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  December 16th, 2016 | Written by

UNCTAD: Digital Economy Offers Phenomenal Opportunities

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  • Digital economy risks opening new divides and inequalities.
  • The internet can unbottle a lot of energy in different economic sectors.
  • The Fortune 500 have $81 billion locked up in the financial supply chain due to lack of digitization.

The digital economy offers phenomenal opportunities to engage more individuals and small businesses in the global economy, but it also risks opening up new divides and inequalities unless infrastructure issues are addressed, UNCTAD Secretary General, Mukhisa Kituyi said.

Speaking at a telecommunications meeting in Bangkok, Kituyi said global trade is undergoing a revolution, driven by new information and communications technology (ICT). Against a background of sluggish global growth, the value of online trade accelerated upwards, between 2013 and 2015, from $16 trillion to $22 trillion.

“ICT has a phenomenal ability to engage different pockets of production with the global economy and to raise productivity,” Kituyi said. “The internet connects goods and markets, reduces overheads, and cuts out middlemen too, so we see it as a great enabler to unbottle a lot of the energies that exist in different economic sectors.”

Kituyi added that by boosting access to economic opportunities, ICT has major potential to support achievement of the UN’s Sustainable Development Goals. It also enables women and youth in particular.

“If you look at new jobs in the service industry, most of them are driven by ICT, and there is a greater participation—even without affirmative action—and enabling of women and young women in the ICT-driven service industry than in other industries,” he said. “And unlike traditional jobs, ICT-based jobs are gender-blind in remuneration.”

Kituyi also announced that UNCTAD is participating in the Equals campaign, whose mission is to reach gender equality online by 2030.

The Fortune 500 have an estimated $81 billion locked up in the financial supply chain in large part due to lack of digitization. But this could change if all parties involved would accept digital versions of contracts and other documents, rather than paper copies, Kituyi said.

For the digital revolution to fulfill its promise of poverty reduction, national governments and others will have to make greater efforts, Kituyi added. Fixed broadband penetration is still 30 times higher in Europe than in Africa and mobile broadband penetration is almost five times higher. In most developing countries, average broadband speeds are lower, while costs are high.

In July, UNCTAD launched the e-Trade for All initiative in Nairobi, bringing together 15 international organizations, including the conference hosts, the International Telecommunications Union (ITU), and 22 private sector actors, easing developing country access to cutting edge technical assistance and giving donors more options for funding.