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How can we harness the digital revolution? 

Nagy K. Hanna
LINK Visiting Associate Professor, author of Mastering Digital Transformation

Blog Post, 3 March 2017

Digital technologies have have been transforming the global economy. Yet the developmental dividends of digital technologies – inclusive and sustainable growth, improved governance, and responsive service delivery – have so far been limited to isolated cases among developing countries. Given the magnitude of change in competitive advantage that digital technologies can confer on adopters, the risks of slow or poor adoption of these innovations can be dire for industries, governments, individuals and nations. So, how can policymakers successfully harness the digital revolution for development? This question is the motivation behind my new publication, Mastering Digital Transformation (Emerald, 2016).

From my long experience in development assistance, I saw how information poverty in its many forms has led to: policy planning and management without facts, disconnected enterprises, inefficient markets, poor serivce delivery, disempowerment, corruption, and more. The ongoing ICT revolution has long been ignored in development thinking and practice. Development practitioners and ICT specialists remain disconnected. I have studied the experiences of countries pursuing digital transformation and captured their lessons and experiences in several books. My new book builds on this longstanding interest in how countries can learn to harness the technological revolution.

Digital transformation is not a technological fix, a blueprint plan, a one-off event, or a one-size-fits-all strategy. Rather, it is a social learning process, sustained over time, involving diverse stakeholders. Its aim is to harness the digital revolution to meet a country’s socio-ecoonmic piorities. This process is a marathon, not a sprint. It is driven by vision, leadership, innovation, learning, and partnership among government, business, and civil society.

How can countries master the digital transformation process?
Three key challenges bedevil the design and implementation of digital transformation programmes.

First, digital technologies are highly interdependent and constitute a dynamic ecosystem. This ecosystem includes: communication infrastructure, digital platforms, digital economy skills, local ICT services and content industries, service transformation for all sectors, cyber policies, and ICT sector leadership and regulatory institutions. Maximising digital dividends requires nurturing this digital ecosystem and tapping into its synergies at national, local and sectoral levels.

Second, sector capabilities to plan and implement digital transformation strategies are increasingly important in order to engender shared vision, mobilise long-term commitment,  integrate ICT opportunities and investments into development strategies, align complementary policies (e.g., policies on competiton and skills), and pursue partnerships with civil society and the private sector.

Third, digital transformation demands substantial investment in organisational capabilities, process innovation, and institutional learning. Best practice suggests that investments in ICT-related process improvements, training, reorganisation, and management development, should exceed investment in ICT by a ratio of 4 or 5 to 1.

These challenges persist in countries where complementary assets and coordinating institutions are weak or missing.

Fortunately, effective practices are emerging in forerunner countries for transforming government, services, communities, cities, and businesses. Approaches that have proved to be effective include: taking a holisitc view of ICT and complementary investments; mobilising demand for good governance and better services; promoting public-private partnerships; and open data. Promoting an inclusive information society requires emphasis on digital literacy, local content, information intermediaries, and grassroots innovation. Developing smart cities calls for adopting an ecosystem view that nurtures shared visons and engages all stakeholders. Policy measures for business transformation should include measures in support of affordable access to Internet and digital technologies; mobile finance; digitally-enabled government-to-business transactions; platforms to facilitate trade and e-commerce; and Internet-based training and business services.

Mastering the digital transformation process demands upgraded managerial and technical skills, leadership institutions, policies, and regulations for a digital economy, and a competitive communication infrastructure and ICT industry. It calls for strategies to strengthen educational institutions and reposition them for a digital economy. It calls on stakeholders to define clear roles for government, business, and development partners, and to build competent institutions to lead the transformation process. It addresses key policy issues such as privacy and cyber security. It promotes a local ICT services industry that supports a vibrant transformation ecosystem.

A learning agenda
I suggest that the following questions form the basis of a learning agenda for any country seeking to chart its digital transformation journey:

  • How can the country commit and sustain a holistic transformation strategy?
  • What measures can help integrate digital transformation into development strategy?
  • What complementary policies and institutions will be needed, both economy-wide and in each sector?
  • How should policymakers engage stakeholders, build coalitions, and pursue partnerships to implement digital transformation?
  • What measures are necessary to scale up and secure digital inclusion?
  • What balance should be struck between strategic direction and local initiative?
  • How can policymakers support innovation, experimentation, learning, monitoring, and evaluation?

Developing countries have the opportunity to learn from the experience of frontrunner countries, while at t the same time inventing their own home-grown, best-fit solutions. Newcomers like South Korea and Singapore have leapfrogged, learned fast, and became hubs for innovation. Mastering the digital transformation process is likely to be the defining core competency of the 21st century.