A defining feature of the post-pandemic world will be digital transformation, but that transformation needs to be directed to the common good, Kaveh Zahedi writes.
We are living through a decisive moment. The COVID-19 pandemic’s devasting impact is reaching every corner of the world. As we look back at this period, we will see history divided into a pre-COVID and a post-COVID-19 world.
And a defining feature of the post-COVID-19 world will be the digital transformation that has permeated every aspect of our lives. Chief technology officers can say that the pandemic has done their job for them, accelerating the digitalisation of economies and societies at an unimaginable pace.
The digital transformation has gone hand in hand with the rise of digital technologies. These technologies have supported governments to implement social protection schemes at pace and scale. They have enabled e-health and online education, and they are helping businesses continue to operate and trade through digital finance and e-commerce.
However, ensuring that the digital transformation happening all around us does not become another facet of the deep inequalities of the countries in Asia and the Pacific is probably one of the greatest challenges we face as countries start to rebuild.
That is why inclusion must be at the heart of digital transformation if the promise to ‘leave no one behind’ is to be met. In particular, we need to embed inclusive objectives in the four core foundations of the digital economy: Internet access, digital skills, digital financing and e-commerce.
Chances are you are reading this on your laptop or mobile phone, giving you access to the digital world. It is hard for most of us to imagine what life would be like during the pandemic if we didn’t. Sadly, this is a reality for over two billion people in the Asia-Pacific region. And among those two billion are some of the most vulnerable groups.
For example, some 20 per cent of students in East Asia and the Pacific and almost 40 per cent of students in South and West Asia could not access remote learning this past year. This will have lasting effects that perpetuate inter-generational inequality and poverty.
To address the digital divide, the Asia-Pacific Information Superhighway initiative focuses on four interrelated pillars: infrastructure connectivity, efficient Internet traffic and network management, e-resilience, and affordable broadband access for all.
However, Internet access alone is not enough. There is a persistent and still expanding digital skills gap in the Asia-Pacific region. Among the top 10 most digitally advanced economies in Asia and the Pacific, around 90 per cent of their populations use the Internet.
At the beginning of the century, this share stood at around 25 per cent. By contrast, for the bottom 10 economies, Internet users have grown from around one per cent in 2000 to only 20 per cent today.
In response, the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP)’s Asian and Pacific Training Centre for Information and Communication Technology for Development is equipping policymakers, especially women and youth, with digital skills by conducting demand-driven training programs.
On digital finance, while the percentage of digital payment users has increased over recent years, the gap between men and women users persists. Additionally, in East Asia and the Pacific, there is a $1.3 trillion formal financing gap for women-led enterprises.
And while the Asia-Pacific region is emerging as a leading force in the global e-commerce market – with more than 40 per cent of the global e-commerce transactions – these gains have been led by just a few markets.
As a response, ESCAP’s Catalyzing Women’s Entrepreneurship project addresses the challenges women-owned enterprises face by developing innovative digital financing and e-commerce solutions to support women entrepreneurs, who have been hit harder than most during the pandemic.
We have supported a range of digital finance and e-commerce solutions through this initiative – such as a digital bookkeeping app and an agritech solution – providing more inclusive options for women entrepreneurs to thrive. To date, the project has supported over 7,000 women to access financing and leveraged over US$50 million in private capital for women entrepreneurs.
Inclusion is undoubtedly central to ESCAP’s technology and innovation work that focuses on addressing the core foundations of an inclusive digital economy.
The recent ESCAP, Asian Development Bank, and United Nations Development Programme report on Responding to the COVID-19 Pandemic: Leaving No Country Behind underlined the key role digital technologies played during the pandemic and how they can also play a critical role in building back better.
However, the report shows that digitalisation can also widen gaps in economic and social development within and between countries, unless countries can provide affordable and reliable Internet for all and make access to the core foundations of the digital economy central to building back better.
While digital transformation is certain, its direction is not. Governments, civil society, and the private sector must work together to ensure that digital technologies benefit not only the economy but society and the environment, and have inclusion at their heart. Only then do we stand a chance of realising the transformative potential of digital technologies to accelerate progress on the Sustainable Development Goals.