As COVID-19 ushers in massive ramifications for emerging economies around the globe, the importance of collaborating to ensure sound frameworks for digital transformation cannot be understated. On one hand, many emerging markets are facing the most acute economic effects of COVID-19, but they also have varying assets that indicate tremendous long-term promise. While each region, and each country, faces its own set of challenges in harnessing innovation for long term growth, the potential digital represents is remarkable across the board.
Under this backdrop, Concordia and Google teamed up to host a pair of important conversations on how emerging markets can most effectively leverage digital transformation to bring about sustainable and inclusive economic growth. At the center of these conversations was Google’s new ‘Digital Sprinters,’ framework, which provided the basis for dialogue at both the 2020 Concordia Africa Initiative and the 2020 Concordia Americas Summit.
Presented by Dr. Guy Ben-Ishai, Google’s Head of Economic Policy Research, the notion of ‘Digital Sprinters’ recognizes that, with the right strategies, emerging markets have tremendous potential to leapfrog more established markets. It’s not a question of “if?” but rather “where, when, and which” markets. If utilized to its fullest extent, digital-driven growth has the potential to amount to $3.4 trillion over the next decade across the 16 emerging markets identified in an Alphabeta study.
In turn, each conversation provided insights into the unique regional contexts of Africa and Latin America, with policymakers, industry leaders, entrepreneurs, and experts weighing in on the next steps needed to ensure the potential is realized.
At the Concordia Africa Initiative, panelists explored the relationship between regulatory policy and innovation on the African continent. They agreed that policymakers need to consider creative digital policies to promote effective collaboration across sectors, steering innovation toward economic growth and industrialization upstream. Policymakers should also ensure incentives for innovators, entrepreneurs, and industry leaders to play a significant role in the governance process to ensure their expertise helps optimize regulatory frameworks. In forging their digital solutions, companies meanwhile need to balance the reach, quality, and effectiveness of their products. In measuring effectiveness, digital solutions should be evaluated through the lens of how well they advance several key markers, from job growth and skills development to economic competitiveness.
At the Concordia Americas Summit, panelists from Mexico, Brazil, Colombia, Uruguay, the United States, and Costa Rica cited several key factors for ensuring the ‘Digital Sprinters’ framework achieves positive impact in the region. First off, there is a need for strategic thinking among political leadership on creating an enabling environment for innovation, entrepreneurship, and industry standards for IP, data privacy, and e-commerce. The challenge for governments is in refraining from overregulation, which can damage the growth of the digital ecosystem. Looking to the role of the private sector, panelists emphasized that the goal should be to create digital solutions for workers, whether in the informal economy or among small- and medium-sized enterprises. Seizing the opportunities represented by digital technology would also benefit from stronger coordination of multilaterals, NGOs, and academia, particularly at the regional level.
Across the African and Latin American discussions, a few common themes emerged. First off, there are many initiatives to strengthen digital connectivity in both regions, whether government or private sector-driven, but the efforts need greater alignment and consistency. In the Latin American context, the policies being deployed to regulate digital technology are many, but without greater coordination and long-term thinking, digital transformation will be impeded. In Africa, a greater emphasis on digital connectivity as interoperable, critical national infrastructure — as opposed to disjointed patchwork solutions — would tangibly provide digital access at lower cost.
Second, the rapid development of digital technologies in both regions has created new challenges for policymakers who are looking to leverage the technology for economic growth. Given the rapid pace of innovation, panelists said policymakers need to explore new models of regulation that neither stifle the expansion of digital technology nor let technological risks go unchecked entirely. One promising model was the idea of “regulatory sandboxes,” which allow for multi-stakeholder partnerships to test new innovations in a narrow scope, without impeding the speed of innovation nor the ability of governments to regulate.
Finally, there was recognition in both conversations that digital access must be contextualized within a broader set of socio-economic goals. In Africa, one panelist raised that despite rapid growth in the number of capable African software developers, they are concentrated largely in the development of consumer applications, instead of industries like agribusiness and power that are more likely to be pivotal in supercharging economic growth. Similarly, panelists noted that in Latin America, digital access alone would not unlock rapid, sustainable growth. Under the right framework, it can, however, be used to tackle long standing socio-economic challenges like inequality, formalization of the economy, and unemployment.
Looking ahead, Concordia shares Google’s confident outlook that, with the right mix of cross-sector collaboration and strategic foresight among regional governments, multilaterals, industry players, and NGOs, emerging markets in Africa and Latin America have tremendous long-term economic opportunities at their fingertips. Through convenings like the 2020 Concordia Americas Summit and the 2020 Concordia Africa Initiative, it was our intention to spring action within our community and look at the most pressing steps needed to leverage digital technology toward this goal. We encourage you to check out Google’s ‘Digital Sprinters’ framework, and we look forward to continuing the conversation with our community throughout our 2021 agenda.