What are the key areas of the digital economy?

The G20’s Digital Economy working group covers discussions around digital access, equality, artificial intelligence governance, safety, innovation and sustainability. It also looks at how the digital space can be regulated so it does not cause harm to society. In the last two or three years it has gained a lot of traction with nations that are trying to deal with inequalities in the digital economy.

For example, the advent of artificial intelligence (AI) is causing consternation in all sectors, especially around jobs and labour, ethics, and the massive amounts of energy it uses. These are huge themes that were discussed in the G20.

How is South Africa measuring up on digital access compared with Brazil?

South Africa has had 31 years of democracy and has generally had suboptimal outcomes. For instance South Africa has one of the highest data costs in Africa.

There’s also a lack of broadband in public spaces. This is despite the Independent Communications Authority of South Africa and the Competition Commission promoting competition to keep prices affordable.

Brazil is a developing country, but has far exceeded South Africa in meeting digital access. South Africa’s broadband rollouts for ordinary people, clinics, rural areas and schools are weak compared to many medium and lower income countries.

This means that connectivity and digital inequality are two major barriers. When people don’t have access or affordability or digital literacy, they can’t use e-government services.

A major part of the problem is that South Africa is trapped between jobless growth, de-industrialisation and inequality.

Academic Dani Rodrik looked at inequality, unemployment, skills development and the unequal globe and came up with this trilemma. In South Africa, the Fourth Industrial Revolution (4IR) digital economy aspects are about automation, big data, AI and the Internet of Things. But very few nations, except those in the north and China, have mastered these four.

For this reason, no more than 10 countries dominate production, patents, research and development, and are able to commercialise these. The rest of the planet are mainly consumers.

If countries don’t have properly managed digital economy policies, systems and skills development in place, they won’t be able to participate in the Fourth Industrial Revolution. This will cause disruptions in society and the labour market.

In the area of digital economy development, Brazil does far better than South Africa, India, Kenya and other developing countries. This is mainly because it’s had a very progressive Labour government, the Partido dos Trabalhadores (Workers’ Party) that has governed Brazil for two periods totalling 15 years. From early on they invested in social development. They funded expansion of infrastructure and services and very strong education programmes.

Brazil has led into the first generation of telecentres in the favelas (shack settlements). The telecentres are public facilities that offer access to computers, internet and digital training programmes for women, youth and low income communities.

Brazil’s National Broadband Plan uses satellites to expand internet to rural areas. They also have world class science and technology institutions and very good regulatory systems. All of these come together under this social agenda and they have solid leadership.

So I would argue that there is no comparison – Brazil far exceeds South Africa in all aspects of the digital economy. But fortunately, Brazil has made many knowledge resources available. It’s up to South African institutions, universities and government regulators to take that knowledge and implement it. That is how South Africa can make a dent in digital inequality.

What progress was made under South Africa’s G20 presidency to boost the digital economy?

The country’s presidency was caught up in global geopolitics and opposition from the Trump administration in the US. The G20’s specific working groups therefore faced great difficulties. For example, the Digital Economy working group could not agree on the final statements because the US delegation opposed any talk of equality, diversity, gender and climate.

These are huge themes in the digital economy. But the final declaration from the leadership summit was generally watered down to accommodate US concerns.

Nevertheless, the South African G20 presidency came up with some good statements on how AI and digital tools can support the growth of small and medium businesses.

Africa is grappling with the rapid growth of fintech – digital tools, apps and platforms that make it easier to provide financial services such as payments, loans, savings, insurance and investments.

In Nigeria and Kenya, new digital financial systems have expanded faster than regulations could keep up. The result has been chaotic state interventions. In contrast, the BRICS Digital Industrialisation initiatives set out an appropriate model for global south countries. (They set out ways for the global south countries to support each other by sharing skills and technologies rather just allowing unregulated market expansion.)

Was the South African G20 presidency worthwhile?

The G20 was an expensive exercise for South Africa. It cost well over a billion rand (US$58.3-million). And I argue that it hardly created impact on themes or dialogues related to social society and civil society.

The absence of public engagement and mobilisation on issues like the debt crisis, cost-of-living pressures and AI exclusion and bias were the “sore thumbs” (most obvious weaknesses) of South Africa’s G20 year. In conclusion, South Africa’s G20 presidency was strong on symbolism and media coverage and marketing, but weak on concrete outcomes and agreements.

Written by Ashraf Patel, Senior Research Associate: Digital Economy, University of South Africa

This article is republished from The Conversation under a Creative Commons license. Read the original article.