The COVID-19 pandemic has precipitated a migration from physical work spaces in many sectors of the economy to online, digital services, supported by staff working from home. Parts of the economy such as mining, manufacturing and hospitality still require workers to be physically present. But other sectors have discovered that virtual platforms are effective substitutes for offices.
Online, however, requires digital infrastructure and services in information and communication technology (ICT). Digital infrastructure is essential to meet the new demand for virtual services as quickly and cheaply as possible. On top of this the potential of digital technologies to support economic growth is apparent. Many developing countries have comprehensive national strategies and initiatives to foster data mining, digital intelligence, e-government and e-commerce. These include
A number of countries have successfully harnessed the digital revolution to enable broader socio-economic development. But
So what's gone wrong?
The "managed" liberalisation of the incumbent telecommunications provider,
In a recent policy research paper we set out how the local digital industry can be stimulated. We address the question: does
Failures and successes
The 2013 National Broadband Policy, known as "South Africa Connect", is seen as a competent guide for
South Africa Connect provides an excellent example of a policy which focuses on both supply-side and demand-side considerations.
But a number of factors have got in the way of digital transformation.
One was lack of continuity in the political and administrative leadership of the national ICT portfolio. Between 2009 and 2018 South Africa had 11 different ministers responsible for telecommunications. In the same time, it had only four presidents.
Another was the ill-considered splitting of the ICT portfolio over two departments under the previous administration. This caused divergence between telecommunication, broadcasting and information technology and hindered the progress of South Africa Connect.
A third factor was a conflict of interest between the regulator and the state as the major shareholder of
And finally, it is reported that political appointments in key agencies such as ICASA (the regulator) and the
Despite the governance issues,
For example, it has created a world class research and education network. The South African National Research Network provides gigabit per second networking to all South African institutions of higher learning as well as science councils and national research facilities.
The model is based on aggregating demand from similar users and buying long term high capacity leased line or dark fibre network capacity on a competitive basis from network operators. It combines this with a policy of always buying bandwidth levels based on future and unanticipated requirement levels.
This has been key to its success. The network has been central to the digitalisation of higher education. It now plays a vital role in the sector's migration to online platforms. The graphs below show how the lockdown disrupted the network's usual support for internet traffic, leading to a massive migration to commercial networks.
SANReN's support for Internet Traffic
What's needed
The key is to have a policy that is a mixture of supply- and demand-side interventions. Supply-side measures reduce costs for firms. Demand-side refers to policies that stimulate demand.
On the supply side, the state needs to invest in a low-cost, high-speed and universally accessible data transmission infrastructure. This should be coupled with support for domestic digital firms and entrepreneurs through public procurement processes aimed at improving government services.
Aspects of the Estonian model rely on high levels of trust between private individuals and digital firms. It is also underpinned by an advanced capable state and a highly skilled workforce. These factors make it difficult for other countries to replicate.
Way forward
Developing countries need to be highly strategic in the development of their domestic digital industry. For example, developed countries like the US are capable of forcing an agenda on developing countries that permits the appropriation of local data, allows unrestricted repatriation of profits and prevents technology transfer.
Another important factor is that governments' interventions in the digital space must be proportional to their technological capability. A capable state can be intimately involved and direct digital development. But where there is limited technological capability the focus should be on creating an enabling environment. This would include ensuring a level playing field, creating an open market, promoting healthy competition and providing the appropriate regulatory framework.
For
A number of other steps should be taken too. The first is to develop the skills for data mining and digital intelligence. The second is to put in place the regulatory framework to support systems for secure but low-cost e-transactions. The final step is to prevent the private appropriation of public data by global corporations.
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