Digital technologies can be a powerful driver of economic growth, job creation and sustainable development, including in the developing world. But while digitalization presents unprecedented opportunities, development gains are not automatic. Digitalization comes with a unique set of challenges that need to be addressed.
Digital divides remain wide and are even growing in some respects. In most low-income countries, the share of the population buying things online remains below 10%, compared with more than 60%in many developed countries.
Rapid pace of technological change, with greater reliance on data-driven technologies such as cloud computing and artificial intelligence, adds to the challenge for low-income countries to participate on equal terms in the digital economy.
To thrive in the digital economy, a holistic, multi-stakeholder approach to digitalization is essential. Within the broader context of trade and development, developing countries need to manage a range of policy areas.
Given the complexity of the challenge and the rapid evolution of digital technologies,many developing countries need assistance from the international community to develop effective responses.
Learn about our 7 policy areas
These 7 key policy areas are essential for ensuring that the benefits of the digital transformation are accessible to all and contribute to bridging economic and social disparities on a global scale.
E-Commerce assessments and strategies
National assessments and e-commerce strategies are essential to identify strengths and weaknesses in the readiness of countries to benefit from e-commerce and the digital economy. These assessments can in turn serve as a basis for formulating targeted policies to harness the potential of digital technologies for economic growth and social development.
ICT Infrastructure and Services
Affordable and reliable ICT infrastructure is a pre-requisite for a thriving digital economy. In particular, issues related to accessibility and affordable connectivity, the regular upgrading of infrastructures and reduced regulatory barriers need to be addressed to foster an inclusive and sustainable digital trade environment.
Payment Solutions
Payment systems online are opening up new possibilities for both consumers and corporate buyers. But cash on delivery remains the preferred option in many developing countries, while e-commerce users could greatly benefit from an environment where payments can be made safely and easily online.
Trade logistics
Logistics is at the heart of all e-commerce businesses’ processes. Effective trade logistics and cross border facilitation measures are key for a functioning digital trade ecosystem. Several key factors must be considered to assess the status of logistics in any given country, like the logistical infrastructure, the availability and quality of delivery services along with their affordability. Additionally, challenges faced by customs and port authorities can either add to or reduce the private sector’s burden, influencing the overall efficiency of trade logistics.
Legal & regulatory frameworks
Security and trust are critical to fostering a safe and reliable e-commerce environment for both consumers and businesses. Effective consumer protection, data privacy, and cybercrime laws and regulations, aligned with domestic, regional, and international standards, are essential to safeguarding online transactions. However, many developing countries face widening gaps in these areas, with outdated regulations struggling to keep pace with evolving digital technologies. Addressing these gaps is crucial to ensuring secure and modern e-commerce systems globally.
Skills development
In many developing countries, business owners and policymakers lack the capacities and technical skills to harness the potential offered by digital technologies, thus hindering the uptake of online commerce and digital activities. The need for upskilling and reskilling is also accentuated by the rapid digital transformation of economies and societies.
Access to financing
A strong financial architecture that funds innovation and entrepreneurship at all points across the e-commerce value chain is crucial to facilitate the growth of ecommerce and digital trade. But digital entrepreneurs in developing countries face many challenges when raising capital due to limited access to formal financial systems, a lack of investor confidence in high-risk markets, or inadequate infrastructure among others. These hurdles are even more stringent when it comes to women digital entrepreneurs, who face a wide financing gap which hampers their ability to grow their businesses and impact the surrounding ecosystems.
Cross-cutting issues
In addition, the initiative addresses 2 cross-cutting issues: gender equality, and e-commerce measurement and standardization.
Measurement
Countries need a base of reliable evidence to design, monitor, and evaluate e-commerce and digital economy policies. Such evidence is usually found in the form of official business statistics, produced through regular surveys or by leveraging administrative, customs, or payments data. But many developing countries lack such statistics and need support to build their statistical production capacities.
Gender
Digital transformation provides new avenues for the empowerment of women, but limited access to digital tools and skills, discrimination, negative stereotypes, and social and cultural biases create specific challenges for women to fully harness the benefits of digitalization. Addressing the gender digital divide through a crosscutting and cross-policy approach is essential to build an inclusive digital economy.