Leveraging the Digital Transformation for Development : A Global South Strategy for the Data-Driven Economy

This policy brief tries to work out some of the implications for the Global South of the emergence of Industry 4.0 and the evolution toward a data-driven economy. The digital transformation provides developing economies new opportunities to leapfrog industrial age infrastructure, to draw on the vast knowledge spillovers from the internet, to take advantage of new markets enabled offered by digital platforms, and to exploit production possibilities enabled by digital technologies. It also increases the distance to the technological frontier as leading-edge countries race forward, creates new competitive challenges in capturing production mandates in tasks that can be automated, and poses daunting new governance challenges in managing the impact of digital technologies on cyber security, integrity of governance, industrial adjustment, preservation of competition, and cultivating trade and investment links to the global economy. Developing countries can leverage the valuable data they generate, given their population size, rapid adoption of mobile technology, and digital procurement potential, to improve the bargains they strike with advanced country suppliers and platforms and in trade negotiations. Despite its relatively vulnerable position in today's fractured global environment, the Global South is not entirely without assets and options. The international financial institutions should support ambitious strategies aimed at leveraging the digital transformation for development