Radical economic transformation. It seems you can’t open a news article or switch on the television without hearing the term thrown about, followed naturally by a spirited discussion of what exactly that means. Well, allow me to throw my own hat in the ring and give my own interpretation: radical economic transformation is simply another name for inclusive growth. The end goal is the same – to create an equal society where everyone has access to shared opportunities and resources.
The discussion of how to achieve this society tends to focus on macroeconomic policy, but it’s the microeconomic determinants that drive much of the broader economic growth of a country. And it’s becoming increasingly clear that a digital society is one of the biggest boosters of these determinants.
Let’s look at the Chinese ecommerce boom as an example. A report by AliResearch has found that online retail platforms have created 30-million job opportunities in China alone. What’s more, the country is home to nearly 40 million SMEs, a large portion of which contribute to 60% of its total import-export volume. Importantly, many of these opportunities are created in poorer, rural areas, ensuring that the wealth created from e-commerce is evenly distributed.
According to the 2017 African Digitalisation Maturity Report from Siemens, a digitalised Africa could generate as much as R4 trillion by 2026. McKinsey meanwhile estimates that increased internet penetration could add $300 billion to Africa’s GDP over the next decade, with much of the impact taking place in the education, healthcare and financial services.
But we still have some work to do before we can access this. According to the WEF’s Africa Competitiveness Report, South Africa is the second most competitive economy in Africa. However, it does not even feature in the top 10 of the Inclusive Development Index (and ranks a lowly 70th among developing economies overall).
How do you promote an egalitarian society?
There were plenty of good intentions on display at the WEF, but history has shown time and again that good intentions alone aren’t enough to ensure that everyone gets an equitable share of the pie. A top-down approach to inclusiveness often fails to recognise the problems, strategies and even people you’re trying to address. So how do you overcome the dreaded execution gap?
To truly drive inclusiveness, whether in your organisation or community, is to make the people themselves part of the process. Here’s where digital truly shines, allowing us to listen better, share ideas, educate others and lift voices that would otherwise have been drowned out, so we can better co-produce value for all.
One excellent example of a developing country that is getting this right is India, which has made connecting and empowering people a major part of its ICT agenda over the last few years. Initiatives include the likes of MyGov, an e-governance platform that literally calls for citizens’ ideas to create value. Collaboration and access lie at the heart of these platforms, and as a result, they are transforming a society that has historically struggled with inclusive economic growth.
The connectivity conundrum
Creating platforms that empower ordinary people is all well and good, but what happens if those people are simply unable to access them? This is one of the biggest challenges hampering Africa from being able to cross the digital divide. To truly become both digitally and economically inclusive, we first need to solve the problem that many South African citizens do not have reliable access to the internet, whether because of geographic or financial challenges.
Initiatives such as Project Isizwe are bridging some of that gap, at least in major urban areas, but rural connectivity is still the elephant in the network. Again, India’s similar environment makes it an easy reference point for our own journey. The Bharat Net initiative is an optical fibre broadband network that traverses the country and spans 155km, making it the largest rural broadband project in the world.
Another strategy to get people connected might be to find ways of putting the devices themselves into their hands. For FNB, offering subsidised device bundles as part of its banking solutions has proven to be an ingenious way of driving connectivity among its potential customers.
The detail’s in the data
The third puzzle piece in using digital to enable inclusive economic growth is to use the data we have available to drive strategies that will actually have an impact. After all, data is the new oil, which makes it the perfect non-expendable resource to fuel a more inclusive form of economic growth. Here’s where business and society can get really bold, pushing the limits of how they can share value using the data they have on hand.
Just look at how data is enabling more sustainable agriculture in Africa. In the face of drought and water scarcity, farmers are increasingly using digital platforms such as Esoko and iCow to get precise data about weather patterns, soil conditions, market prices and more. While platforms such as FarmDrive make use of analytics to connect smallholder farmers with financial institutions and potential investors.
Similar data-driven initiatives are empowering people in the realms of healthcare, banking, transportation, energy, and much more. Here at TransUnion, for example, we use geospatial and population data in our indigence models, to ensure the fair and equitable distribution of important services such as healthcare. The lesson from all of these initiatives is clear: use whatever access to data you have, to promote some form of inclusion.
As the world becomes fully digitised, it’s clear that digital and economic inclusion are one and the same. Build a digital society and economic inclusion will naturally follow. The question you need to ask yourself is what your organisation is doing to contribute towards the delivery of this outcome.