Key challenges when building digital ecosystems

Limited innovation capacity (advanced digital skills)

Having enhanced knowledge of digital technology – such as programming, machine learning (ML), the Internet of things (IoT), networking, engineering, hardware design, big data analysis, and design thinking – is a part of the foundation for designing and programming new digital tools and features. In approximately 50 per cent of the 83 countries where data is available, up to 5 per cent of people have advanced digital skills.[92] In only 4 of those countries are there advanced skills among 15 to 50 per cent of the population,[93] but it is estimated that this level of ability will be required for tens of millions of future jobs. There is still a long way to go to develop these capabilities across the globe.

Inequitable digital governance

Governments can lead the creation of an accessible digital ecosystem by advancing e-governance and subsequently implementing enablers, for example the introduction of e-services and equitable regulatory frameworks promoting intensive initiatives, strategic directions and multisector cooperation. It is important that policy-makers develop frameworks around key digital topics and issues (e.g. data privacy) that safeguard all who engage with the technology. Most LDCs, LLDCs and SIDS have an e-government development index (EGDI, to measure the readiness and capacity of national institutions to use ICTs to deliver public services) that ranges from 0.25 to 0.50, indicating the potential for improved e-governance and subsequently an environment more conducive to growing the digital economy equitably.[94] Figure 21 illustrates governments’ ability and willingness to offer services and communicate with their citizens online.

Disclaimer: The designations employed and the presentation of material on this [map/infographic] do not imply the expression of any opinion whatsoever on the part of ITU and of the Secretariat of the ITU concerning the legal status of the country, territory, city or area or its authorities, or concerning the delimitation of its frontiers or boundaries

Geographically concentrated digital platforms and data collection

A crucial aspect of building a strong digital ecosystem is developing digital platforms that can support it. These platforms have the advantage of being well-positioned to collect data from the users accessing their products or services. This creates a considerable advantage that, without the necessary adequate global data governance, can be converted into disproportionate financial gain. With 41 per cent of the top 100 global digital platforms (by market capitalization) located in the US and 45 per cent in the Asia-Pacific region, there is a clear discrepancy in the ecosystem development happening across the world.[96]

Concentrated research and development

The geographic areas with the greatest amounts of R&D investment have shifted over time. The economic changes caused by the pandemic do not seem to have altered these “swings”. If anything, COVID-19 accelerated the rate of these changes. North America, South America and Europe have traditionally been the main locations of R&D leadership. Similarly, Asia – China in particular – is increasing their share of worldwide R&D and related spending. Japan, India and South Korea are also leading this shift. Even though nearly USD 1.7 trillion was spent on R&D globally, 80 per cent of this expenditure was from approximately 10 countries located in Asia, Europe and the Americas. [97]

Countries in Africa, South America and the Middle East continue to languish in the hierarchy of R&D spenders. The combined total investments of these three regions is just 5 per cent of the total global R&D spending, despite creating more than 13 per cent of the total global GDP. These ratios have not changed significantly over the past ten years, and there is no evidence to support expectations of any meaningful improvements over the next five years. Therefore, the benefits of R&D (e.g. generating expertise, patents, data, and innovations) are not yet fully realized or experienced in these regions.

The factors outlined above indicate that the creation of a thriving digital ecosystem is a challenge in many countries, especially in Africa, South America and the Middle East. However, local digital ecosystems are essential for developing digital services and exploiting the economic and societal benefits of the Internet.