‘Har­ness vast so­ci­etal value in dig­i­tal­i­sa­tion’

In­vest­ment in broad­band could ben­e­fit job cre­ation, health care, re­duce in­come dis­par­ity and road deaths

The Star Early Edition - - BUSINESS REPORT -

DIG­I­TAL­I­SA­TION could ben­e­fit con­sumers more than busi­nesses – but only if it was har­nessed prop­erly.

Ac­cord­ing to find­ings of the World Eco­nomic Fo­rum Dig­i­tal Trans­for­ma­tion Ini­tia­tive (DTI), much of the value that dig­i­tal­i­sa­tion could po­ten­tially gen­er­ate for so­ci­ety would re­main trapped un­less ef­forts were stepped up to align pri­vate-sec­tor in­vest­ment in­cen­tives with the long-term pub­lic good.

Anal­y­sis by the DTI es­ti­mated that more than half of the value that dig­i­tal­i­sa­tion po­ten­tially of­fered was in the form of so­ci­etal ben­e­fits.

Th­ese in­cluded net job cre­ation and reduced in­come in­equal­ity, im­proved health out­comes and fewer ac­ci­dents, reduced car­bon emis­sions and time and cost sav­ings for con­sumers.

“The ma­jor­ity of the ben­e­fits of dig­i­tal will ac­crue to so­ci­ety, but only if col­lec­tive ac­tion is taken to as­sess the po­ten­tial, us­ing con­sis­tent cri­te­ria to eval­u­ate the out­comes of spe­cific pol­icy ac­tions,” said Bruce Weinelt, head of the DTI.

“A greater change in the mind­set of busi­ness will also be nec­es­sary. The pri­vate sec­tor will have to go be­yond mea­sur­ing per­for­mance by growth and profit, and be­gin to em­bed sus­tain­able and trust­based busi­ness mod­els at the heart of their strate­gies.”

The DTI project, un­der­taken in col­lab­o­ra­tion with Ac­cen­ture, had com­pleted value-at­stake analy­ses in 10 in­dus­tries to help the pri­vate sec­tor iden­tify op­por­tu­ni­ties for growth. It had com­ple­mented this with a new so­ci­etal-value frame­work en­abling the pri­vate and pub­lic sec­tors to un­der­stand and mea­sure wider so­ci­etal ben­e­fits in fi­nan­cial terms.

This pro­vided a con­sis­tent ev­i­dence base that would help gov­ern­ments and busi­nesses de­sign reg­u­la­tory and pol­icy changes that re­moved in­vest­ment bar­ri­ers at na­tional and re­gional levels. The WEF said the new so­ci­etal value model had been tried in In­dia, the UK and Den­mark to en­gage dia­logue with pol­icy-mak­ers.

In the In­dian state of Te­lan­gana, the four dig­i­tal ini­tia­tive mod­els demon­strated that value gen­er­ated in the next decade could be equal to 40% of In­dia’s GDP in 2015.

Of the ben­e­fits of dig­i­tal­i­sa­tion, 94% could ac­crue to so­ci­ety and the en­vi­ron­ment, as op­posed to in­dus­try.

For ex­am­ple, dig­i­tal pay­ment solutions could im­prove ac­cess to fi­nan­cial ser­vices for small busi­nesses, cre­at­ing 4.5 mil­lion jobs and $410 bil­lion (R5.5 tril­lion) in value to so­ci­ety.

This would re­quire mea­sures to spur more in­vest­ment in broad­band and wider adop­tion of dig­i­tal ap­pli­ca­tions.

Ma­ture Or­gan­i­sa­tion for Eco­nomic Co-op­er­a­tion and De­vel­op­ment economies could see even greater so­cial ben­e­fits from dig­i­tal­i­sa­tion than the global av­er­age. For ex­am­ple, the higher costs in sec­tors such as health care could re­sult in greater sav­ings and pro­duc­tiv­ity im­prove­ments.

In the UK, im­proved safety mech­a­nisms in ve­hi­cles could re­duce road fa­tal­i­ties by 9% a year, while ad­vanced driver as­sis­tance sys­tems could save con­sumers $25bn in in­sur­ance and accident costs.

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