Denis Opudo
The technological revolution is changing how every sector works. Technology is changing the global economy from cloud computing to Al. The changes are in developing countries. But the developed countries might be lagging behind.
Back then the digital changes were gauged using the weight of internet connectivity. But now it is how businesses in developed countries use technology to strengthen their control of world value chain. The value of share extracted by the wealthy nations from developing countries can tell the development of the digital world. The recent innovations affected the export-oriented industrialization strategy. Moreover, development strategy has fuelled development in many countries.
Developing countries increased their share of world manufacturing activities. This is by using low-cost and abundant labor. The manufacturing activities included attracting investment and creating investments among others. Companies that preyed on an opportunity to lower costs always had a trade-off. This is done through shifting manufacturing to the developing world. Offshore productions lead to limited ability to respond to changes in consumer demand. Technology, therefore, comes with a different option.
Companies are now able to get their production nearer to their final markets. This is through investing in additive manufacturing, robots, and various non-human tools. For instance, Adidas is taking that direction by shifting footwear to US and Germany. The digital technology is also helping businesses done across the borders. But protection of local services is becoming more difficult to initiate. Local businesses in developing countries will face competition from the rest of the world. This is a threat to the development strategies relied on by many countries in the global South.
The digital world is widening at a very high speed. This is even as the emerging and advanced economies are moving fast to get the new opportunities created by technology. European Union (EU) is supporting technology investments through its digital single market. Moreover, it is supporting technology through new policies. This takes place in areas like high-capacity computing, cloud computing, and venture capital. But the global South has very few or no comparable frameworks. Development strategists have stated that poor countries cannot channel resources to the digital economy. This might be true. But failure to account for technology-driven economic trends will only worsen the state. Such like trends should be placed at the top of national development strategies. At a regional level, there is a need to analyze technology-driven economic shifts and policies. Policies should be those that take advantage of the opportunities they represent while coping challenges.
There should be collective effort to help local startups expand. Moreover, they should be helped to be more competitive internationally. Many developing countries are so far using well the digital technology. From mobile banking to data-driven farming techniques are already embraced by almost everyone. But such innovations are not enough to push the developing countries in the global market. Therefore policymakers need to come up with new tools to match the global North. Support from international organizations is key to the investment in new tools.
