what is the digital economy? It′s the
These companies connect market
economic activity that results from billions
of everyday online connections among
people, businesses, devices, data, and
processes. The backbone of the digital
economy is hyperconnectivity which means
growing interconnectedness of people,
organisations, and machines that results
from the Internet, mobile technology and
the internet of things (IoT).
Recently, TechCrunch, a digital economy
news site, noted, “Uber, the world’s largest
taxi company, owns no vehicles. Facebook,
the world’s most popular media owner,
creates no content. Alibaba, the most
valuable retailer, has no inventory. And
Airbnb, the world’s largest accommodation
provider, owns no real estate… Something
interesting is happening.”
The term evolved from the 1990s, when the
focus was on the impact of the internet on
the economy. This was extended to include
the emergence of new types of digitally-
oriented firms and the production of new
technologies.
Today the term encompasses a dizzying
array of technologies and their application.
This includes artificial intelligence, the
internet of things, augmented and virtual
reality, cloud computing, blockchain,
robotics and autonomous vehicles.
These include e-commerce, digital banking,
and even “traditional” sectors like
agriculture or mining or manufacturing that
are being affected by the application of
emerging technologies.
 The best example of this is the rise of
digital platforms such as Amazon, Uber and
Airbnb.
participants together in a virtual world.
They reveal optimal prices and generate
trust between strangers in new ways.
Lastly, the digital economy is fuelled by –
and generates – enormous amounts of
data.
Digitalisation also enables more efficient
processes in companies, helps minimise
waste, promotes longer life for products
and minimises the transaction costs.
Digitalisation can been seen as one of the
enablers of the Circular Economy (CE) due
to its building visibility and intelligence into
products and assets such as knowledge of
the location, condition and availability of
assets.
Increasing use of digital technologies such
as utilisation of artificial intelligence or
blockchain technology brings novel ways to
improve traceability and transparency
throughout product lifetime [5]. Smart,
connected products allow producers to
monitor, control, analyse and optimize
products’ performance and collect usage
data [5,6
Digitalisation will have a serious impact on
jobs transformation. A study conducted by
the McKinsey Global Institute in 2017
predicted that one-third of the US
workforce is likely to go through job re-
profiling by 2020. We are entering a new
marketplace of smartphones, robotics and
artificial intelligence. There is no turning
back now as digital technology is expected
to accelerate its pace in the coming years.
. A striking fact is that less-developed
economics are quickly adopting these
technologies and are taking a lead in the
usage of digital technologies including e-
payments in Kenya, land registration in
India and e-commerce in China. Special
attention will have to be given to the
potential exclusion of the workforce whose
skills have been degraded and the potential
threat of further concentration of wealth.
Four drivers of change are expected to
influence business growth in the next five
years — high-speed mobile internet,
artificial intelligence, widespread adoption
of big data analytics and cloud technology.
According to a survey conducted by the
World Economic Forum, 71pc of tasks that
were undertaken by humans in 2018 will be
reduced to 58pc in 2022. The rest will be
done by machines. The education and skills
development systems are failing to catch up
with the pace of change. While digital
economy could accelerate the pace of
labour market dynamics by opening new
opportunities, it also makes traditional skills
obsolete. The change calls for more
adaptability, a flexibility among firms and
individuals.
The greater challenge for Pakistan is to
reach out to illiterate adults who fear digital
change. As one of the most adaptive digital
economy, Singapore made this structural
shift in 1977 from efficiency-based skills to a
knowledge-based skills model.
There is a clear gap between institutions
and technology in Pakistan. The
governments tend to adopt technologies for
service delivery with little emphasis on
empowering citizens to hold them
accountable.
Pakistan also has the comparative
advantages of a young, educated
population and lower median wages than
the West. Academia and industry need to
invest in their students and employees by
offering relevant training programmes to
prepare them for future job markets.
Governments could help spur innovation
and be a strong support system for the
manufacturing sector by creating Special
Economic Zones for micro-, small- and
medium-sized enterprises, with benefits
such as import tax subsidies on equipment
and infrastructure subsidies for setting up
advanced manufacturing facilities.
 Prof Klaus Schwab of the World Economic
Forum says that stakeholders need to adopt
an “agile governance” model for regulating
technology and making constant
adjustments with its evolution. Agile teams
that constantly evaluate and fine-tune
policies to enable the adoption of new
technologies will provide a strategic
advantage within governments and
organisations hoping to thrive in the fourth
industrial revolution. It is crucial to build
stronger links between governments that
regulate technology, academia that
nurtures new technologies, and industry
that builds technology.
As countries such as Bangladesh are
digitising their economies to fuel
innovation, growth and jobs, we are still
struggling with slow, patchy internet
connectivity and a poor digital
infrastructure.
The speakers at the 14th symposium of the
Pakistan Academy of Engineering titled
‘Preparing for our digital economy’ also
identified areas for research and
underscored the need for transparency in
data.
In his welcome address, Dr Engineer Jameel
Ahmad spoke about the gaps in Pakistan’s
response to the use of emerging digital
technologies, regretting that Pakistan did
not rank high in important global indices of
cyber security and business-to-consumer e-
commerce.
“In order to digitise economy, the
government needs to support the
components of its digital policy with
appropriate allocation of resources,” he
said.
Prime Minister Imran Khan said that with
the introduction of the 'Digital Pakistan
Vision', the full potential of the
contribution of youth and the women to
the economy will be unleashed.
He said that the introduction of e-
governance will be essential in combatting
"the endemic of corruption which started
out at the top but with their flight to foreign
countries has now settled down in the
lower tiers of society".
The tech consultant also said that Pakistan
has more than 70 million internet users and
local tech talent as well as diaspora which
has been forming tech companies for a
decade. "All these people are ready to
contribute to the development of Pakistan."
Aidrus then introduced the five strategic
pillars which will form the basis of the new
digital initiative:
1. Access and Connectivity that
ensures every Pakistani has access
to the internet that is a fundamental
right that we need to make available
universally and especially to
underserved populations.
2. Digital Infrastructure that creates
the ability to do most daily tasks
using smart-phones in a secure and
faster manner.
3. E-Government that digitises intra-
government operations and
processes towards a paperless and
efficient environment and also
digitises government services for
citizens and businesses for better
delivery.
4. Digital Skilling and Literacy that
enables our tech graduates to
secure relevant jobs. A majority of
our tech graduates today cannot
compete globally because our
curriculum is outdated and barring
them from monetising those skills.
5. Innovation and
Entrepreneurship that provides an
enabling environment for startups
to flourish.
A country’s progress in digital
transformation is measured using the
Information and Communication
Technology (ICT) framework.
Broadband connectivity is a basic
requirement for the digital economy and
networked society. Once that has been
achieved, we need to look beyond
broadband and work on the other four
enablers: data centres, cloud services, big
data and internet of things (IOT).
As the foundation of the modern economy,
broadband is delivered on fibre optic
landlines and 3G (or newer) cellular
networks; we must develop a national
policy and have a national broadband plan,
which articulates a download and upload
speed for a targeted number of users. In
addition to speed and access, price also
plays a crucial part. The average download
speed varies. Karachi leads with 3 Mbps,
with Islamabad and Lahore at 1.8 Mbps. In
terms of pricing, we are more expensive
than our regional partners. The
comparative prices per 10 Mbps are:
Pakistan Rs2,005, India Rs1,200 and
Bangladesh Rs2,301. In terms of
connectivity, Pakistan’s position is
improving. The number of smartphone
users is estimated at 40 million, expected to
grow to 80m by 2020 according to the
Groupe Speciale Mobile Association.
However, the increase in smartphones will
not achieve the desired effect unless taxes
on data are materially reduced or
eliminated and import duties on
smartphones under Rs10,000 are
eliminated.
Without big data optimisation of economic
information, digitalisation becomes even
more challenging. No longer just a place for
hosting IT equipment, data centres form a
key part of the infrastructure for enabling
digital transformation and satisfying
demands on speed, efficiency and
processing power. Big data and IOT will
create huge amounts of data to be stored,
processed and analysed. Pakistan must
invest in fully secure, reliable and efficient
data centres if it is to digitalise its economy.
Cloud services are also key enablers and are
fast becoming a mainstream model for
building and deploying IT systems. In
Pakistan, they are essential, as most players
that are small- and medium-sized
enterprises cannot afford to build their own
data centres.
IOT is not just a buzzword; it is one of the
most fertile areas for enabling digital
transformation. IOT in Pakistan is in its
infancy. An example is a small power device
which not only informs the amount of
energy being consumed by each device in
your home, but in addition, using big data,
also advises how to more effectively save
energy and reduce your power bill. As
Pakistan is in the very early stages of big
data usage, IOT will take time.
The government needs to create a plan for
a Digital Pakistan similar to the national
financial inclusion strategy. The benefits of
a digital economy are not limited to
financial inclusion. They impact practically
every sector of the economy: e-health, e-
education, and e-agriculture are only a few
of them.
one of China’s leading internet operators,
Alibaba Cloud, has been constructing 10
industrial internet platforms for various
industry sectors, including textiles, clothing,
food and beverage, processing, home
appliances, electronics, and textile printing
and dyeing.
Pakistan carried out six reforms that helped
improving its ranking from 136 to 108,
according to the WB's annual flagship
report, 'Ease of Doing Business 2020',
released on Thursday. It turned out to be
the sixth global reformer and first in South
Asia that brought ease in doing business in
the last one year.
he global map is being altered at a much
faster rate than anticipated due to the
disruption created by digital infrastructure,
artificial intelligence, the Internet of Things,
and blockchain. Further digital and
technological disruption is now set to mend
fractures in society – leading to improved
living conditions and enhanced economic
empowerment.
This disruption has given new life to e-
commerce and the start-up scene in BRI
countries. In light of the Global
Competitiveness Index 4.0, it is extremely
important that economies grow in all areas,
overcoming challenges and making
investment in human capital and
innovation. Resilience and agility are key.
akistan, which is emerging from many years
of the war on terror, is now on a decent
path to progress, with economic growth of
5.8% and improved investor confidence. At
the World Economic Forum in 2017, Ebay’s
chief executive, Devin Wenig, highlighted
Pakistan as one of the fastest growing e-
commerce markets in the world. In 2018,
Alibaba bought Pakistan’s largest e-
commerce platform, Daraz.pk.
Growth is being accelerated by other major
investments in power and connectivity
infrastructure, technology and digital
infrastructure. Ant Financial Services,
China’s biggest online payment service
provider, recently bought a 45% stake in
Telenor Microfinance Bank, in a deal that
valued the Pakistani bank at $410 million.
Irfan Wahab, chief executive of Telenor
Pakistan, called the deal a “game changer”;
while Eric Jing, chief executive of Ant
Financial, said it would provide “inclusive
financial services in a transparent, safe, low-
cost and efficient way to a largely unbanked
and underbanked population in Pakistan”.
 Pakistan was ranked 110 among 141
countries on the World Economic Forum
(WEF) Global Competitiveness Index (GCI)
for 2019.
It has been observed that populations in
countries with large digital and
technological divides are fast adopters of
technology. China is at the forefront of
developing future technologies – artificial
intelligence, robotics, cyber and space
technologies – making it a promising
partner for countries along the BRI.
Fourth industrial revolution are on the way.
 For instance, one of the projects that is
part of CPEC is the laying of 820 kilometres
of fibre-optic cable, that will connect more
Pakistanis to the digital world.
The impact on the economy can also be
significant. According to the Small and
Medium Enterprises (SMEs) development
authority, about 90 per cent of businesses
in Pakistan are SMEs that have a 40 per
cent share in the country annual gross
domestic product. Developments in the
digital sector can help SMEs reach more
consumers and achieve growth.
A security concern
The existing fibre optic network through
which Pakistan connects to the world has
been developed by a consortium that has
Indian companies either as partners or
shareholders.
This is viewed as a security concern e.g.
when it comes to surveillance of
communication. As recently as January this
year, Director General Special
Communications Organisation (SCO) Maj
Gen Amir Azeem Bajwa informed the
National Assembly Standing Committee on
Information Technology that some
incoming and outbound internet traffic
landed in India before being routed to its
destinations, posing a security risk for
Pakistan.
Digital Economy: How does digitalization
change the competitiveness of individual
economies?
In the future, the international
competitiveness of individual economies
will depend crucially on how quickly digital
technologies are used in production
processes. This digital transformation in
turn depends on whether a country has the
necessary resources for this transformation.
The resources available depend largely on
the level of economic development
achieved. As a rule, this is measured by the
level of real gross domestic product (GDP)
per capita. With this indica-tor, the world
can be divided into three groups of
countries – exemplarily and roughly
simplified – (see figure 2).
1 Western industrial economies
If we look at the current situation of GDP
per capita, the western industrialized
countries have the highest per capita
income.
 If these countries succeed in
promoting the use of digital technologies,
they will become even more competitive.
The result will be a further increase in GDP
per capita. This includes the U.S. in
particular.
 Those industrialized countries
that fail the digital transformation are
losing competitiveness. This applies to
economically weak countries that are also
heavily indebted, such as Greece and
possibly Italy. Ageing societies can also fall
into this group of countries because the
innovative power and productivity of an
ageing society tends to be lower.
2 Asian emerging economies
Many emerging Asian economies have
experienced strong economic growth over
the past two decades. They therefore have
the financial resources for digital
transformation. This applies not only to
China, but also to other Asian economies
such as South Korea, Indonesia, Thailand
and Taiwan.
3 African developing countries
A mixed picture arises with a view of Africa:
 On the one hand, African countries
have a young and growing population. If
these countries succeed in building a digital
 infrastructure and promoting the education
sector, strong economic growth can result.
 Some of these countries may even
be able to skip a technology step.
Economists call this leapfrogging. For
example, a country that does not yet have a
landline for telephony is setting up a mobile
network and is therefore on the same
technological level as an industrialized
country.
 On the other hand, it becomes
problematic for poor, underdeveloped
economies that have no valuable raw
materials and no access to the capital
market. They are in danger of being left
even further behind in economic terms
because they are losing competitiveness.
Digital Economy: Changing
competitiveness and the distribution of
global wealth
The international competitiveness of a
country is crucial for the prosperity of its
people. If an economy is competitive,
domestic companies can sell their products
at home and abroad. This secures jobs and
generates income for employees.
With improved competitiveness, the
country can produce more goods and
services and thus increase GDP – and GDP
per inhabitant. Global prosperity is being
redistributed: A successful digi-tal
transformation increases people’s
prosperity. In countries that fail to do so,
GDP per inhabitant falls.
The digital transformation of one’s own
economy thus becomes a prerequisite for
securing and improving a country’s
prosperity.
The megatrend report “The Bigger Picture”
of Bertelsmann Stiftung examines the
central interactions between the
megatrends of globalization, digitalization
and demographic change and their effects
on people’s employment and income
opportunities. This has direct consequences
for individual participation in social life and
social cohesion – and thus for the need for
political action.
the digital economy has evolved with the
underlying technology. Over the past
several decades, the information and
communication technology (ICT) sector has
undergone rapid development, from
microelectronics in the 1940s, to the birth
of the computer in the 60s, the introduction
of the internet in the 90s, and most
recently, blockchain, Artificial Intelligence
(AI) and robotics. Correspondingly, new
sectors based on the evolving technologies
have emerged, such as e-commerce, fintech
and driverless cars.
The G20 uses this broad concept and has
defined the digital economy as “a broad
range of economic activities that includes
using digitized information and knowledge
as the key factor of production, and modern
information networks as the important
activity space”
China ranks 50th out of 131 countries based
on the World Bank digital adoption index,
59th out of 139 countries in the World
Economic Forum index, and 36th out of 62
in the Fletcher School digital evolution
index
But China has become a global leader in
some key digital industries.
• On e-commerce: China accounts for over
40 percent of global transactions, and the
penetration of e-commerce (in percent of
total retail sales) stands now at 15 percent,
compared to 10 percent in the U.S
On fintech: Chinese companies account for
more than 70 percent of the total global
valuations. The value of China’s
consumption-related mobile payments by
individuals totaled US$790 billion in 2016,
11 times that of the U.S. Related to the
growth of this sizable market, the
processing capacity of one of China’s largest
mobile payments providers is roughly 3
times faster than of U.S. counterparts
While still at an early stage, China’s leading
industries have started to have global reach
spanning a range of sectors, particularly in
fintech. • Payments. China’s tech giants
have been rapidly expanding in overseas
markets. Most notably, in the payment
industry, Alipay and WeChat Pay, the two
popular third-party payment applications in
China, are available at physical retailers in
28 countries and regions outside of China
for Chinese tourists. • In e-commerce,
Alibaba has set up a global platform
connecting sellers and buyers from more
than 200 countries, with its total revenue
growing by more than 200 percent. Chinese
companies have also promoted the
development of e-commerce and third-
party payments in other countries by
investing in local companies, such as Pay
TM in India, Airwallex in Australia, and
Lazada in South East Asia. • On cloud
computing, Alibaba cloud computing has set
up 14 data centers globally, with overseas
cloud computing revenues growing at 400
percent. • ICT exports. Overall, China
accounts for 32 percent of global ICT goods
exports6 , and 6 percent in ICT services
exports. In 2017, 11 percent of China’s ODI
was in the ICT sector.
China’s success in the new digital industries
reflects a confluence of factors. • A
relatively large financially-underserved
population: In the early days of digital
development, financial inclusion was still
limited in China compared to advanced
economies. In 2011, account ownership
among adults was 64 percent in China,
compared to more than 90 percent in
Japan, Korea and Germany7. Small and
medium enterprises also have limited
access to credit via the formal banking
channel. This resulted in sizable demand for
services from non-bank financial service
providers. • Government policies have
provided a supportive environment for the
digital economy in a number of ways.
Investment in digital infrastructure has
played a particularly important role in
facilitating the boom of digital industries.
Reflecting continued government
investment, the digital infrastructure has
improved significantly over the past years,
and now broadly in line with advanced
economies8 . Also, the government has
adopted light regulation at the early stage
of development to allow for innovation.
These efforts facilitated the boom of new
industries. Relatively limited concerns
related to data privacy by the public has
also facilitated China’s rapid digital
development.
Scale advantage and enthusiastic
adopters/consumers have been a key
driver. China has a large base of 700 million
internet users and 282 million digital
natives (internet users that are less than 25
years old), eager to adopt new technology.
By contrast, internet users in India, a
country with roughly the same population
as China, is about 60 percent of China’s size
in 2016, while the U.S., the current digital
leader, has less than 300 million users
reflecting a smaller population size.
The ecosystem, developed by the so-called
“BAT” (Baidu, Alibaba and Tencent) tech
giants, capitalizes on its multi-industry
reach and rapid accumulation of consumer
data to provide easy access to new products
and services to millions of users.
China has experienced rapid digitalization in
recent years. The size of the digital
economy has surged from 15 percent of
GDP in 2008 to 33 percent in 2017, mainly
driven by the integration of ICT with
traditional sectors (text chart). Despite the
emergence of various new ICT sectors, their
overall size remains small and largely stable
at around 7 percent of GDP. On the other
hand, the size of digitalized traditional
sectors (e.g., financial and entertainment
sectors increasingly use ICT in service
provision, while industrial production
increasingly uses robotics) has expanded
from 10 percent of GDP in 2008 to 25
percent in 2017. Based on the Fletcher
digital adoption index, China’s speed of
digitalization is the fastest in their 62-
country sample.
The degree of digitalization varies across
sectors. Overall, the service sector is the
most digitalized, with ICT contributing to 33
percent of the sector’s valueadded in 2017.
The industrial sector is lagging, with ICT
contributing 17 percent of its value-added.
The agriculture sector is the least
digitalized, with only 7 percent of
digitalization. There is also substantial
variation among subsectors. In services, the
most ICTintensive subsectors are mostly in
financial services and entertainment; In the
industrial sector, the advanced
manufacturing sector is also more
digitalized.
There are a few channels through which
digitalization has improved efficiency •
Lower transaction costs. This channel is
particularly visible in the fintech industry.
Financial transactions that had required
visiting bank branches can now be
completed in seconds on mobile phones. •
Reduced information asymmetry and better
matched demand and supply. The eco-
system established by the tech giants in
China provide small suppliers with instant
access to a large pool of consumers. Big
data analytics also reveal consumer
preferences and help target service
provision. • Enhanced production efficiency.
In the manufacturing sector, automation
has led to shorter cycle times, improved
quality and reliability.
Digitalization has created millions of jobs
in the new sectors. The booming e-
commerce sector and the sharing economy
have become a new engine for job creation
in China. In the ecommerce sector,
Alibaba’s platform has almost 11 million
SMEs, which have created over 30 million
jobs over the past decade. The Didi taxi
platform (China’s Uber) is connected to 13
million drivers. Employment in the ICT
sector has also expanded, though at a
smaller scale, with 1.4 million jobs added
for high-skill workers in the past five years,
and the average wage has doubled since
2012.
At the same time, millions of jobs have
disappeared amid digital disruption. The
disruptive impact of digitalization on
employment is mostly evident in the
industrial sector, while the impact on the
service sector has been limited. Industrial
employment has fallen by 9 million since
2012, a result of overcapacity cuts, and, to a
large extent, automation-driven industrial
upgrading. For example, Foxcom, a leading
ICT company, has replaced 60 thousand
workers with 40 thousand robots. In the
service sector, the most vulnerable sector
appears to be retail, given the speed of
digitalization there. However, despite the
surging penetration in E-commerce, the
growth of retail employees has been
broadly stable
Digitalization has a profound impact on
market structure. There are three channels
through which digitalization has shaped
market structure:
1) Disintermediation: Digitalization has
reduced layers of distribution, linking supply
and demand directly through digital
platforms. 2) An increase of small players in
traditional sectors: digitalization has
significantly lowered entry barriers in many
sectors, especially consumer goods and
services. Small businesses are easily
connected to a large consumer base at low
cost. This has led to a shift of the market
from dominance of big companies to the
rising influence of small firms. 3) Oligopoly
in platform industries: while barriers are
lower in traditional sectors, they are higher
in the new industries, especially digital
platforms, with only a few firms dominating
the space. For example, Alibaba and
Tencent dominate the mobile payment
sector and have branched out to other
parts of the financial services supply chain.
Such structure has the advantage of
economies of scale or “information scale”,
but may also lead to price distortions if
there is a lack of competition.
The net impact of digitalization on income
inequality is uncertain
Digitalization will likely result in industrial
job losses going forward, but the overall
impact on employment is likely to be
contained. China’s current robot intensity
in the industrial sector is 5 percent,
compared to 18 percent in the U.S. and 60
percent in Korea. Automation will continue
replacing low-skilled workers as China goes
through industrial upgrading.
Digitalization may also lead to increasing
labor market polarization: High skill, low
skill wage difference. This has been widely
observed in advanced economies in the
past (text chart shows the experience of the
U.S.). With China entering more advanced
stages of digitalization, such polarization
could also increase.
Downside risks to employment emerge if
artificial intelligence is applied on a large
scale.
Currently AI is still at an early stage of
application, but developing rapidly.
Machine Learning, a subset of AI, is already
being applied and increasingly so,
particularly in the financial sector. World
Bank (2016) estimates that 77 percent of
employment in China is susceptible to
automation.
Digitalization brings significant benefits to
the economy, but also risks.
Digitalization can boost productivity,
promote rebalancing, and create jobs in
new sectors. On the other hand,
digitalization could disrupt traditional
sectors, lead to job losses, especially mid-
skill workers in the manufacturing sector.
Similarly, while fintech has improved
service efficiency and expanded financial
inclusion, it also created financial stability
concerns and created new challenges for
regulation and supervision. Going forward,
continued digitalization will provide new
sources of growth, yet its impact will likely
not be large enough to reverse the gradual
downward trend of China’s potential
growth.
Recommendations:
The government can play a pivotal role to
maximize the benefit of digitalization while
minimizing its risks. Key measures include:
Active labor market policy: To smooth
labor transition, the government could
usefully play an active role in retraining the
labor force.
Strengthening the social safety net: For
affected workers who are close to the
retirement age, a strong social safety net
will be important to ensure minimum living
standards.
Competition policy: Oligopoly is common in
China’s newly-emerged digital industries. It
is therefore critical to promote competition
(including entry of foreign firms) and
encourage data sharing among the
companies.
Data privacy and consumer protection.
Supervisors should communicate and
coordinate with relevant regulators and
authorities in charge with data and
consumer protection to enhance regulation
and supervision of fintech entities (Basel
Committee on Banking Supervision, 2018).
According to UN E- Govt DATA
E-Government Development Index
Rank 153 of 193 – Pakistan Ranking -2020
Rank 45 of 193- China RANKING 2020
Rank 9 of 193 - US
E-Participation Index
Rank 103 of 193 – Pakistan Ranking -2020
Rank 9 of 193 - China RANKING 2020
Rank 1 of 193 – US Ranking 2020
E-government. The government could
improve the efficiency of public services
through digitalization. The United Nation e-
government index shows the digitalization
of public services in China ranks . Above
latest ranking
Continued support for digital
infrastructure.
more efforts are needed to improve
internet penetration in rural areas,
Education policy. Increasing focus on ICT
education is needed in universities and
vocational schools.
• More active role in setting global
standards. As a global leader in e-
commerce and fintech, China could play an
active role in collaborating with other
countries setting global standards on
regulating these industries, as well as on
issues related to cyber security, global
digital standards and governance.
To spur economic growth in India, Prime
Minister Narendra Modi recently
announced a $265 billion stimulus
package, called the “Atmanirbhar Bharat
Abhiyan” (Self-Reliant India Scheme). This
scheme amounts to roughly 10 percent of
India’s GDP. In his address, Modi said:
“India’s self-reliance will be based on five
pillars — economy, infrastructure,
technology-driven system, vibrant
demography and demand.”
Unequal access to the internet is a
multifaceted issue; there are various
reasons such as infrastructure gaps, the
rural and urban divide, and economic
inequality in Pakistan. Many impoverished
regions and far-flung areas of Pakistan don’t
have access to the internet.
According to The Inclusive Internet Index
2020, Pakistan fell into the last quartile of
countries, overall ranking 76th out of 100
countries (24th out of 26 Asian countries).
Besides a low level of digital literacy and
poor quality networks, the country also
scored poorly in the affordability
indicators. Internet access in Pakistan
stands at around 35 percent, with 78 million
broadband and 76 million mobile internet
(3/4G) connections.
Haque further said that the government is
trying its best to provide internet facilities
to people. It has set up a universal service
fund (USF), a government initiative that
aims to extend fiber optic connectivity to
the unserved. “We have recently invested
600 million rupees in Shahdadkot and
Sanghar, two districts of Sindh, for the
digital infrastructure. Billions and billions
are needed to end this digital divide,”
 South Area - the Moon administration has
proposed spending 76 trillion won ($62
billion) over the next five years on the
Korean New Deal to prepare the South
Korean economy for the future.
The Korean New Deal is centered on two
pillars – the Green New Deal and the Digital
New Deal. While the Green New Deal is
focused on transitioning South Korea to a
net-zero emissions economy, the Digital
New Deal would lay the foundations for a
digital economy that will spur economic
growth and innovation.
Information and communications
technologies (ICT) are transforming the
global economy. The new digital economy
that is emerging is underpinned by
technologies such as 5G, big data, and
artificial intelligence (AI). IHS Markit
estimates that by 2035 the 5G global value
chain will be worth $3.6 trillion  and
support 22.3 million jobs.
South Korea has been a leader in 5G. It was
the first country to deploy 5G and leads
the world in coverage. LG Uplus
used Huawei’s equipment in its 5G network,
but South Korea has largely been able to
avoid dependence on the Chinese firm as it
develops its network and instead use
Samsung, which is one of the
world’s leading 5G equipment makers.
While South Korea is at the forefront of 5G
development, it trails in AI. South Korea’s AI
sector lacks competitiveness compared to
countries such as the United States. It is
also not among the top countries for AI
researchers or training AI researchers. In
terms of government preparedness to
utilize AI, Oxford Insights only ranks South
Korea 26th in the world.
South Korea’s AI strategy also called for
spending 1 trillion won ($820 million) over
10 years to support the development of
the AI semiconductor industry.
South Korea plans to invest $2 billion by
2022 in strengthening AI research
capabilities, including the development of
six AI graduate schools.
South Korea faces similar challenges in the
area of big data. While South Korea is
among the world leaders in the production
of new data, it is unable to efficiently use
the data collected and only ranks 50th in
the world in the Coursera Global Skills
Index in the area of data science.
The Digital New Deal would address data
usability by creating a “data dam” to collect
data from public and private sources and
then standardize the data so it can be
analyzed. It would also utilize 560 billion
won ($459.2 million) to establish 15 new big
data platforms.
An additional aspect of the Digital New Deal
is a commitment to expand
digital inclusiveness. It includes 110 billion
won ($90.2 million) to build high-speed
internet in rural areas and increase WiFi in
public facilities, as well as 750 billion won
($615 million) to promote remote learning
and working solutions.
In combination with the Green New Deal
the investments are expected to
create 550,000 new jobs, including 100,000
in the areas of AI and software
programming, boosting employment and
better preparing South Korea to compete in
the digital economy of the future.
Indonesia's digital economy, the largest in
Asia, is valued at US$40 billion. By 2025, the
number could reach $133 billion, a leap
from just $8 billion five years ago.
Maintaining this growth trajectory will be
crucial to help enable a rapid economic
rebound when the pandemic threat is over.
Indonesian e-commerce itself is forecast to
reach $21 billion in total value this year, or
52 percent of Indonesia's current $40 billion
digital economy. By 2025, e-commerce is
anticipated to comprise two-thirds of the
country's digital economy.
Indonesia's young, growing and digitally
savvy population have among the world's
highest social media and mobile-usage
growth rates, which are critical drivers of e- challenge of collecting unpaid debts
commerce adoption. Underpinning this is “severe”.
growth are Indonesians micro, small and
medium enterprises (MSMEs). These How is China’s mobile internet
enterprises are crucial to the economy, and
they also comprise virtually all online economy transforming Chinese
sellers. lifestyles?
A platform like Tokopedia has over 7 million
digitized microbusinesses operating across In a profound way, the mobile internet
its platform; 86.5 percent are first-time has improved people’s lifestyle, not
entrepreneurs, and no matter the location
only in large cities, but also in remote
across the vast archipelago, the
marketplace is no longer the confines of areas. For example, mobile payment is
their desa (village). more popular – to the surprise of many
Implementation regulations for GR80 are – in China’s underdeveloped western
currently being drafted. Vital areas need
resolving to enable e-commerce to unlock regions. Among all the provinces, Tibet
opportunity and growth.  led the country in mobile payment
Indonesia's e-commerce sector is at a adoption. Obviously, for less-populated
nascent stage, with expenditure a relatively
areas without much commercial
low 3 percent of total retail, compared to
16 percent for China and 12 percent for the infrastructure, mobile e-commerce is a
United States. To capture this significant
good solution.
value, Indonesian MSMEs need simple and
clear rules. These rules should be applied
consistently and not create additional
burdens that could restrict the ability for
MSMEs to scale operations and trade.

The Indonesian economy is

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