Digital technologies
Digital technologies are key to economic diversification
Digitalization has changed the way people produce, consume, trade and live. Narrowing the technological gap and closing the digital divide between and within developed and developing countries provides opportunities for improving incomes and resilienceThe ability of a system, community or society exposed to hazards to resist, absorb, accommodate, adapt to, transform and recover from the effects of a hazard in a timely and efficient manner, including through the preservation and restoration of its essential basic structures and functions through risk management -—
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—-., as well as reducing the vulnerabilities, of the poorest – and in particular of women and youth. Past and ongoing crises have highlighted the role of digital technologies in diversifying economies and building resilient systems that are open, inclusive, and secure and benefit everyone.
It all starts with getting people and businesses online
To be able to engage in and benefit from the digital economy and digital tradeDigital Trade is “all international trade that is digitally ordered and/or digitally delivered., individuals and businesses must first be online. This means being covered by Internet infrastructure that is sufficiently fast and reliable, and furthermore by electricity infrastructure to power digital devices. By 2024, 92% of world population was covered by 4GFourth generation of cellular network technology mobile networks, double the share in 2015 -—
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—-. However, there is considerable variation in 4G deployment between regions; while 4G is available to all in Eastern Asia and in Europe, only 54% of people in sub-Saharan Africa live in areas covered by 4G networks (map 1). Furthermore, mobile networks continue to evolve, with 4G being superseded by 5GFifth generation of cellular network technology technology which covered 51% of the global population as of 2024 -—
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—-. The widest roll-out was in Europe, where 72% of the population was covered, followed by the Americas (63%) and the Asia-Pacific (62%). However, deployment has barely begun in many countries.
Source: UNCTAD calculations based on -—
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Coverage alone is not enough
While 96% of the world population is covered by mobile broadbandA general term meaning a telecommunications signal or device of greater bandwidth, in some sense, than another standard or usual signal or device. In data communications, this refers to a data transmission rate of at least 256 kbit/s. In the context of Internet, this can be delivered via fixed (wired) or mobile networks -—
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—-. (3GThird generation of cellular network technology or above) networks, many other factors create a gap between those who could access the Internet and those who do use it. In 2024, two thirds of the world’s population used the Internet, leaving 2.6 billion people offline. Furthermore, while almost all people in developed countries are online, only 35% of those in the least developed countries (LDCsLeast developed countries) use the Internet -—
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One key reason is that the costs involved in getting online can be prohibitive for many. In 2024, the annual cost of a mobile broadband subscription was equivalent to 4.6% of per capita GNIGross national income in LDCs while a fixed broadband subscriptionFixed broadband subscriptions refer to subscriptions to high-speed access to the public Internet (a TCP/IP connection), at downstream speeds equal to, or greater than, 256 kbit/s. equated to one sixth of GNI per capita -—
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—- – both exhibiting a slight decrease compared to previous year. Given disparities in income distribution within countries, for many people connectivity will be even less affordable. Furthermore, the digital devices required to access the Internet, such as smartphones, also need to be available and affordable.
Additionally, the skills required to use the Internet must be sufficiently widespread and available amongst the population, and people need to be aware of the opportunities of the digital economy and of digital trade, especially those working at firms that stand to benefit from digital transformation. Finally, the speed provided by Internet connections and fixed line technologies, such as the fixed broadband, matters -—
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Digital technologies offer a vital opportunity for economic diversification
Digital technologies, including the Internet, underpin e-commerceE-commerce is defined as the sale or purchase of goods or services, conducted over computer networks by methods specifically designed for the purpose of receiving or placing of orders. The goods or services are ordered by those methods, but the payment and the ultimate delivery of the goods or services do not have to be conducted online -—
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—-. – in which buyers place and sellers receive orders online. Additionally, they enable instantaneous remote delivery of services directly into businesses and homes. Both digitally ordered and digitally delivered transactions increasingly take place across borders. The possibility of engaging in such digital trade offers new opportunities for the diversification of developing economies. Digitally deliverable services now account for over half of all services exports worldwide. Their share grew especially during the disruptions of the COVID-19COVID-19 is an infectious disease caused by the strain of coronavirus SARS-CoV-2 discovered in December 2019. Coronaviruses are a large family of viruses which may cause illness in animals or humans. In humans, several coronaviruses are known to cause respiratory infections ranging from the common cold to more severe diseases such as Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS). The most recently discovered coronavirus causes coronavirus disease COVID-19 -—
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—-. pandemicCommonly described by the WHO as ‘the worldwide spread of a new disease’, no strict definition is provided. In 2009, they set out the basic requirements for a pandemic: • New virus emerges in humans
• Minimal or no population immunity
• Causes serious illness; high morbidity/mortality
• Spreads easily from person to person
• Global outbreak of disease.
The US Centre for Disease Control uses a similar approach, but with a reduced set of criteria. It is very difficult to gauge whether the spread of a disease should be termed an outbreak, epidemic or pandemic. In other words, when to declare a pandemic isn’t a black and white decision -—
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—-., then declined as exports of other services recovered, and stabilized in 2023, at a higher level than before the pandemic (figure 1).
Source: UNCTADstat -—
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Note: Digitally deliverable services are services that can be delivered remotely through computer networks. The figures in the graph cover: insurance and pension services; financial services; charges for the use of intellectual property; telecommunications, computer and information services; other business services; and audio-visual and related services.
Seizing the opportunities of digital trade requires not only investments in ICTInformation and communications technology (ICT) is a diverse set of technological tools and resources used to transmit, store, create, share or exchange information. These resources include computers, the Internet, live broadcasting technologies, recorded broadcasting technologies and telephony -—
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—-. connectivity but also actions to boost digital skills and awareness of the opportunities and risks associated with digital trade. Measures to facilitate digitally ordered goods transiting the border and regulatory actions to encourage digital payments, ensuring privacy and data protection, as well as the establishment of channels for recourse in case of loss or detriment related to digital trade, represent further enabling factors -—
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References
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