BY MENGESHA AMARE
The advent of innovation and digitalization is marked by the explosive penetration of information technologies in all aspects of life and by a related fundamental transformation in every form of existence. Policy makers, scholars, scientists and business people in conjunction have these days recognized the importance of addressing technological, economic and social impacts. However, it is scandalously difficult to examine the cross-impacts of social, economic and technological aspects of the digital system. The social and economic transformation in the digital era addresses this challenge by assembling the latest thinking of leading academics and other influential personalities.
The Ethiopian Herald recently approached Abel Chaka, a software engineer and an economist graduated from Bahir Dar University and working for a private company as a consultant, to have a piece of information about the contribution of digital era to the economic progress centering what is happening in Ethiopia regarding the economic reform.
He said, “The emergence of digital era is mainly driven by developments like Internet and other related technologies. As utilizing the technological achievements for the well-being of societies, it is highly relevant to address the social and economic issues and thus is a very valuable contribution to the ongoing inclusive transformation, economic advancement in particular.”
The rapid spread of digital technologies is of meaningfully invaluable in transforming many economic and social activities. While creating many new opportunities, widening digital divides threaten to leave developing countries, and especially least developed ones like ours, further behind. A smart embrace of new technologies, enhanced partnerships and greater intellectual leadership are needed to redefine digital development strategies and the future contours of globalization. No one is left behind by the fast-evolving digital economy, he said.
According to Abel, digital technologies such as the Internet, big data, artificial intelligence, accelerate the deep integration with industries, bringing nations into the era of digital economy. The digital economy can further optimize the industrial structure and increase jobs through information and communications technologies, Internet and other intelligent means, greatly improving the economic development. The digital economy has in particular played an active role in mitigating economic losses and promoting economic recovery at bad times, for instance.
True, Abel said digital transformation is a key component of a successful innovation strategy for modern businesses. A well-designed digital transformation strategy can bring about a wide range of benefits, from increased efficiency and productivity to improved customer experiences and satisfaction. He said, “Across each horizon of growth, digital transformation can take on different forms and focus on different types of innovation such as for improving a business or economic model, means making incremental changes in order to execute current systems and processes more effectively.”
In each stage of growth, the focus of digital transformation may shift, but the goal remains the same: to use technology to drive business success and achieve new levels of socio-economic growth through innovation, he opined. For organizations that want to participate in this digital-driven economic growth, digital transformation is essential. By adopting digital technologies and processes, businesses can improve their competitiveness and take advantage of new opportunities for growth, centering economic aspect. This can result in increased revenue, improved customer satisfaction, and enhanced operational efficiency, Abel added.
He said, “Digital transformation can help organizations stay ahead of the curve as new waves of economic development emerge. For example, the rise of industrial technologies such as artificial intelligence and the Internet are already transforming the manufacturing sector and creating new opportunities for growth. By embracing digital transformation, organizations can position themselves to take advantage of these new technologies and capitalize on the next wave of economic development.” As to him, digital transformation not only helps organizations participate in the digital-driven economic growth, but it also provides numerous benefits that can positively impact the bottom line. Adopting digital technologies and processes leads to improved competitiveness, increased revenue, and enhanced operational efficiency.
The benefits of digital transformation are numerous and can significantly impact organizations’ bottom line, he said adding that by implementing a digital transformation strategy, businesses can improve their overall efficiency and streamline their operations. This can lead to increased efficiency and productivity, better customer experiences and satisfaction, increased agility and flexibility, as well as lower costs and increased revenue. Abel further elucidated th at digital transformation is a vital component for the success of modern businesses and economic advancements. It involves the integration of digital technologies into all areas of an organization, a company and business entity, transforming the way it operates and delivers value to customers.
“We are living in a time of exciting technological innovations. Digital technologies are driving transformative change. Economic paradigms are shifting. The new technologies are reshaping product and factor markets and profoundly altering business and work. The latest advances in artificial intelligence and related innovations are expanding the frontiers of the digital revolution. Digital transformation is accelerating even in the wake of the COVID-19 pandemic. The future is arriving faster than expected,” he explained.
As to him, since technology reshapes markets and alters economic growth and distributional dynamics, policies must ensure that markets remain inclusive and support wide access to the new opportunities for firms and workers. The digital economy must be broadened to disseminate new technologies and opportunities to smaller firms and wider segments of the labor force.
The digital economy poses new regulatory challenges that must be addressed, including market concentration. As in product markets, policymakers need to ensure that financial markets remain sufficiently competitive and address regulatory challenges relating to the new world of digital financial products and platforms, he added. He further revealed that Ethiopia is believed to become one of the few developing countries that have managed the fate of rising from being a manufacturing assembly hub of the world to an economic powerhouse, thanks to the sheer scale of its new economic reform move.
“There are noteworthy lessons from countries such as China and others towards emulating advanced economies, but most developing countries are better placed to learn from bottom-up growth experiences,” he added. It is this time around clear that Ethiopia designed targeted policies and strategies for its structural transformation. It has built a digital economy from scratch with a comprehensive policy that targeted both the supply and demand sides, he said. Along with comprehensive digital policy, Ethiopia’s macroeconomic policy framework has played a critical role in the country’s structural transformation.
The country is going to achieve its entire economic transformation plan through a combination of proactive macroeconomic management, financial reforms and carefully managed capital account liberalization. He said, “As countries across the world tackle the economic fallout from the COVID-19 shock, their success will depend on the implementation of bold policy actions to structurally transform their economies. This remarkable step has to be well entertained by this east African fastest growing nation.”
The society drive economic activity and so can play a leading role in the shift towards a more sustainable economy, he opined. “The solidarity economy is fundamentally about reasserting citizens’ control over the economy. Its principles are based on collective power, democratic decision-making, citizens’ autonomy, transparency, sustainability, self-management and the egalitarian distribution of economic returns,” he said.
According to Abel, cooperatives produce and distribute millions of goods and services every day, from the food citizens eat to the hotels in which they stay, the factories they work in and the credit unions in which people can choose to invest their savings. He said that the central aim of economic organizations in Ethiopia should be to fulfill the needs of communities in harmony. New instruments need to be developed and new opportunities shall be exploited to further buttress an economic transformation strategy in Ethiopia.
In sum, every organization wants to digitally transform. But identifying the right path to digital transformation can be difficult. So, the key drivers of the economic sector are expected to merge potential and move in unison to make a difference in all aspects. In so doing, organizations, companies, line ministries, concerned bodies and stakeholders in aggregate can ensure a successful economic progress via employing a viable digital transformation. The digital economy, as an emerging development model, represents a change in the way of economic growth, which will have a positive impact on the employment and industrial structure.
THE ETHIOPIAN HERALD FRIDAY 26 MAY 2023
