Digital Economy Participation in Developing Countries

Dated Published: October 2023

By Louise Leenen

There is a global awareness and acknowledgement that the traditional concept of an economy has been transformed by increasing connectivity to the Internet and innovative digital technologies. The COVID 19 pandemic enhanced the speed at which the digital economy is growing. Newer technologies such as the blockchain, the Internet-of-Things (IoT), Artificial Intelligence (AI), and augmented and virtual reality, offer many advantages but also some risks. Significant advantages are the increased access to information, access to global partners, and the low bar of entry for participation in the digital economy. On the contrary, there are cybersecurity risks, the possible loss of privacy and data and additional societal changes that can be disruptive. There are however ways in which the BRICS alliance can strengthen cooperation in digital economic transformation. I consider these here with a particular reference to Africa and a focus on South Africa.

"In a post-COVID-19 world, the acceleration of Africa's digital transformation is a key opportunity to narrow the digital divide"

Digital Economy Environment
Africa experienced the fastest global growth in broadband connections in the years before the COVID-19 pandemic. In a post-COVID-19 world, the acceleration of Africa’s digital transformation is a key opportunity to narrow the digital divide. The first step towards enhancing digital cooperation is to consider the ecosystem required for the development
of a digital economy. Apart from human resources, we should consider digital infrastructure, capacity and capability, regulations and legislation, and risks. Amongst other entities, the digital economy development ecosystem includes:

• Governments
• Private Organisations
• Individuals
• Regional and global bodies
• Digital Infrastructure including collaboration platforms
• Cybersecurity regulations, laws, and risks
• AI regulations and risks
• Education and training.

In developing countries, it is important to ensure that small scale entrepreneurs are empowered to participate in the digital economy with basic digital skills, connectivity to the Internet and digital equipment. Governments should work with the private sector to provide basic skills to the whole population. Tertiary education institutions should focus on educating future practitioners in cybersecurity, Artificial Intelligence (AI), computer engineering and other technical specialisation areas.


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