Data and the Global South: Key Issues for Inclusive Digital Development

Digital technologies have brought new opportunities to the global economic margins. However, rapid digitalization in the absence of sufficient regulatory frameworks and human rights protections poses new challenges and risks. Digital development has implications for human wellbeing. It affects all countries, sectors and stakeholders, yet it affects the developing world differently and disproportionately. Since developed countries pioneered the digital revolution, developing countries could only benefit from the periphery. Populations in industrial countries have been digitally connected since the 1990s, yet people in low-income countries arrived relatively late to the digital world. This gap has narrowed rapidly in the past few years due to the falling costs of hardware, connectivity, and large infrastructure initiatives. Most of the more than one billion people who secured internet access between 2013 and 2018 live in low- and middle-income countries. However, another billion people, in particular women living in rural areas, remain unconnected.

Lack of connectivity makes it difficult for lower-income countries to grasp the opportunities of the digital age and to protect its citizens from potential risks. Even in the countries with the strongest digital economies, the progress of digitalization has outpaced the establishment of state institutions, legal regulations, and other mechanisms that could help manage the new challenges. As countries around the world grapple with questions ranging from innovation policy to data governance, it is crucially important to establish a global framework that will lead to inclusive development in the digital age.

Digital technologies have been described as “democratizing” forces and opportunities for innovation, entrepreneurship, and economic development. It is widely held that digitalization contributes significantly to economic growth in emerging economies. Research has shown that each additional 10 percentage points of internet penetration, meaning more people with access to computers or phones connected to the internet, add 0.77 percentage points to per capita gross domestic product (GDP) growth in developed countries and 1.12 percentage points in emerging economies. Furthermore, each additional 10 percentage points of broadband penetration contribute 1.21 percentage points to per capita GDP growth in developed countries and 1.38 percentage points in emerging markets.

These numbers show that new technologies drive economic growth, but the question remains whether such growth is inclusive. Do these technologies provide opportunities for everyone? Do they help improve standards of living? While there is no agreed-upon definition in the academic literature, the term “inclusive development” is widely understood to refer to “growth coupled with equal opportunities.” The term inclusive can refer to the inclusion of poor and vulnerable populations (based on geographic location, gender, religion, ethnicity, caste, creed etc.) within a country. The recognition of rights along with economic prosperity is a key principle adopted in the United Nation’s Millennium Development Goals (MDGs) and subsequently in the Sustainable Development Goals (SDGs). The recent discourse of inclusive development has shifted from poverty eradication to bridging the income inequality gap between wealthy and poor individuals and nations. The international development policy literature interprets inclusive development as reducing inequality between industrialized and low-income countries.

The discussion of inclusive development is particularly relevant in the digital era. Less developed countries are at risk of being left behind by the front-runners in the digital economy, the United States and China, and to a lesser extent the European Union.

Many countries in the developing world struggle with fundamental issues when it comes
to inclusive digital development:

• The ability to provide universal coverage to their citizens, due to patchy infrastructure, lack of affordable data bundles, and gender, age, economic, and other access divides.
• The ability to play an active part in their data-driven economy, due to a lack of capital, skills, and technical capacities.
• The ability to protect their citizens’ rights whilst tackling the complexities of digitalization, due to lack of institutional capacities and frameworks for effective data governance.

This report explores some of the key issues that affect inclusive digital development in the Global South, largely focusing on Least Developed Countries (LDCs). The report begins with a review of existing models for digital development and continues to examine hindering factors such as access and connectivity divides. Further, it examines the importance of data and data governance for digital development.