Africa, Latin America Lag Far Behind in Digital Economy - UNCTAD

By Staff Reporter

David-LukeSeptember 4, 2019 ( -- Africa and Latin America are trailing considerably far behind in wealth creation through digital economy, the first-ever United Nations Digital Economy Report 2019 revealed on Wednesday in Addis Ababa.

The United Nations Conference on Trade and Development’s (UNCTAD) report said Africa and Latin America together account for less than five percent of the world’s collocation data centers. If left unaddressed, this gap can exacerbate existing income inequalities between people living in these continents and the rest of the world, says the report.

According to the report, digital wealth is concentrated in the hands of a few US and Chinese-based platforms.

US and China account for 75 percent all patent related block chain technologies , 50 percent of the global spending on Internet of things (IoT), and more than 75 percent of the cloud computing market and as much as 90 percent of the market capitalization value of the world’s 70 largest digital platforms.

The report noted that 40 percent of the world’s 20 largest companies by market capitalization have a platform-based business model.

The report said the world is characterized by a yawning gap between the under-connected and the hyper digitalized countries. It said in least developed countries (LCDs), only one in five people uses the internet as compared to four out of five in developed countries. The number can considerably lower in some trailing countries such as Ethiopia.

The report further said capabilities gap for harnessing digital data and other technologies between developed and developing nation is considerably higher.

Speaking to journalists, the Coordinator of African Trade Policy Center at ECA, David Luke said digital access to digital economy has already led to the creation of enormous wealth in record time. Mr. Luke stated that this is highly concentrated in a small number of countries, companies and individuals.

The coordinator underscored the need for inclusivity in building a digital economy that delivers for all, calling for greater global cooperation to avoid widening the income gap.  

Luke stressed, “We must work to close the digital divide and harness its potential for the many and not just the few. This requires creative thinking and policy experimentation.”

Concerted global efforts are required to spread the rapidly expanding digital economy’s gains to many people who currently reaping little benefit from it the report noted.

Speaking to, Luke said Digital economy is taking off in Ethiopia. Young people are showing a lot of interest in finding digital solutions as public and private sectors are increasingly providing services through digital access.

“We must work to close the digital divide, where more than half of the world has limited or no access to the internet. Inclusivity is essential to building a digital economy that delivers for all,” UN Secretary General Antonio Guterres was quoted as saying.

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