Exporters of manufactured goods based in countries without sufficient information technology resources to support the transition to data-driven production and trade will be continually trying to play catch-up in the fourth industrial revolution, according to the Digital Economy 2021 Report by the United Nations Conference on Trade and Development (Unctad).
“As the data-driven digital economy has evolved, a data-related divide has compounded the digital divide.
“In this new configuration, developing countries may find themselves in subordinate positions, with data and their associated value capture being concentrated in a few global digital corporations and other multinational enterprises that control the data.
“They risk becoming mere providers of raw data to global digital platforms, while having to pay for the digital intelligence obtained from their data,” states the report.
“Data are multidimensional, and their use has implications not just for trade and economic development but also for human rights, peace and security,” writes United Nations secretary general António Guterres in the preface.
The authors of the report state that the United States and China dominate the data-driven digital economy.
“Together, they account for half the world’s hyperscale data centres, the highest rates of 5G adoption in the world, 94% of all funding of AI start-ups in the past five years, 70% of the world’s top AI researchers, and almost 90% of the market capitalisation of the world’s largest digital platforms.
“The largest such platforms – Apple, Microsoft, Amazon, Alphabet (Google), Facebook, Tencent and Alibaba – are increasingly investing in all parts of the global data value chain: data collection through the user-facing platform services; data transmissions through submarine cables and satellites; data storage (data centres); and data analysis, processing and use, for instance through AI.
“These companies have a competitive data advantage resulting from their platform component, but they are no longer just digital platforms.
“They have become global digital corporations with planetary reach; huge financial, market and technology power; and control over large swathes of data about their users.”
The authors of the report believe that without concerted and coordinated government intervention around the world, the digital divide will deepen and put importers and exporters in developing countries at a continued advantage.
“With data and cross-border data flows growing more prominent in the world economy, the need for global governance is becoming more urgent.
“Data are strongly linked to trade and can provide strong competitive advantages to those capable of benefiting from them.
“Command of data leads to information advantages.
“The information asymmetry inherent in the data economy seems irreducible, as there are no market solutions to correct for it.”
