Digital catch-up needed in post-Covid recovery
Summary:
> One of the economic realities exposed in the Covid-19 pandemic is the importance of digitalization of the economy.
> Fact check: The US, Israel, and the UK started vaccination in December, and the result was impressive.
> Fact check: China and the United Arab Emirates also started mass vaccinations in 2020
> A cultural shift has to take place in the Philippines as surveys regularly show Filipinos are spending 8 to 10 hours a day on social media and entertainment, while STEM education deteriorates.
Digital catch-up needed in post-Covid recovery
Henry Chan
March 1, 2021
Life in developed countries is likely to return to normal by the end of 2021 and in developing countries, six to nine months after them. There is no doubt that vaccine sourcing is the most immediate task for developing countries. Smart governments, however, are also looking at the important tasks of post Covid-19 economic recovery.
One of the economic realities exposed in the Covid-19 pandemic is the importance of digitalization of the economy. The use of digital technologies reflects the prevalence of information and communication technology usage in a country. It immediately leads to continued processing by government and businesses, viable work from home, education despite nonphysical attendance, e-commerce to continue business activities and better streamlined logistics to keep goods flowing.
The World Health Organization declared on March 11, 2020 that the world was facing the Covid-19 pandemic. The number of confirmed cases at the time was 118,000 from 114 countries with slightly over 4,000 deaths. By Feb. 26, 2021, the number of accumulated confirmed cases was more than 113 million, and more than 2.5 million people from 221 countries and territories have died from the pandemic. The spatial and temporal spread of the disease is unprecedented in human history; its impact on economic and social life in affected countries is comparable to a ravaging war.
Luckily, scientific advancement played a key role in the pandemic’s eventual resolution. The world produced working vaccines in a record nine months. The US, Israel and the UK started vaccination in December, and the result was impressive. The US reported 77.000 new infection cases on February 25, a 75-percent drop from peak daily infection of more than 300,000 cases reported on January 8. For the UK, case numbers dropped 85 percent to less than 10,000 on February 24, from a peak of more than 68,000 on January 8. China and the United Arab Emirates also started mass vaccinations in 2020.
The developed countries have cornered most of the initial supply of vaccines, and the leading vaccinating major countries, the US and the UK, are targeting full population vaccination by July. For developing countries, even if they are late in the queue, the current efforts to source small quantities of vaccines to cover frontline essential workers will lessen pandemic spread risk and bring new infection down. Together with increasing supply from approved vaccine manufacturers and additional supply from soon to be approved vaccines, it is expected that vaccination for developing countries will start in earnest by late third quarter or early fourth quarter.
The Covid-19 pandemic revealed the digital divide between developing and developed countries. Data shows developing countries are still playing catch-up on digital access, their digital connection is achieved mainly via mobile phone through 2G-4G technology, and these connections are not the broadband high-speed connection required for advanced work environments. The 5G technology, promising enhanced mobile broadband connection, is still nascent to the world.
The broadband speed of communication in the world today is still mainly done through traditional optical fiber-based internet, and most developing countries are way behind in the traditional broadband internet connection. In addition, as the corresponding platform to enable remote learning and business processes is often not well developed, developing countries suffer more economic pain in this pandemic, as economic activities cannot be done efficiently by remote means.
The digital divide is not just happening between developed and developing countries; it also manifests itself among different social strata within a developing country. It is the wealthy class in a community that has good digital connection and relevant access tools; their ability to continue working or learning while the poor segment not being able to do the same thing can deepen social division.
A good number of thinkers from different industries opine that the pandemic has accelerated new technologies’ adoption by many years and a new competitive landscape is emerging in the world. The accelerating technology adoption means a higher degree of automated production complemented by AI, 5G and other emerging technologies. This move to a more knowledge-based economic development model with digital connectivity at the core is working against the competitive strength of many developing countries whose comparative advantage is more on cheap labor. In the Philippines, the BPO/call center global industry will be greatly impacted as jobs are lost to AI, and the same may happen to industries like education.
For the post-Covid-19 world, the digital divide between the have and have-nots in a society can only be addressed through extensive government policy to improve the access to digital service of the poor and working class. Many developing countries are facing the twin task of addressing domestic digital-divide challenge and international competitive challenge arising from accelerating technology adoption brought by Covid-19. Citizens need to empower themselves and find ways to link to and capitalize on the digital transformation taking place. A cultural shift has to take place in the Philippines as surveys regularly show Filipinos are spending 8 to 10 hours a day on social media and entertainments, while STEM education deteriorates. The digital divide is becoming one of the greatest challenges to post-Covid-19 economic recovery for developing countries and will further widen the gap if left unabated.
Dr. Henry Chan is an internationally recognized development economist based in Singapore. He is also a senior visiting research fellow at the Cambodia Institute for Cooperation and Peace and adjunct research fellow at the Integrated Development Studies Institute (IDSI). His primary research interest includes global economic development, Asean-China relations and the Fourth Industrial Revolution.
New Worlds by IDSI (Integrated Development Studies Institute) aims to present frameworks based on a balance of economic theory, historical realities, ground success in real business and communities and attempt for common good, culture and spirituality. We welcome logical feedback and possibly working together with compatible frameworks (idsicenter@gmail.com)
**Also published in:
Digital catch-up needed in post-Covid recovery