THE GLOBAL MANUFACTURING & INDUSTRIALISATION SUMMIT

KNOWLEDGE HUB

The Fourth Industrial Revolution (4IR) has brought with it world-changing technology including drones, artificial intelligence, virtual reality, 3D printing, robotics and blockchain. Much of this technology is making lives, and jobs easier – aiding automation and therefore quality, efficiency and speed of both production and services.

However, the majority of these benefits have been enjoyed in Developed Countries, not yet reaching many Less Developed Countries (LDCs), despite the potential it could bring to their economies.

According to the UN, there are currently 47 LDCs,  ‘low-income countries confronting severe structural impediments to sustainable development.’ These countries are highly vulnerable to economic and environmental shocks and have low levels of human assets and therefore, access to technologies could buffer them against crises. It could also allow them to leapfrog along their current development trajectories.

The barriers to technology flow into LDCs are affordability, accessibility, a lack of skilled labour and a need for relevant regulation. Until these challenges are addressed, LDCs and their populations will continue to be isolated from the benefits technology could bring, and worse, the gap could increase further. Consequently, action needs to be taken to ensure technology reaches all communities and here’s how.

1. Improving affordability

For economically poor countries, the cost of using new technology is often prohibitive. In many LDCs, internet service providers acquire monopolies or oligopolies and are able to set costs at a level of their choosing. For instance, the Alliance for Affordable Internet estimate that 2.3 billion people are blocked from accessing a 1GB mobile broadband plan as the costs are too high to afford compared to their monthly income. That is because the average cost of 1GB of internet access is 14.8% of Gross National Income (GNI) per capita whilst in countries such as the Democratic Republic of the Congo, the Central African Republic and Haiti, a 1GB plan is almost half the average monthly income.

To ensure technology and connectivity is inclusive, governments need to work with internet service providers to bring down the costs. For example, in Cambodia, 1GB of internet access costing less than 2% of GNI per capita as the internet markets highly competitive and largely unregulated market.

These countries also face high tariffs on technological equipment such as 3D printers, smartphones or robotics. However, in many LDCs, prices of drones and 3D printing have fallen drastically, making them more affordable, especially where governments can see the economic potential of ensuring innovation can thrive.

For instance, 3D printing can facilitate local production capable of kickstarting prosperity. This is because many countries lack the roads and shipping facilities necessary for supplying and distributing goods from big factories, yet additive manufacturing eliminates the risks and complexities of distribution, allowing local plants to potentially displace a country’s imports over time, allowing many countries to vault logistical gaps and develop competitive manufactures.

2. Enhancing accessibility

LDCs also often lack the necessary electricity and internet infrastructure to enable the use of advanced technologies. Today, half of the world’s population are not online. The ‘digital divide’ does not just signify those who have access to the internet and those who do not, the gap also encompasses a number of other discrepancies, including the quality of digital infrastructure in rural communities, the speed of connectivity in remote areas, and the training and skills required to navigate such technology. For instance, by the end of 2017, only 172 million of the slightly more than 1 billion people living in LDCs had access to the internet.

However, even if electivity is available and access to the internet is possible, new technology is often out of reach for LDCs as it is protected by patents available to only a handful of countries. However, just as new technology is inaccessible, other innovations are allowing LDCs to circumnavigate this barrier. For example, because it is ‘open-source’, blockchain has begun to support several LDC’s export trades. For instance, the government of Ethiopia is working with the Cardano Foundation to use blockchain technology to enhance trade coffee beans, Ethiopia’s biggest export product. Here, blockchain is being utilised to record, track and trace coffee beans from local farmers whilst allowing consumer confidence about the product’s source. The transparency this allows enables producers to receive an increased return on their labour from the ability to charge consumers willing to pay a premium for the end product.

3. Developing Digital skills

Once access to electricity and connectivity is sorted, and the price of the technology is brought down to a level that allows LDCs to buy the necessary equipment, the workforce needs the skills to utilise it.

Consequently, in a 4IR world, it is now critical for all governments to consider how they plan to “future-proof” skills in order to keep up with the digital revolution.

This is not an easy task as most LDCs do not have the resources to provide basic education, let alone digital education. Therefore, the only way to deliver this training is through a prohibitively expensive external provider in the private sector. As a result, rigid and inflexible education systems in many LDCs, are preventing the necessary flexibility and adaptability needed to develop key skills fit for the future. This can only be tackled by LDC government’s placing ‘future-proof’ skills at the top of their agendas.

For example, in Rwanda, the ‘Digital Opportunity Trust’ launched a massive digital skills development programme to employ 5,000 young Rwandans to provide hands-on basic digital literacy training to 5 million citizens. This project will help rural Rwandans with little experience of technology to use the internet, whilst also helping digitally literate citizens to use e-gov and e-business services.

4. Relevant Regulation

The 4IR requires relevant regulation to thrive. For example, For example, the government of Rwanda has updated its regulation surrounding drones, which are being used to deliver critical supplies to inaccessible areas such as blood to hospitals in the remote parts of the country. The regulation allows drones to access airspace on a mission-specific basis. The government specifies the safety standard of the mission, and the drone operators specify how they are going to meet it. Because the regulation is agile, it allows the government to keep up with the rapid development of drone technology.

In addition, to close the digital divide, LDCs need to implement policies that imposes universal service obligations on internet providers to ensure connection of ‘all’ users to the internet. This could be done by installing a trade policy that reduces tariffs on the import of smartphones and tablets and a corresponding investment policy that removes the cap on foreign ownership of internet services.

The 4IR is upon us. It is already changing lives around the world and enabling connectivity on an unprecedented level. Whilst its benefits are many, the potential for almost 50 countries to be left behind is significant. If they are unable to keep up, poverty will worsen, the effects of environmental issues will increase and economies will shrink further. However, if there is a concerted effort to bring the digital revolution to all communities, it could enable these countries to lift themselves from poverty, drive new markets and become self-sufficient through local, cost-effective production.

The dawn of the digital age is the most accessible revolution yet, but its potential requires true inclusivity. We must address the challenges preventing LDCs from joining the new era and mitigate them with urgency.

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