Trade Forum Features

Creating an inclusive digital economy is vital to achieving the SDGs

5 July 2016
ITC News
Information and communication technologies are already improving
peoples’ lives, but their potential can help us build an even better world

Since the birth of the World Wide Web in 1990 the world has witnessed the beginning of an extraordinary fourth wave of industrialization. Information and communication technologies (ICTs) from computers and smartphones to mobile apps, networked smart sensors, web-enabled drones and cars now pervade the personal and professional lives of those living in the industrialized world.

At the International Telecommunications Union (ITU), the United Nations specialized agency for ICTs, we celebrate the fact that more than 3.2 billion people are connected to previously unimaginable possibilities. ICTs are already helping people make better-informed decisions, providing access to education resources and health information and creating new organically grown networks of information and influence around issues that matter.

According to Connecting the World: Ten Mechanisms for Global Inclusion, a new report from social media firm Facebook and financial services company PwC, providing internet access to the 4.1 billion people in the world who do not yet have it would increase global economic output by US$ 6.7 trillion and lift 500 million people out of poverty.

The Global e-Sustainability Initiative, an NGO focusing on ICTs for a sustainable future, estimates US$ 6.5 trillion of additional revenues will flow from ICTenabled services in 2030. It also predicts ICT-enabled services from other sectors will contribute an additional US$ 4.5 trillion of revenues from increased agricultural yields, expanded e-commerce offerings and smart energy solutions. Increasing use of ICTs could also cut total economic costs across sectors by US$ 4.9 trillion.

Early success stories are already coming out of the developing world, where smartphone capabilities are now being used in applications ranging from detecting and mapping disease outbreaks, to the proliferation of educational resources, to platforms for economic empowerment such as e-commerce and mobile banking.

Three areas in particular are providing good reason for optimism around the potential for ICTs to overcome long-standing development challenges – the Internet of Things (IoT), digital financial services (DFS) and small and medium-sized enterprises (SMEs).

In the industrialized world, IoT – the growing number of connected devices ranging from computers and smartphones to simple sensors and radio frequency identification chips – is already extensively deployed in stock and inventory systems, fleet management, environmental monitoring and industrial processes.

ITU’s report on ICTs, ‘Trends in Telecommunications Reform 2015,’ noted that over one billion wireless IoT devices were already shipped in 2015, with as many as 25 billion networked devices predicted to be connected by 2020 – making IoT the largest ICT device market worldwide.

This could be great news for developing economies. A recent joint report by ITU and global technology company Cisco, ‘Harnessing the Internet of Things for Global Development,’ gives concrete examples of how IoT could have a major impact in areas such as grassroots delivery of health care and education, positively transforming communities within a time frame that would have been unimaginable just a few years ago.

In terms of deployment, strong demand for IoT technologies in developed countries has created a huge array of IoT devices that are readily available, affordable and scalable. The basic infrastructure to support IoT (Wi-Fi, internet cafés etc.) is already in place in many developing communities.

IoT devices are well-adapted for use in rugged, remote and inhospitable environments and many devices already offer very simple functionality that does not require skilled technicians for installation or maintenance. For example, reduced and alternate power supplies, such as solar, can maintain sensors and networks where there is no consistent electricity supply.

Global interoperability between devices will be key to leveraging IoT’s full potential. To this end ITU’s Telecommunication Standardization Sector has set up a new ITU-T Study Group, ‘Study Group 20: IoT and its applications, including smart cities and communities.’

DFS matters, too. Keep in mind that an estimated 2 billion adults worldwide have no access to even basic banking services, representing a major barrier to socio-economic development. In today’s connected world, however, we can start to leverage near-universal access to mobile phones as a basic platform for financial transactions, representing a fast, easy, cost-effective way of putting financial services within reach of all the world’s people. ITU is working to bring ICT and financial service regulators together with industry to develop a common international framework for DFS to facilitate the development and deployment of easy-to-use new services while ensuring vulnerable people are protected.

Considerable work must be done to realize that goal. Regulatory gaps that need addressing include ensuring a level playing field for new service providers; number and data portability to promote consumer choice; guaranteeing gender-inclusive access; creating consumer safeguards; and harmonization of regulations. Substantial technical challenges such as safeguarding network and user protocols; developing simple, effective online payment platforms; counteracting digital fraud to mitigate risk; and promoting return on investment to encourage healthy market competition must also be overcome.

To fully realize the benefits in terms of social and economic progress of bringing the more than 4 billion people with no internet access into the online world, we must continue leveraging the power of public private partnerships and the huge potential of SMEs. Today’s ICT ecosystem is increasingly being driven by grassroots entrepreneurship, delivering local solutions to tackle local challenges. Entrepreneurs and SMEs provide up to 70% of global employment and we need their expertise, innovation and investment to achieve common goals of sustainable economic and social development.

Governments around the world recognize this and many are now actively promoting national innovation and entrepreneurial hubs with the aim of creating a vibrant startup culture.

However, we still need to address a huge gap in funding, skills, tools and knowledge. Almost one-third of the world’s venture capital is concentrated in the San Francisco Bay area. This very small part of northern California matches venture capital investments in the whole of China and Europe combined.

As Secretary-General of ITU, I want to ensure that we use our experience and global network to support the evolving ICT ecosystem, including government-funded tech parks, university incubators and startup accelerators so that SMEs in emerging economies can more easily grow and scale their business and access new market opportunities.

ITU will continue to work with our membership in supporting these endeavours to achieve widespread digital social innovation and promote ICT entrepreneurship for social impact to create a better world for all.