Digital transformation holds potential to transform economy

Said Shehata
Saturday 10 Feb 2024

The digitalization of every aspect of our life is an ongoing process that poses threats as well as provides opportunities.

 

Many questions have been raised about this new development, such as the digital divide between developed and developing countries, the cost of digital infrastructure, and the public awareness of this huge transformation, among others.

In this context, it should be highlighted the vital role of the Digital Cooperation Organization (DCO) in pushing the growth of this digital era, since its objective is to achieve social prosperity and the growth of the digital economy.

The role of the digital economy in mitigating the effects of climate change through using digital technologies, such as blockchain, artificial intelligence (AI), and virtual reality (VR), is crucial in achieving prosperity for human beings.

Digital technology is very important in health, trade, sport, supply chain, and other sectors. For example, Elon Musk, the founder of Neuralink, said that the first human patient has received a brain chip implant and is recovering well.

This technology uses a robot to surgically place a brain-computer interface implant in a region of the brain that controls the intention to move. Digital devices helped to make this invention see the light. It should be argued that there are benefits from digitalization and digital technology as well as challenges posed by the same technology.

The role of digital organizations, such as DCO, governments, the private sector, and civil society, is how to maximize opportunities and mitigate the negative effects of threats.

On the agriculture level, generative AI has the potential to contribute to the optimization of current operations. It could enable farmers to enhance productivity while mitigating environmental impact through data elaboration on key agricultural elements, like water usage, energy consumption, soil conditions, and crop health.

The food industry contributes to around 26 percent of global greenhouse gas emissions, while about 70 percent of the world’s freshwater usage is allocated to agriculture. Sustainable agri-tech boosts productivity, reduces costs, and fosters green innovation, contributing to food security, rural development, and climate change mitigation.

According to the Digital Economy Trends report 2024 by the DCO, blockchain technology has emerged as a solution to protecting data, integrity, and security. This will help to shorten the time of medical inventions since people trust the authorities and health entities through giving data which is crucial for medicine making.

Blockchain helps pharmaceutical traceability and clinical trials, where this technology provides credibility and authenticity of the records and trial results. For example, Patientory is a collaborative blockchain platform designed to facilitate a more secure exchange of information. It gives patients control over the distribution of their medical records and enables medical professionals to diagnose safely and quickly patients based on a clearer medical history.

Blockchain can also enhance coordination and communication across various actors involved in the supply chain. It brings visibility to the goods route, serving as a guarantor for consumers and the concerned governmental sectors. Blockchain can facilitate the tracking and management of materials and components across the supply chain, enabling increased levels of material reuse, remanufacturing, and recycling.

In addition, VR supports remote and personalized healthcare through telemedicine experiences, VR-based diagnosis, and providing a realistic educational environment for medical professionals. Those professionals benefit from VR simulations. This technology allows medical staff to practice surgeries in a realistic, risk-free virtual environment.

Scientists have used AI to discover a new antibiotic that can kill a deadly species of superbug. The AI helped to narrow down thousands of potential chemicals to a handful that could be tested in the laboratory. The researchers in Canada and the US say AI has the power to massively accelerate the discovery of new drugs.

With regard to food, digital technologies could help tackle food waste. The Food and Agriculture Organization (FAO) estimates that about one-third of the food produced for human consumption is lost or wasted.

Blockchain technology helps in food waste mitigation by enhancing traceability to deal with food safety concerns and promotes sustainability through eliminating inefficiencies in the food supply chain.

This technology increases visibility which enables food producers, distributors, and retailers to identify how to reduce food waste.

On the services level, Shanghai is an example of a digital twin city through digital reality. The digital version of the city models more than 100,000 elements including road traffic and the location of apartment buildings.

The model is used to plan public services, simulate the effects of natural disasters, and aid response planning.

Another example is that Ford Company creates a visual replica of its products to explore multiple scenarios, aiming to enhance product quality and refine the production process.

This technology supports the designing and manufacturing of the cars and the related components, resulting in a faster turnaround time, reduced process inefficiency, and improved customer experience.

On the sports level, E-sports is a materialization of the digital present and future. Virtual reality enables the creation of arena-size events and tournaments. The E-sports market worldwide is projected to reach 5.7 billion dollars by 2028.

In 2023, Saudi Arabia hosted gamers, one of the largest independent E-sports events, featuring 13,000 events with participants from more than 70 countries. The Olympic Council of Asia included eight medal E-sport events during its 2022 Asian games. This sport helps to reduce emissions because it is done on devices.

There is a need for regulations and cybersecurity digital technologies to be applied in order to minimize uncertainty in terms of privacy and security. Some governments have taken measures to facilitate the early-stage testing of new technologies.

For example, the UK’s Digital Securities sandbox allows financial market participants to conduct various activities related to digital securities. The global cybersecurity market is expected to reach 538.3 billion dollars by 2030. By 2026, 70 percent of the company boards will include one member with cybersecurity expertise.

There are tools to mitigate cyber threats, such as the Multi-Factor Authentication, encryption, and AI-enhanced cybersecurity as well as digital identity.

It should be mentioned that the vast amount of data generated by internet of things (IoT) devices offers opportunities for data-driven insights and promoting a sustainable digital economy by boosting productivity, creating new markets and revenue streams for businesses, stimulating job opportunities, and creating additional tax revenue. The digital economy integrates technology with the environment through resource optimization, waste reduction, and recycling by using digital technology, such as AI, VR, blockchain, and others.

The challenges of this transformation, according to the Secretary-General of the DCO Deemah Al-Yahya are many, such as the know-how, policy reforms, infrastructure, human capital, investment, and the digital gap. She told the writer in an interview: “The DCO gets governments, private sector, civil society to share the successful practices in order to be replicated and engage more with the private sector to provide finance to the digital projects.”

She added that the member states of the DCO communicate the digital gap in each country and the DCO reaches out to the financial institutions to sponsor proposed initiatives in the concerned countries. She mentioned a DCO initiative called “Data Embassy Project” which helps to store the data of countries that cannot do so.

This initiative works as a secure cloud hub and diplomatic cloud. It enables developing countries to benefit from digital technology to prosper their economies and protect the environment.

Digital literacy is another challenge. For example, there are 2.7 billion people who are not connected to the internet. Technology should be accessible before educating people about how to use them.

Devices should also be available to people to maximize using the digital technology. Working on e-waste solutions by recycling the devices in rich countries and making them available to poor countries could be a solution. The cost of connecting to the internet is also another obstacle to this digital transformation.

The digital infrastructure is also another challenge, where only 2 of the 16 DCO countries have supercomputers. The DCO did training to member states on what is called “digital taxation,” where countries should tax companies that use their data and services. Training sessions to educate governmental officials on cross-data flow and digital taxation.

The DCO focuses on women and youth, where youth should be there in all projects and initiatives. The DCO helps women to move from traditional to online businesses. This creates more jobs and revenues. The women's contribution to the digital economy will reach 400 billion dollars by 2030.

Finally, the next few years will witness how the DCO and other similar organizations with governments, the private sector, and civil society will bridge the gap between opportunities and challenges. Digitalization adds strength to climate change mitigation, medical inventions, food for all, smart life, and sustainability.

However, more investments are needed in digital infrastructure, public awareness, regulations, and devices to face cyber threats and knowledge sharing.

The author is a lecturer in Middle East politics and international relations in the UK.

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