The COVID-19 pandemic has accelerated the shift towards a more digital world. “The changes we make now will have lasting effects as the world economy begins to recover,” stated Mukhisa Kituyi, Secretary-General for the UN Conference on Trade and Development (UNCTAD).
An analysis from UNCTAD shows that because of the COVID-19 pandemic, more people now shop online and rely on the internet for news, health-related information and digital entertainment. But can digitalization foster more than just shopping and entertainment? Can a digitalization strategy bring a society closer together? Can more digitalized countries help developing countries for the better? And is it possible to foster trade through better digital systems? To find an answer to these questions, UNRIC interviewed Christian Staffeldt, Head of Tech Sector Advisory Team at the Ministry of Foreign Affairs of Denmark. He highlighted:
“The Corona crisis showed us that as a society, we can tackle even the biggest challenges when we act together. And it showed us, not least, that digitalization is a crucial tool. The crisis underlined the opportunities that digitalization brings. And it has accelerated the transformation that was already well underway.”
The digital economy presents significant opportunities for both developing and developed countries. Governments in developed countries launch digitalization strategies with ambitious initiatives to support businesses and the people. These strategies and initiatives can help the countries themselves, but also countries abroad towards a brighter future.
Welfare and the digital world
E-commerce and the digital economy introduce new opportunities within e.g. global trade, and thereby contribute to international cooperation and job creation across the world. Policies and tech diplomacy are strong and effective tools for innovation and progress but must be launched effectively. Ensuring that countries have a reliable digital system and, therefore, a robust e-commerce system is crucial in supporting the improvement of welfare. However, Staffeldt warns that there are some challenges that we must not forget:” The rapid digital evolution also requires us to address the challenges that follow. As we transform our welfare societies, we must ensure that everyone can use and benefit from digital services. We must therefore continue to invest in our digital security and ensure the ethical use of new technology and data.”
Improving welfare is directly linked with the 17 Sustainable Development Goals (SDG), where the main objective is to leave no one behind when reaching the goals. Establishing a reliable system of digital identity is critical to enabling every person to fully participate in society and the economy. This is a priority in both developing countries and developed countries; “In Denmark, there is a joint public cooperation on digital inclusion, where solutions and communication for the digitally vulnerable are systematically worked on”.
An example of how digitalization has led to an improved system can be found in India. In India, a national identification system, the Aadhaar, has led to the opening of over 150 million new bank accounts. Many of the account holders were previously unable to open an account.
Staffeldt explained that in developed countries the majority are so digitally savvy that people don’t know what they are capable of. However, at one point, the digitally competent citizen may find themselves at a disadvantage if e.g. a self-service solution is not user-friendly enough. “What is easy for some citizens is difficult for others – and what you could do yesterday, you may not be able to do today. As a group, the digitally vulnerable are estimated to represent 17-22% of the adult population”.
As such, the key to unlocking a more inclusive welfare system is by ameliorating the digital economy, and by improving digital education for subgroups that are being left on the outside due to their lack of digital knowledge. On a national level and international level, conditions can be changed.
The importance of digital strategy
Digital identity refers to the set of electronically captured and stored attributes and credentials used to uniquely identify a person. Digital identity includes data such as fingerprints, facial features and date of birth and using these attributes can provide technology-based solutions for identification to establish a person’s identity and verify credentials.
Digital identification can provide a cost-effective means whereby nations can provide citizens with access to rights and services, including the ability to attend school, access health services, safely engage in online transactions, and open a bank account, as seen in India. On a bigger scale, digitalization provides opportunities with the common well-being of a nation at its core. We asked Staffeldt about the Danish national plans for digitalization:
”We must strengthen our common welfare, accelerate the green transition and boost growth and exports through digitalization. At the same time, we must secure Danish citizens and businesses against cyber attacks. This requires us to invest wisely and to do so here and now.”
Focusing on accelerating the green transition will help Denmark reach the targets set by the Danish climate law, the targets set at the Paris Agreement, and the targets set via the Goals of the 2030 Agenda for Sustainable Development. The green transition will help reach SDG 7, Affordable and clean energy. Growth and exports will help reach SDG 8, Decent and economic growth, and SDG 9, Industry, Innovation and Infrastructure.
Overall, e-commerce and digital strategies have the potential to help SMEs (small to medium-sized enterprises) with business, alleviate unemployment and crime, promote trade, improve methods of learning, and stimulate green development.
Policy making
The advantages of a strong digital economy are clear. However, for many countries, both developed countries and, especially developing countries, a lack of access to information, communications technology infrastructure and other shortcomings hinder them from fully integrating into the digital economy. From a commercial point of view, the issues are due to “a lack of resources and knowledge about the possibilities of digitalization, a lack of skills to implement new technology and unclear or outdated rules for the development and use of new technologies”, Staffeldt states.
Therefore, to ensure that e-commerce contributes to sustainable development, policies need to be carefully considered, to ensure that they maximize positive effects while making sure that no one is being left behind. If all countries focus on national digital strategies and policies, the international level of welfare and well-being can be raised, thereby accelerating the fulfillment of the SDGs.
International cooperation
In a field as fast growing and innovative as the technology sector, all countries are working hard to stay at the top of this sector. When developing countries devise their national strategies and these strategies are proven to work, other countries turn their attention towards them and try to follow in their footsteps. One of the digital pioneers is Denmark whose “[…] Government, therefore, wants Denmark to influence and set the direction for European work on several key digital agendas. These include cyber security, digital public services, regulation of tech giants and a well-functioning digital internal market with fair competition conditions,” Staffeldt explains and continues: “The government, therefore, wants greater internationalization and export of Danish digital solutions. The potential is great, and many countries are facing the need to invest in public digital solutions”.
The United Nations are also working hard to accelerate and improve the digital know-how of developing countries. The eTrade Readiness Assessments programme by UNCTAD has – since 2017- been working with developed and developing countries to help guarantee that countries benefit from the digital transformation.
Global cooperation, cooperation between authorities and citizens, and nations and organizations will allow the international community to ensure that technology is harnessed for good and seek the opportunity to manage its impact. And while governments remain at the centre, the involvement of the private sector and civil society is essential. Future generations will judge whether the present generation seized the opportunities presented by the age of digital interdependence. The time to act is now. Act to find a solution that benefits everyone.
Read more here:
E-commerce and the digital economy | UNCTAD
A UN treaty on cybercrime en route (unric.org)
The Danish National Strategy for Digitalisation