he digital economy, broadly defined to include the digitalization of all economic activity for individuals and businesses, can be an important driver of democratic and economic development. Leveraging online marketplaces to democratize economic opportunity creates new market channels for local businesses, promotes inclusive trade, and boosts tax revenue to expand access to essential services. The COVID-19 pandemic has accelerated the scale and necessity of the digital economy, as internet connectivity and the digital ecosystem around it have become indispensable for access to information, communication, and conduct of all forms of online commerce.
Since the beginning of the pandemic, online data traffic has risen by 20%, while the use of communications platforms has more than doubled. Livelihoods and businesses are reliant on the internet and online transactions for everything from working remotely to marketing products for shipping or curbside pickup and delivery. This crisis boosted the use of social media platforms for commerce and precipitated wider adoption of e-payments, as central banks and governments encouraged consumers in India, Indonesia, Georgia, and several other countries to go cashless to limit the spread of COVID-19. Nigerian e-commerce platform Jumia, which operates in 11 African countries, adapted its business for COVID-19 recovery by reducing fees for its e-payment service, JumiaPay, and offering African governments the use of its last-mile delivery network to distribute supplies to healthcare facilities and workers.
The Need for Policy Dialogue on Digital Economy Frameworks
The pandemic has also underscored the digital divide, both globally and within countries, particularly felt by local businesses in emerging markets. Across the globe, there is deep concern that small businesses unable to move operations online may not survive. Yet, many entrepreneurs and businesses still have difficulty just navigating unclear, conflicting, or non-existent legal frameworks that govern entry into the digital ecosystem. This has created an enormous need for new or better-defined policy frameworks, laws, and standards that are rooted in supporting digital inclusion, streamlining tax laws, and protecting consumer privacy.
National policies, laws, and regulations governing the digital space heavily influence development outcomes. It is increasingly clear that the benefits of technological innovation and the digital economy have not been equitably distributed or felt by all people, economic sectors, or countries. As economic activity increasingly takes place online, local business communities must have a say in how the rules and regulations for electronic commerce and digital trade are designed and implemented to ensure their participation and sustainability on- and offline.
Chambers of commerce and business associations around the world are important vehicles for reform, especially in times of crisis, such as the COVID-19 pandemic. To address the urgent need to facilitate this kind of multi-stakeholder dialogue around policies governing the digital economy, CIPE and New Markets Lab developed an in-depth legal and advocacy resource, the Digital Economy Enabling Environment Guide: Key Areas of Dialogue for Business and Policymakers. The guide was designed to facilitate a greater understanding and dialogue around key legal and regulatory considerations, and has been used to support public-private dialogues on digital transformation in Kenya, Ethiopia, Bangladesh, and Tunisia. Additionally, in 2019, the Government of Kenya released the Digital Economy Blueprint outlining its official national strategy for digital transformation, in which it referenced the guide for promoting local private sector engagement in the policy development process.
Challenges and Opportunities Ahead
The nature of technology policy and digital transformation is complex. The rapidly changing technology landscape also means that the terminology of key elements within the digital economy and policy solutions in this space continue to evolve. For example, data privacy is now a fundamental component of consumer protection legislation, while data protection and cyber resiliency is now a cornerstone of national security and tend to involve numerous public agencies and international trade agreements.
Urgent policy changes are needed in the wake of COVID-19 to ensure that the digital economy is developed in a way that advances democratic values and access. This requires coordinated multi-stakeholder efforts at a local level to ensure diverse participation in policy development and implementation. Such efforts must include local business communities, women, and marginalized groups that are too often excluded in the decision-making processes that affect their lives and livelihoods.
Moreover, international discussions that shape global norms and standards of the digital economy still have insufficient participation from local business communities and marginalized groups, undermining efforts to resolve persistent divides and policy gaps. To realize an equitable post-COVID-19 recovery, the inclusion of local business communities in regional and global dialogues that focus on the digital economy is essential.
a global affairs media network
Promoting Inclusive Participation in the Digital Economy
June 28, 2020
The COVID-19 pandemic has accelerated the scale and necessity of the digital economy, as internet connectivity and the digital ecosystem around it have become indispensable for access to information, communication, and conduct of all forms of online commerce.
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he digital economy, broadly defined to include the digitalization of all economic activity for individuals and businesses, can be an important driver of democratic and economic development. Leveraging online marketplaces to democratize economic opportunity creates new market channels for local businesses, promotes inclusive trade, and boosts tax revenue to expand access to essential services. The COVID-19 pandemic has accelerated the scale and necessity of the digital economy, as internet connectivity and the digital ecosystem around it have become indispensable for access to information, communication, and conduct of all forms of online commerce.
Since the beginning of the pandemic, online data traffic has risen by 20%, while the use of communications platforms has more than doubled. Livelihoods and businesses are reliant on the internet and online transactions for everything from working remotely to marketing products for shipping or curbside pickup and delivery. This crisis boosted the use of social media platforms for commerce and precipitated wider adoption of e-payments, as central banks and governments encouraged consumers in India, Indonesia, Georgia, and several other countries to go cashless to limit the spread of COVID-19. Nigerian e-commerce platform Jumia, which operates in 11 African countries, adapted its business for COVID-19 recovery by reducing fees for its e-payment service, JumiaPay, and offering African governments the use of its last-mile delivery network to distribute supplies to healthcare facilities and workers.
The Need for Policy Dialogue on Digital Economy Frameworks
The pandemic has also underscored the digital divide, both globally and within countries, particularly felt by local businesses in emerging markets. Across the globe, there is deep concern that small businesses unable to move operations online may not survive. Yet, many entrepreneurs and businesses still have difficulty just navigating unclear, conflicting, or non-existent legal frameworks that govern entry into the digital ecosystem. This has created an enormous need for new or better-defined policy frameworks, laws, and standards that are rooted in supporting digital inclusion, streamlining tax laws, and protecting consumer privacy.
National policies, laws, and regulations governing the digital space heavily influence development outcomes. It is increasingly clear that the benefits of technological innovation and the digital economy have not been equitably distributed or felt by all people, economic sectors, or countries. As economic activity increasingly takes place online, local business communities must have a say in how the rules and regulations for electronic commerce and digital trade are designed and implemented to ensure their participation and sustainability on- and offline.
Chambers of commerce and business associations around the world are important vehicles for reform, especially in times of crisis, such as the COVID-19 pandemic. To address the urgent need to facilitate this kind of multi-stakeholder dialogue around policies governing the digital economy, CIPE and New Markets Lab developed an in-depth legal and advocacy resource, the Digital Economy Enabling Environment Guide: Key Areas of Dialogue for Business and Policymakers. The guide was designed to facilitate a greater understanding and dialogue around key legal and regulatory considerations, and has been used to support public-private dialogues on digital transformation in Kenya, Ethiopia, Bangladesh, and Tunisia. Additionally, in 2019, the Government of Kenya released the Digital Economy Blueprint outlining its official national strategy for digital transformation, in which it referenced the guide for promoting local private sector engagement in the policy development process.
Challenges and Opportunities Ahead
The nature of technology policy and digital transformation is complex. The rapidly changing technology landscape also means that the terminology of key elements within the digital economy and policy solutions in this space continue to evolve. For example, data privacy is now a fundamental component of consumer protection legislation, while data protection and cyber resiliency is now a cornerstone of national security and tend to involve numerous public agencies and international trade agreements.
Urgent policy changes are needed in the wake of COVID-19 to ensure that the digital economy is developed in a way that advances democratic values and access. This requires coordinated multi-stakeholder efforts at a local level to ensure diverse participation in policy development and implementation. Such efforts must include local business communities, women, and marginalized groups that are too often excluded in the decision-making processes that affect their lives and livelihoods.
Moreover, international discussions that shape global norms and standards of the digital economy still have insufficient participation from local business communities and marginalized groups, undermining efforts to resolve persistent divides and policy gaps. To realize an equitable post-COVID-19 recovery, the inclusion of local business communities in regional and global dialogues that focus on the digital economy is essential.
