digital industrial policies: national and regional ... · sri lanka’s ministry of digital...
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Rashmi BangaSenior Economic Affairs Officer
Unit on Economic Cooperation and Integration amongDeveloping Countries (ECIDC), GDS-UNCTAD
WTO: 2 February 2019
Digital Industrial Policies: National and Regional Perspectives
Trade and Development Report 2018
RISING DIGITAL CONTENT IN INDUSTRIAL PRODUCTION
Potentiel Opportunities to Upgrade in Value Chains for developing countries
But need to build digital infrastructure and digital capacities
Growing Digital Divide
0.50.6
0.5
0.80.9
1.0
0.0
0.2
0.4
0.6
0.8
1.0
1.2
2000 2007 2014
Value Added by Computer Programing in Manufacturing Exports
Developing Countries (inclROW)
Developed Countries
Developing Countries (excROW)
The Growing Digital Divide
The Growing Value-Added by Digital Services in Manufacturing Exports
Shares in exported value added in manufacturing GVCs, 2000–2014Global level High income
2000 2014 Difference 2000 2014 Difference
Capital 44.8 47.8 3.0 40.3 42.3 2.0
Labour 55.2 52.2 -3.0 59.7 57.7 -2.0Headquarter functions 31.7 30.4 -1.3 35.2 37.0 1.7
Fabrication 23.5 21.8 -1.7 24.5 20.8 -3.7
China Other countries2000 2014 Difference 2000 2014 Difference
Capital 57.0 49.6 -7.5 59.2 59.4 0.2
Labour 43.0 50.4 7.5 40.8 40.6 -0.2Headquarter functions 13.6 19.7 6.0 22.5 23.7 1.1
Fabrication 29.3 30.8 1.4 18.3 16.9 -1.3
Rising profits and growing inequality
Of the top 25 big technology firms in terms of market capitalization, 14 are based in the United States of America, 3 in the European Union, 3 in China, 4 in other Asian countries and 1 in Africa (Naspers-SA). In 2015, the top three big technology firms in the United States had an average market capitalization of more than $400 billion, compared with an average of $200 billion in the leading big technology firms in ChinaApple recently became the first company to be valued at more than $1 trillion, matching the combined economic output of Saudi Arabia and South Africa.
Big has become Bigger!
Growing E-Commerce: Who Benefits?
Anti-Competitive Strategies
National platforms cannot compete with super digital platforms given their anti-competitive practices
Predatory pricing in often used- bear losses in identified countries to compete and wipe off competition in the national markets.
Amazon’s international losses on the back of its India business amounted to over $ 3 billion to fight off the domestic rival Flipkart, which then eventually sold off to Walmart.
Building Digital Infrastructure is the Key
Building Digital Infrastructure Building Data infrastructure by devising national data regulatory
policies Regulating digital platforms and protecting national marketing
platforms Formulating Digital Industrial Policies with a view to increasing
digital content in manufactured products-Digital industrial hubs Harnessing digital start-ups Developing digital competencies
Way Forward for Developing Countries:
National Level Polices
:
Rwanda’s National Data Revolution Policy Sri Lanka’s Ministry of Digital Infrastructure The EU's initiative on 'Digital Single Market strategy' (DSM),
which was adopted in 2015, can provide rich learnings• DSM has 16 initiatives and aims at better access for all to
digital goods and services; creating a level playing field and launching European Cloud initiative and a new e-government national plan.
From Feb 2019, India FDI in e-commerce policy
Good Examples
• Building a Regional Data Economy.• Building Regional Cloud Computing Infrastructure• Strengthening Regional Broadband Infrastructure• Promoting E-Commerce in the Region• Promoting Regional Digital Payments• Progressing on Single Digital Market in the Region.• Sharing Experiences on E-Government.• Forging partnerships for building Smart Cities• Promoting Digital Innovations and Technologies• Building Statistics for measuring Digitization
Regional Support through South-South 10-point Progressive Digital Cooperation Agenda
• Build Digital Infrastructure and capacities using both by national and regional efforts
• Data Regulation Policies- Developing countries need national data policies that determine who can own data, how it can be collected, who can use it, and under what terms.
• Antitrust & competition policies must concern with market structure and behaviour, along with consumer welfare
• Developing countries need to preserve their policy space
Potential benefits of digital revolution risks being lost to digital monopolies: Urgent Actions
