Digital transformation – How do we shape its socio-economic and labor impacts for good?

Event report

[Read more session reports and live updates from the 12th Internet Governance Forum]

In this session, the panel sought to discuss how the world can shape the modern global economy so that it effectively affects global production, commerce and development while facing the challenges it brings to work, social protection, and income equality. The session was divided into two parts:

• Digitisation, global production and flows of digital commerce; and
• Digitisation, automation, and employment issues.

The moderator, Dr Makoto Yokozawa, Co-chair of the Organisation for Economic Cooperation and Development (OECD)/Business and Industry Advisory Committee (BIAC), introduced the panel and the session by listing the five main policy questions related to digitisation, global production, and flows of digital commerce to be discussed.

1. How is the new digital ecosystem different than the traditional ecosystem?
2. What are the contributions of different types of e-commerce (B2B, B2C, B2G) to the global economy and how is e-commerce distributed worldwide?
3. How do emerging technologies, such as big data, IoT, and AI affect e-commerce?
4. How does digitisation enable new business models and encourage entrepreneurship?
5. What roles do international organisations play in facilitating the discussion of these policies and how can they work with other actors to promote better coordination in the field of e-commerce? 

Mr Torbjörn Fredriksson, Head of the ICT Analysis Section at the United Nations Conference on Trade And Development (UNCTAD), began his remarks by pointing out the disparity in the adoption of e-commerce between developed, developing and least developed countries. Fredriksson believes that those who are better equipped to harness the potential of e-commerce are also those who will experience the least challenges and transformations during the adoption period, while those who are less equipped will have to bear the greatest costs.

Mr Oscar Gonzalez, Undersecretary of Regulation at the ICT Secretariat of the Government of Argentina, addressed some additional concepts specific to e-commerce. He explained how the Internet infrastructure has opened a whole new myriad of possibilities both for businesses and consumers. He argued that governments, industry and civil society should struggle to ensure that the digital economy does not replicate the problems seen in previous revolutions.

Ms Ankhi Das, Public Policy Director of Facebook India, stated that the main beneficiaries of digital trade have been small and medium sized enterprises (SMEs) and that India is second only to China in the number of SMEs. She mentioned three exampleswhich have benefited the digital economy in South Asia: i) the decision by the government of India to demonetise the currency, which led to increased economic activity and less corruption; ii) the initiative by companies to create applications that can properly run on lower speed connections such as 2G; and iii) the use of ICT tools by women to fight against violence and sexual harassment.

Mr Walid Al-Saqaf, Senior Lecturer at Södertörn University, compared the role of data in the modern economy to that of oil, arguing that both can be used for development or for negative purposes, and we must therefore ensure that developing countries can reap more benefits than challenges. He described a currently ongoing revolution in payment systems, boosted by the advent of blockchain technologies, and went on to assert that in essence, it is important to ensure that the Internet is alive and well, so that its benefits can be accrued by everyone.

Ms Farzaneh Badiei, Executive Director of the Internet Governance Project, criticised the way in which archaic laws on an international level have become barriers to the further development of digital trade.

During the interaction phase, Yokozawa highlighted the importance of having sustainability in mind during the development of all the aforementioned processes. Fredriksson brought numbers to the table, asserting that 90% of e-commerce is still business-to-business. Badiei explained that this is because in most countries, the customs procedures are still too bureaucratic and it is therefore not worth adopting e-commerce. Al-Saqaf argued that SMEs must learn how to use data in their favour.

Next, Das argued that artificial intelligence (AI) will be a revolution not unlike that of the steam engine, and therefore government and society must worry about capacity building for the next generation.

Fredriksson criticised the comparison between data and oil, because the former is not finite and increases in value the more it is available. Badiei stated that one of the reasons why information services flourished on the Internet, was because of cross-border data flows, but that governments are now moving towards data localisation and closing of jurisdictions.

On the role of international organisations, Al-Saqaf explained that all organisations and businesses must make sure that any forms of monopoly, fragmentation or localisation do not exclude SMEs, and that they should lead by example by being more transparent. Fredriksson stated that it will be hard for developing countries to succeed in overcoming any of the challenges presented so far without the help of the international community. Das urged international organisations to strengthen regional processes as a means of fostering the harmonisation of national laws and empowering citizens with a voice.

For the second part of the session, one of the moderators, Ms Natalia Foditsch, Research Fellow at the Cornell College of Business, explained the importanance of understanding what lessons can be learned from the upcoming revolution in automation and the labour market, instead of trying to predict its every aspect.

Mr Hossam El Gamal, Chairman of the Information and Decision Support Centre, considers that technology is currently on version 4.0, while legislation is still on version 2.0. Therefore, it is necessary to discuss the gap in order to truly benefit from the digitisation phenomenon.

Ms Valentina Scialpi, Policy Officer at the European Commission, stated that Europe is trying to position itself as an important player in the fourth industrial revolution, and that oftentimes, such disruptive phenomena can feel threatening, but that any challenge can be overcome with co-operation.

Mr Philip Jennings, General Secretary at the UNI Global Union, suggested the session to adopt the motto ‘Leave no one behind’, and to support policies that put people and jobs first, with the aim of delivering social justice in the 21st century.

Ms Karen McCabe, Global Community Professional at the Institute of Electrical and Electronic Engineers (IEEE), spoke of the importance that the IEEE gives to keeping autonomous and intelligent systems human-centric when it comes to values and principles. She considers that by sticking to these values and principles, autonomous and intelligent systems have the potential to greatly advance development goals and offer an opportunity for the positive disruption of economic, social and labour institutions and relationships.

Mr Edmon Chung, CEO of DotAsia, quoted the results of a commissioned study that pointed out that one of the things that young people around Asia are most worried about is employment, with AI and job obsolescence. Chung explained how the DotAsia programmes try to empower youth in two ways: by giving young people knowledge and skills, and by creating a supportive environment, by changing policies and relationships.

Ms Cristina Amoroso das Neves, Director of the Department for Information Society at the Science & Technology Foundation, considered that just as during the previous industrial revolutions, humanity will adapt to the new age of automation. What is necessary for that adaptation is the capacity building of the new generations, so that they are able to create their own tools and enterprises with the new technological advances.

Mr Ndicho Bambo, Foreign Service Officer at the Ministry of External Relations of Cameroon, raised his concerns about the peripheral situation of Africa in this new revolution: once again, the continent finds itself standing by and watching as the digital revolution takes place everywhere else..

The moderator then went on to ask the five policy questions related to digitisation, automation, and employment issues guiding the debate.

1) What are some of the lessons learned from past market transformations, e.g., agricultural to industrial, and how does digitisation assist in making the most of the lessons (taking also into account the context of sharing economy)?

Jennings considered that the lessons learned from the previous market transformations are that countries cannot expect the market to deal adequately with social transition and social transformation, but rather, to accompany people in the process of change through a global deal. El Gamal agreed with Jennings and highlighted the challenges posed by the lack of both local and global legislation regarding automation and work. He shortly described a few initiatives by the Egyptian government that seek to qualify and include workers in technology-oriented labour. Chung argued that the AI transition will be a different type of shift of paradigm. Scialpi agreed with the need to qualify workers so as to ethically influence code so that intelligent machines can benefit labour more than damage it.

2) Are there tools that can better measure and predict the impact of ICT on the labor market? Are there tools that can predict what skills are needed going forward?

El Gamal mentioned the potential of big data to allow for clear and precise predictions which can be used towards policies related to the labour market and its issues. Amoroso das Neves considers that it is only possible to predict the near future, but even then it is important to further qualify workers. Chung believes most predictions made nowadays will be wrong. Jennings took the question in a different direction by asking how much have governments invested in human capital. He thinks that there is a chronic underinvestment in human capital and therefore humanity is not prepared for the upcoming revolution. McCabe mentioned that technical innovation often comes with the transformation of jobs.

The moderator summarised the next three questions so that they could be addressed together by the speakers.

3) 4) 5) What are the ways in which the labour market will most likely be affected by digitisation and automation? What policies should be considered in an environment of increasing demographics in developing countries? What will be the necessary professional skills to take advantage of the jobs created in a highly digital society, and what are examples of innovative approaches to training by which workers can be more effectively connected to more opportunities? And finally, how can education and capacity development play a role in this new scenario and what kind of efforts would be necessary for public and private stakeholders to promote education and capacity development in both the developed and developing countries?

Chung said that he believes that the curriculum must be changed to transform the actual learning system. El Gamal explained his view that digitisation will not harm the labour market as much, but instead create new employment for people that did not have the opportunity before. Jennings advocated in favour of creating a governmental ‘Future of Work Commissions’.

The moderator called for final interventions. Bambo stated that the classic work market will be altered and new laws are necessary to mitigate possible damages as well as to properly allocate capacity building. Jennings reiterated the dangers of leaving the regulations to the market. McGabe reminded the audience of the difficulty of having all voices heard. Chung summarised that everybody agrees that change is imminent, and that we need a mix of permissionless innovation and processes to protect workers.

By Pedro Vilela