Industrial policy now spans platforms, algorithms, and data—not just factories. Drawing on Kenya’s digital economy, Kitrhona Cerri and Maria Mexi argue that without stronger data governance, labour protections, and mechanisms for domestic value capture, digitalization may risk reproducing structural dependency rather than driving transformative, inclusive industrial development.
The New Industrial Frontier: From factories to platforms
Industrial policy has re-emerged at the centre of global debates and as a central mechanism of economic development, but the terrain on which it operates has changed profoundly. Historically designed to nurture manufacturing capacity and manage trade, industrial policy now confronts a landscape in which value creation is increasingly intangible, organized through digital platforms and new networks of production and trade.
To understand this transformation, it is worth recalling what industrial policy was originally meant to accomplish. Traditional state-led industrial models built productive capacity through targeted support, protection, and coordination, aligning state, industry, and finance toward common development goals. Tariffs and incentives shielded infant industries; state enterprises and public investment promoted industrial upgrading and innovation. These instruments persist, yet in the digital economy, competitiveness depends less on the physical production of goods than on the ability to coordinate through digital infrastructure.
Digital platforms—infrastructures that match, mediate, and monetize interactions across users and markets—now function as the connective tissue of globalization: (re-)organizing power relations, exchange, and trust. They connect clients and workers, use algorithms to allocate tasks, and set the rules that govern how income and reputation are distributed. Their influence derives not from owning factories but from controlling data, determining who works, who learns, who profits, and who becomes visible in global markets. This reconfiguration shifts the frontier of industrial policy from sectoral promotion alone to the governance of infrastructure. Knowledge, innovation, and coordination—the fundamental assets of industrialization—are increasingly embedded within algorithmic systems and proprietary databases.
In an economy organized through code and connectivity, the capacity to turn data into domestic innovation now plays the role that investment in factories once did; it underpins competitiveness and resilient industrial trajectories. Data governance, therefore, becomes not only a matter of privacy or security but a central pillar of industrial policy. Once treated as a mere by-product of production, data has become the primary input of value creation in the digital economy. To govern data is, increasingly, to shape the pathway of development itself.
Kenya’s Digital Turn
The digital transformation is redefining how low- and middle-income countries (LMICs) conceive and implement industrial policy. Kenya’s experience in building a digital services sector, anchored in business-process outsourcing (BPO), information-technology-enabled services (ITES), online freelancing, and digital entrepreneurship, illustrates both the promise and the paradox of industrializing through integration into digital and platform-mediated supply chains.
Since the early 2000s, Kenya has positioned the digital transition as a core pillar of state-led transformation. The Digital Master Plan 2022–2032, the National ICT Policy Vision 2030 framework, and national programs, such as Ajira Digital and Jitume Labs, have aimed to connect youth to global online work and attract outsourcing investment. Within the East African Community’s 2022 tariff schedule, Kenya still differentiates between information and communication technology components and finished electronics to promote local assembly, showing the continuity of industrial tools. But its developmental horizon now extends beyond goods production to digital services, connectivity, and skills. By 2025, roughly 1.9 million Kenyans were engaged in digital work, including about 1.2 million platform-based gig workers. On the global Online Labour Index, Kenya accounts for about 1% of all online labour supply, ranking among Africa’s largest digital work exporters. These figures help sustain the narrative of Kenya as the “Silicon Savannah” and signal the country’s deepening integration into the global digital services market.
Kenya’s integration into global BPO, ITES, and digital labour markets has created jobs and digital capabilities, but domestic value capture remains limited. Workers produce essential data for the global digital and AI economy, yet lack ownership or control over these outputs, and most locally generated data is stored and monetized abroad. Furthermore, most production is mediated by foreign-owned platforms whose data infrastructures and algorithms lie outside national oversight, producing what can be described as industrial thinness: an economy rich in digital services but with limited control over the infrastructure that organizes them. Growth in the digital sector has produced a hybrid developmental path: service-intensive, globally integrated, yet structurally dependent.
Kenya’s trajectory reflects a wider pattern across LMICs, which occupy low-value segments of digital supply chains: providing data and labour while the gains from analytics and intellectual property accrue elsewhere. This condition reproduces what UN Trade and Development calls the global data divide: a world in which some states capture the infrastructure of digital accumulation while others provide the informational raw materials. Such conditions create an informational form of dependency that parallels earlier resource extraction patterns and the “resource trap” that has long characterized commodity economies.
Building domestic capacity to localize, analyze, and repurpose data is, therefore, a developmental imperative. It requires institutions that treat data as a productive asset and embed innovation within systems of rights and accountability. Given that these dependencies also shape the organization and conditions of labour, rethinking data governance is central to reimagining industrial policy for the platform age.
Data, Dignity, and Decent Work
The political economy of data is inseparable from the political economy of labour. In the digital economy, the capacity to generate and control data largely enables the capacity to organize and value work. The link between data governance and dignity at work is therefore central: the terms under which data are extracted and monetized shape the terms under which labour is performed and rewarded.
Research on Kenya’s content-moderation workforce reveals the hidden costs of digital transition. At Sama’s Nairobi facility, employees contracted to moderate harmful content for global tech companies have reported psychological trauma, unpredictable pay, and limited recourse. A closer look at the country’s gig economy—short-term, task-based digital work coordinated through apps—exposes similar vulnerabilities: workers face algorithmic surveillance, unstable earnings, gender pay gaps, opaque rating systems, precarity, and limited avenues for collective voice or social protection.
As evidence from other country contexts shows, such conditions are not confined to Kenya but are structural features of platform-mediated work. Algorithms not only assign tasks and evaluate performance but also shape workers’ access to income and future opportunities. This algorithmic management reproduces power asymmetries within global production networks—the same asymmetries that govern data extraction and circulation. In effect, the commodification of labour and the commodification of data proceed in tandem, reinforcing each other across the digital value chain.
Embedding decent work—encompassing fair pay, transparency, and representation—within platform governance is both a necessity (whether a “digital transformation” can spur development) and a just transition imperative, essential for achieving better labour and societal outcomes. Translating this principle into policy requires institutions capable of coordinating across domains that are too often treated separately. This involves aligning trade, labour, and industrial policy while ensuring coherence with innovation and competition frameworks. Moreover, industrial policy frameworks must connect digital sector promotion with mechanisms that ensure worker protections and collective voice.
Social dialogue, long a cornerstone of industrial relations, remains a crucial instrument of this governance. It enables workers, employers, and policy-makers to deliberate over algorithmic transparency, control and accountability, wage standards, and data rights—core issues that now define fairness in digital labour markets. In the platform economy, such dialogue must also extend to civil society actors engaged in debates on privacy, consumer protection, and artificial-intelligence ethics. In this way, industrial policy evolves into a process of democratic coordination over the infrastructure that organizes production, knowledge, and value in the digital age.
Yet, national reforms alone cannot resolve the structural asymmetries of the global digital economy. The infrastructures that shape work and data often operate across borders, governed not by global standards but by platform-specific architectures that frequently evade national oversight. As a result, the capacity of any one state to regulate platform labour or secure data sovereignty is limited. Coordinated regional and multilateral action, therefore, becomes indispensable.
Regional and Global Cooperation
The African Continental Free Trade Area Digital Protocol represents a chance to embed these lessons in continent-wide regulatory frameworks. The Protocol aims to harmonize rules on data governance, digital trade, and platform regulation. Aligning national efforts with regional frameworks can leverage collective bargaining power and prevent a regulatory “race to the bottom.” Kenya recently ratified the East African Community (EAC) Digital Trade Protocol, though ensuring that digital integration benefits those who generate data—not only those who own platforms—remains a central governance challenge.
Multilateralism offers the broader scaffolding for these reforms. The OECD has called for horizontal coordination across innovation, competition, and labour policy, emphasizing that digital governance must link technological progress with social outcomes. This includes measures for data localization, fair taxation of digital services, and interoperable regulatory standards. The International Labour Organization, through its ongoing discussions on a global standard for decent work in the platform economy, similarly underscores that algorithmic management and cross-border labour markets require common norms and accountability mechanisms.
In a global digital economy characterized by entrenched asymmetries, such frameworks are indispensable. They can help ensure that the data and labour of LMICs feed into sustainable upgrading rather than extractive accumulation. UN Trade and Development further stresses the need for a global architecture that treats data as a shared resource and promotes equitable access to digital capabilities through technology transfer and open innovation.
For LMICs, the challenge is to move beyond input-focused digital integration toward strategies that strengthen local value creation, innovation capacity, and labour protections. Coordinated action across national, regional, and global levels can help ensure that digital transformation expands—rather than constrains—domestic policy space. But turning multilateral principles into tangible outcomes ultimately depends on domestic institutions able to align industrial, labour, and data governance under a coherent, transformative vision.
A Digital Development Pathway
Kenya’s trajectory offers valuable lessons for the current stage of digital industrialization. First, policy cannot end with access, infrastructure, or skills development; it must extend to the governance of data, the transparency of algorithms, and the protection of rights at work to ensure domestic value capture. Second, decent work is not a by-product of transformation but one of its productive foundations: it anchors trust and stability in the labour market, creating the conditions for sustained learning, innovation, and socio-economic spillovers. Third, a credible digital development pathway must do more than attract investment. It must possess the regulatory and institutional capacity to discipline platform monopolies, nurture domestic innovation ecosystems, and cultivate public trust in the governance of technology and work. Public–private partnerships should, therefore, expand beyond capital and connectivity to include worker representation, digital-rights advocates, and local small and medium-sized enterprises—not only global firms. Industrial policy in the digital era must be infused with principles of technological and epistemic justice: equitable access to infrastructure, inclusive governance of data and knowledge, and strong socio-economic rights.
With artificial intelligence accelerating the digital transition, LMICs face a critical choice: whether to adapt passively to technological change or to shape it as architects of a fair, inclusive, and sustainable digital future. Reimagining industrial policy in this context means embracing digital dynamism while ensuring that countries fully grasp the dividends of digitalization.
The challenge is enormous, and so is the opportunity.
Maria Mexi is Senior Advisor on Labour and Social Policy, and Kitrhona Cerri is Executive Director of TASC Platform at the Geneva Graduate Institute.