDGs) in areas such as combatting the climate crisis and bolstering humanitarian response.
“It’s in our collective interest that we can shape AI faster than it is shaping us,” said ITU Secretary-General Doreen Bogdan-Martin. “This summit, as the UN’s primary platform for AI, will bring to the table leading voices representing a diversity of interests to ensure that AI can be a powerful catalyst for progress in our race to rescue the SDGs.”
Innovative solutions and world-class speakers
The AI for Good Global Summit will feature eight humanoid social robots and over 20 specialized robots, being brought together for the first time under the same roof. The robots will showcase capabilities ranging from fighting fires and delivering aid to providing healthcare and farming sustainably.
The event will also feature talks from thought leaders as well as demos of state-of-the-art AI solutions that could achieve global scale with the support of the international AI for Good community.
Two high-level roundtables – featuring government officials, industry executives, academics, and UN partners – will explore the policies, regulations, and standards needed for AI to advance sustainable development.
The event will also host the final round of the AI for Good Innovation Factory where start-ups from around the world will pitch their AI solutions to advance the SDGs.
More than a summit
The AI for Good Global Summit, established in 2017, returns to Geneva in person for the first time since 2019. In response to the COVID-19 pandemic, AI for Good transformed into a year-round online engagement platform bringing together a diverse range of participants from 183 countries.
This year’s summit combines the best of the physical and virtual worlds, with the potential to welcome over 2,500 participants in Geneva alongside online participation from the over 15,000 members of ITU’s fast-growing AI-powered community platform, the AI for Good Neural Network.
The event will emphasize networking to build new projects, calls to action, and partnerships. AI for Good’s dynamic show floor will also include AI-inspired performances and artwork.
ITU connects the world
AI for Good is organized by ITU, the UN specialized agency for information and communication technologies, together with 40 partner UN agencies. The summit is co-convened by the government of Switzerland.
ITU’s global membership includes 193 Member States and – uniquely in the UN system – over 900 companies, universities, and international and regional organizations.
Member States at ITU’s governing Plenipotentiary Conference in 2022 adopted a resolution supporting the tech agency’s work across the UN system to realize the benefits of AI for sustainable development.
The two-day AI for Good Global Summit at The International Conference Centre Geneva is preceded by machine learning workshops on 5 July led by experts from the AI of Good Discovery series.
Participation in the AI for Good Global Summit is free of charge and open to everyone.
Where human and robot minds meet
Confirmed summit participants include:
- Lila Ibrahim – Chief Operating Officer, DeepMind
- Yuval Noah Harari – Historian, philosopher, and bestselling author of “Sapiens” and “Homo Deus” (participating remotely)
- Orly Lobel – Warren Distinguished Professor of Law, University of San Diego, and author of “The Equality Machine” (among The Economist’s best books of 2022)
- Stuart Russell – Professor of Computer Science at University of California, Berkeley, and author of “Human Compatible: Artificial Intelligence and the Problem of Control”
- Alessandra Sala – Senior Director of AI & Data Science, Shutterstock, and President, Women in AI
- Babak Hodjat – Chief Technology Officer for AI, Cognizant
- Sophia Kianni – Iranian-American climate activist, Executive Director of Climate Cardinals and, at 20 years of age, the youngest member of the UN Secretary-General’s Youth Advisory Group on Climate Change
- Andrew Zolli – Chief Impact Officer, Planet
- Ebtesam Almazrouei – Director of the AI-Cross Center Unit at Abu Dhabi’s Technology Innovation Institute
- Iker Casillas – Former football goalkeeper, Real Madrid, FC-Porto, and Spanish National team
- Ali Agha – Group Leader at the Autonomous and Robotics Systems Division of NASA’s Jet Propulsion Laboratory, Caltech Center for Autonomous Systems and Technologies
The summit will also feature:
- Beonmi – the world’s first fully functional general-purpose humanoid robot (Beyond Imagination)
- Nadine – one of the world’s most realistic humanoid social robots (University of Geneva)
- Sophia – first robot Innovation Ambassador for the United Nations Development Program (Hanson Robotics)
- Geminoid – ultra-realistic humanoid robot from Japan (Hiroshi Ishiguro)
- 4NE-1 – one of the world’s most advanced cognitive humanoid robots designed to collaborate with humans (Neura Robotics)
- Ai-Da Robot – first ultra-realistic robot artist (Aidan Meller)
- Grace – the world’s most advanced humanoid healthcare robot (SingularityNET)
- Desdemona – the rockstar robot of the Jam Galaxy Band
The AI for Good Global Summit 2023, co-convened by Switzerland, is supported by Immersion4 (Diamond sponsor), Technology Innovation Institute (Diamond sponsor), Monash University (Gold sponsor), ZTE (Gold sponsor), and Rohde & Schwarz (Networking sponsor).
- | February 1, 2023
The Coalition for Digital Africa announced another major initiative aimed at strengthening the Internet infrastructure across the continent. This latest initiative will focus on enhancing five existing Internet exchange points (IXPs), to improve Internet access by making it faster and more affordable, thus positively impacting Internet users in the regions they are placed in.
The Coalition for Digital Africa is an initiative created by the Internet Corporation for Assigned Names and Numbers (ICANN) that aims to bring more Africans online by supporting the development of a robust and secure Internet infrastructure in Africa. IXPs enable the exchange of Internet traffic locally and are essential for any region aspiring to participate fully in the global Internet economy. The initiative is supported by a grant from ICANN and will be implemented by the Internet Society (ISOC).
Using an assessment tool developed by the Internet Society, five IXPs will be identified based on their potential to make a high impact on the respective local and sub-regional markets. The Internet Society will work to create a clear plan for growth and development, tailored to the regions’ interests to strengthen the Internet in Africa. A local manager will be identified and recruited for each IXP, to be responsible for implementing the action plan and achieving measurable project targets while receiving training and support from the Internet Society.
Well-managed IXPs open new worlds of possibilities, with modest investment, by improving local Internet services and reducing their costs.”
Sally Costerton, Interim President and CEO, ICANN, which launched the Coalition for Digital Africa in December 2022
Research from the Internet Society shows that IXPs improve the end-user experience through lowering the costs of Internet access and stimulating the development of local Internet ecosystems and cross-border interconnection.
IXPs make Internet access cheaper and more reliable. They are a critical resource in making sure the Internet is for everyone. The Internet Society is grateful for this investment by ICANN that will help bring Internet access to more people throughout the continent.”
Andrew Sullivan, President and CEO, Internet Society
Details of the IXP project were announced during a webinar on 30 January. The initiative is another in a series of initiatives aimed at improving accessibility to the Internet under the auspices of the Coalition for Digital Africa.
The Coalition for Digital Africa comprises governments, regional and international organizations, and the local Internet community. Conceived by ICANN, the Coalition for Digital Africa is an alliance of like-minded organizations committed to building robust and secure Internet infrastructure to bring more Africans online. More information is available at www.coalitionfordigitalafrica.africa.
About ICANN
ICANN’s mission is to help ensure a stable, secure, and unified global Internet. To reach another person on the Internet, you have to type an address – a name or a number – into your computer or other device. That address must be unique, so computers know where to find each other. ICANN helps coordinate and support these unique identifiers across the world. ICANN was formed in 1998 as a not-for-profit public-benefit corporation and a community with participants from all over the world.
About the Internet Society
Founded in 1992 by Internet pioneers, the Internet Society is a global non-profit organization working to ensure the Internet is for everyone. Through its community of members, special interest groups, and 130+ chapters around the world, the organization defends and promotes Internet policies, standards, and protocols that keep the Internet open, globally connected, and secure. For more information, please visit internetsociety.org.
- | January 26, 2023
On 26 January, WTO members discussed consumer protection in the first of a series of dedicated discussions to be held this year under the Work Programme on Electronic Commerce. Members recognised the importance of consumer protection in enhancing trust in e-commerce, shared experiences and highlighted the challenges they face in this area.
Other topics to be addressed in the dedicated discussions scheduled for the first semester of this year include the digital divide, the legal and regulatory framework on e-commerce and the moratorium on customs duties on electronic transmissions.
Ambassador Usha Dwarka-Canabady, the facilitator on the E-commerce Work Programme and the moratorium, said that the topics of these dedicated discussions stem from what she heard during her consultations with members in December 2022.
India presented a submission looking at consumer protection at each phase of a commercial transaction, including pre-purchase, purchase and post-purchase. It also looks at current work on consumer protection at the international level.
Members considered the guiding questions in India’s submission, shared experiences on consumer protection, discussed how members can enhance regulatory cooperation between enforcement agencies and looked at the role the WTO can play alone or in collaboration with others in enhancing consumer protection in e-commerce.
The next dedicated discussion will be on 21 February, focussing on the digital divide in terms of digital infrastructure, connectivity and capacity building.
- | January 26, 2023
- This is the first B Bond structured by IDB Invest to be issued under a 144A/ Regulation S format
- This is the largest B Bond issued by a Costa Rican telecommunications company
- The bond proceeds will help to expand 4G coverage to narrow the digital divide
IDB Invest and Liberty Costa Rica announced the international issuance of a Sustainability-Linked Bond (SLB) as part of a $450 million financing package to increase digital access and broadband quality in Costa Rica. This is the largest Bond B structured by IDB Invest to date.
The proceeds will be used to finance investments in fiber-to-the-home, increase capabilities and speeds of the HFC network, capital expenditures related to 4G/5G infrastructure, refinance certain financial obligations, working capital and general corporate purposes.
The deal has been financed through a $50 million A loan funded by IDB Invest through its balance sheet and a $400 million B Bond funded through the issuance of a sustainability-linked bond in the international debt capital markets in accordance with Rule 144A and Regulation S under the U.S. Securities Act of 1933. Securities Act of 1933. Citibank served as lead left bookrunner, while Bank of America and Scotiabank served as joint bookrunners on the issue.
“With this innovative structure, IDB Invest will be able to mobilize a greater number of institutional investors who, otherwise, could not participate in our deal under the A/B loan structures and private placements of B bonds,” said Gema Sacristán, IDB Invest Chief Investment Officer.
Liberty Costa Rica CFO, Maarten Hekking, commented: “With the launch of our inaugural Sustainability-Linked Bond, we are one step further on our ESG journey and have materially extended our debt maturities. This bond will help accelerate digital infrastructure development in the market and drive us forward towards creating a more sustainable future here in Costa Rica.”
IDB Invest will also provide additional advice to Liberty Costa Rica to establish a roadmap for climate change mitigation actions. The Costa Rican entity, for its part and in line with the Sustainability Strategy, commits to Sustainability Performance Goals (SPTs) to cover a reduction of more than 30% in direct and indirect emissions and a reduction of more than 35% in the intensity of GHG emissions per operating unit.
The second opinion was issued by Moody’s ESG Solutions, which accredits its alignment with the Sustainability-Linked Bond Principles of the International Capital Market Association (ICMA).
This agreement is expected to contribute to three of the United Nations Sustainable Development Goals: Decent Work and Economic Growth (SDG 8), Industry, Innovation and Infrastructure (SDG 9) and Partnerships for the Goals (SDG 17).
About IDB Invest
IDB Invest, a member of the IDB Group, 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 $15.3 billion in asset management and 375 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 Liberty Costa Rica
Liberty Costa Rica is a provider of fixed and mobile telecommunications services for residential and B2B customers in Costa Rica. Liberty Costa Rica offers customers a comprehensive set of convergent mobile, broadband, video and fixed line services and, as of September 30, 2022, had 267,000 Internet subscribers, 204,800 video subscribers, 204,800 fixed line subscribers and 2,922,200 mobile subscribers.
- | January 26, 2023
Supporting micro and small entrepreneurs worldwide for better online sales through training and community support.
Many small businesses lack the knowledge and skills to effectively use online sales channels. Mastercard and ITC have partnered to bring the benefits of digitalization to more micro-businesses across the world through an online training course.
Designed by TechnoServe, the course content follows a structured learning path with an emphasis on driving behaviour change and adopting new practices in e-commerce. The collaboration is part of Strive Community, a global philanthropic initiative developed by the Mastercard Center for Inclusive Growth and Caribou Digital. Strive Community aims to support the resilience and growth of five million small businesses around the world.
To spread the word and offer easy access, this course is now freely available on ecomconnect.org, the online community of the International Trade Centre (ITC).
Developed by ITC’s ecomConnect Programme for e-commerce professionals, the ecomConnect community, which is active in 163 countries, provides resources and support for businesses, sharing the goal with Strive Community of equipping millions of small businesses with innovative digital solutions that build resilience and growth.
Training based on the experiences of entrepreneurs
The training content targets small business gaps and learning preferences that were identified by global experts as well as entrepreneurs from Latin America, Asia and Africa.
The curriculum comprises ten modules covering four important knowledge areas that entrepreneurs usually lack in the online sales process: understanding and attracting clients, closing sales, and fostering customer relationships. Concrete examples and case studies are used in making the content relatable.
Increased sales and brand awareness through actionable tips
The self-driven course shares examples and suggests actionable “quick wins”, guiding the user through a variety of tools and exercises.
In addition, entrepreneurs can benefit from the feedback and support of e-commerce experts next to sharing their experiences with fellow entrepreneurs who are part of ITC’s ecomconnect.org community. Relevant events organized virtually on the ecomConnect community also provide entrepreneurs with knowledge and networking opportunities.
Maximizing the potential of communities
The partnership with Strive Community is helping ITC strengthen the skills of entrepreneurs, empowering otherwise excluded merchants, and creating e-commerce opportunities for all. The training will be available in Spanish by the end of 2023.
“This partnership marks an exciting moment in ITC’s plans to grow the ecomconnect.org online community,” says James Howe, Head of Digital Markets and Connectivity at ITC. “Linking to the network of Strive Community is key for our mission to strengthen the digital capabilities of small businesses.”
Other organizations wishing to upskill small businesses in their communities may contact ITC and Strive Community to offer the virtual course at ecomconnect@intracen.org.
- | January 26, 2023
The South Centre provided its comments to the OECD Secretariat on Pillar One – Amount B. Amount B is part of the components of Pillar One to address the tax challenges arising from the digitalization of the economy. It seeks to simplify transfer pricing rules for ‘baseline’ marketing and distribution functions.
Transfer pricing remains a highly complex and challenging area for developing countries. The ultimate objective of transfer pricing is to determine a market price for intra-company transactions, but doing this in practice is a largely subjective exercise, which makes it prone to abuse and profit shifting. Developing countries lose billions of dollars in revenue each year due to abusive transfer pricing.
Amount B is important for developing countries as it seeks to provide a simple method through which in-scope intra-company transactions can be priced, which can potentially ease tax administration, reduce disputes and increase tax certainty. However, the current form of the proposal renders it highly complex and unlikely to achieve its stated objective of simplification.
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 55 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 organization’s flagship program for promoting South-South cooperation among developing countries in international tax matters.
The South Centre submits the following comments and recommendations to the OECD Secretariat on Pillar One – Amount B.
II. Comments and recommendations
i. Amount B Mandate and Goals
a. Definition of “Low Capacity Jurisdictions”
This term is not defined anywhere in the document. Low Capacity Jurisdictions (LCJ) could imply jurisdictions lacking administrative capacity and/or lacking local comparables. The two are not the same. The key issue that led to Amount B was the problems arising from lack of local comparables. Hence, this term needs definition to give sharper focus to the design of Amount B.
Recommendation: The term “Low Capacity Jurisdictions” should be defined.
b. Reference solely to OECD Transfer Pricing Guidelines
The document only refers to OECD Transfer Pricing Guidelines (TPG). However, as was mentioned by the South Centre in a prior Statement, “profit allocation under the OECD’s transfer pricing guidelines allocate profit to jurisdictions based entirely on supply factors of Functions, Assets and Risks (FAR), through the Authorized OECD Approach (AOA). In practical terms this meant developed, industrialized jurisdictions with high value exports were privileged in profit allocation. This also disadvantaged market jurisdictions, which are largely developing countries, and often net importers, especially of high value goods and services, and capital.”[1]
Further, some Members of the IF do not follow the OECD TPG and rely more on other approaches, such as those in the UN Transfer Pricing Manual.
Recommendation: Amount B design should be in line with both the United Nations Transfer Pricing Manual and OECD TPG.
ii. Scope of Amount B
a. Should sales agency and commissionaire arrangements be included?
These are common distribution models used to eliminate or minimize tax in market jurisdictions while still conducting through MNE group members most if not all distribution functions within the jurisdiction. Further, in practice their functions are similar to “baseline” marketing and distribution activities, with the main difference being that such entities do not assume title of goods/inventory. Their inclusion will enhance the impact of Amount B for developing countries.
Recommendation: Sales agency and commissionaire arrangements should be included
b. Should different Profit Level Indicators (PLIs) and arm’s length returns be used for wholesale (buy and sell) distribution arrangements and commissionaire and sales agent arrangements?
Actual distribution and related functions performed within the jurisdiction by MNE group members will not significantly differ irrespective of the legal form of the contractual relationship (i.e. distributor, sales agent, or commissionaire). The legal form is often primarily motivated to reduce or avoid taxes. Further, such a bifurcation may create additional complexity.
Recommendation: There should not be any difference in the Amount B pricing between distributors and sales agents and commissionaires.
c. Should Amount B only be used when local comparables are not available?
As mentioned in the initial point on “Low Capacity Jurisdictions”, Amount B was primarily meant to address the problem of lack of comparables. It must thus operate accordingly.
Recommendation: Amount B should be used only when local comparables are unavailable.
d. Can comparables from similar markets be used?
The document suggests drawing on comparables from similar market conditions. This is welcome and developing countries can yield better comparables from each other than from a ‘global’ comparison or market condition agnostic comparison. Such an approach is also in alignment with existing transfer pricing guidelines which lay emphasis on economically relevant characteristics as a comparability factor.
Recommendation: When local comparables unavailable, similar markets (e.g., in terms of size of the economy, market participation, per capita GDP) can be used for deriving suitable comparables.
e. What can be the “Most Appropriate Method”?
The document proposes Transactional Net Margin Method (TNMM) on a rebuttable presumption basis as the Most Appropriate Method (MAM), but also asks whether other methods or a combination of methods is appropriate.
Recommendation 1: For administrative simplicity, calculation of a distributor’s profits should be as objective as possible and subject to only one designated pricing method.
Recommendation 2: Given routine nature of most distributor operations, and relatively wide use of TNMM, it is a suitable choice for MAM.
Recommendation 3: Power of rebuttal should only be with tax administration, not taxpayer, as taxpayers will rebut whenever they have an economic incentive.
f. Should retail distributors be covered?
Since Amount B is meant to cover situations where there are lack of comparables, it can cover retail as well as wholesale distributors.
Recommendation: Retail distributors should be in-scope.
iii. Amount B Pricing Methodology
a. Issues with Methodology
It may be quite challenging to arrive at a ‘global’ pricing solution given the limited uniformity in data available across jurisdictions and reliance on one commercial database to arrive at a solution expected to apply for the whole world. Any Amount B pricing solution should include differentiation along the lines of geography as well as industry.
Recommendation: The country and industry-specific factors outlined in para 57 of the document are more suitable than attempts to formulate a ‘global’ solution.
b. Selection of Net Profit Indicator (NPI)
Para 69 of the document proposes operating margin or return on sales as the most appropriate net profit indicator. Alternatives provided in para 70 include Berry ratio, return on assets, etc.
Recommendation: Return on sales is the most appropriate NPI. The other indicators may not be reflective of true profits given the nature of operations undertaken by marketing and distribution entities.
c. Selection of most appropriate point in the range (4.3.2)
The outcomes of the pricing matrix or mechanical tool may be either a range of values or a point estimate. The question is what can be the most appropriate point in the range.
Recommendation: Median can be the most appropriate point in the range
d. Comparability Adjustments (4.3.3)
The OECD TPG are cited to argue “comparability adjustments should be considered if (and only if) they are expected to increase the reliability of results.”
Recommendation: Since Amount B is essentially meant to ease administration and act as a simplification measure, a direct trade-off is involved with reliability. Hence, such indirect adjustments can further complicate the process and would not be necessary if the geographic (based on homogeneity of markets) and industry wise classifications are made in the pricing model.
[1] https://www.southcentre.int/wp-content/uploads/2021/07/SC-Statement-on-IF-Two-Pillar-Solution-FINAL.pdf
- | January 25, 2023
In the framework of peer exchange initiatives, the South Centre and the Foreign Economic Relations Department of the Ministry of Trade of the Government of Iraq co-organized a workshop on the digital economy and other issues of international relations on the 24th of November 2022.
In his introductory remarks, Mr. Adel Khudair Abbas, Director General of the Foreign Economic Relations Department, highlighted the importance of understanding better the digital economy for the work of the Ministry of Trade and expressed his appreciation to the South Centre for the workshop.
The topics discussed were:
- “Data and the Digital Economy”, by Dr. Carlos Correa, Executive Director of the South Centre
- “Climate Change and Implications for Developing Countries”, by Mr. Luis Fernando Rosales, Coordinator of the Sustainable Development and Climate Change Programme (SDCC) of the South Centre
- “Digital Technology in Public Health”, by Dr. Viviana Muñoz, Coordinator of the Health, Intellectual Property and Biodiversity Programme (HIPB) of the South Centre
- “International Tax Reform and the Digital Economy”, by Mr. Abdul Muheet Chowdhary, Senior Officer of SDCC and focal point of the South Centre Tax Initiative
- “The WTO Reform and E-commerce”, by Ms. Vahini Naidu, Coordinator of the Trade and Development Programme (TDP) of the South Centre
Data and the Digital Economy
Carlos Correa noted that the digital economy poses new challenges to developed and developing countries alike. The dominance of a few tech firms that control a large portion of data that are produced, stored and transmitted globally compromises the sovereignty of countries. Thus, Angela Merkel, former German Chancellor, noted that “the EU should claim ‘digital sovereignty’ by developing its own platform to manage data and reduce its reliance on the US-based cloud services run by Amazon, Microsoft and Google”.[1] Data are deemed to be one of the most important assets in the modern economy and, hence, what policies are applied to benefit from its economic value are of critical importance. Notably, as there are no international standards on this matter yet, there is wide policy space to legislate at the national or regional level. To this end, it will be necessary to develop a taxonomy of data (especially to distinguish between personal and non-personal data), clarify the limitations to copyright protection (which may be applied, for instance, to derived data), identify who the right-holders are (a complex matter as data are produced as the result of interactions between different parties), adress the current asymmetries and market dominance of data and define the developmental objectives that the regulation of data would aim to achieve.
As noted in a South Centre’s statement, “there are major asymmetries in the capacity to produce, process, store, use and transmit data. These asymmetries underpin one of the major North-South contemporary divides.”[2] In fact, “new digital markets introduce a range of market failures throughout the process of knowledge creation, knowledge mediation, value creation, value capture and trade in the digital economy. The new technology-mediated economy is imperfect, riddled with information asymmetries, monopolies, algorithmic intransparencies and ‘winner-takes-all’ effects”.[3] The European Union (EU) has advanced not only in relation to the protection of data privacy, but recently approved new regulations, inter alia, in relation to ‘gatekeepers in digital markets’ that have gained ‘the power to act as private rule-makers’ (EU Digital Services Act and Digital Markets Act). Importantly, in the plurilateral negotiations in the World Trade Organization (WTO) on e-commerce, the United States proposes a regime of free flow of data. Governments need to consider, however, data localization as a policy (currently applied in many countries) to domestically extract value from data and pursue other national public interests.
Climate Change and Implications for Developing Countries
During his presentation, Luis Fernando Rosales highlighted three elements: first, the scientific bases of the climate change discussions; second, the international policy framework and the state of play and; third, the interaction between climate change and digitalization.
He stressed that the identification of the climate change crisis is based on solid scientific evidence. The scientific community has shown clearly the magnitude of the climate crisis. Scientific studies began in the19th century, and, with no mistake, from a scientific point of view, we are witnessing an unprecedented climate crisis which is affecting many areas of human activity and the environment. International cooperation to respond to this crisis has been centered mostly on mitigation. However, key issues of interest for developing countries are adaptation, finance, transfer of technology and loss and damage. The main instruments such as the United Nations Framework Convention on Climate Change (UNFCCC), the Kyoto Protocol, the Paris Agreement (PA) and Conference of the Parties (COP) decisions allow the international community to work together to respond to the climate crisis. However, they remain highly insufficient since the magnitude of the problem is increasing. At COP27, a financial facility for loss and damages has been adopted, but it still is a work in progress.
Climate change and the digital economy are cross-cutting issues. The digitalization of the economy could contribute to the efforts of developing countries to deal with climate change. Countries can improve the implementation of climate change-friendly policies and processes by digitalizing them. However, the transfer of cutting-edge technologies is still challenging in the context of the legal climate change architecture. Developing countries can seek support from international financial climate-related institutions to access resources to implement digital solutions that may contribute to deal with climate change related events, such as droughts, heat waves, and water scarcity.
Digital Technology in Public Health
Viviana Muñoz started her presentation by stating that the use of digital technologies in public health should be considered in the context of achieving the objectives of the public health system. An overall objective of public health systems is to better conditions under which people can improve their health and wellbeing, not only the eradication of diseases. Governments’ key role in the public health system is considering health as an investment, not merely expenditure. Prior to assessing the potential of digital technologies to improve the public health system, an assessment can be made of the functioning of the health system, considering components such as the current service delivery, capacity of the health workforce, management of information and networks, access to medical products, diagnostics, vaccines and other health technologies, how the system is financed and the current governance structures. The challenges of the health systems can be identified, as described by Dr. Munoz in respect to Iraq.
Digital health is a term used to refer broadly to the use of new digital technologies in public health, converting analog records to digital data, new ways of working including the integration of digital technologies into public health operations and reorganizing services on the basis of the health needs of the public. The applications are diverse, including mobile health, health information technology, wearable devices, tele-medicine and personalized medicine.
Countries can consider establishing national strategies on digital health. These should clearly define the objectives, target impacts and be tailored to the national context. Some issues to consider in the context of Iraq include the priorities in health system strengthening, the workforce, Internet access, electricity, information and communications technology (ICT) and digital infrastructure, investments required in the public and private sector, need for capacity building, assessment of benefits vs risks of digital technologies for health particularly for those where there is limited evidence for quality, and efficiencies vs cost. Consideration must also be given to the establishment of adequate policies and regulations, including in the areas of safeguarding personal privacy, security for data collection and use, ethical considerations, evaluation and surveillance of new technologies, cost control, and governance and institutions responsible.
International Tax Reform and the Digital Economy
The South Centre workshop for the Government of Iraq also focused on the issue of the taxation of the digitalized economy. The presentation was made by Abdul Muheet Chowdhary, Senior Programme Officer of the South Centre Tax Initiative, part of the Sustainable Development and Climate Change Programme. The presentation began with a focus on the outsized role of tech companies such as GAFAM (Google, Apple, Facebook, Amazon and Microsoft), their growing oligopolistic tendencies and their low effective tax rates, meaning taxes actually paid to countries.
This was followed by an examination of the key limitations in existing international tax rules that make it difficult to tax such highly digitalized companies. These have resulted in two major multilateral solutions for taxation of the digitalized economy – the Organisation for Economic Co-operation and Development (OECD) solution known as Amount A of Pillar One and the United Nation’s solution known as Article 12B of the United Nations (UN) Model Tax Convention. The presentation explained the key features of both solutions, as well as outlined the unilateral or national tax policy measures that countries were taking, outside of the two solutions.
The presentation concluded with an examination of the revenue estimates from the OECD and UN solutions for the 84 combined Member States of the South Centre and the African Union, and for Iraq in particular, so as to inform appropriate decision-making on the right tax policy option.
The WTO Reform and E-commerce
Ms. Vahini Naidu stated that the WTO Twelfth Ministerial Conference delivered on a range of issues including a TRIPS (Agreement on Trade-Related Aspects of Intellectual Property Rights) Decision, a partial, slimmed down multilateral agreement to discipline fisheries subsidies notifications, WTO Response to the Pandemic and a Declaration on Food Insecurity. One of the major developments was a commitment by WTO Members to work towards the necessary reform of the WTO. While developing countries are not generally the main demandeurs for the new WTO reform per se, their longstanding interests in the Doha Development Round was traditionally considered to be the reforms they were seeking through redressing the asymmetrical rules in the Uruguay Round Agreements. It is a common understanding amongst developing countries that the WTO reform agenda will be guided by the principles of inclusivity, transparency, the continuation of the practice of consensus-based decisions in the WTO, and upholding the rule of law and objectives of the WTO as envisaged in the Marrakesh Agreement Establishing the WTO.
On the treatment of e-commerce in the WTO, the 1998 Work Programme on Electronic Commerce establishes a comprehensive framework to explore the trade-related aspects of e-commerce under the covered agreements including the time-bound moratorium on customs duties on electronic transmissions which is set to expire by the Thirteenth WTO Ministerial Conference or on 31 March 2024, whichever comes first. There is no agreed definition of ‘electronic transmissions’ which has been the subject of much debate in clarifying the scope of the moratorium. For the majority of developing countries, policymakers are seeking to preserve the policy space for the development of the domestic digital industry as imports of online deliveries of digitizable products exponentially increase while seeing a commensurate decline in tariff revenues due to the moratorium in excess of $1 billion for many developing countries like China, India, Mexico, Nigeria, Pakistan, Paraguay and Thailand.
In his concluding remarks, Mr. Tharwat Akram Salman, from the Ministry of Trade, reiterated the appreciation of the Government of Iraq to the South Centre for this activity. Luis Fernando Rosales, SDCC Programme Coordinator, expressed his gratefulness to the Government of Iraq for the activity and that the South Centre is open to further cooperation.
[1] Guy Chazan, “Angela Merkel urges EU to seize control of data from US tech titans”, Financial Times, 12 November 2019.
[2] See https://www.southcentre.int/wp-content/uploads/2022/05/SC-Contribution_UNCTAD-E-commerce-week-2022_DATA-FOR-DEVELOPMENT.pdf.
[3] See https://www.southcentre.int/wp-content/uploads/2019/03/RP93_Regulating-the-Digital-Economy-Dilemmas-Trade-Offs-and-Potential-Options_EN-1.pdf.
- | January 25, 2023
Predicting the future is a tricky affair, but existing patterns provide good clues on what to expect, and how to respond.
In general, it’s a gloomy outlook for global geopolitics, the world’s economy, and the climate crisis. IIn the digital realm, fragmentation of the internet is almost certain; the online space is more unsafe than ever; and the digital divide shows little signs of narrowing. As the UN Secretary-General has just warned in Davos, ‘Our world is plagued by a perfect storm on a number of fronts.’
International Geneva, which will be impacted by global issues and plays a major role in tackling them, will need to move away from the ‘business as usual’ approach. Clarity in thinking and speaking will be needed. The current crisis should not be allowed to overshadow our thinking on how to shape our future.
1. WHAT TO EXPECT
(a) Geopolitical tensions will impact negotiations in Geneva
Technology is at the centre of several geopolitical tensions. The cold war in trade between the USA and China is playing out mainly in the semiconductor and data industries.
Semiconductors are used to power computers and electronic devices, and are therefore vital for developments in AI and cutting-edge technologies. The USA has placed export controls on Chinese chip companies, which is separating China from the global industry it once dominated. In December 2022, China initiated a formal dispute complaint with the World Trade Organization (WTO). The USA’s reply is that the export (and import) controls were put in place as a national security measure.
Tensions around the data flows are more longstanding but less hostile. So far, there have been two main camps: those in favour of unfettered flows of data (the USA is a strong proponent), and those who prefer localising – or storing within a nation’s own territory – the data generated by its citizens (China and Russia are strong proponents). Although many other countries are involved in negotiations, the US-China trade war could reverberate across data governance negotiations, especially at the WTO and ITU.
Read more on digital geopolitics and geoeconomics in 2023.
(b) Deeper discussions on values, ethics, and human rights
The rapid digitalisation of society has led to challenging ethical questions. Are human rights at the core of emerging technologies or an afterthought? Does the private sector’s bottom line respect society’s core values or trample them? What safeguards are in place to ensure that AI developments are beneficial – and not detrimental – to society?
Every time a new technology is released (right now, that’s content generators like ChatGPT), fresh questions are raised. Thus, we can expect these issues to grow in relevance at Human Rights Council discussions and side events, and at other human rights-based forums throughout the year.
Read more on digital rights in 2023.
(c) A crunch year for negotiations on commerce and trade
Speaking of the WTO. In 2019, a subset of WTO members came together at the Joint Statement Initiative (JSI) on e-commerce with the aim of reaching a binding agreement covering both classic trade topics, such as market access and trade facilitation, as well as digital policy issues, such as data flows and localisation, online privacy, cybersecurity, and spam.
Although the JCI negotiating process still faces the opposition of mainly developing countries such as India and South Africa, the process made headway in 2022 with a new negotiating document. It’s now crunch time for the JSI, which will need to bridge positions on issues that made it into the new consolidated document.
Any agreement reached by the 87-strong group, which accounts for 90% of global trade, will have considerable global implications for e-commerce regulation.
Read more on digital economy in 2023.
2. HOW TO RESPOND
(a) New leadership = fresh thinking on digital issues
Three international organisations in Geneva are poised for a period of fresh and future-oriented thinking on digital issues, thanks to the experience of their incoming leaders.
The three of them can contribute a lot to the vibrant digital scene in Geneva as discussions advance on both practical policy issues and future developments shaped increasingly by AI and digitalisation.
(b) Embracing digital as an integral part of the work of international organisations
The ‘e-’ prefix we’re so familiar with is disappearing. E-commerce and e-trade are now firmly part of commerce and trade; e-health is a significant part of health. The same goes for ‘cyber’ and ‘digital’. The lines are so blurred that digital has become mainstream in multilateral negotiations at IOs, including at the World Health Organization (dealing with health), World Trade Organization (dealing with trade), ICRC (dealing with humanitarian issues), human rights bodies, and many others.
International organisations will experience this mainstreaming even more strongly. Digital issues will permeate work programmes and agendas without any explicit mention. Technology will undoubtedly continue increasing its impact in shaping the work of IOs and other actors.
This is happening not only in Geneva. The priorities of the Swedish presidency of the EU Council, for instance, have not singled out digital issues – rather, digital is mainstreamed into traditional policy issues, from security and trade to human rights.
Navigating this digital mainstreaming will require new knowledge and skills, and the emergence of a new breed of diplomatic boundary spanners who understand both digital transformation and traditional policy issues.
Navigate Geneva’s digital landscape.
(c) Lucem futuri: A lesson from Geneva’s enlightenment period
With its roots in Geneva – in particular, through the teachings of Voltaire and Rousseau – the age of enlightenment embodied respect for human life, dignity, creativity, and spirituality. Dubbed the ‘age of reason’, this period produced rigorous scientific, intellectual, and philosophical discourse.
Today, those same values are in jeopardy. Trust is quickly eroding; human autonomy is being challenged by AI systems; human creativity is being rendered obsolete.
It’s time for humanity to develop a new social contract that addresses some of the core issues of human existence and predicaments, as the UN Secretary-General called for emphatically in his report Our Common Agenda. Time for us to rekindle the lucem futuri (light of the future).
As we start building a new digital social contract, we should keep the core values of humanity firmly in mind. These values can bring together our historical, cultural, and spiritual traditions. They are the common thread that can reunite humanity in the face of faster technological developments ahead of us.
- | January 24, 2023
One core vision and four core values explain the success of e-Residency of Estonia and form the basis for our strategic objectives and future focus.
The vision of e-Residency of Estonia is to be where entrepreneurs go to do business, 100% digitally and from anywhere in the world. Our four core value propositions are ease, trust, opportunity and community.
Since the programme launched in 2014, 100,000 e-residents from 179 countries have joined e-Residency and received their own digital ID card. E-resident entrepreneurs have gone on to register 24,000 Estonian companies. And they continue to log into Estonian e-services with their digital IDs on a regular basis to manage their business accounts, file taxes, and submit annual reports.
The Core Vision of e-Residency
To be where entrepreneurs go to do business, 100% digitally and from anywhere in the world.
And these numbers continue to grow at a steady pace. 11,835 e-residents joined our community in 2022. Leading the charge were entrepreneurs from Spain, Germany, and Ukraine. E-residents started 4,463 companies – just over 20% of all companies started in Estonia in 2022.
So what makes e-Residency the go-to place for global entrepreneurs? Why is the programme so popular for people wanting to start and run a business? In this article, we’ll cover the four key advantages e-Residency has over our competition – which our team refers to as our four core values.
table of contents
- The Four Core Values of e-Residency
- 1. E-Residency makes business easy at every stage.
- 2. E-residents do business securely in the world’s most digital country
- 3. E-residents can access opportunities for their business to thrive
- 4. Through e-Residency, you can connect to the world’s entrepreneurs
the four core values of e-residency
Underlying our vision are four core value propositions: ease, trust, opportunity and community. We identified these key values following a long process of self-reflection, feedback from e-residents and other partners, and research into the strengths of the e-Residency programme.
Our vision and values differentiate us from competitors – other e-residency programmes or places or methods to set up a business. They also guide our strategy and decision-making processes. This means that every project we commit to or goal we set must reflect the intent of our vision and values. So let’s dive in deeper and introduce them one by one.
1. E-Residency makes business easy at every stage.
The first core value proposition of e-Residency is ease – perhaps the most obvious and self-explanatory. E-Residency makes business easy at every stage.
Whether you are starting, running or growing a business, you will find e-Residency 100% digital, always in English, and entirely built for your needs.
- Starting: set up a business in as little as 15 minutes, like Austrian e-resident Dominic Panosch did when he registered sign.online on-stage at London Tech Week in May 2022 and broke the world record for fastest company incorporation.
- Running: run your business from anywhere. With an e-Residency digital ID, you have 24/7 remote access to Estonian e-services. So, you can access your company accounts, make changes, file taxes or submit annual reports anytime and from anywhere.
- Growing: Overcome barriers to growth by joining a supportive community of like-minded people. E-Residency doesn’t just give you access to e-services; it also opens up growth opportunities for you and your business in Estonia and the EU.
E-residents have a broad choice of resources and support available for every step of your customer journey. And when you’re ready to start an Estonian company, we also offer a very helpful tool of support: the e-Residency Marketplace.
The Marketplace is a curated, vetted business directory of a of trusted service providers, who can help with legal address and contact person set-up, company formation, opening a business bank account, tax consulting, accounting, relocation and more. This gives you the option to further automate and delegate any business administration tasks further and make life easier for yourself. It also saves you precious time to dedicate to developing your product/service or plan, find partnerships, and spend time on marketing or sales.
2. E-residents do business securely in the world’s most digital country
Our second core value is trust – encompassing security, corporate safety and business continuity. With e-Residency, you can do business securely in the world’s most digital country – Estonia.
Since it was launched in 2014, e-Residency has been designed to meet the needs of the world’s entrepreneurs. These needs are not just about ease of doing business, but also about safety and dependability.
E-Residency didn’t come from nowhere. Over the last 30 years, through collaboration between the private and public sectors, digital pioneer Estonia has built state-of-the-art digital infrastructure. To ensure data security, there’s no central database. A distributed data exchange layer (known as X Road) enables secure, encrypted data exchanges between decentralised public or private databases.
As a result, now 99% of public services can be resolved safely online by Estonian citizens and residents with their Estonian national IDs. And by extension, e-residents get a secure digital ID just like the one Estonian citizens have and the right to access certain e-services to start and run a business. All ID holders in Estonia (whether citizens, residents or e-residents) own their personal data and have the right to view their information and see how it is being used.
estonia’s international business rankings
| INDEX | RANKING |
|---|---|
| EU Digital Public Services Index 2022 | #1 |
| Economic Freedom Index 2022 | #7 |
| Global Corruption 2022 | #5 |
| Rule of Law Index 2022 | #9 |
On the other hand, Estonia has an open business environment where all company information is publicly available. It ranks among the best in the world for transparency, rule of law and anti-corruption. This means you can have complete confidence in doing business, in a country that’s transparent and in the EU.
3. E-residents can access opportunities for their business to thrive
The third core value proposition is opportunity – referring to all the possibilities for you and your business to grow and thrive.
How? Well, having e-Residency of Estonia gives you and your business access to unrivalled growth opportunities in a few broad ways:
- Trade within the EU. Yes – that’s right. Having a company in Estonia means you have an official EU business. So, regardless of your citizenship or residency, your business can trade within the European Economic Area (EEA), the world’s largest single market.
- Reach a pool of investors and partners to help you scale. Just like Estonian founders, e-residents with Estonian companies can access private investors, accelerator and incubator programmes. They are also eligible to apply for many EU or Estonian public grants. Along with local business chambers and high-value pitching competitions at local startup conferences, this means it’s seamless to seek out new clients, collaborators or investors for your fast-growing technological venture through the e-Residency and Estonian business networks.
- Benefit from a government that incentivises growth and innovation. Estonia leads Europe as the most entrepreneurial country for tech startups (according to Atomico’s State of European Tech 2021). And we’re the birthplace of globally recognised unicorns like Wise, Bolt, Pipedrive, and Skype. The country’s innovation-friendly government and entrepreneurial culture has helped create a vibrant business ecosystem that incentivises startups and small businesses to scale. To illustrate, consider the country’s favorable tax system (ranked the most competitive in the OECD for 9 years running) that rewards early stage reinvestment, as well as its low level regulation, minimal bureaucracy, and founder friendly laws.
4. Through e-Residency, you can connect to the world’s entrepreneurs
The fourth core value is community – I’m sure you’ve heard this one before as it has been a mainstay almost since e-Residency began.
When you become an e-resident, you’re not simply getting a digital ID or a business gateway to Estonia. You’re also able to connect to a truly international community of people with a passion for entrepreneurship. They are business owners, digital nomads, consultants, startup founders, and investors, just to name a few.
Established e-residents are ready and willing to provide advice and shortcuts to help in your e-Residency journeys. The best example of this is the Estonian e-resident international chamber association (eerica), an independent, membership-based organisation of e-residents formed to provide support to the community.
E-residents tell us they feel a huge sense of inclusion and belonging that comes with Estonia’s digital community. There are 100,000 Estonian e-residents based around the world in 179 countries. So, wherever you are in the world you will find a network of experience, advice and support from like-minded people. Find an event online or near your location and start networking with fellow e-residents now.
- | January 24, 2023
A Sub-regional Workshop on cross-border e-commerce was held from 16 to 19 January 2023 at the WCO Regional Training Centre (RTC) in Suva, Fiji. The objective of the Workshop was to raise awareness of the WCO tools and initiatives aimed at facilitating and securing cross-border e-commerce and to discuss good practices and challenges in this area.
The event was organized with the financial support of the Customs Cooperation Fund of China (CCF China) and benefitted from the participation of twelve Customs officials from Fiji, Papua New Guinea, Samoa, Timor-Leste, Tonga and Vanuatu. During the last day of the Workshop, the participants attending on-site were joined by some representatives of designated postal operators from the beneficiary countries for an online presentation by the Universal Postal Union (UPU).
Throughout the event, the Workshop facilitators provided detailed explanations of the 16 standards of the WCO Framework of Standards on Cross-Border E-Commerce and the tools available to support their implementation. Dedicated sessions discussed the WCO Immediate Release Guidelines and the tools developed jointly with the UPU, such as the WCO-UPU Postal Customs Guide and the WCO-UPU Guidelines on the exchange of electronic advance data between designated operators and Customs administrations.
The six beneficiary Members delivered presentations focusing on revenue collection, facilitation and control of cross-border e-commerce, which were the basis for valuable exchanges of information on challenges and possible solutions.
During his closing remarks, the Chief Executive Officer of the Fiji Revenue and Customs Service, Mark Dixon, highlighted the opportunity provided by the Workshop to enhance cooperation in the sub-region on the important topic of cross-border e-commerce and expressed his readiness to support future sub-regional events at the WCO RTC in Fiji.
- | January 24, 2023
Germany’s Federal Ministry for Economic Cooperation and Development (BMZ) has launched a new Africa Strategy dedicated, among other goals, to ‘lend[ing] structural support to the achievement of the development goals set by the African Union (AU) and its member states’.
Titled ‘Shaping the future with Africa’, the strategy notes that Germany’s cooperation with Africa will be based on respect and reciprocity, and anchored into Africa’s priorities and initiatives. Moreover, ‘the BMZ wants to engage in a dialogue with Africa rather than about Africa. It advocates for the voices of African states and the AU to be heard appropriately within multilateral fora.’
Digital transformation features among the focus areas for development cooperation (as part of a broader cluster titled ’employment, fair trade, migration and digital transformation’). First and foremost, Germany intends to contribute to the growth of digital economies across Africa by providing support in areas such as (a) enhancing relevant economic and political frameworks; (b) creating digital markets; (c) enabling secure, universal internet access and bridging digital divides; (d) fostering legal standards and data privacy regulations; (d) stimulating the creation of jobs in the ICT sector. Mobilising investments in digital infrastructures and supporting the implementation of the African Common Free Trade Area are also envisioned.
But supporting digital transformation across Africa relates to more than the digital economy. BMZ will also be directing its development cooperation towards supporting (a) enhancing women’s economic participation, including through providing training for women with a special focus on digital expertise; (b) the digitalisation of healthcare; and (c) the digitalisation of the public sector and the use of digital technology to strengthen political participation.
- | January 23, 2023
The African Continental Free Trade Area offers better access to regional markets. New workshops lay out how African businesses can tap into them.
African businesses looking to export within Africa’s new continental free trade area can have many questions. A new series of workshops held across five countries in September and December 2022 laid out how they can navigate the new trade environment and identify top markets in the continent.
Organized by the SME Trade Academy, ITC’s learning solutions team, these workshops were developed in partnership with Afreximbank and implemented with local partners, namely:
- The Department of Trade Industry and Competition (DTIC, South Africa)
- Kenya Trade Network Agency (KenTrade)
- Association Marocaine des Exportateurs (ASMEX, Morocco)
- Centre de Promotion des Exportations (CEPEX, Tunisia)
- Foreign Trade Training Centre (FTTC, Egypt)
The sessions were designed to be interactive and provide participants with practical knowledge, including how to:
- Identify market opportunities in Africa
- Prepare to become export ready
- Understand the documents required for exporting and how to use them
- Select one or more African markets with viable opportunities for their products
- Choose between different options for entering the market(s) selected
- Identify the different trade financing options available for their business
What’s more, the workshops were designed using the SME Trade Academy’s new technology-enhanced workshopping concept: the digital workshopping methodology. This includes interactive digital presentations, videos, exercises, trainer guides, learner workbooks, as well as online workshop pages that serve as administrative supports for the training.
Each of the “How to Export with the AfCFTA” workshops included training of trainers’ sessions, where a total of 102 local trainers were taught how to run the workshops themselves using the digital workshopping methodology. This not only gave the local partners a sense of ownership towards the content, it also enabled the training interventions to scale beyond the initial five cities of Johannesburg, Nairobi, Casablanca, Cairo and Tunis.
Each workshop ran over four days. During the first two days, the new trainers learned about the digital workshopping methodology, as well as how to facilitate and plan their “How to Export with the AfCFTA” workshops using the resources available on the How to Export with the AfCFTA Online Training Platform. During the subsequent two days, the trainers put what they had learned into practice and led sessions in front of invited participants, which mostly consisted of local small and medium-sized enterprises (SMEs). Some 142 small and medium-sized enterprises attended.
The workshops were led by master trainers and technical experts Guillaume Lamothe, Ilyas Choubaili, Rania Habib and Dorothy Tuma, with support from training programme coordinator Dorina Dobre.
“The role of the workshop was, on one hand, to train the first batch of SMEs, while on the other hand to equip the future trainers with regards to the content delivered,” said Dobre. “ITC will continue to be there to help participants access the online programme and help trainers strengthen their facilitation capacity.”
About the “How to Export with the AfCFTA” training programme
The “How to Export with the AfCFTA” training programme is the result of a partnership between ITC and Afreximbank. It combines both online and offline elements to teach current and prospective African exporters the fundamentals of intra-African trade, as well as explore the opportunities resulting from the AfCFTA.
About ITC’s SME Trade Academy
The SME Trade Academy is ITC’s learning solutions team. Through its flagship online platform, the Academy offers over 100 free online courses on a wide variety of trade-related topics in French, English, Spanish and Arabic, and boasts over 100,000 enrolments per year from over 190 countries. In addition, it provides a variety of turnkey learning solutions in support of ITC’s trade related technical assistance projects. These range from fully online products, such as e-learning courses, virtual learning spaces and virtual workshops, to technologically-enabled in-person trainings, such as digital and digitally-supported workshops, to everything in between.
About One Trade Africa
One Trade Africa works to enable, empower and enhance African MSMEs, women and youth entrepreneurs to access new transformative business opportunities created by the AfCFTA. The programme embraces a three-pronged delivery model which supports African MSMEs to compete, connect and change at the enterprise, business ecosystem and policy levels. ITC provides African MSMEs with training, advice and coaching to build capacities, connect to new and more lucrative markets, and create jobs.
Over the course of two days, the scientific material provided to understand how to export under the African Continental Free Trade Agreement was very important, and the choice of respected professors to explain the information related to that was a good choice. Indeed, I benefited greatly from the many details of export operations, in addition to the rich discussions from most of the attendees.
Hossam Mostafa
Ultrakem
Egypt
- | January 20, 2023
At the World Economic Forum Annual Meeting in Davos this week, Director-General Ngozi Okonjo-Iweala urged governments to respond to growing fragmentation by strengthening multilateralism and making a success of the WTO’s upcoming 13th Ministerial Conference (MC13), building on the unprecedented package of trade outcomes achieved at MC12. “Let’s get to delivering results,” she said to trade ministers at the close of the week at an informal ministerial gathering on WTO issues hosted by the Swiss government.
At the informal meeting of ministers and top officials from 23 members, Switzerland became the first WTO member to submit its instrument of acceptance of the historic Agreement on Fisheries Subsidies reached at MC12 in Geneva last June.
DG Okonjo-Iweala commended Switzerland for its leadership. She also lauded the launch of the Trade Ministers for Climate Coalition by dozens of members seeking to make trade a stronger instrument for climate mitigation and adaptation. After congratulating ministers for the important results they delivered at MC12, the Director-General turned her sights to the next Ministerial Conference, which will take place in Abu Dhabi in February 2024, and outlined areas she believes need to be tackled between now and that gathering.
Topics for further work include the follow-up negotiations provided for in the Fisheries Subsidies Agreement; a decision on extending the TRIPS waiver compromise beyond COVID-19 vaccines to cover therapeutics and diagnostics; food security and agriculture reform; WTO and dispute settlement reform; development, in particular topics of interest for least developed countries; and e-commerce and a forward-looking agenda covering digital trade and climate change. DG Okonjo-Iweala suggested focusing on a few target areas for results at MC13.
The informal gathering took place on the sidelines of the World Economic Forum’s Annual Meeting held under the theme “Cooperation in a Fragmented World” at a time when the global economy is still struggling with the effects of the pandemic, the impact of the war in Ukraine, a spike in inflation, and food security concerns.
During the weeklong event, DG Okonjo-Iweala met heads of state and government, high-level government officials, business leaders, academics and others, delivering the message that trade has to be part of the solution to the global polycrisis, and that there will be no recovery from the current economic weakness without trade.
She also called for bolstering global cooperation and working towards “reglobalization”, as opposed to trade fragmentation and “friend-shoring,” or seeking trade primarily with only a small set of allies. “A friend today may not be a friend tomorrow”, she said at a session entitled Relaunching Trade, Growth and Investment. “In order to allow growth to recover, we have to strengthen multilateralism. We have to strengthen cooperation. When you’re building resilience, use it to bring in those who were at the margins of the global value chains, decentralize and diversify your supply chains to these areas.”
The Director-General shared her assessment about the prospects of the global economy. While there is still a lot of uncertainty on the horizon, there is the possibility of a soft landing, she said. “For 2023, we are projecting 1% growth in the volume of merchandise trade compared to 3.5% last year. Citing the WTO’s trade forecast released in October, she noted that trade could even contract this year if downside risks materialize. “But if we have a soft landing, if things work out well, we could see a situation in which trade grows even more,” she added.
Environment, digital trade, investment
In her speaking engagements and meetings, DG Okonjo-Iweala also highlighted the areas she sees as becoming more relevant for the global economy. “I always say that the future of trade is services, is digital, it’s green, and it should be inclusive. When countries take steps to try to see how to decarbonize to get to net zero by 2050, I think you can only be supportive,” she said, while cautioning against approaches that could create negative spillovers for other members or leave behind developing countries without the resources to compete in a subsidies race.
DG Okonjo-Iweala joined the launch of the Coalition of Trade Ministers on Climate on 19 January and congratulated participants for what she called “an historic event”. The Coalition seeks to cooperate on the global response to climate change with trade as a tool. The initiative “sends a very strong message that trade — rather than being seen only as part of the problem — is also part of the solution” for fighting climate change, the Director-General said.
The Director-General also stressed the importance of digital trade and the need for rules for this important area. “We have an e-commerce initiative that is being negotiated at the WTO. We hope that soon we can come up with rules that underpin global trade and that is where we can be helpful on the digital side,” she said during the Tradetech Meets Fintech event on 18 January.
DG Okonjo-Iweala attended the informal meeting of the WTO Joint Statement Initiative on Electronic Commerce organized by ministers of Australia, Japan and Singapore — co-convenors of e-commerce negotiations — on 20 January. The meeting focused on how to accelerate the pace of work under the initiative in order to conclude negotiations by December 2023.
“You can be proud of the progress made and the results you have achieved,” she said. “Further progress in areas under negotiation promises to bring more stability and predictability to this vast area of international trade. This can be of benefit to all: women, entrepreneurs, remote countries and marginalized groups.”
In a statement issued on the sidelines of the meeting, the co-convenors reaffirmed the participants’ commitment to establishing a set of high-standard rules to govern the global digital economy. The ministers added that participants are committed to intensifying negotiations moving forward while making sure the initiative remains balanced, inclusive and meaningful to consumers and businesses alike.
The ministers said that they are working with stakeholders to promote digital inclusion under the E-Commerce Capacity Building Framework to support developing and least developed countries. The full statement is available here.
At the WEF’s session Decarbonizing Supply Chains: Leaving No One Behind, DG Okonjo-Iweala said the WTO stands ready to play its part as a forum for reaching shared understandings on environmental regulations and for preventing trade frictions. She added that WTO members would do well to consider progressing on efforts to liberalize trade in environmental goods and services, bearing in mind different sensitivities. Developing countries, she added, must be supported so they can participate in low carbon value chains, along with women entrepreneurs and small businesses. “This is a big agenda, but I know we can do it,” she said.
The Director-General attended a meeting of WTO members negotiating an Investment Facilitation for Development Agreement on 19 January. The negotiations aim at rules to improve the investment and business climate, and help developing countries attract and retain more and higher-quality investment. She highlighted progress made on this initiative, following the circulation on 16 December of the latest negotiating text — an important step towards concluding an Agreement.
- | January 20, 2023
Senior Trade Officials from across the Commonwealth met virtually on 17 and 18 January 2023 to discuss plans for the 2023 Commonwealth Trade Ministers Meeting (CTMM) to be held in June.
During the meeting, Senior Trade Officials agreed that this year’s Trade Ministers Meeting will focus on the significant economic challenges facing all Commonwealth members – the role that trade can play to support an inclusive digital transition, climate action and a sustainable future.
Speaking at the Senior Trade Officials Meeting, the Commonwealth Secretary-General, the Rt Hon Patricia Scotland KC, said:
“As we meet today, we can take confidence in the fact that trade and investment advantages are real examples of the benefits of Commonwealth membership. We may not be a formal trading bloc, but trade costs between Commonwealth countries are 21 per cent lower, on average, compared to trading with non-Commonwealth members.”
“At the 2022 Commonwealth Heads of Government Meeting (CHOGM), Heads directed that Trade Ministers should meet by June this year,” she added. “This Senior Officials Meeting is the first step in preparing for that important meeting and delivering outcomes that will help boost trade and investment among our 56 member countries. It is a vital opportunity for us to come together, to continue to unlock the benefits of intra-Commonwealth trade and investment, and to forge an ever-more resilient shared pathway to growth and prosperity.”
The Senior Trade Officials Meeting was chaired by Antoine Kajangwe, Director-General of Trade and Investment at Rwanda’s Ministry of Trade and Industry.
In opening remarks, Richard Niwenshuti, Permanent Secretary of Rwanda’s Ministry of Trade and Industry, said:
“Trade and investment lie at the forefront of transformational change for our communities… At CHOGM in Kigali, leaders articulated a clear trade and investment mandate, one that seeks to connect, innovate and transform the lives of citizens across the Commonwealth.”
He added: “This meeting of the senior trade officials provides the first opportunity to reflect on our shared targets and objectives, reflecting on how to revitalise our cooperation on matters pertaining to trade and investment for the next 18 months until [the next] CHOGM in Samoa.”
During the two-day meeting, Senior Trade Officials discussed additional issues to address at CTMM 2023, including co-operation to increase food security, the role of agricultural trade and supporting small and medium enterprises to create digital jobs. They also reviewed the progress made through the Commonwealth Connectivity Agenda and examined the work taking place to support Commonwealth members from developing and emerging economies to integrate into the digital economy.
At the CTMM 2023, Trade Ministers will also take stock of the state of the multilateral trading system leading up to the World Trade Organization’s 13th Ministerial Conference to be held in Abu Dhabi, the United Arab Emirates, in February 2024.
The Commonwealth Secretariat, through its trade programmes, continues to help member countries by conducting research in trade policy to promote the trade and development interests of members, by improving their global trade competitiveness, and by encouraging members to exchange best practices and experiences on trade and investment.
- | January 19, 2023
- Digital technologies will offer benefits to billions, but getting the right investment into technology is essential.
- The pandemic resulted in years of unplanned reinvention; we now need to make intentional change.
- There are more technologies available than there is money to fund them, so the strategic development of technology is key.
We are living through the most rapid period of intense technological innovation in human history, which in turn is providing us with the tools to help business and government navigate the uncertain times ahead. Digital technologies enable efficiency, helping heavy industries reduce emissions by up to 20% of their net-zero goals. The same technologies will ultimately provide billions of people with access to health, education or financial services for the first time. In another incarnation, these technologies can help SMEs connect with markets worldwide, unleashing entrepreneurialism anywhere that someone can use a smartphone. But in the face of economic headwinds, how do we ensure that we are making the right private and public investment in technology itself?
In an era where cheap credit has dried up, budgets and economies are being squeezed, and there are competing priorities for capital allocation, what strategies and decisions do government and business need to make during 2023 to ensure their digital transformation stays on track? In the decade ahead, having a clear and informed technology investment strategy will be paramount to its success.
Waves of technological transformation
Technology transformation is well under way. Anyone reading this has probably experienced the first wave – enabled by computers in our pockets – characterized by a complete reimagination of how we shop, learn, entertain ourselves, travel and even find our way around the world.
Accelerated by the pandemic, we are currently ‘past the point of no return’ on a major second wave – enabled by ubiquitous, connected and intelligent things – which is transforming the world of business. Not only how we work, but technologies like 5G, AI and ‘as-a-service’ business models are driving a reimagination of manufacturing, supply chains, urban infrastructure, energy and mobility. Global spend on ICT technologies in 2022 is expected to be $5.82 trillion, exceeding 5% of global GDP for the first time. In addition to growth, this is starting to drive greater efficiency, supply chain transparency, emission reductions and circular business models. It will likely take several years to fully realize these opportunities and innovations.
We can also see a third wave of technologies emerging. Quantum technologies and biotech hold the potential to usher in a new age of scientific discovery in both life and non-life materials, transforming our societies. No country can be a leader in all technologies, so governments are already making decisions on where they want to focus their energies. Clarity on these future roadmaps is crucial for industry leaders looking to make decisions on where they make large-scale investments.
In 2023, we stand at a crossroads. The pandemic resulted in years of unplanned reinvention, which built on a decade of consumer-facing innovation supported by cheap credit, stability and growth. We now need to make intentional change. There are more opportunities and technologies available than can be invested in. This makes the strategic development of technology hugely important, meaning that the financing decisions that government and business take in the coming 12 to 24 months will shape their prospects for the rest of the decade.
Challenges and opportunities
There is no blueprint for the technology transition. As a result, there are inconsistencies in how different sectors are approaching this type of investment. This has culminated in an overall failure to effectively articulate how transformation affects strategy and long-term progress. Reflecting this, Deloitte has reported that 85% of CEOs who accelerated digital initiatives during the pandemic have subsequently struggled to translate this into strategy.
Perhaps unsurprisingly, therefore, digital leaders in businesses often face difficulty in obtaining the funds they need for investment because organizationally technology transformation differs from standard IT investment. There are few fixed projects, standard metrics aren’t always applicable, and different skill sets, processes and departments are often needed to fulfil a project. Furthermore, programmes don’t always meet expectations, one survey putting this number at 87%.
From a societal perspective, estimates for how much it would cost to ensure every individual has the opportunity to use the internet range from $700 billion to $2 trillion. As the situation stands, 95% of the world’s population lives within range of broadband infrastructure, yet 2.7 billion people remain offline.
While there is an intuitive understanding of the enabling capabilities of digital technologies, financing is often stymied by narrow thinking around ICT as a vertical (rather than a horizontal enabler) and as a boon to fiscal coffers.
Critically, we lack a framework to think about enabling the transition in a strategic and holistic way. Strategic in the sense that companies or governments can be confident when making decisions on not only what to invest in, but what not to invest in. And holistic in the sense that we account for all the elements of enabling a digital society, and we know how to align the right types of capital and incentives with the right investments.
Positive shifts are under way. One big change that is materializing is the understanding that the technology transformation will ultimately matter to everyone. Although digital infrastructure doesn’t yet feature as a priority in investment strategy, investment into it is increasing, with 2021 a record-breaking year. More than one-half of all infrastructure funds raised had a digital focus, with more than $64 billion generated. Supply chain and production challenges for critical semiconductor technology components resulted in more than $200 billion of capacity investments from countries and companies, particularly in US and Europe, while global investments in quantum technologies reached $35.5 billion globally.
Thinking strategically and long term
he global automative sector has become one of the largest investors in digital transformation, with the electrification of the sector the most obviously recognizable example of this. Here, ABB’s experiences highlight the benefits of thinking strategically. In 2021, it announced plans to make its e-mobility business a separate entity, using the capital raised to support acquisitions and investment. It focused the latter on partnerships in developing battery or charging technology, and has a long-term goal of moving beyond charging hardware into software and services to expand its overall market. This is reflective of broader industry innovation and adoption of technologies in ways that deliver both for the bottom line and their societal responsibilities.
Thinking about the digital infrastructure needed to support the intelligence and inclusive digital economies of the future requires an holistic approach from both boardrooms and government high office. From communications and computing infrastructure to components, security needs, and empowering a digital-ready workforce and entrepreneurial ecosystem, preparing for our digital future is a team sport.
We need to understand that technological improvements and transformation – of the type witnessed during the pandemic – are not side-effects but are rapidly becoming driving forces of the market. But without having a strategy for investment, technological transformation will fail to develop as swiftly and robustly as it would otherwise have done.
This article was originally published in Sina.
- | January 19, 2023
- The initiative will identify challenges and solutions to growing digital FDI: cross-border investment in the digital economy.
- Enabling digital FDI requires specific policies and measures vis-à-vis traditional FDI as digital firms operate different business models.
- This initiative opens the door for cooperation in other areas such as data policy, digital payments, digital skills and international agreements.
Digital transformation is rapidly taking place, and we need the right governance frameworks to maximize its positive contribution and enable societies to prosper.
The World Economic Forum and the Digital Cooperation Organization have launched a collaboration – the Digital FDI Initiative – to identify the biggest challenges to growing the digital economy by helping implement policies and measures that will create “digital-friendly” investment climates.
Pakistan and Rwanda will be the first two countries to be supported by this new initiative to create an enabling environment for their digital future. More countries are in the pipeline to join the initiative and will be announced in the near future soon.
With unemployment rates raised by COVID-19, the digital economy presents an opportunity to create innovative new jobs and stimulate entrepreneurialism in new subsectors of the economy, like e-commerce and fintech.
Key to these solutions will be development of digital infrastructure and empowering populations with the tools to participate in the digital economy. Access to the internet is regarded as one of these metrics. In 2020, however, only 53% of people, and 16% of the world’s poorest, had access to the internet.
Government and private sector investment in the necessary infrastructure, hardware and software to boost this interconnectivity is therefore crucial to targeting growth in new sectors in pursuit of the SDGs.
If there’s one thing that the COVID-19 pandemic has taught us, it’s that digital transformation is no longer a luxury, but a necessity for growing emerging economies. To grow the digital economy, markets must attract and facilitate the flow of foreign direct investment (FDI), which brings not only capital but also knowledge, technology and know-how.
Yet attracting “digital FDI” requires specific enabling policies and measures vis-à-vis traditional FDI because digital firms operate different business models, as delineated in the Forum’s thought-leading Digital FDI white paper, which presented the results of a global investor survey on the most important policies, regulations and measures for firms’ decision to invest in the digital economy (Figure 1).
4 pillars of digital FDI
Based on our previous work, we’ve learnt that policies, regulations and measures to attract and facilitate digital FDI can be thought of as falling into four pillars (Figure 2): (a) those that enable investment in new digital activities (e.g. ridesharing apps); (b) those that enable investment in the adoption of digital services by existing firms (e.g. telemedicine or mobile banking); (c) those that enable investment in digital infrastructure, which will not only be driven by the policy and regulatory framework but also by physical considerations; and finally (d), outward digital FDI, which looks at the various home-country measures that can be taken to not only increase outward FDI, but also home-country benefits that help reach national development goals.
Increasing digital capacity and competitiveness and investing in digital infrastructure and digital activities are essential for all economies – and especially emerging markets – to tap into this new channel of development and not be left behind. As a result, we came together to launch the Digital FDI Initiative at the 2022 Annual Meeting, bringing together government and business to create ‘digital friendly’ investment climates across various countries.
Now, at the 2023 Annual Meeting, we are pleased to announce the progress made and the next steps in this collaboration between DCO and the Forum. Together, we will collaborate to deliver country projects in a number of emerging markets, leveraging public-private cooperation between digital investors, governments and other stakeholders.
Which is why we are proud to unveil the first two projects that will take place in Pakistan and Rwanda, with more country projects to be announced soon. This is tangible progress towards the possibility – and realization – of cooperation in a fragmented world.
The projects will be based on public-private cooperation and participation of foreign and domestic investors as well as technology startups, innovators and civil society. This multi-stakeholder approach ensures that the voices of those on the ground will help us identify the challenges and solutions to create enabling environments.
Once priority reform recommendations are identified, we will work hand-in-hand with the government to help support their implementation and provide the technical assistance needed to achieve tangible results that will create “digital-friendly” investment environments. This will help achieve development goals by transforming economies into digitally dynamic markets.
The Digital FDI Initiative is just the first step – this initiative opens the door for cooperation in other areas such digital payments, data policy, digital skills and international agreements.
Together, we can work towards a world in which every country, business and person has the opportunity to prosper in the digital economy.
- | January 19, 2023
The International Telecommunication Union (ITU) has established an expert focus group to work towards international technical standards for the metaverse.
The focus group offers a venue to start laying the groundwork for technical standards that can help create an underlying technology and business ecosystem that encourages market entry, innovation, and cost efficiency in a sector expected by some industry analysts to grow to a value of nearly USD 800 billion by 2024.
“The metaverse and its layers of technologies can help human development and progress,” said ITU Secretary-General Doreen Bogdan-Martin. “The work of this ITU focus group is the first step in ensuring that these technologies work well and that they work for all. The benefits of the metaverse should be shared broadly and equitably, and the risks should be well understood and addressed.”
Metaverse standardization roadmap
ITU, the United Nations specialized agency for information and communication technologies, is mandated by governments to expand digital connectivity and promote sustainable digital transformation.
The ITU focus group aims to develop a roadmap for setting technical standards to make metaverse services and applications interoperable, enable a high-quality user experience, ensure security, and protect personal data.
“Standards development must be driven by everyone that will rely on the resulting standards,” said Seizo Onoe, Director of the ITU Telecommunication Standardization Bureau. “This focus group will support our work together to envision technology use cases for the metaverse, determine the associated technical requirements, and develop standards that help meet these requirements on a global scale.”
Public-private expert consultation
Uniquely in the United Nations family, ITU brings together a global membership of 193 Member States and over 900 member companies, universities, and international and regional organizations to work on issues such as technical standardization.
ITU focus groups, open to all interested experts, accelerate standardization by leading intensive studies in areas of rapidly evolving strategic importance. The metaverse focus group will be active for one year and will conduct “pre-standardization” work as a basis for developing new ITU standards.
To stimulate cohesive metaverse standards development, the focus group aims to elaborate common terms and definitions and promote collaboration among relevant standards bodies. The group will report to the ITU Telecommunication Standardization Advisory Group.
“The establishment of this focus group is very important to define in a timely manner the standards that contribute to a secure and interoperable metaverse and enable growth and prosperity,” said Abdurahman M. Al Hassan, Chairman of the ITU Telecommunication Standardization Advisory Group from the National Cybersecurity Authority (NCA) of Saudi Arabia.
The focus group will meet for the first time in Riyadh, Saudi Arabia, on 8 and 9 March 2023, hosted by NCA, following an ITU forum on embracing the metaverse on 7 March, co-organized by ITU and NCA. The forum and meeting are open for online participation.
Note to editors:
The estimate that the metaverse could grow to a value of USD 800 billion by 2024 comes from “Metaverse may be $800 billion market, next tech platform” published 1 December 2021 by Bloomberg Intelligence. This estimate is referenced in the focus group’s terms of reference agreed by the ITU Telecommunication Standardization Advisory Group.
Source: https://www.bloomberg.com/professional/blog/metaverse-may-be-800-billion-market-next-tech-platform/
- | January 19, 2023
- The global Web3 market was worth an estimated $3.2 billion in 2021, and is projected to continue growing.
- There is likely to be a changing policy landscape for Web3 innovators, and an increased use of decentralized social media.
- There will be more tokenization of assets, and increasingly mainstream use of blockchain technology.
There are many ways to define Web3, but fundamentally it is a decentralized internet, owned by builders and users, based on blockchain. The global Web3 market was worth approximately $3.2 billion in 2021, and this is projected to continue growing in the next decade as adoption of new technologies built on blockchain increase. Some consider this to be the internet of the future; in 2023 it is poised to continue being an important topic in public discourse.
Expected Web3 developments in 2023
The Web3 industry is evolving rapidly. Given what we’ve seen in 2022, here are four areas to keep an eye on in 2023.
1. Changing policy landscape
There has been much discussion of regulation and policy approaches for the Web3 industry throughout 2022. Heading into 2023, it is likely this will continue with more concrete policy taking shape globally. In the US, 2022 was a year for reflection, research, and debate on what Web3 policy could look like. In 2023, it is likely that the outputs from President President Biden’s executive order on digital assets and continued advances on crypto legislation in Congress will progress into a clearer policy framework. More countries could also take the example from Japan and launch a dedicated policy office focusing on Web3 to establish more defined policy approaches.
2. Rise of decentralized social media
One of the critical pillars of Web3 is the concept of decentralization – the idea that there won’t be middlemen managing things on the internet as we have now with big tech. This will probably mean a rise in the popularity of decentralized social media in 2023. We are already seeing the beginnings of this play out as users join platforms like Mastodon. While Mastodon is not based on blockchain technology, it is intended to be decentralized and operates on a federated model. This could open the door for other blockchain-based platforms like Lens Protocol or Minds.
3. Increased tokenization of assets
Tokenization can allow for almost any real-world asset to have a digital representation on a blockchain. The increased use of tokenization has the potential to revolutionize financial markets and most industries. 2023 will see continued increases in the use of tokenization, especially as more mainstream players like BlackRock and Goldman Sachs explore its possibilities. This could impact financial markets, but also other sectors with viable assets to digitize like real estate and entertainment as well.
4. Expansion of mainstream use cases
The first three trends highlighted all point to 2023 being a year in which Web3 breaks further into the mainstream. As the technology matures there will be an increasing number of concrete use cases for it beyond those that currently excite early adopters. This will be encouraged by major companies that have already started to explore Web3, such as Starbucks who announced their new NFT-based rewards program Starbucks Odyssey in 2022. In addition to traditional companies incorporating Web3 into their businesses, Web3-native use cases like Helium will also continue to gain traction.
This article first appeared on the World Economic Forum blog.
- | January 19, 2023
The practitioners of the Inclusive Digital Economies Scorecard (IDES), a policy tool developed by the UNCDF to assist governments in setting priorities for digital transformation, participated in the first-of-its-kind community of practice meet-up at Livingstone, Zambia. The community of practice saw 70 participants across 15 countries from Asia, Africa and the Pacific commit to learning and supporting one another for digital transformation and inclusiveness. The event was launched by Zambia’s Minister of Technology and Science, Hon. Felix Mutati. The community of practice inaugural event has resulted in a strong network of digital transformation experts for peer and knowledge exchange on inclusive digital transformation practices.
IDES tool has been implemented in 31 countries across Africa, Asia, and the Pacific, to measure and track digital transformation and inclusiveness of countries.
Learn more about the IDES here.
- | January 19, 2023
The Dispute Resolution in Digital Economy (DRDE) project world tour kicked off with the 2022 Tokyo Forum on Dispute Resolution on 15-16 December. The forum was co-organized by UNCITRAL, the Japanese Ministry of Justice and International Centre for Settlement of Investment Disputes (ICSID).
The first session of the forum sought inputs for the project on the stocktaking of developments in dispute resolution in the digital economy (DRDE). Practitioners and academics gathered to discuss how technological means have changed the landscape of dispute resolution, how practice has adapted to the change and whether there is a need to update existing UNCITRAL texts or develop new ones in light of these developments.
The second session of the forum was dedicated to a discussion of the 2022 ICSID Rules.
Both sessions can now be viewed online on the UNCITRAL YouTube page:
- | January 18, 2023
The country’s ministry of foreign affairs, trade and development cooperation will provide the funds during the period 2023–2026
The Netherlands will provide $10 million to UNCTAD to help developing countries benefit more from e-commerce and the digital economy and facilitate business and investment.
UNCTAD Secretary-General Rebeca Grynspan and Liesje Schreinemacher, Minister for Foreign Trade and Development Cooperation of the Netherlands, signed an agreement on 17 January for the financial contribution.
“We greatly appreciate the Netherlands’ increased support for our work on e-commerce and the digital economy, and business and investment facilitation,” Ms. Grynspan said.
She said the support underscores the growing importance of digitalization for inclusive and sustainable development in a time of multiple global crises.
Ms. Schreinemacher said: “The Netherlands appreciates UNCTAD’s contribution to global digitalization and linking it to improving business and investment opportunities. We are therefore happy to continue our support and hope other donors will follow the Netherlands in its support for this important programme”.
Bridging digital and data divides
According to the agreement, $6 million will be dedicated to research and technical cooperation activities under UNCTAD’s e-commerce and digital economy programme.
The funds will support the integration of developing countries into the digital economy and enable the benefits of digitalization to reach all people and businesses.
While the COVID-19 pandemic revealed the growing importance of e-commerce, it also exposed digital and data divides between developing and developed countries. The funds will boost UNCTAD’s capacity to meet this growing demand for e-commerce and help bridge the divides.
The Netherlands’ long-standing support to the programme has contributed to building more gender-inclusive digital economies and fostering partnerships to support e-commerce development in low-income countries.
Its support for the eTrade for Women initiative has been instrumental in strengthening more than 200 women-led digital businesses.
Strengthening business and investment facilitation
A further $4 million will fund UNCTAD’s efforts to strengthen digital government services for micro- and small and medium-sized enterprises (MSMEs) and international investors.
It will also support enterprise development, accounting and reporting for MSMEs to strengthen business facilitation.
To boost investment, UNCTAD will use the funds to help strengthen facilitation mechanisms and institutions promoting both national and international investment policies.
The Netherlands’ support has so far strengthened digital business and investment facilitation in six countries in Africa and one each in Asia and Latin America.
It has supported the formalization of more than 400,000 MSMEs and contributed to key publications including UNCTAD’s SDG Investment Trends Monitor and its policy guide on foreign direct investment and gender equality.
- | January 18, 2023
Seven African tech companies wooed investors, networked and showcased their products at two of the world’s biggest tech gatherings in Europe.
For African tech startups, finding investors means getting into the spaces where venture capitalists gather.
Seven companies received exactly that, by attending two of the world’s biggest tech events: Web Summit in Lisbon, and Slush in Helsinki.
With 70,000 attendees from 1 to 4 November, Web Summit gathers CEOs, founders, investors, media, politicians and cultural figureheads. It’s a unique opportunity to meet people looking to use technology to reshape the world.
Muchu Kaingu, CTO of Lupiya, went to Web Summit with startup funding already in place. With his wife Evelyn Kaingu, CEO of Lupiya, their micro-finance company Lupiya had already raised $1 million in 2020. They were looking for a new round of funding to grow the business and expand into markets beyond their home country, Zambia.
“As Africa rapidly digitizes, we’re seeing wider adoption of ecommerce. There’s more demand for online payment options,” he said. “We have learned that our customers require holistic banking services, providing low barrier to entry investment opportunities, and allowing customers to easily transact using online channels.”
Through ITC’s #FastTrackTech Africa project, powered by the Switch ON initiative, Lupiya and Zambian food delivery platform AfriOnline each had a booth for a day. Kaingu also received a coveted slot to pitch on stage for about 80 people.
“We’re now talking to three technology partners,” Kaingu said. “These are partners we can leverage to continue building our platform. We’re also talking with an internationalization partner to register a holding company in the US, which would give us better access to capital.”
And his meetings with investors have already taken concrete steps forward. Lupiya has signed non-disclosure agreements with two investors, a first step in exploring possible fundraising to grow their market internationally.
Visions for how to scale
n Helsinki, NTF V and #FastTrackTech sent five companies to network among the 12,000 attendees that gathered during Slush, which has established its reputation on its high investor/startup founder ratio and its focus on being an event “by founders for founders”. Souleymane Gning represented Senegalese online insurance company Assuraf. Abdoulaye Maiga went to pitch his ride-hailing app Teliman, which lets users find motorcycle taxis and Tigabu Abriham showcased Eshi Express, an online delivery service in Ethiopia.
From Uganda, Eric Nana Agyei represented MobiPay, which provides small farmers with digital payment solutions. Also in agritech, Jean-Delmas Ehui brought ICT4Dev from Côte d’Ivoire, to showcase how his company uses data to help small farmers improve their harvests.
They all held meetings with other company founders, as well as potential partners and investors. For many of the African businesses, Slush opened a window on how to scale businesses that they had often bootstrapped with their own money to bring services that hadn’t previously existed in their countries.
When Maiga started Teliman in 2018 in Bamako, the city didn’t have any motorcycle drivers – much less an app to link customers to that service.
“Now we have about 500 drivers on the platform, and on average they’re doing 10-12 rides a day,” he said. The benefit of attending the event in Helsinki was to see how tech companies around the world are tackling problems that he also faces in Mali.
Among the immediate takeaways that Maiga noted were meetings with third-party providers who could help manage costs for critical web services like Google Cloud or Amazon Web Services.
“For us, it was interesting just to see the different meetings and the different presentations, because it was very inspiring in terms of seeing what’s being done in the world,” he said. “It gave a vision of how to scale from being smaller to being bigger.”
About the project
Netherlands Trust Fund V – NTF V
The Netherlands Trust Fund V (NTF) (July 2021 – June 2025) is based on a partnership between the Ministry of Foreign Affairs of The Netherlands and the International Trade Centre. The programme supports MSMEs in the digital technologies and agribusiness sectors. Its ambition is two-fold: to contribute to an inclusive and sustainable transformation of food systems, partially through digital solutions, and drive the internationalisation of tech start-ups and export of IT & BPO companies in selected Sub-Saharan African countries.
FastTrackTech Switch ON
The International Trade Centre’s #FastTrackTech project is harnessing the transformative power of the digital economy to generate jobs and contribute to the economic growth and productivity. The project is powered by the Switch ON initiative. ITC’s recent initiative, Switch ON, focuses on digital connectivity, prioritizes investments in the sector and calls on policymakers to create the right conditions for small businesses in developing countries to profit from digital trade and entrepreneurship. It also focuses on delivering affordable networks and unlocking access through education and digital literacy.
- | January 18, 2023
Digitalisation has transformed how we access our finance and the way we interact with those providing the services. In a post-Covid world, 57% of adults in developing economies now make or receive digital payments (an increase of 23% from 2014) and two-thirds of adults worldwide use digital payments. For people’s everyday lives, this means quicker transactions, improved access to essential products, and reduced travel time to withdraw and pay in cash. But in a relatively novel sector, consumers face a number of frustrations which impact their experience of digital financial services – such as system glitches, inappropriate design, fraud, cybercrime, data breaches, opaque pricing, and more.
The sector has a long way to go before our consumer vision of inclusive, safe, data protected and private, and sustainable services is realised. For this to happen, the consumer voice must be heard.
Our latest report – Digital finance: The consumer experience, 2023 – provides an assessment of the scale of the issue across low- and middle-income countries. In evaluating the pain points facing consumers, it provides a much-needed route map for regulators, consumer associations, and market actors to take action. Assessed across four ‘pillars’ of financial consumer protection, the total index score comes in at just 40 out of 100. These results make it clear that more work is needed to build consumer protection frameworks that sufficiently protect and empower consumers.
The Four Pillars are:
- Need for a financial consumer protection framework in the first place, centred on understanding the risks that consumers face and their ability to protect themselves against risk – such as by knowing their rights and responsibilities.
- Regulatory frameworks in place, whether based on consumer-centric principles and how they have sought participation from consumer representatives.
- How is financial service usage playing out for consumers? Do consumers actively use and have positive experiences with digital finance?
- Outcomes in real-terms for consumers. Are digital financial services making a difference to consumers’ financial health? What impact are they having on advancing sustainability?
What are the Keys Takeaways?
Action is needed to address how consumers experience the financial sector. Risk perception received an average score of just 27, and consumer capability to protect against risk just 36, showing a nervousness about engaging with digital financial services. Consumers also experience user frustrations, notably around safety, data protection and digital literacy. Together, these findings point towards a digital finance market which is failing to adequately or meaningfully protect consumers.
- More people than ever are using digital financial services, with access driven by improved internet access and widespread smartphone penetration. This was reflected in high scores in the enabling infrastructure and inclusivity elements, which received 54 and 65 out of 100 respectively. However, improving the quality and affordability of digital financial services remains a significant hurdle for the sector to overcome.
- The results for the outcomes pillar hold a disconcerting mirror up to the financial community – whilst there have been advances in financial consumer protection frameworks and financial inclusion – these have not yet translated into improved financial health and sustainability outcomes for consumers.
- Consumers are rarely present in financial sector regulatory decision-making processes, and their experiences are often left out of reported metrics on consumer protection. Financial consumer protection frameworks must go further and give consumers a real seat at the table.
What differences can be seen between economies?
Developing this tool has allowed us to take an interesting look at how different countries compare. Countries were categorised into three tiers, ‘advanced’, ‘transitioner’ and ‘emerging’.
Advanced and transitioner countries perform better due to having stronger protection frameworks and established independent recourse mechanisms and complaints systems in place. Meanwhile, ’emerging’ countries are lagging significantly behind in building strong financial consumer protection frameworks. Interestingly, the results showed limited variation between clusters on the inclusion and protection playing field pillar – which saw relatively high scores across all three tiers. This could be explained by the uptake of mobile money across low- and middle-income countries. In the years to come, annual instalments of this report will gather more data on remaining user frustrations allowing us to make deeper assertions on variation across countries.
What’s Next?
Right now, we need a concerted effort to build consumer-level and system-level resilience to risk. The report lays out a call to action for decision-makers at the global and national level:
- Consumer associations should find innovative ways to engage with and educate consumers and proactively work with regulators to bring the consumer perspective into policymaking and regulation.
- Regulators should fill gaps in existing consumer protection frameworks to address the risks consumers are most worried about, and ensure that consumers are given a real seat at the table in the policy-making process.
- Financial service providers should build in consumer protection, empowerment and inclusion from the outset. This means using plain and transparent language, providing clear channels for recourse, and designing products and services that can effectively reach and empower marginalised consumers to engage in the financial sector.
- At all levels, actors should initiate action on bringing sustainability to digital financial services.
Consumers International will build these findings into the work of our Fair Digital Finance Accelerator – equipping market actors and others to heed our call to action and to ensure that consumer associations are actively involved. Over the next year we will also bring sustainability issues firmly to the digital finance agenda, exploring the massive opportunity for reaching climate goals and demystifying what sustainability in digital finance means in practice.
Useful Links:
- Learn more about the Fair Digital Finance Accelerator
- Read our consumer vision for fair finance
- Find out how we are driving systemic change at the Davos Annual Meeting 2023
- Connect with us on Twitter, Facebook, LinkedIn and Instagram
- Contact us to collaborate as we explore opportunities for further research in this space
- | January 18, 2023
- Today, 2.7 billion people do not use the internet.
- Access, affordability and usability of technology and digital services are the barriers to connectivity.
- The EDISON Alliance is mobilizing cross-sector action to accelerate digital inclusion across health, education, and financial services.
The impact of investing in digital inclusion.
The COVID-19 pandemic dramatically accelerated digitization worldwide. Access to digital technologies allowed people to carry on with their lives, but the health crisis also exacerbated existing inequalities for the 2.7 billion people who remain unconnected to the internet.
The World Economic Forum’s EDISON Alliance is a global movement of leaders from across industries and governments who are prioritizing digital inclusion and bringing millions of people online, so they can access critical services in healthcare, finance and education.
The Alliance fosters collaboration and cross-sector action to enhance the case for digital investment. It is mobilizing commitments globally to accelerate the delivery of digital solutions to unserved and underserved populations, aiming to improve the lives of 1 billion people by 2025.
What is the challenge?
Although most people in the world live in areas covered by a broadband network, 34% of the global population (2.7 billion people) remain offline and left behind. This is due to the persisting barriers to connectivity: affordability of data and devices, knowing how to use products and services, and a lack of access.
In low-income countries, home to 650 million people, mobile broadband is 18 times more expensive than in developed countries – as a proportion of average income. Even in the most advanced nations, affordable usage of broadband remains a challenge.
Having access to affordable digital services, as well as the digital skills required to use them, is no longer a luxury but a necessity. Leaders from industry and government are pushing this complex and urgent challenge to the forefront of the Forum’s agenda because no one sector can address this challenge on its own.
Our approach to improving digital inclusion.
The EDISON Alliance is the first global mobilization of industry and public sector leaders, bringing actors from the telecoms and broader ICT industry together with 14 other industries (members of healthcare, financial services, education and investors) to lead the way into the digital infrastructure of the 21st century.
In September 2021, the Alliance launched the 1 Billion Lives Challenge to improve 1 billion lives globally through affordable digital access to healthcare, education and financial services by 2025.
The EDISON Alliance published its first impact report, which states that as of October 2022, Alliance partners have impacted the lives of 454 million people by activating over 250 digital inclusion initiatives across 90 countries.
“We are implementing programmes that will ensure that our citizens have access to affordable smart devices and possess appropriate digital skills to harness the benefits of a digital, cashless economy. We invite partners, corporates and governments, within the EDISON Alliance to accelerate their commitments to ensure universal and lasting digital inclusion for 1 billion lives.”
— Paula Ingabire, Minister of Information Communication Technology and Innovation of Rwanda
Mastercard has brought 500 million previously unbanked people into the financial system. As part of the 1 Billion Lives Challenge, it is doubling down on its original commitment to bring another 500 million people into the digital economy by 2025.
“There’s an opportunity to bring more people into the digital economy – that makes communities more resilient and grows markets. An important example is the EDISON Alliance. Through partnerships like this, digital tools can benefit everyone, not just a few. It is one more important step in making technology as trusted, accessible and useful as possible.”
— Michael Miebach, Chief Executive Officer, Mastercard
Verizon has committed $3 billion to help those who need it most, by investing in programmes that foster innovative learning and contribute to re-skilling the digital workforce. While Apollo Hospitals, through its remote intervention programmes in India, is committed to providing healthcare services to 36 million people by 2025.
“Inspired by the vision of the EDISON Alliance, Apollo Hospitals and American Tower joined hands to launch five digital dispensaries in rural Madhya Pradesh, India. Through this partnership, we are bringing quality healthcare services to rural communities and providing them with primary, preventive and speciality teleconsultation services.”
— Shobana Kamineni, Executive Vice-Chairperson, Apollo Hospitals
The Alliance also supplies ongoing guidance to empower policymakers and relevant stakeholders to make informed decisions that advance digital inclusion. These tools include shared principles for digital health inclusion and an inclusive financial system, a guidebook for digital inclusion bond financing, and the Digital Inclusion Navigator – a one-stop shop of curated case studies and leading best practices to help policymakers decode the digital divide.
At the World Economic Forum Annual Meeting 2022, the Alliance launched a network of Lighthouse Countries, including Bahrain, Bangladesh and Rwanda, to work with the United Nations Development Programme (UNDP) to promote digital inclusion in their respective countries. The goal is to provide a global platform for local actors to leverage the collective capability of the Alliance.
“The digital revolution is an empowering force for people and planet, yet billions, especially those most vulnerable populations of societies, remain offline or poorly connected. That is why UNDP became a founding member of the EDISON Alliance, and we are very pleased to see how it has accelerated wider adoption of digital inclusion through collective advocacy and country-level initiatives.”
— Achim Steiner, Administrator, United Nations Development Programme
How can you get involved?
The EDISON Alliance is an initiative of the Forum’s Platform for Shaping the Future of Digital Economy and New Value Creation. Nearly 50 active leaders – from CEOs to Ministers to Heads of International Organizations – are championing digital inclusion.
Companies and organizations can join the 1 Billion Lives Challenge by pledging an existing or new commitment to improve lives through digitally inclusive services, or contributing to an initiative with a recognized pledge.
- | January 18, 2023
- According to the World Trade Organization trade growth is set to slow sharply in 2023.
- Trade and investment are engines of growth that can be harnessed for sustainable development.
- We must explore ways to apply technology to improve trade in goods and services.
Trade growth is set to slow sharply in 2023, according to World Trade Organization (WTO) forecasts, as the global economy faces persistent inflation, high energy costs, monetary policy tightening, food and fertiliser shortages, and debt distress in developing countries. Amid these challenges, urgent climate action is needed to avoid even more distress.
Trade and investment are engines of growth that can be harnessed for sustainable development. But with these engines spluttering, it will be much harder to deliver the innovation, capital, know-how and jobs we need. What can we do to get trade – and investment – out of trouble to build a green, inclusive future?
Technology is often offered as a solution to global problems. Sceptics might argue that no amount of technology can address the major geopolitical risks facing trade and investment. Others might say that technology is actually a driver of fragmentation – witness the divisions over the governance of data flows, or the recent commercial conflict over green tech subsidies.
However, we know technology has already been a massive trade accelerator, and so perhaps it’s worth digging deeper. Growth in global flows of services and intangibles grew at nearly twice the rate of goods flows over the past two decades, underpinned by data movement, telecommunication advances, and new tech business models. In the year ahead policy-makers must explore ways to apply technology to improve trade in both goods and services.
Trade tech
We are at a tipping point where technologies are changing physical trade faster than ever. Artificial intelligence (AI), distributed ledger technology (DLT), 3D printing, smart sensors, and more are combined for more supply chain resilience, speedy border clearance, better risk management, and financial crime mitigation.
These developments could also be incredibly powerful for planet and social goals. For example, governments and consumers want to know imported products have not led to deforestation, or driven child labour. The EU, for example, recently agreed tighter controls on forest-linked commodity imports like palm oil, cacao, and soy, among others.
Product traceability enhanced by Internet of Things (IoT) devices, blockchain storage of transactions and increased transparency, and smarter algorithms for assessing risk, can help to meet these demands.
More collaboration is urgently needed though to reduce digital identity silos, increase system operability, and improve the regulatory environment. Very few trade agreements to date touch on the topic of digital identity – the Digital Economy Partnership Agreement (DEPA) and Singapore-Australia Digital Economy Agreement (SADEA) are frontrunners.
Another challenge business highlight is the uneven treatment of IoT devices used on containers by customs authorities. In some cases, these will be treated as a definite import, leading to substantial duties. Tackling these technical issues could really help trade move forward more efficiently and sustainably.
Service tech
At the same time, technology is also vital for reducing the costs and accelerating services trade. According to the OECD, trade costs for financial, communication and business services fell between 30-60% between 2000-2019, with about half of these cost reductions linked to ICT and travel.
Interestingly, services provisions in trade agreements explain another 3-14% of the reductions, highlighting the need to combine innovation with policy collaboration. While services account for more than six out of 10 jobs, services trade costs are twice as high as those for goods, mostly linked to opaque regulations and cumbersome procedures.
Services traded through digital technologies in particular accelerated through COVID-19. Many digital services will be vital for climate action too. By some estimates, 20-25% of the emission reductions needed for a net-zero EU economy require some degree of digital enablement to work at scale and at an acceptable social cost. That includes things like remote control systems for smart heating, data aggregation on supply chain emissions or improving farming techniques through real-time weather, crop, and other analysis – often delivered across borders or combining inputs from multiple locations.
Just over a year ago, a group of 66 WTO Members – responsible for 90% of world services trade – struck a deal to reduce red tape on services trade. The deal focuses on greater transparency for business services compliance, creates more predictability around services authorisation requirements and encourages more impartial regulatory processes.
Stakeholders should advocate for more countries to join this deal, particularly in economies where the regulatory environment holds back innovative services deliver.
And more intergovernmental dialogue is sorely needed for sustainable digital services. Since 2020, European and G20 governments have introduced over 1,700 legal and regulatory requirements in digital sectors, and not always in a coordinated fashion. While regulation can serve important purposes, if designed in a trade restrictive way or implemented with limited transparency, the gains from services trade for growth, jobs and the environment risk being set-back.
Collaboration is the key to get technology applied correctly to unlock sustainable growth.
- | January 18, 2023
- Technology can be a stabilizing factor in a changing world, enhancing business resiliency.
- Chief digital officers should scale use of data and artificial intelligence, while investing on emerging technologies, such as quantum computing.
- The roadmap to meeting the 2030 SDGs rests on competitive and responsible development of technology by business.
Against a backdrop of global shocks, fragmented systems and an uncertain business environment, we asked chief digital officers from diverse industries about their priorities for technology leadership in 2023. They highlighted the need to double down on digital innovation that creates meaningful and responsible outcomes for people and the planet.
To enhance consumer experience, business resilience and competitiveness, leaders must continue to scale the use of technologies of today, such as data, cloud and artificial intelligence, while also investing in frontier technologies such as metaverse, quantum computing and synthetic biology to open up a new era of discovery.
‘Innovate with cloud, AI and metaverse’
Paul Daugherty, Accenture
In an uncertain world, technology innovation is the one certainty that you can rely upon to tackle seemingly intractable challenges and accelerate business and societal progress.
Cloud, artificial intelligence and metaverse are the defining technology trends that will shape our future. Leading companies are turning to these technologies to foster resilience, accelerate growth, optimize operations and reinvent their capacity for innovation – setting the stage for top-line growth through and beyond a period of economic uncertainty.
In an uncertain world, technology innovation is the one certainty that you can rely upon to tackle seemingly intractable challenges
—Paul Daugherty, Accenture
‘Start with the customers’
Parag Parekh, IKEA Retail (Ingka Group)
Ingvar Kamprad, IKEA’s founder once said: “What is good for our customers is also, in the long run, good for us”, and these words continue to be a driving force in the company’s journey to creating seamless omnichannel experiences that inspire customers and empower co-workers.
IKEA is transforming its business model, and technology will continue to be a key enabler in helping build its competitive edge. A recent example is IKEA Kreativ, which combines decades of IKEA life-at-home expertise with the latest developments in spatial computing, machine learning and 3D mixed reality to democratize home design and deliver a truly personal experience.
More personalization requires greater digital trust. Data and technology must be used as a force for good and in a responsible and sustainable way for people and our planet, in order to create better everyday lives.
Our founder once said: ‘What is good for our customers is also, in the long run, good for us’, and these words continue to be a driving force
—Parag Parekh, IKEA Retail (Ingka Group)
‘Digital must power the energy transition’
Jay Crotts, Shell
Digitalization must play a vital role in helping to thrive through the energy transition. Decarbonization of the energy industry is not possible without a comprehensive digital transformation. Digital technology provides mechanisms and toolsets for optimizing energy efficiency and making it possible to design and operate entirely new and low carbon footprint energy systems at scale.
Business leaders should prioritize open innovation and collaboration with partners who can contribute technical capability, knowledge and resources. Shell focuses on working with a range of partners from academia, customers, suppliers, start-ups and open communities to pursue larger objectives together.
Shell’s 2023+ roadmap focuses on digital technology that help us reduce the footprint of our operations, offer low carbon energy to customers, and design the energy system of the future.
Decarbonization of the energy industry is not possible without a comprehensive digital transformation
—Jay Crotts, Shell
‘Think and act differently with digital’
Geeta Thakorlal, Worley
Digital solutions are driving outcomes that were not possible a decade ago. In the energy industry, digitalization can enable faster delivery decisions, improve asset performance and provide visibility to communities. To unlock the full potential that digital offers, we must think and act differently.
When data and digital teams are part of the project leadership, they can help connect assets, ensure project information can be shared on common platforms, and overall improve the efficiency and speed of the project delivery. With a focus on the right investments of both dollars and time with the right partners, it will advance the transformation.
Worley dives into the heart of the digital challenge by taking a strategy-first and integrated approach to delivering value. The shift is complex but critical on our journey to a more sustainable world.
When data and digital teams are part of project leadership, they help connect assets, ensure information can be shared on common platforms, and improve the efficiency and speed of the delivery
—Geeta Thakorlal, Worley
‘Digital age of personalization and sustainability’
Asmita Dubey, L’Oreal
In the digital age, consumers expect personalization, inclusivity and relevance. L’Oreal is shifting from products to services, using predictive sciences and technology to help consumers to make perfect choices, and to curate and coach them with their beauty routines and care.
L’Oreal is pioneering beauty tech to create a new type of relationship with its consumers powered by data, technology and artificial intelligence. As we enter a new chapter in the web, the consumer journey is also evolving to more immersive experiences using technologies like augmented reality, virtual reality and 3D creation, cracking new codes of beauty in the metaverse and Web3 world.
It is important to embed sustainability at the core of this shift. The combination of technology, green sciences and commitment to planetary boundaries will allow L’Oreal to make better and more sustainable products, best capable of addressing the beauty needs of the future.
We are shifting from products to services, using predictive sciences and technology to help consumers to make perfect choices
—Asmita Dubey, L’Oreal
‘Decentralize control of data’
Albert Chu, Sompo Holdings
Data-driven insights and technology innovations can help address the societal issues exacerbated by our increasingly volatile, uncertain, complex and ambiguous (VUCA) world. In Japan and elsewhere, there are growing social issues, such as climate change, natural disasters, supply chain disruptions, pandemics, and an ageing society.
Data collected in every aspect of our society is increasing exponentially. In 2023, we need technology leadership to clarify data ownership and privacy, decentralize the control of data, and make data governance more transparent. We must ensure that data is not controlled by a few centralized companies, without being channelled towards addressing social issues.
For example, Sompo’s Nursing Care Real Data Platform solution in Japan uses data from its nursing care facilities, residents and caregivers to improve quality of care and operational efficiency by over 20%. With decentralized data control and appropriate governance and privacy policies, such solutions can be scaled globally to other ageing societies.
We must ensure that data is not controlled by a few centralized companies, without being channelled towards addressing social issues
—Albert Chu, Sompo Holdings
‘Unlocking vehicle data potential’
Bernd Schmaul, Bosch Mobility Solutions
Today, many drivers expect their vehicles to be fully integrated into their digital lives. New connectivity, automation, and personalization features will be increasingly implemented in vehicles with software in the future. While in the past a customer’s experience of a car was primarily defined by hardware, software is now taking on a much more important role.
Data, as well as its availability and potential, will be an integral factor in transforming the automotive industry, such as through Bosch’s data-driven intelligence solution. This evolution not only affects development and operation, but also makes new business models and types of collaboration possible. Working and agreeing on standards for data exchange will pave the way for efficient use. Cooperation between suppliers, vehicle manufactures, and partners within the automotive industry and beyond become more important than ever. By sharing data throughout the wider ecosystem, industry leaders can realize new efficiencies, services and solutions.
While in the past a customer’s experience of a car was primarily defined by hardware, software is now taking on a much more important role.
— Bernd Schmaul, Bosch Mobility Solutions