‘Why government must incentivise investment, promote digital economy’

The Global System for Mobile telecommunications Association (GSMA) has advised governments to pursue policies that incentivise investment and promote development of digital economies, so as to be able to build an inclusive digital future for their citizens.

The association, in a report titled: “Embracing the Digital Revolution: Policies for Building the Digital Economy,” developed in collaboration with Boston Consulting Group (BCG), called on policymakers to encourage digital advancement and prepare for the changes that lie ahead, while highlighting the risk of inaction.

Today, the digital economy holds huge potential for entrepreneurs and small and medium-sized enterprises (SMEs). New digital trends such as cloud computing, mobile web services, smart grids, and social media, are radically changing the business landscape, reshaping the nature of work, the boundaries of enterprises and the responsibilities of business leaders.

Chief Regulatory Officer, GSMA, John Giusti, said digital and mobile technology has delivered far-reaching social and economic benefits at both the global and national levels, stressing “as the digital and mobile revolution continues to accelerate, new technologies — artificial intelligence, robotics and the Internet of Things — promise great benefits but also continued disruption resulting from the digitalisation of many industry sectors. Forward-looking policies can enable citizens, businesses, societies and countries to prosper, improving lives and livelihoods, while mitigating the possible adverse effects that can accompany economic change.”

Giusti noted that digitalisation enables businesses to operate more efficiently and to access new markets and customers. The GSMA Chief Regulatory Officer, observed that digital technologies can better connect government with its citizens and have a major impact on day-to-day life, from shopping and banking to entertainment and connecting with friends and family.

The report estimates, for example, that digital technologies will influence up to 45 per cent of all retail sales by 2025. The association research has examined the positive impact that mobile has on the worldwide economy. The mobile ecosystem generated 4.2 per cent of global GDP in 2015, a contribution of more than $3.1 trillion of added economic value.

According to it, the benefit consumers receive from mobile technologies can be quantified using the economic concept of consumer surplus, which is the value that consumers receive, over and above what they pay for devices, apps, services and internet access. BCG research in six countries (Brazil, China, Germany, India, South Korea and the United States) showed that mobile technologies have created $6.4 trillion of yearly consumer surplus, which is more than the individual GDP of every country in the world, with the exception of China and the United States.

The telecommunications body noted that digital and mobile technology is transforming the everyday life of billions of people around the world.