Can less industrialised countries benefit from post-pandemic digitalisation?

Can less industrialised countries benefit from post-pandemic digitalisation?

A more connected world can also open many doors for youth populations which, according to the United Nations, are concentrated in developing countries, particularly in Central and South Asia, East Asia, and sub-Saharan Africa. In this 2012 photo, a young Burmese man sits outside with his laptop.

(Laura Villadiego )

When the Covid-19 pandemic forced families across the world to stay home, half of them didn’t even have internet access. According to UNESCO, just 55 per cent of global households had access to the internet before the pandemic. Around 3.7 billion people remain unconnected.

Most of them reside in one of the 46 countries currently classified by the United Nations as least developed countries (LDCs), where only 19 per cent of the population has access to the internet. That number rises to 47 per cent in the so-called developing countries, while up to 87 per cent of people in industrialised countries have internet access.

According to an analysis published by the United Nations Conference on Trade and Development (UNCTAD): “The least developed countries are the most vulnerable to the human and economic consequences of the pandemic, and they also lag farthest behind in digital readiness. Only one in five people in LDCs use the internet, and in most developing countries, well below 5 per cent of the population currently buy goods or services online.”

But that doesn’t mean the internet isn’t experiencing a boom in developing countries. According to Grace Natabaalo, researcher at Caribou Digital, an initiative that, according to its website, promotes a fairer, more inclusive and ethical digital world: “Digitalisation in Africa has been happening for some time now, just not at the same level as Europe.”

As Natabaalo tells Equal Times, the platform economy was already being replicated in many African countries in a multitude of sectors that had adopted freelance platforms. “Before Covid-19, we already had people who were using these digital platforms. Individuals were using them to look for work and small businesses were using them to find markets,” says Natabaalo, who led a study on the impact of Covid-19 on young platform workers in Nigeria, Kenya, Uganda and Ghana.

And the impacts of the pandemic in these countries have not been so different than those experienced in Europe. “There have been some interesting opportunities and many difficulties. People who sold online were able to sell more at the beginning of the pandemic, but that didn’t last long,” explains Natabaalo.

“There has been an acceleration of digitalisation due to the Covid-19 pandemic,” adds Lacina Koné, CEO of Smart Africa, an initiative launched in 2013 by the governments of the African Union to create a single digital marketplace for the continent.

As Koné explains, the pandemic has given a boost to new technologies that are not yet widespread in Africa, including e-health, telematic education and e-commerce.

Moving beyond Africa, a recent study by the International Labour Organization (ILO) analysing the role of digital platforms in transforming the world of work found that Asia already accounts for a large part of global investment in this sector, with US$56 billion (around €45.8 billion) invested in 2019. This puts Asia ahead of the traditional power centres of North America (US$46 billion) and Europe (US$12 billion). And while China has become the major Asian power of the digital marketplace, according to the World Bank, interesting opportunities have opened up in other still developing but rapidly growing countries in South-East Asia, one of the world’s most internet-intensive regions, with an average of 3.6 hours of mobile use a day, double the UK average of 1.8 hours.

Outside Asia, North America and Europe, progress remains limited. Latin America, Africa and the Arab States received only 4 per cent of total investment (in digital labour platforms). Economic benefit is also highly concentrated, with 70 per cent of the revenue generated by these digital labour platforms concentrated in just two countries, the United States (49 per cent) and China (22 per cent), while the share was much lower in Europe (11 per cent) and other regions (18 per cent).

A marketplace of opportunities

Forced to remain at home by the lockdowns, millions of workers tried teleworking for the first time during the pandemic. This led many companies to change their philosophy of work. “There is greater acceptance of remote work and it is now more possible for a company to employ a worker in another country,” says Mark Coeckelbergh, professor of philosophy at the University of Vienna and researcher on the philosophy of technology and media. According to consulting firm McKinsey, although more than half of the workforce cannot telework because their jobs require physical presence, several activities such as information gathering and processing, communicating with others, teaching and counselling, and coding data can be done remotely. And this can create opportunities for countries with lower labour costs.

A certain number of these tasks have already been outsourced to developing and emerging countries. According to the ILO report, India is the country offering the most online work, especially in the software and technology development sector. Other countries leading the way are Bangladesh, Pakistan, the Philippines and Ukraine. However, the pandemic has reduced labour demand in most of these countries with the exception of India and Ukraine, where it has increased compared to 2018.

An increasingly connected world can also open many doors for youth populations which, according to the United Nations, are concentrated in developing countries, particularly in Central and South Asia, with 361 million young people aged 15 to 24; followed by East Asia, with 307 million; and sub-Saharan Africa, with 211 million.

The largest increases in youth population growth are expected to occur in the least developed countries, where a 62 per cent increase is projected by 2050, most significantly in Africa. Young Africans are expected to make up close to half of the world’s youth population and account for 75 per cent of those under the age of 35 by 2030.

The economies of many of these developing countries are also experiencing rapid growth. According to a 2020 report by the International Monetary Fund, the ten countries with the fastest economic growth in 2019 were developing countries, most of which are located in Asia and Africa, with South Sudan, Rwanda and Libya leading the pack (although the data for these countries is from the 2017 and 2018), closely followed by Ethiopia, Nepal, Vietnam and Burma. “We can compete in the international arena,” says Koné, referring to African companies. “We have a big enough population to develop [products] here and then sell them in countries where the market is more mature,” he says. But according to Koné, achieving this will require a change in mentality. “We are going to need an adjustment of our priorities to [...] move our continent towards a knowledge-based economy.”

Breaking from the neo-colonial model

As Coeckelbergh of the University of Vienna explains, despite the opportunities it provides, the digital economy can easily reproduce the colonial structures that have long dominated relations between rich and developing countries. “I worry that existing inequalities and power relations will remain the same. There is a risk that neo-colonial ways of working will remain the same,” he explains. “We need to discuss access to technology, but more importantly how technology does or does not empower people in their daily lives and in their struggle with precarious jobs.”

These dynamics are already evident. According to the ILO’s study, workers in developing countries often earn less than those in rich countries. On freelance platforms, for instance, they earn 60 per cent less, even after controlling for basic characteristics and types of tasks performed.

Natabaalo’s organisation has already found unequal treatment by platform companies of workers in rich countries versus those in developing countries during the pandemic.

For example, Uber did not inform drivers in Kenya and Ghana of its financial assistance policy. “There was ongoing communication with them about safety protocols but not about these benefits,” explains Natabaalo. Bolt, for example, offers financial assistance to drivers on its platform in Europe but not to its drivers in Kenya.

Only a change in the rules of the game will enable the countries of the Global South to truly benefit from digitalisation, the long-term impacts of which remain unclear. “Internationally, countries with more resources have an obligation to reorient international regimes towards greater solidarity,” says Coeckelbergh. “For things to change in the right direction, we need more than just a digital revolution.”

This article has been translated from Spanish.