#1Digital Economy Report 2019 Value creation and capture: Implications for developing countries 5 September 2019, Tokushima, Japan Teresa Moreira Head, Competition and Consumer Policies, UNCTAD [email protected] UNITED NATIONS UNCTAD 1#2The evolving digital economy is closely associated with key frontier technologies that impact all SDGs Blockchain Data analytics Artificial intelligence ✓ 3D printing Internet of Things Automation & Robotics Cloud computing The digital economy impacts all SDGs UNITED NATIONS UNCTAD 2#3What do we know about the size and the scope of the digital economy? Global digital economy estimates range from: Narrow definition 4.5% of GDP In the US estimates range from: Narrow definition 6.9% of GDP In China they range from: Narrow definition 6% of GDP Broad definition 15.5% of GDP Broad definition Source: UNCTAD, Huawei and Oxford Economics, US BEA, Miura. 21.6% of GDP Broad definition 30% of GDP UNITED NATIONS UNCTAD 3#4. Geography of the digital economy is highly concentrated in two countries UNITED NATIONS UNCTAD QUS: 68% 22% US and China: 90% of the market capitalization value of the world's 70 largest digital platforms 03.6% o China: 68% Europe O Q 27% North 1.3% Africa Asia America 00.2% Latin America Source: Holger Schmidt (https://www.netzoekonom.de/vortraege/#tab-id-1). 4#5Geography of the digital economy is highly concentrated in two countries US and China account for: UNITED NATIONS UNCTAD 75% of all patents related to blockchain technologies 50% of of global spending on loT >75% of the cloud computing market Source: UNCTAD, based on ACS, IDC and Cisco. 5#6And there are still huge digital divides e Half of the world remains offline In LDCs only 1 in 5 people is online Gender gap is the widest in the poorest economies UNITED NATIONS UNCTAD Source: UNCTAD, based on ITU Statistics database.#7Economic value of data arises once data are refined into digital intelligence that can be monetized. Data value chain Data monetization Transform data into digital intelligence Analyse Store Collect From Data to Value creation 凹: Selling targeted online advertising (e.g. Google, Facebook) Operating e-commerce platforms (Amazon, Alibaba, Uber, Airbnb) Transforming traditional goods into rentable services (Mobike, Rolls Royce) Renting out cloud services (Amazon Web Services, Tencent, MyJohn Deere) UNITED NATIONS UNCTAD 7#8Measurement of the digital economy needs. improvement Need for agreed definitions of value in the digital economy ✓ Need to collect official statistics More needs to be done to make progress in measurement of the digital economy, especially to support developing countries in building statistical capacities to produce relevant information. UNITED NATIONS UNCTAD 8#9Global digital platforms have achieved very strong market positions Combined value of the platform companies with a market capitalization of >$100 million $4.7 trillion +67% $7 trillion Top 7 platform companies UNITED NATIONS UNCTAD in terms of market capitalization Microsoft amazon Alphabet facebook 腾讯 EL Alibaba Group 2015 2017 Source: UNCTAD, based on Dutch Transformation Forum, and Evans and Gawer. Tencent 9#10Factors explaining the rapid rise and consolidation of dominance 10 Network effects Ability to extract, control and analyze data High switching costs Actions taken by platforms: Acquiring potential competitors UNITED NATIONS UNCTAD Expanding into complementary products or services Investing strategically in research and development Lobbying in domestic and international policy-making Exploring strategic partnerships with traditional sectors 10#11The risk of subordinate positions of developing countries Global digital platforms Risk of subordinate positions of developing countries in global 'data value chain'... ! Data TO Providers of raw data ...While having to pay for the digital intelli- gence produced with those data. } 11 UNITED NATIONS UNCTAD#12New policies at national and international levels are needed to build an inclusive digital economy Technology is not deterministic. It creates both: Opportunities Policy makers need to make choices that can help reverse... UNITED NATIONS UNCTAD Challenges ...the trend towards widening inequalities and power imbalances 12#13It is up to governments in close dialogue with other stakeholders to set the rules of the game 000 Academia Private sector Civil Society Governments Tech community UNITED NATIONS UNCTAD Shaping the digital economy JO by defining the rules of the game 13#14New policies that are tailored to national objectives backed by more international support Need for policy UNITED NATIONS UNCTAD space for National experimentation to efforts in -> assess the benefits developing Inclusive digital and disadvantages of different options countries transformation More o International support 14#15UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT UNCTAD DIGITAL 2019 ECONOMY REPORT VALUE CREATION AND CAPTURE: IMPLICATIONS FOR DEVELOPING COUNTRIES UNITED NATIONS Geneva, 2019 Discover the Digital Economy Report 2019 Follow us on: @ICT4DatUNCTAD #DigitalEconomy Report UNITED NATIONS UNCTAD http://bit.ly/2019DER#16Thank you! 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