The NileView
It is the strategy and societal readiness, not just technology adoption and acceleration, that can help drive digital transformation
The world will always remember 2020 as the year when Covid-19 struck, causing massive disruptions in virtually all aspects of life, affecting millions of lives and livelihoods in both the developed world and the emerging economies and triggering a series of shockwaves with multiple social, economic, and geopolitical implications, some we have already seen, others are looming on the horizon. However, 2020 could and should also be remembered as the year that the world has witnessed an unprecedented acceleration in digital transformation, presenting ample opportunities for individuals, organizations, and societies to reimagine how the future will look while seamlessly adapting to emerging innovative technologies. In retrospect, it is always important to acknowledge that it was a year when the world relatively adapted fast, showed that it can change and learn, and continues to discover on the go the characteristics of the new normal, obviously with variations from one country to another with no one size fits all model and depending on infrastructure, resources and more importantly human capital readiness.
It is important to emphasize that digital transformation did not start in 2020; it has been in the making for decades; I would argue that it began to take real momentum with the invention of personal computers in the early 1980s and prompted many households to include them as a new, exciting and smart acquisition. What changed last year was the pace of acceleration coupled with the endless volumes of analyzed data generated from all types of information, including text, audio, images, and videos, caused by an interconnected global ecosystem that comprises billions of hyperconnected humans and machines. These two developments are here to stay for the long haul and have the potential to radically transform many aspects of our lives, including how to make decisions, create value, offer products and services, allocate resources, optimize efficiency and effectiveness, and reduce the digital divide, to mention a few.
Digital transformation goes way beyond automation, infostructure, communication, technology, and digital infrastructure. How countries think, plan, prepare their human capital, avail the support platforms including the legal and regulatory environments, and strategize for the future while factoring in the emerging global changes is essential for such transformation to reach its true potential and be able to offer economies both developing and developed a broad portfolio of prospects from education and healthcare to manufacturing and agriculture to inclusive and societal development.
One of the platforms that address the notion of digital transformation is the Network Readiness Index (NRI) through its model that recognizes the pervasiveness of digital technologies in today’s internetworked global environment. The model is based on four dimensions: technology, people, governance, and impact. The NRI model’s premise is that we need to combine the complementary strengths of technology and people within an effective governance framework to achieve both economic and social impact. The NRI’s comprehensive nature means that it addresses a broad spectrum of issues that demonstrate the potential of emerging technologies in accelerating digital transformation and consequently impacting economies and societies.
Late in the fourth quarter of last year, the Portulans Institute released its 2020 Network Readiness Index, demonstrating 134 countries’ readiness to leverage information technologies to be future-ready. In November 2020, The American Chamber of Commerce in Egypt, jointly with the Portulans Institute, the United Nations Educational, Scientific, and Cultural Organization (UNESCO), and the School of Business at The American University in Cairo, hosted a regional session on the launch of the 2020 NRI for the Middle East North Africa (MENA) region. The report revealed that Egypt ranked 84th in the world and the most network-ready country in Northern Africa. It also indicated that Egypt has an advantage in the level of information and communication technology (ICT) usage and skillset given its young and tech-savvy population with over 60 percent under the age of 30, making it overwhelmingly composed of digital natives.
The surge in the dissemination of the use of ICTs and penetration rates of both mobility and the internet is primarily based on the government’s support of emerging technologies, various research and development efforts, and activities as well as the multiple initiatives led by the private sector and supported by the civil society. However, Egypt’s weakest dimension is in ICT-related governance. Its challenges include improving the legal and regulatory support environment and ensuring equal universal access to digital technologies throughout the population, including remote and underprivileged locations, which could collectively help support the private sector, improve its competitiveness, expand its local and global footprints, leverage its digital readiness and reduce the digital gap between the haves and have nots.
By design, the NRI offers a balance between both the human and technology dimensions of network readiness. Besides, it emphasizes several essential elements, including measuring trust, security, privacy, and leveraging the power and reach of emerging innovative technologies which are all instrumental factors to help realize the United Nations Sustainable Development Goals (SDGs).
For Egypt to maximize its prospects from digital transformation, it needs to invest continually in its (a) technology infrastructure –the heart and soul of the network economy– by providing affordable and universal access coupled with adapted and localized content, (b) human capital –the most valuable asset of the economy– should be digitally-ready with the upskilling and reskilling of capacities to be future-ready and better positioned to navigate the challenges of the 21stcentury, and (c) governance –the checks and balances mechanism– with its multifaceted benefits including a legal and regulatory environment that can help build trust, provide transparency, and enable inclusivity.
As the pace of digital transformation worldwide intensifies, there are three key issues facing digital economies in 2021 and beyond.
First, no discussion of digital transformation is complete without a substantial focus on the ways in which digital transformation is impacting global inequalities, particularly the growing digital divide. Around 40 percent of the world’s population lives without access to the internet, and even among those who have access, meaningful connectivity remains an issue. Communities most negatively impacted by the growing digital divide are located in the Global South. These digital inequalities also have gender, race, and ability dimensions that further complicate solving the digital divide. In Egypt, while internet penetration is on the rise, with over 59 million people connected in January 2021 representing an increase of 8.1 percent compared to January 2020 and 57.3 percent of the total population, entrenched inequalities prevent underprivileged communities from benefiting from the full opportunities enabled by the digital economy.
A second core issue relates to the relationship between digital transformation and the quality of life. While digital technologies provide new conveniences to many communities, there are growing concerns about the negative impacts of digital solutions on people’s lives. In particular, questions are being raised about the future of work, jobs, and the rise of a ‘gig’ economy, with a poor track record for worker protection and rights. Most employees in the gig economy work part-time, without a contract, without health benefits, and often at or close to minimum wage. Many of these workers have a hard time saving for buying a home or paying for their children’s education. Thus, it is not surprising to see gig workers unhappy and often protesting with strikes in many economies around the world.
The third leading question is: are we controlling or being controlled by technology? The nature of work itself is also changing in the gig economy. With ubiquitous technology, employers are able to monitor minute details of their employees’ behaviors and reward or penalize them accordingly. Working for small rewards and bearing the constant monitoring of the gig economy does not necessarily lead to better lives. Recent years have brought to the fore concerns and debates about the steady erosion of human rights and political freedoms in the digital world. In the wrong hands, it is clear that digital technologies can be used for unethical surveillance, data harvesting, and algorithmic bias, preventing society’s most vulnerable from participating in the digital economy. With Egypt emerging as a growing digital hub, there are tangible concerns regarding the acceleration and implementation of emerging technologies without the right norms and regulations to govern them. Therefore, in 2020, as part of its efforts to address these issues, the government of Egypt issued a Data Protection Law establishing various standards and controls governing the processing and handling of personal data, which is part of a growing trend among several countries such as Egypt that enacted comprehensive data protection laws to safeguard the rights of individuals in respect of their personal data and to place responsibilities on businesses in how they process personal data.
For the acceleration of digital transformation to create sustainable value, realize a scalable and sustainable impact beyond connectivity to include economic empowerment, job creation, and maximize enterprises’ competitiveness, there is a need for a holistic approach that encompasses a well-thought and coordinated multi-sector strategy and an effectively designed execution plan. Digital transformation is a journey, and despite the current acceleration, we are still scratching the surface. We live in a world that is increasingly relying on timely communication and interconnectedness and the prospects lying ahead demonstrate that there remains a lot of unfinished business and untapped opportunities.
About the authors: Sherif Kamel is a Professor of Management, Dean of the School of Business at The American University in Cairo, and President of the American Chamber of Commerce in Egypt, and Soumitra Dutta is a Professor of Management, and the former Founding Dean of the SC Johnson College of Business, Cornell University and Chair of the Board of Directors of the Global Business School Network.
28 February 2021
Issue #11
Sherif - I am grateful for your thought leadership. You have touched on the main factor Egypt needs to fully embrace to move forward for Egypt and Egyptians.
Dahlia Khalifa