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Tell Me How: Speedy Delivery, Lower Costs When Ports Go Digital – So What’s Stopping Them?

View all episodes on our Tell Me How: The Infrastructure Podcast Series homepage

In this episode, we discuss the digitalization of maritime shipping focusing on the benefits in terms of faster and better service, the regulatory changes needed to advance digitalization, the types of jobs that would be created and importantly, the need for good cybersecurity measures.

This podcast series is produced by Fernando Di Laudo and Jonathan Davidar. 

Listen to this episode on your favorite platforms: Amazon MusicApple PodcastsGoogle PodcastsPodbean, and Spotify

Transcript

Roumeen Islam: This is the World Bank’s infrastructure podcast. Following on from our last episode, today, we continue looking at shipping, and our focus will be on digitalization. I’m sure you’re all familiar with the Panama Canal. The canal spans 82 kilometers, an engineering marvel, and it took 10 years to build. It allows 14,000 ships a year to cross from the Atlantic, the Pacific Ocean, saving huge distances and untold weeks at sea.

Of course, each vessel also pays a hefty toll, a $50,000. In 2019, the Panama Canal and Maritime Authorities decided to upgrade to their new maritime single window, which relies on digitalization, and at one stroke removed about 300,000 pieces of paper and saved over 3000-man hours every year. That’s a lot of savings, and in the pandemic, digitalization has proved really important.

The more digitalization of ports and shipping can help reduce queues of ships, waiting to dock and unload across major ports faster we will get the goods we are waiting for. Let us find out how countries should approach this change.

Roumeen Islam: Good morning and welcome. I am Roumeen Islam, host of Tell Me How. And today my guest is Martin Humphreys, expert on issues of transport, connectivity, and regional integration, specifically on the maritime sector. Martin will be speaking about how digitalization is transforming ports and the shipping industry. Welcome, Martin.

Martin Humphreys: Hi, Roumeen. Thank you very much, indeed. It’s a pleasure to be here.

Roumeen Islam: Lovely to have you. Martin, could we start by getting an idea of why maritime transport is so important to the world’s economies and to economic development in our client countries?

Martin Humphreys: Yes. By all means let’s start with maybe the larger figures. It’s fair to say that I think four-fifths of global merchandise trade is now carried by the maritime sector. It’s been growing approximately 3 percent a year since 1970 and amounted in 2019 to about 11 billion tons. It’s projected to continue to grow. And although the pandemic has flattened the trend a little bit, the expectation is that it’s going to be close to doubling by 2050. In terms of how it affects our daily lives, one of the sorts of anecdotal comments that people make about the maritime sector is that the maritime sector carries 90 percent of everything. The clothes that you wear, the shoes that you wear, the food that you eat, the furniture you sit on, it’s usually traveled by container ship from somewhere to somewhere before it comes to your door.

And increasingly, as we’ve seen over the last 12 months, whenever you have friction within the maritime sector, it translates very quickly into shortages on the shelves. At the most serious end, that’s food insecurity and increased food prices in our client countries. At the more humorous end, one of the concomitance or outcomes from the Ever Given blockage of the Suez Canal was the risk that you might run out of toilet paper because China makes 25 percent of the world’s toilet paper. And apparently there were a number of large consignments held up at the entrance to the Suez Canal on the way to you. I was just going to add for our client countries, particularly, the maritime sector is a crucial avenue for their international trade, and the relationship between the maritime sector and the cost of that trade, whilst it isn’t entirely clear, there has been an awful lot of work to indicate that a reduction or an improvement in the efficiency of the maritime gateway will have a direct impact on the cost of the international trade and obviously GDP imports and exports, incomes, and prices within the countries. Let me pause there.

Roumeen Islam: Yes, thank you. I was going to say that it wasn’t just a shortage of toilet paper that was worrying us. There were all kinds of shortages. You mentioned food. There were medicines, protective equipment, all sorts of things that depend on these ships getting to the ports, and the goods, getting from there to us. And in terms of what you just said, transport costs have indeed been a very important factor in determining trade flows historically. So, as it’s so important to trade, both internal and external, I assume, there’ve been substantial innovations in technology, both for ships and for ports — they carry much more cargo. And so, I assume you also require constant improvement of the physical infrastructure, is that right?

Martin Humphreys: Yeah, that’s absolutely right. Probably the biggest change in the last 70 years has been the introduction of, what’s known in the industry as the standardized unit load, but outside the industry, it’s the container. This was introduced in the mid-1950s by an American inventor, an entrepreneur by the name of Malcolm McLean. And prior to their introduction, ports historically had been noisy, dirty, extremely labor intensive. And because of the piece rate nature of the work, had led to considerable poverty and deprivation. Ultimately, it led to unionization and the protection of the workers, and that engendered a new set of problems.

The port was usually at that time in the heart of the city. So, every major city of commerce would have, at its heart, a bustling network of narrow streets and vessels and longshoremen and stevedores carrying loads back and forth to the vessels, but also carrying loads individually, sometimes from the port to retail and wholesale establishments. The introduction of the container actually revolutionized all that and realized an emphasis on cost reduction that is ongoing. It allowed, for the first time, a very smooth interchange with other modes.

And just to give you an indication, I think in 1956, in New York, it took approximately 2.5-man hours of work to move one ton. And that every time you lifted it, so from the vessel to the pallets, it would be 2.5-man hours per ton. And then of course, if we’re talking about 10 tons, it’s 25-man hours. And the pallet gets lifted out and put on the quay, and it’s another 25-man hours. And now, that’s done in two or three minutes in one container.

Roumeen Islam: So, containers are much easier to pack than sacks and they can also be lifted by cranes now. So, you don’t need those same laborers?

Martin Humphreys: Absolutely. Yes, it can be done in three minutes. The same work that had taken half a day and 50 men is now lifted out in one container, put on a truck, and driven out of the port. And it actually led to the movement of ports from the city centers to large open areas with good rail and road access.

Roumeen Islam: And the shipping industry also became much more capital-intensive. So, are we seeing that trend continue? Everything is becoming more capital intensive, is that right?

Martin Humphreys: Absolutely. The first vessels or the first container vessels, when they were introduced, carried about 500 containers, and then slowly, and that’s in the early sixties. Twenty years ago, the largest vessels were carrying 6-to-8,000 containers or equivalent containers. We call them 20-foot equivalent units in the industry. Now the largest vessels carry 24,000 containers and are the length of four football pitches and almost one football pitch across. And to access and egress the main ports, that requires the ports to expand both the depth of water that’s available, the strength of the quay, the size of the crane, and the access infrastructure in order to shift those containers in and out of the port quickly. That places a considerable need for public investment in parallel to the investment in the vessel. And there is obviously a difficult calculation. Although it reduces the cost of international trade, does it reduce it enough to justify the investment in public investment terms that will essentially increase or reduce the cost margins for a private shipping line? And that calculus is not always done clearly by the port authority and in our client countries obviously that’s some way that we help.

Roumeen Islam: Is there an estimate of how much a country might gain from investing in its ports?

Martin Humphreys: At the level of the port? Yes. I think it’s much more difficult to come up, partly because the industry is notoriously secretive, on the rates of charges and how they vary from the premium routes, say between China and Europe, or China and the west coast in America. So those routes that essentially serve the smaller ports in our client countries, despite the fact that it’s a network industry, unlike a public mail service, which obviously is a public good and charges the same rate to deliver a first-class letter anywhere– that isn’t true of the shipping industry and our client countries are disadvantaged by distance and by volume. But what that disadvantage is, the lines are very cagey about revealing. Let’s put it like that.

Roumeen Islam: Right, let us go back to digitalization. Can you explain what that term encompasses here, and why is this so critical for the sector? What are the risks? And actually, could you also speak about the risks for our countries if they don’t move on this digitalization path?

Martin Humphreys: Let me just paint you the historical picture. And I think that provides a nice background if I may. When the vessel comes into a port, historically, the captain would have been required as soon as the gang plank is dropped. He will be met by a number of representatives from public agencies within the country and the port in which he’s calling. And he will declare what he’s carrying on the vessel. He will declare the crew that he has. He will declare whether they’re well or not. He will declare whether there’s any personal effects that the crew is carrying. He will declare whether there’s any hazardous materials. And he will also declare what he’s proposing to load and unload at that port. And all that was done by paper.

He would also be met by the agent of the importer, who for a range of different consignments potentially, would also have a piece of paper indicating what they were expecting to receive. And this took quite a long period of time. It could take days. And then, the vessel with the men employed themselves would then be berthed for anything up to a week, whilst that cargo was unloaded by the day workers, the longshoreman or the stevedores.

Digitalization, essentially in its simplest form, means the conversion of all that text and the paper-based transactions into an electronic format. This obviously brings significant savings. It can be done in advance. It reduces the amount of time required at the berth before you can start unloading, to potentially nothing. It also, I think, removes the possibility of error. It removes the need for all those representatives to be there when the gangplank is dropped, and it can be done in advance. Unfortunately, despite the fact that it’s mandatory, it isn’t something that’s done in all ports yet. The international maritime organization standardized the format of the transfer of information and it’s now mandatory that all ports have to be able to receive this information in electronic format from ships, by EDI, electronic data interchange. And that’s basically the first step in the digital roadmap.

Roumeen Islam: Sorry, you’ve already saved several days with that first step. And we know from just reading the newspapers, and how much it costs for the Ever Given to be stuck, that each day cost a lot to a number of different agents. Is that right?

Martin Humphreys: Let’s just look at it from the vessel itself. If we’re talking about a container ship, not a particularly large one here, let’s talk about one that carries maybe 5,000 containers, that’s $50,000 a day, every day, it’s sitting idle. Multiply that by the number of calls the vessels will make in a port. And if you have each vessel waiting two and a half days, you’re very quickly accumulating waiting time costs of up to quarter of a million dollars.

And we did a study in Tanzania in 2013, where we looked at the cost implications of ships waiting at Anchorage. And there, the annual estimate was $252 million, which is similar to what we see now, actually in some of the South African ports.

Roumeen Islam: Okay, these are large numbers. So, you mentioned this one aspect of efficiency improving with digitalization, the paperwork and the processes that you have to do, they’re done fast. Now, what about other advantages? Does it reduce corruption, rent seeking, because you have fewer people, fewer bureaucrats to deal with or agents?

Martin Humphreys: Let’s be kind and say in its purest form, it removes the possibility of errors in the duplicate papers. It certainly reduces the time; it reduces the risks associated with individuals not being able to make a particular time or appointment. The ship’s agent, if he’s not there, his consignment would not be unloaded. If the customs officer doesn’t get there, then, at a particular point in time, there would be a delay until the captain was cleared to start unloading. And at the time of, within a pandemic, moving over to an electronic system obviously removes all the risks associated with a breakdown, of availability of key staff at the quay. So, it improves the resilience of the system as well by moving over to a paper-based system.

Roumeen Islam: Could you explain a bit more what you mean by resilience? We’ve mentioned the pandemic, but are there other areas where it might improve other situations and where it might improve resilience?

Martin Humphreys: If you think about the number of paper-based transactions, obviously the government’s implications are removed by moving over to an electronic data interchange system or digitalization, a digital system. Moving over to a digital system, a digitalized system, assuming that you have consistent power supply, and assuming that you have understanding on the part of the operators, you essentially get a stronger system that is more efficient in terms of cost and time but is also more robust to interference.

The pandemic gives us an excellent example about how the resilience of a system can be tested by the unexplained or unexpected. Another unfortunate, recent tragedy was the explosion in Beirut port on August the fourth. Now, at the time, that halted all the operations in the port, because the container terminal was a little bit further away. They had an electronic system in place. They were able to get back up and running in some form within days.

Roumeen Islam: I see. And I assume then, you hedge your gains, any kind of risk, it could be weather related ones as well. You’re better able to manage.

Martin Humphreys: As long as your power supply doesn’t go down because of the cyclone or the hurricane, yes.

Roumeen Islam: That’s a very important point, indeed. So, I think our listeners might be interested in hearing about all the port and ship infrastructure that’s involved in delivering goods. Could you describe for us a logistical chain for some goods that we use every day?

Martin Humphreys: Yes, by all means. I jokingly mentioned earlier about the maritime sector carrying 90 percent of everything, but the illustration that possibly comes to mind most quickly, and this displays possibly my preferences in the evening when I’m relaxing after work, is let’s talk about a bottle of Pinotage, red wine from South Africa.

Here, the only thing that comes from South Africa to a certain extent is the wine itself. And the bottle: usually sourced in China. The corks, I think I’m writing saying 80 percent of cork production around the world comes from Southern Spain, Portugal and part of North Africa; and are dominated by Portuguese companies, so undoubtedly, the corks will come from there. The eco labeling that goes on most wines now, particularly those that are being sold at a relative premium comes from specialist producers in the United States. So, they are all taken by container, down to South Africa, and they’re taken out of the port of Durban up to Stellenbosch.

The vineyard loads its wine into the bottle, puts the American label on it, and the Portuguese cork, and sends it back in the container at the Stellenbosch. It comes back over from Stellenbosch, to possibly via Northern Europe, to Savannah, Baltimore, and then goes from Baltimore onto a train or truck to the wholesaler where it’s unloaded. And then from there, will go on another smaller distribution vehicle to Wegman’s or Whole Foods, and eventually, you or I will buy it one evening and enjoy a nice glass of South African Pinotage.

Roumeen Islam: That’s amazing. I did not realize that so many ships and ports were involved in that bottle of wine getting to me. So, when I see all these ships, they’re more than ships that pass in the night. They’re actively collectively doing something.

Martin Humphreys: Yes, absolutely. And there’s another famous example that economists often quote as an illustration of how global trade takes place. And that’s, I think there was a publication a few years ago that was well known, The Travels of a T-shirt in a Global Economy, essentially, it’s the same thing. The cotton is grown in Texas, it goes to China to be processed, comes back to the United States to have the graphic printed on it. And then it’s distributed elsewhere in the world from the United States.

Roumeen Islam: Very interesting. So, let’s go to some of the obstacles that there may be in a port or a country to commence its digitalization journey. Is there a logical sequence? How should we think about this?

Martin Humphreys: There is, and the complexity gets more difficult as you travel down the roadmap. We talked a little bit earlier about the mandatory requirements. And it’s possible for those mandatory requirements to be met to a certain extent by the port authority and the stakeholders within the port themselves. So, the EDI interchanges between the vessel and the port authority and the other public agencies, if it goes through one channel, if you like, then it’s known as maritime, single window. When you start linking that to the other clearance agencies via a port community system, then you need to ensure that all the agencies understand how it fits together. You need to ensure that there is trust and willingness to share certain amounts of information, but also no suspicion that information can be accessed by third parties. And there needs to be a willingness to work with the private sector because they’re a key part of that.

Now, often in some of our countries, there is a certain silo mentality between the port authority and the customs agency for instance. Or, between the customs agency and the feeder sanitary agency that precludes, based usually, on a limited understanding of how to work together, that precludes the introduction of the more appropriate and complex technologies as we go forward. So, you need political commitment, usually at the highest level to be above ministry level, to ensure that you have a clear commitment and a clear understanding on the parts of all, that this is the journey you want to embark on. And then, you need to ensure that the people within the different agencies have the capacity to implement, but also to understand what the technology is telling them, and what the technology could potentially allow them to do.

And as one example, the movement of ivory through the ports of East Africa is a known problem. And the international maritime organization requires all loaded containers to be scanned before they’re placed on the vessel. So many of the port authorities have been investing in scanners, but the problem often is that the scanner operator has no capacity to interpret the images on the scanners to look for the ivory that’s in the container, potentially hidden away in, you know, the commodity groups. So there needs to be quite a lot of capacity building in terms of the human capital. And then most importantly, you need a legal, regulatory, and policy framework at the national level, across the different agencies, across the different sectors, that would facilitate the introduction of an optimal system. And that’s quite a challenge.

Roumeen Islam: So, this system would ensure that data are shared across the different units that need the data. That’s one of the important aspects of the legal and regulatory framework?

Martin Humphreys: What if you go back to my earlier example about the group that’s meeting the vessel at the quay side? And now, potentially with a digital system that is appropriate, the customs officer wouldn’t need to leave his office. He can log into the system. He knows in advance what’s coming, and what’s going to be unloaded off that vessel. He can check that the agent has paid the duty and that he can push the button to say that consignment is cleared. Of course, that precludes him, asking the agent for a small gratuity in order to provide that clearance, which is a benefit, but potentially it’s much quicker if he understands that. To get to that point, you need to have the customs agency and the port authority working collaboratively to ensure that the system will allow access to both, but the communication between the vessel and the port authority, and the vessel and the customs.

Yes. Undoubtedly, that data has to be transmitted in a format that will be recognized by the port authority and the customs clearance body. And it has to be done to a standard that would allow that vessel to make that same communication in every port, to every customs authority on every juncture in its journey basically, every point of call on its route.

Roumeen Islam: I want to go back to something you mentioned about capacity development and human capital. So yes, obviously there will be some training needed, some capacity development needed both managerial and technical levels, but then there’ll also be displaced workers, I assume, because as you get more mechanized and more digitalized, I assume that there will be some unemployment or am I incorrect?

Martin Humphreys: No, you’re absolutely right that this is going to be a structural change in the industry. And I don’t think in the same way that the introduction of the standardized unit loads, the container, was a structural change in the industry. Prior to that, the ports would hire many thousands of day workers: stevedores, longshoreman. And obviously with container ships and container vessels, the numbers dropped dramatically. Now, you have one crane operator who can do the work of 500 men in an hour, basically. Digitalization is going to also lead to some structural changes, particularly when you move further down the path towards greater autonomy.

Rather than having a crane operator, now, the crane will be operating automatically rather than having somebody driving a straddle carrier or reach stacker, these are the mobile vehicles that would lift a container for the stacking; that could all be done by autonomous vehicles within the port area, because the port area is secure.

So, the educational requirements, if you like, or the skill level of the port worker on average will go up markedly and yes, the number of port workers required will go down. I wouldn’t say in our countries that you know, our client countries with certain exceptions, that we’re there yet. I think at this end of the spectrum, we’re starting to see this in your Antwerp, your Rotterdam, your Shanghai, your Singapore. I think probably over the next 10 or 15 years, we’ll see this in Dar-es-Salaam, Cotonou, and in places like this.

Roumeen Islam: Yes. I think it’s very important to be cognizant that these structural changes could have impacts on the human level as well in the labor market as well. And to understand that if countries also undertake additional investments in efficiency and structural change, then it creates opportunities for labor to be employed elsewhere. But this is how it is with every structural transformation. Now, you mentioned standardization of documents earlier on, and I guess this is an issue that’s related to interoperability of the various systems used by ships and ports.

Martin Humphreys: The example we can draw before we move on to the digitalization of the text and the paper-based transactions, is one of the reasons that the container has been so successful, is it’s actually standardized. With certain exceptions: we have 20-foot containers, we have 40-foot containers. We have some that are high cubes – a little bit taller, some refrigerated, but the vast majority fall into the two categories of being 20 foot or 60, can be loaded on a ship in one place and unloaded another. We know exactly the type of crane we need to load it. And then it can be lifted onto a lorry which needs no changes or train, and it can go on to its destination. And that container can be loaded or unloaded at any port. So, the technology is the same everywhere. It’s exactly the same with the digitalization aspects. What you need is to ensure that the data that is transmitted by the vessel is done to a similar standard in every port so that every port can receive exactly the same data, the essential data that it needs, and act on it.

But the systems that receive the data don’t need to be the same, but the data needs to be conveyed in a manner that can be responded to by each and every port authority. One of the aspects related to this is the software on the landside, of course. You have options between proprietary software and you have options with open-source software.

Now, some ports have chosen to go down the papaya tree route partly because earlier there was little opportunity to develop open-source software. I think for many of our client countries, particularly the small island developing states, some of the smaller countries, those are pretty expensive options.

The port authority is usually one of the most profitable parastatals. Some form of modular open-source system will probably suit them better. As long as that system can receive exactly the same data.

Roumeen Islam: Could you talk a bit about increasing cyber security risks as we go digital?

Martin Humphreys: Yes. And we may, as we may have, you may have seen on the news relatively recently, we have one of the largest container shipping lines in the world, CMA CGM, a French line based in Paris, it’s entire online booking system went down for five days.

Roumeen Islam: How much did that cost it?

Martin Humphreys: They, as a private company, they’re not going to reveal it, but it would have been a considerable amount of money, it’s undoubtedly, as with anything. As you move down the digital path, whether it’s Wi-Fi in your home, whether it’s your home security system, there’s a risk, and there’s a risk that system could be breached. And what we’re seeing is certainly a significant increase now in the number of cyberattacks. Between February and May of this year, one estimate was a 400 percent increase. In 2017, Maersk, which is one of the biggest container lines was subject to an aggressive cyberattack that involved a Trojan and asked for ransom. And at the time their answer wasn’t paid, but it certainly led to a significant awakening on their part, of the potential risks. And just to give you an indication of the scale of potential intrusions here at the port of Los Angeles, which I think it’s probably fair to say, is one of the leading ports within the world in terms of protecting itself from cyber security risks, has about 40,000 cyber incidents a month.

Roumeen Islam: Oh, goodness. That’s a huge amount. A huge number. Yes. I see. I guess the advice to our clients as they go toward being increasingly digitalized, at the same time, it’s really important to think about these cybersecurity risks. Now, can you very briefly define what a smart port is? I’ve heard this term before, but I’m not sure exactly what it means.

Martin Humphreys: I wouldn’t say that there’s a consistent definition. You can look, depending on where you look, you’ll find a slight variation. It’s the ultimate point in the roadmap that we have laid out, together with the international association of ports and harbors, in the digitalization roadmap. And, essentially, we’re defining it as a sort of automated port that uses data analytics to make the right business decisions and to run their operations effectively, one would expect a smart port possibly to be run along the manner that I described earlier. So, they will use artificial intelligence. They would use autonomous vehicles. All of the equipment within the port will be connected to the internet things. They will use fifth generation, 5G technology to communicate. And potentially, they will have a digital twin, where they could manage the port digitally through an online twin. When you see it, it is terribly impressive, but I’ve only actually seen at the moment, I’m aware of, one port that has a digital twin, and that’s the Port of Antwerp.

Roumeen Islam: What a concept, interesting concept. So, thank you, Martin, that was really quite instructive. And I’m just wondering whether you would like to add anything?

Martin Humphreys: I think the only thing I would add right at the end is, and we touched on this before, it’s that the iconic figure of the dock worker for those of us who like old movies was, the sort of colorful, muscular Marlon Brando figuring on the waterfront. And the 21st century dock worker is going to be very different. And I don’t think the awareness of that or the need for that has sunk in some of the port authorities in our client countries yet, where he’s more likely to have a PhD than he is to have large biceps.

Roumeen Islam: This is a very important point that we’re ending on. Actually, I think perhaps you want to mention the publication that you’ve recently worked.

Martin Humphreys: Roumeen, thank you very much for the reminder. Yes, I do apologize. The publication I referred to in my comments throughout was: Accelerating Digitalization, Critical Actions to Strengthen the Resilience of the Maritime Supply Chain. This was the first in the new mobility and transport connectivity series, which we prepared jointly with the International Association of Ports and Harbors and was released in December last year. And we’re now following up, I think with a subsequent publication specifically on the cyber security guidelines for port authorities in our countries. Certainly, the former is available online, and the latter will be when it’s released.

Roumeen Islam: Thank you very much. And thank you for that information.

Martin Humphreys: Thank you very much for me. It’s a pleasure.

Roumeen Islam: So, listeners, what did we learn today? Well, firstly, we learned that countries could gain substantially by increasing the efficiency of their ports and transparency of their services through digitalization.

Secondly, such a transformation will require a number of regulatory changes and better coordination between different public authorities, such as the customs and port authorities.

Thirdly, digitalization will go hand-in-hand with a lower demand for unskilled workers, and a higher one for skilled, educated workers, as of other technological changes.

Finally, it’s really important that proper cyber security measures are adopted as countries digitalize. Losses from successful cyber-attacks can be large. That’s all for now. Thank you, until next time.

You can find more information about the podcast on www.worldbank.org/tell-me-how. If you’ve got questions or comments, we’d love to hear from you. You can also find us on all popular podcasting platforms. This podcast was released in September 2021.

Don’t forget to subscribe and thanks for listening.

See you in two weeks.

View all episodes on our Tell Me How: The Infrastructure Podcast Series homepage

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In Benin, where an estimated 19 percent of women make or receive digital payments compared to 38 percent of men, another World Bank initiative aims to provide women smallholders with a safe and private place to store their money and connect them with other financial services. Complementary training on digital financial literacy for recipients and promoting a network of women agents can also help, as social norms often limit women’s ability to interact with male agents.

Digital Businesses

Women entrepreneurs often face a range of barriers, including unequal access to financing, legal discrimination, differences in skills, less access to networks, and more care responsibilities. They are also poorly represented in technology startups. To address these constraints, the Digital Cabo Verde Project aims to support women entrepreneurs with business and entrepreneurial mindset training, access to business networks, peer support, and mentoring.

Beyond comprehensive support for women-led businesses, tackling investor bias is critical. Research suggests that the persistent gender gap in financing cannot easily be explained by differences in education, experience, sector, intellectual property, or geography.

Digital Skills

Building digital skills starts early with hands-on exposure to technology to build girls’ interest and confidence. Typically, complementing technical skills training with soft skills, engaging role models, and creating structured linkages to the labor market through internships, apprenticeships, and job placement programs have positive outcomes. The Kosovo Digital Economy Project, which trains rural women in programming and web design to become online freelancers, shows how digital skills training can create pathways to economic prosperity. Women with disabilities, older women, and illiterate adults may require tailored curricula and flexible programs with active outreach to develop their basic digital skills — another key area for engagement.

Cutting across these pillars is the need to address restrictive gender norms that prevent women from fully participating in the digital economy. Solutions to tackle these vary with context but addressing gender stereotypes and engaging men and boys are essential steps in shifting beliefs and behaviors.

Ensuring that women and girls have equal access to and use of digital technologies — mobile phones, computers, and the internet — is central to their economic and social empowerment and inclusive economic recovery. As we accelerate our efforts on the digital inclusion of women and girls, we call on our partners to join us in this ambitious agenda.

ONU

Some 2.9 billion people still have never used the internet, and 96 per cent live in developing countries, a new UN report has found. According to the International Telecommunication Union (ITU), the estimated number of people who have gone online this year actually went up, to 4.9 billion, partially because of a “COVID connectivity boost”.

This is good news for global development, but ITU said that people’s ability to connect remains profoundly unequal – as many hundreds of millions might only go online infrequently, using shared devices or facing connection speeds that hamper their internet use.

“While almost two-thirds of the world’s population is now online, there is a lot more to do to get everyone connected to the Internet,» Houlin Zhao, ITU Secretary-General said.

“ITU will work with all parties to make sure that the building blocks are in place to connect the remaining 2.9 billion. We are determined to ensure no one will be left behind.»

‘Connectivity boost’

The UN agency’s report found that the unusually sharp rise in the number of people online suggests that measures taken during the pandemic contributed to the “COVID connectivity boost.”

There were an estimated 782 million additional people who went online since 2019, an increase of 17 per cent due to measures such as lockdowns, school closures and the need to access services like remote banking.

Uneven growth 

According to the document, users globally grew by more than 10 per cent in the first year of the COVID crisis, which was the largest annual increase in a decade. But it pointed out that growth has been uneven.

Internet access is often unaffordable in poorer nations and almost three-quarters of people have never been online in the 46 least-developed countries.

A ‘connectivity Grand Canyon’

Speaking in Geneva, Doreen Bogdan-Martin, Director of the ITU said: “The internet divide runs deep between developed and developing countries. Only a third of the population in Africa is using the internet.

“In Europe, the shares are almost 90 per cent, which is the gap between those two regions of almost 60 percentage points. And there is what the UN Secretary-General António Guterres, has called in his Common Agenda blueprint for the future, “a connectivity Grand Canyon”.

‘Digitally excluded’

The report found that younger people, men and urban dwellers are more likely to use the Internet than older adults, women and those in rural areas, with the gender gap more pronounced in developing nations.

Poverty, illiteracy, limited electricity access and a lack of digital skills continued to hinder “digitally excluded” communities, ITU noted.

GBM

For citizens in countries around the world, paying taxes is among their most challenging and time-consuming interactions with government.  For many governments, enhancing tax compliance and collecting sufficient revenue have been a matter of necessity to finance public goods and services.

That is why tax administrations are undertaking the digital transformation and automation of their systems. The adoption of technology can enable successful and sustainable tax reforms, ensure the proper taxation of the digital economy, and reduce the obstacles to compliance. The COVID-19 pandemic, which led to a boom in the use of digital commerce, made this change especially urgent for tax administrations.

The transformation has progressed increasingly rapidly over the past decade, as the cost of digital technologies has plunged and powerful tools to develop applications have become more user-friendly. One example of the falling cost: Cloud storage is now over 50% cheaper than it was a few years ago.

The rise of big data is an important factor in the shift because it can allow easy cross-checking of information, which enhances compliance by taxpayers. Overall, global data volume from mobile payment providers, electronic cash registers, online marketplaces, and other digital sources is expected to nearly triple from 2020 to 2024. 

Digital transformation is also being driven by the rapid growth of e-commerce, which is projected to expand 24% from 2020 to 2025, making it an increasingly important part of the tax base.

The increasing use of cashless payments, through mobile phones and other devices, is also powering the change. Such payments can be easily reviewed by tax administrations and often leave a digital trail that can be audited.

Digitalization makes life easier for authorities by easing the administrative burden, which gives officials more time to focus on higher-value activities.  But it also allows authorities to simplify procedures and reduce the compliance burden on taxpayers. Research shows that in South Korea, for example, digitalization has reduced compliance costs by as much as 19% in the 2011-2016 period.

A real-time, more user-friendly future

With these changes underway, taxation is likely to look a lot different in the future:

  • Instead of storing huge amounts of taxpayer data, administrations will have access to encrypted, distributed ledgers that allow them to capture tax information seamlessly and in real time. This has the added benefit of making tax administrations “less visible” to the public.
  • The decisions of the tax administrations will increasingly be supported and strengthened by artificial intelligence. But the system will need to be closely monitored for errors.
  • Tax administrations could become warehouses for more and more government data. That will give them a central role in the formulation of economic policy, enabling policymakers to review transactions in the economy and allowing better forecasting.
  • The tax system could become much more user-friendly. Services could include prefilled tax returns, taxpayers’ access to their own filing information, the sharing of data with banks to expedite credit approval, along with privacy preserving queries on the tax file by researchers and local communities.
  • Tax administrations will streamline the interface between taxpayers and tax officials, for instance by connecting corporate accounting systems with the tax administrations’ e-filing and e-payment platforms.

Making change work

Despite all the benefits, this transformation is up against major challenges. Research shows that most digital transformation initiatives don’t succeed. Of the $1.3 trillion spent in 2018, an estimated $900 billion was wasted.

To have the desired result, the digitalization of tax systems must enlist a broad coalition of stakeholders to make the necessary legal reforms and provide the funding. 

The shift should also focus on providing value by simplifying procedures and permanently bringing taxpayers into the e-filing, e-payment, and e-document ecosystem. The value could be provided by reduced compliance costs, increased tax certainty, and higher compliance.

In addition, reform should aim to change the culture from managing processes to managing data, and administrations should focus on getting the right data. One high-income jurisdiction told us that there were errors in 15% of their taxpayer files and that 98% of returns could be prefilled with data from just banks.

Finally, tax administrations must develop scalable and interoperable systems that can be used across departments, in headquarters and in the field. 

The process can be cumbersome, but by providing finance and technical assistance, the World Bank has already supported administrators’ efforts on automation and digitalization in dozens of countries—benefiting governments and citizens alike.

UIT

Los Premios para PYME de ITU Digital World 2021 exponen soluciones digitales que ayudan a las nuevas empresas tecnológicas creativas a forjar alianzas y atraer inversiones

Las soluciones tecnológicas inspiradoras tienen el potencial de cambiar y mejorar vidas en todo el mundo gracias al impulso y la dedicación de las pequeñas y medianas empresas (PYME).

El miércoles se presentaron y anunciaron las soluciones ganadoras de PYMES digitales con sede en Hong Kong (China), México, Arabia Saudita, Suiza, Corea del Sur y Estados Unidos con motivo de la ceremonia de entrega de los Premios ITU Digital World, colofón del evento ITU Digital World 2021 y programa clave de promoción de las PYME por parte del organismo de las Naciones Unidas dedicado a la tecnología.

La Unión Internacional de Telecomunicaciones (UIT), organismo especializado de la ONU para las tecnologías de la información y la comunicación (TIC), ha puesto de relieve a las PYME como contribuyentes esenciales para ayudar a sacar partido de la transformación digital en curso en el mundo con el fin de garantizar el desarrollo sostenible.

Los últimos Premios ITU Digital World reconocieron las contribuciones sobresalientes de las PYME al avance de la conectividad, las ciudades inteligentes y la vida inteligente, la cibersalud, las finanzas digitales y la tecnología educativa.

«Las PYME tecnológicas innovadoras –que se mueven con rapidez y responden a las necesidades de los diferentes mercados sobre el terreno– tienen un papel vital que desempeñar para acelerar la transformación digital», declaró el Secretario General de la UIT, Houlin Zhao. «Los gobiernos y la industria de las TIC deben actuar juntos para fomentar un clima que apoye la innovación tecnológica y empresarial, ayudando a empresas como las ganadoras de nuestros premios a expandirse y prosperar».

Este año aparecieron seis ganadores, que abarcan las cinco categorías principales.

PYME ganadoras

Las ganadoras fueron:​

Empresa Categoría País
Benefit Vantage Limited – Ipification Conectividad Hong Kong, China
WIWI Conectividad México
URBIT GROUP LLC Finanzas digitales Estados Unidos de América
Baobabooks Education Sàrl Tecnología de la educación Suiza
Mawidy Cibersalud Reino de Arabia Saudita
SCE Korea, Inc. Ciudades inteligentes, vida inteligente República de Corea

El Vicesecretario General de la UIT, Malcolm Johnson, expresó su reconocimiento a los ganadores y les entregó sus certificados en presencia del Viceministro de Información y Comunicaciones de Vietnam, Phan Tam.

Esta séptima edición de los Premios marcó el evento final de una conferencia y exposición en línea de tres meses de duración coorganizada por Vietnam. Inaugurada en septiembre, ITU Digital World 2021 también marcó el 50º aniversario de la serie de conferencias y exposiciones sobre telecomunicaciones más importante de la UIT.

Durante la ceremonia, se anunció una nueva asociación de la UIT con la empresa tecnológica estadounidense Hewlett Packard Enterprise (HPE), con el objetivo de acelerar el programa el próximo año y dotar a las PYME de acceso a las herramientas, las redes y la tutoría de HPE.

Selección competitiva
El concurso estaba abierto a todas las PYME del mundo, y los proyectos ganadores iban desde la autenticación móvil y la accesibilidad a la información hasta la conectividad para el transporte público, la tecnología financiera (fintech), la escritura creativa y la atención sanitaria impulsada por la inteligencia artificial (IA).

Un jurado de expertos, representantes de los campos de la empresa, la tecnología y la iniciativa empresarial, seleccionó a los ganadores entre un total de 133 candidatos elegibles de 53 países.

Preparar a las PYME transformadoras

Los Premios ITU Digital World formaban parte de un programa para PYME dirigido por expertos que incluía clases magistrales en línea y presentaciones para PYME digitales. Manteniendo el formato virtual, la ceremonia final de entrega de premios celebró la creatividad y la innovación tras unas soluciones digitales que responden a las necesidades del mundo real.

Las clases magistrales especiales exploraron áreas tales como la creación de empresas sostenibles y la colaboración entre las PYME y las corporaciones, la licitación para las oportunidades de contratación pública, el servicio al cliente y la innovación, la cibersalud, el diseño para la inclusión de la discapacidad y la recaudación de fondos. El programa y los premios para las PYME son componentes clave de ITU Digital World 2021, que fue coorganizado con el Gobierno de Vietnam y tuvo lugar de septiembre a diciembre de 2021.

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