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INTERNET GOVERNANCE FORUM EXPLORES SOCIO-ECONOMIC AND LABOUR IMPACTS OF DIGITAL TRANSFORMATION

Addresses Inequality in Access and Use of Data, E-Commerce and Cross-border Movements, New Technology for Transparency and Accountability, and Human-centric Policies for the Fourth Industrial Revolution
21 December 2017

The twelfth Internet Governance Forum this morning held a session on digital transformation: how to shape its socio-economic and labour impacts for good? The session examined the impact of digitization on global production and commerce, as well as digitization, employment and labour issues.

Introducing the session, Kenta Mochizuki, Japanese member of the Multi-Stakeholder Advisory Group of the Internet Governance Forum and Principal Attorney at Law, Yahoo Japan Corporation, noted that the digital economy had an unprecedented potential for developing countries, and cautioned that although it contributed to economic growth, it also presented challenges in terms of employment quality and social protection.

Session participants stressed that the mistakes from previous industrial revolutions and transformations must not be repeated. They called for building of capacities – particularly in developing countries - to leverage data positively and use it for development, prosperity and freedom. The speakers also warned against the growing inequalities in accessing the digital economy which widened income gaps. They noted that, while they knew which tasks will be automated, it was hard to say what the jobs of the future would be. In this context, they emphasised the need to accompany the people on this journey of change, put in place human-centred policies, and invest in skills and human capital.

Digitization, Global Production, and Flows of Digital Commerce

Dr. Makoto Yokozawa of Kyoto University moderated this discussion in which the speakers were Torbjörn Fredriksson, Chief of the Information and Communication Technologies Analysis Section, United Nations Conference on Trade and Development; Oscar Gonzalez, Undersecretary of Regulation, Information and Communication Technologies Secretariat at the Ministry of Modernization of Argentina; Ankhi Das, Public Policy Director, India and Southeast Asia, Facebook; Dr. Walid Al-Saqaf, Senior Lecturer in Journalism and Media Technology, Södertörn University, Sweden; and Dr. Farzaneh Badiei, Executive Director of the Internet Governance Project, School of Public Policy, Georgia Institute of Technology, United States.

On the new digital ecosystem, Mr. Fredriksson noted a huge global e-commerce gap: 60 to 80 per cent of the population in most developed countries bought goods or services online, and less than 10 per cent in developing countries. He cautioned that those best equipped to take advantage of the new digital environment would see the greatest gains, which would lead to widening income inequalities; a key challenge then was to ensure that enterprises in developing countries had the required skills and capabilities to take part in evolving global value chains. It was necessary to ensure that the digital economy did not replicate problems seen in other industrial revolutions, agreed Mr. Gonzales, adding that a modern regulatory framework and policies that incentivized development and addressed the issue of connectivity were needed. Dr. Al-Saqaf noted the crucial role of connectivity in informing the world about the ongoing violence in his country Yemen, and in enabling some businesses to thrive despite the war. He was concerned that many did not leverage data positively – using the data they collected and analysed for development, prosperity and freedom, and stressed that the focus must be first on connecting the people and ensuring they had the required digital skills.

Ms. Das noted that in India and South Asia, the major beneficiaries of digitization and e-trade were women, and small and medium enterprises - the backbone of the national economies, and it had increased the number of start-ups which catered to local markets. The majority of connections in the region were 2G, so the private sector had made the application economy for this connectivity a priority. Dr. Badiei agreed that access to the Internet was essential and then emphasised the importance of ensuring access to other digital infrastructures, such as mobile payments. The progress in the cross-border online trade of goods was lagging behind, she said, and noted that in order to enable platforms to flourish, better digital infrastructure must be in place without imposing archaic laws and regulations. Mr. Fredriksson concurred that access to global digital platforms could help small enterprises to access markets, and went on to underline that e-commerce should not do away with trade barriers because companies still needed to produce competitive products. While affordable connectivity access was fundamental for participating in the digital economy, it was far from sufficient, he said and called for more assistance to developing countries in various areas in order to achieve the Sustainable Development Goals.

With regard to the contributions of different types of e-commerce, Mr. Fredriksson noted that the value of global e-commerce amounted to 25 trillion in 2015, out of which 90 per cent was business to business (B2B); the top 10 markets included China and the Organization for Economic Co-operation and Development economies, and most of e-commerce was domestic in nature. Ms. Das said that over the next two or three years, there would be more mature investments in digital companies; the focus in the first phase would be on domestic markets, and on cross-border trade later on. Dr. Badei noted that customs procedures had not been updated to accommodate the flow of goods traded online and said that if the customs procedure was difficult, it was not worth having cross-border e-commerce. Mr. Gonzalez highlighted inequalities in accessing the digital economy and stressed the importance of including small and medium enterprises into new production processes as they had a great contribution to make. Dr. Al-Saqaf pointed to a possible monopoly of information and data by companies to understand where deals were made; for others, this inability to access data or have the required skills to access the data, posed a risk of always being the last in the race.

Concerning the impact of emerging technologies, such as big data, the Internet of Things, and artificial intelligence, Dr. Al-Saqaf, noted that blockchain technology could be used in countries like Somalia, for example, to increase transparency and accountability for the huge sums of money received in international aid to rebuild the country after decades of conflict. Mr. Fredriksson stressed the need to increase the role of data in the digital economy, and to focus on analysing and translating those analyses in business opportunities. “The ability to use data is the key factor in productivity,” he said and noted that, in the context of the growing importance of data, the challenge was how to bring developing countries in the process. “To equate artificial intelligence to a form of automation that would lead to unemployment was perhaps a very high form of fear-mongering,” said Dr. Badiei, stressing that societies must engage in a massive re-skilling agenda: create the right environment and develop the right policies to impart new skills. Technology alone was not a silver bullet. Mr. Gonzalez said that it was important that public policies be aimed at the development of new technologies and to target the universalization of their use, including through eliminating the artificial barriers to new endeavours that the countries had put in place. Dr. Badei highlighted the value of the cross-border flow of data and said that trade agreements could lead to better protection of privacy if countries agreed on the minimum standards of privacy protection.

Discussing how digitization enabled new business models and the roles of international organizations in this context, Dr. Al-Saqaf stressed that international organizations should ensure equal treatment for all companies and limit monopolies, otherwise the gap between the rich and poor would widen. He urged international organizations to increase transparency, facilitate accessing data about their work, and ensure their accountability to the international community. For Mr. Fredriksson, one of the key roles of international organizations was to address the digital economy gap, but their efforts so far were too small and too fragmented. Mr. Gonzalez underlined the cross-border and cross-cutting impact of the digital economy, in which there were multiple stakeholders who could play a role as important as international organizations.

“Digitization helped entrepreneurship and development of markets”, noted Ms. Das and said that international organizations had an important role in addressing the outstanding question of harmonization, in particular through strengthening regional processes to ensure that people from the global south had more voice. Dr. Badei called for more cooperation between civil society and international organizations.

Digitization, Automation, and Employment Issues

Speaking in the discussion were Hossam El Gamal, Chairman of the Egyptian Cabinet Information and Decision Centre; Valentina Scialpi, Directorate-General for Communications Networks, Content and Technology, European Union; Philip Jennings, UNI Global Union; Karen McCabe, Senior Director of Technology Policy and International Affairs at the Institute of Electrical and Electronics Engineers; Edmon Chung, Chief Executive Officer of DotAsia Organization; and Ana Cristina Amoroso das Neves, Director of the Department for Information Society, Science and Technology Foundation, Ministry of Science, Technology and Higher Education, Portugal.

Samuel Ndicho Bambo, Foreign Affairs Secretary of Cameroon and a member of the Multi-Stakeholders Advisory Group of the Internet Governance Forum, also spoke. The session moderators were Paola Pérez, Vice-President of the Internet Society Venezuelan Chapter and Chair of the Latin America and Caribbean Network Information Centre (LACNIC), and Dr. Nathalia Foditsch, Research Fellow at Cornell College of Business, Washington, DC.

In opening remarks, Mr. El Gamal reminded that technology was at level 4.0 and many laws were at level 2.0, while Ms. Scialpi stressed that digitization and automation had a very real effect on the labour force. Since Europe was an important player in the fourth industrial revolution, it should work to make it available to all and to reduce inequalities, she said. Mr. Jennings advocated for policies that placed people at front and centre, and that promoted social cohesion and peace. “There will be no lasting peace without social justice,” he stressed, especially in the world which was experiencing the largest transfer of wealth from working people to the one per cent and where 40 million people worked in conditions of modern slavery. Ms. McCabe agreed that politics should be human-centric and that techno-scientific communities should participate in debates in an open and honest way in order to elevate the trust between people and new technologies. There was an ongoing narrative about affordable and universally accessible Internet, she noted and stressed that its outcomes should be fair and inclusive. It was imperative that all humans were considered in the general development and application of digitization and automation to avoid the risk of bias and excessive imbalances.

Mr. Chung spoke of the impact of digitization on youth and said that their study on youth mobility in Asia had found that the youth’s biggest concern was employment: as a result of automation, artificial intelligence and other emerging technologies, jobs were becoming obsolete, and their nature changed. Mr. Chung stressed two components of youth empowerment: first, to give them knowledge and skills for the future; and second, often overlooked, to provide a supportive environment to facilitate co-learning with machines which would be the key challenge for the future. A part of that environment was the protection for people to challenge the machines. Ms. Amoroso das Neves said that the challenge for the future was not the employment but how to get paid. Humans had an amazing ability to adapt to new technology; the current generation was born with smartphones, but what would the next generation be born with? The current enthusiasm for technology also depended on how humans were able to influence that technology, therefore digital competencies were needed more than ever. Mr. Bambo said that he wanted to leave this session with some answers to the question “Where was Africa in the fourth industrial revolution?”

Speaking about the lessons learned from past market transformations, Mr. Jennings said that all must learn about successes and failures of transitions – one of the lessons learned was the “just transition” which stressed the need to accompany people in the process of change, including through active labour market policy, skills policy and social protection and social safety nets. “We must not leave it to the invisible hand of the market to deal with the social transformation required,” he stressed, warning that otherwise, the political costs would be severe, including a threat to global peace and cohesion. Mr. Chung agreed on the importance of workers’ welfare for a healthy society, and noted that today, there was a different type of transition, from machines to the network paradigm. It was important to understand the biases of algorithms and how machines worked before workers’ rights could be protected. “Algorithms must be ethical,” stressed Ms. Scialpi who underlined the fundamental importance of digital skills since machines were now intelligent.

There were many aspects of the socio-economic impact of digitization that must be appreciated, said Mr. El Gamal, citing the example of Egypt which used technology to identify those most excluded and marginalized individuals and communities and create and deliver on personalized plans. Another positive socio-economic impact was on women’s empowerment, particularly in rural areas, as well as financial inclusion through a cashless economy which was instrumental in fighting corruption.

Examining the tolls to better measure and predict the impact of information and communication technologies on the labour market, Mr. El Gamal said that it was possible to develop clear country development maps and to identify skills gaps in the labour market and address them through adequate education programmes. Ms. Amoroso das Neves noted that people had to be aware of digital transformation and said that Portugal had launched an initiative on digital inclusion and digital literacy. Mr. Chung said that youth’s mobility online was a good predictor of the digital future.

Mr. Jennings drew attention to the chronic underinvestment in people, from the transition from school to work, and during the active working life. Also, there was an underinvestment in active labour market policies: the United States spent only 0.1 per cent of its gross domestic product, while those higher up on the competitive scale spent almost two per cent. In the face of the fourth industrial revolution, the world was grossly unprepared as it failed to invest in human capital. Ms. McCabe said that while they knew which tasks would be affected by automation, it was difficult to imagine the new jobs that would be created; in addition, the change would happen in a greater number of industries and sectors than before because of the pervasive nature of digital technologies. But this also provided an opportunity, including through shifting the yardstick of progress from gross domestic product to wellbeing, which could open up markets for new jobs in health care, civic engagement and environmental protection.

Commenting on how labour markets would be most affected by automation and digitization and which professional skills would be needed for jobs in highly digitalized economies, Mr. Chong emphasised a different format of education for youth – information-dense learning which would demand from students to actively learn, and also empower them to challenge artificial intelligence. Mr. El Gamal said that digitization would not hurt the “classic labour”, for example technology opened new jobs for thousands of people; what needed to be done was to put in place a curriculum which would build the skills for the fourth industrial revolution.

Final Remarks

Mr. Jennings called on governments to establish future of work commissions, which was a critical mission for the good governance of the nation. The world today was witnessing the commoditization of labour, he said, noting that certain issues should not be left to the market and to the big six data companies to regulate, as the invisible hand of the market would not bring social cohesion. Mr. Bambo called for a harmonised legal system on digitization in order to avoid gaps in development among countries and, noting that technological changes were far ahead of people, wondered in which direction the youth should be trained. Humans should not become inhuman in the quest for development, he warned. Ms. McCabe reminded that the great promise of technologies intersected with trust and said that the Forum provided a great opportunity to take a deeper dive into those issues.

Mr. Chung noted that they should not throw away what was learned from the previous industrial revolution, and said that the big six data companies should be rolled back to protect workers and people. Ms. Amoroso das Neves stressed the importance of digital knowledge and skills in the nearest future, while Mr. El Gamal highlighted the importance of proper identification of challenges, all the while keeping the Sustainable Development Goals as a priority.

Today, 21 December, is the last day of the 2017 Internet Governance Forum.

The participants and attendees will gather at the Assembly Hall, Palais des Nations at 3 p.m., to take stock of the discussions that took place over the four days and to officially close the twelfth annual meeting of the Internet Governance Forum.


For use of the information media; not an official record

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