The global economy is experiencing major technological shifts, with the rise of digital technology a key driver. These shifts are likely to intensify in coming years with new technologies such as artificial intelligence, cloud computing, and autonomous vehicles. In this context, developing and emerging economies face a serious challenge. The digital economy – broadly defined as the use of digital technologies to facilitate business transactions such as production, exchange, and consumption, and encompassing e-commerce, digitally delivered services, online payments, and digital media, among others – provides an opportunity to leapfrog and achieve economic and technological catch-up through using digital technologies and building capacities in the digital economy. However, technological shifts also threaten to widen the technological divide, with advanced economies reducing further the value added in developing and emerging economies and making ongoing catch-up efforts ineffective.
Author: Shamel Azmeh and Christopher Foster