Digital Ranking

New North-South issues in the digital economy

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The production, development and dissemination of digital technologies are raising concerns – political, economic, and environmental – that are increasingly being debated. However, their consequences on North-South relations are still too often ignored. Yet they run the risk of deepening inequalities, while creating new forms of dependence and exploitation.

“Platform capitalism” (Srnicek, 2017), “surveillance capitalism” (Zuboff, 2019), “fourth industrial revolution” (Schwab, 2016), “digital economy” (UNCTAD, 2019), there is no shortage of terms to describe the consequences of the development of digital technologies on the economy and society. Digital technologies are defined as : “The sort of technology – as opposed to analogue technology – based on notation of all signals (e.g., sounds, pictures, data) in uniform 0–1 form. Digital technology includes computing, communication and content” (Zacher, 2015).

The emergence of these technologies dates back to the 1950s, but their explosion dates mainly from the late 1970s, with the arrival of the first “PCs” (Personal Computers), followed by the opening of the Internet to the general public in the 1980s and 1990s (Lilen, 2019). More recently, the development of wireless connections (Wifi, 3G, 4G, etc.), the arrival of mobile phones, then smartphones (in 2007), and advances in automation and artificial intelligence have contributed to the ever-increasing “digitization” of our societies (UNCTAD, 2019).

The weight of the “Internet bubble” and the crash of 2008

However, at least two other “extra-technological” events have played a key role in shaping the “digital economy” as we know it. The first was the bursting of the “Internet bubble” in 2001, which Shoshana Zuboff describes as the catalyst for Google’s invention of “surveillance capitalism” (Zuboff, 2019). Until then, the Mountain View firm (in Silicon Valley, the location of Google’s headquarters) had vowed never to monetize the information collected on its users for advertising purposes. But faced with the need to start making a profit in a context of generalized mistrust of “Internet companies”, it quickly changed its mind and developed a model for the systematic extraction and exploitation of “data” that would soon be emulated.

The second event was the economic and financial crisis of 2008, which led to a massive injection of liquidity into the global economy, without which “uberization” and the proliferation of “collaborative platforms” would not have been possible (Bauraind, 2018 ; Srnicek, 2018). The widespread use of smartphones and advances in algorithms have indeed been necessary but not sufficient conditions for the development of these new platforms, which, for the time being, are generally struggling to make a profit, starting with the most prominent, such as Uber or Deliveroo… Only speculation about their future ability to be profitable is keeping them afloat today, with the main issue at stake being how they will be able (or not) to exploit their “data” reservoir.

“Data is the new oil”

These developments have given rise to a new social and economic dynamic in which “digital data” [1] occupy a central position. These have four distinct uses (Casilli, 2019 ; UNCTAD, 2019 ; Zuboff, 2019). First, data enable the optimization of processes, services or products by providing those who deploy them with increasingly comprehensive information about their functioning. Secondly, they make it possible to make increasingly accurate predictions about individual or collective behavior or about natural events (e.g. droughts, diseases, etc.), which can offer a decisive competitive advantage over rivals (economic or political).

Thirdly, data is the raw material for the development of the currently most common form of artificial intelligence, “deep learning”, which works on the basis of examples provided in astronomical quantities [2]. Finally, all these utilities mean that data also acquire an exchange value that allows those who hold them to monetize them (or rather to monetize the intelligence they feed) with those who would also like to benefit from them.

All this explains why data is sometimes referred to as the “new oil” (The Economist, 2017). Indeed, what all the “digital giants” that have now dethroned the oil companies at the top of the stock market indexes have in common, beyond their sometimes radically different business models, is their ability to collect and exploit data on a massive scale. And to do this, the “platform” model has emerged as the most efficient model. “Platforms organize the production and exchange of products and services by optimizing the relationships between a network of actors – consumers, advertisers, service providers, producers, suppliers and even objects”, explains a recent report on the “platformization” of the economy (Gurumurthy et al., 2019).

In doing so, these particular companies are both intermediaries and the very architecture of the exchanges they make possible, with the result that they have access to the famous data and the possibility of enhancing them. This is why, to quote Parminder Jeet Singh, “as a sector undergoes digital transformation it gets organized around a networking “platform”.. (…) Sectoral digital “platforms”, of a monopoly nature, can be considered as a generic feature of social reorganization under digital impact” (Singh, 2017a).

Economic and geographic concentration

This trend towards monopoly is all the more important because these platforms benefit particularly from what economists call the “network effect”, the fact that the utility of a service increases with the number of people who use it. The more people are using Google’s search engine, the more accurate and relevant its results are… the more people will be using it, and so on.

Still according to Singh (2017a), “As “platforms” monopolise sectors they collect vast amounts of data for each sector. This data, fed into digital cognitive systems, whether algorithms or artificial intelligence, produces the required intelligence for the platforms to increasingly dominate the respective sector. Data fed intelligence is an exponentially cumulative phenomenon. The intelligent “platform” soon begins to act as, what could be considered, the “brain” of that sector. Such centralisation of “digital intelligence” in data-run platforms, and its commodification, enables a business model that surpasses any other in profitability and durability. Its unbeatable network effect greatly rewards centralisation and monopolisation, quickly eliminating most competition” (Singh, 2017a).

This situation explains why Google today captures 90% of the global online search market or Facebook 66% of the social networking market (UNCTAD, 2019). And this monopoly trend is all the more problematic as it is gradually spreading to all sectors of the economy : “We are currently witnessing the first stage of economic re-organisation around digital platforms/ecosystems, covering sectors like shopping, transportation, travel/accommodation booking, and finance. Similar changes will soon come to all other sectors, from manufacturing and agriculture to health and education. Initial developments are already discernible in all these areas” (Singh, 2018).

Another problem is that this economic concentration is coupled with a geographical concentration which is also particularly acute. Only two countries, the United States and China, account for the lion’s share. The former, because they were the forerunners of digital technology thanks to massive (often public) investment, a culture and institutional framework conducive to innovation, and a national and global market dominated by English. The second, because they have been able to take advantage of their huge domestic market through a mixture of protectionism, targeted support to key players or technology transfers imposed on foreign companies allowed to operate in the country (Singh, 2019).

As a result, while the United States has long ruled unchallenged over all the strategic links in the digital economy, China is now on a level playing field in a growing number of areas, and in some cases is already outperforming the Americans. But above all, the United States and China alone account for 75% of patents related to blockchain technologies, 50% of global spending on the Internet of Things, 75% of the global cloud market and 90% of the market capitalization of the world’s seventy largest digital platforms (UNCTAD, 2019).

Deepening of North-South inequalities

The consequences of these developments for the Global South are numerous, even though they remain largely unexplored [3]. To begin with, it is necessary to underline the risk of seeing the “digital divide” deepen inequalities between countries and between individuals even further. Progress in digitisation has indeed been – and remain to date – profoundly uneven. Half of the world’s population remains deprived of Internet access, with penetration rates ranging from 12% in Central Africa to over 90% in North America and Europe [4]. And the gap is even greater if we take into account the quality of connections, access to equipment or “digital skills” (World Bank, 2016).

Based on this observation, some have suggested that promoting access to digital technologies for poor groups and countries would be sufficient to help them catch up. “In this discourse, Ouma et al. (2019) explain, development was reconceived as catching up to an interconnected world from which many countries in the Global South, particularly in Africa, were said to be cut off by a digital divide”. A discourse in which these authors underline the continuities with the modernising rhetoric of the colonial era. “May the Global South connect and equip itself digitally, and it, too, will enjoy the benefits of the digital economy », this is, in substance, what the enthusiasts of “ICT for development” (“ICT4D” for the insiders) claim. A rhetoric that is also aimed at marginalized groups such as women, for example (see, among others, MC Carrick & Klein and Gurumurthy et al. (2019)). However, in doing so, these groups are being called upon to reinvent themselves under the exclusive – and problematic – figure of the “digital entrepreneur”.

New sources of dependence and exploitation

This neo-liberal promotion of a (digital) level playing field thus masks the structural asymmetries and inequalities that underlie the very functioning of this “new economy”. “Never before has a small sector had so much power over the entire World, to monitor the present and predict future behaviours of not just individuals, but entire populations” Renata Ávila Pinto (2018) points out. However, this “power of surveillance and the concentration of the data gathered by both public and private mechanisms is focused on a small number of actors, public and private, based mainly in one jurisdiction and leading to a rapid erosion of state sovereignty and democracy”.

It is thus difficult, under these conditions, to imagine that the simple “digital inclusion” of the most marginalized countries and groups could result in anything other than new forms of dependence and exploitation. The various contributions gathered in the latest issue of Alternatives Sud [5] confirm this intuition in their own way. Sibo Chen (2016), for example, reminds us of the heavy human and environmental toll that people in the Global South pay to an ICT industry that is too often wrongly presented as “immaterial”. “The ICT production process can be divided, he explains, as : (1) the extraction of minerals, (2) ICT manufacturing and assemblage, (3) software engineering, (4) call centre and other service work, (5) the digital labour of prosumers, and (6) the disassembly of ICT/CE residuals”. He then points out that the participation of Southern countries and workers in this digital production cycle remains largely confined to the lowest paid and most environmentally destructive stages.

Similar observations are made in this edition of Alternatives Sud by Pat Mooney (2018) on agriculture and food sovereignty, by Anita Gurumurthy et al. (2018) on women’s rights, and by Anita Gurumurthy & Deepti Bharthur (2018) on trade and development. Each time, we witness the description of North-South relations and logics of domination which sometimes seem old, but which digital technologies contribute to renew and – too often – strengthen. “To give an analogy with industrial age geoeconomics, Singh explains, for example, digital data is the raw material collected from developing countries, on extremely unfair terms, which gets “manufactured” into “digital intelligence” in developed countries, largely the US, and then sold back to developing countries” (Singh, 2017a). In other words, reframing “unequal exchange” in the age of Big Data…

Digital “colonialism” and “cold war”

Plunder, dependency, unequal exchanges, all this is enough for many authors to see these developments as a form of “digital colonialism”, in which the Global South is once again used as a territory to be conquered and exploited (Pinto (2018) ; Kwet, 2019) [6]. Incidentally, connecting “the next billion” to the Internet, mainly in countries of the Global South, is seen as the “last frontier” for the digital giants, making it a key strategic issue. Under the guise of philanthropy, programs such as Facebook’s “Free Basics” [7] are thus aimed above all at consolidating the technological and commercial dependence of the targeted countries, by guaranteeing the companies that deploy them control of the markets and, above all, precious data.

“These corporations, one of which usually represents the user’s first digital experience, often combine their programs with the provision of hardware, software, and limited content, giving neither citizens nor the state much choice. New users are typically subjected to private, long-term agreements, which allow the entities full access to any of the user’s data. This is compounded by the fact that we are usually talking about territories with absent or limited privacy and data protection. The contracts also often contain severe penalty clauses in case of breach. This situation enables new and disguised forms of exploitation and subordination” (Pinto, 2018).

Another recurring analogy is to liken the growing digital rivalry between the United States and China to a new “Cold War”, pitting two superpowers that increasingly think and act in terms of antagonistic “blocs”. The US decision to ban Huawei would be the most recent illustration of this, as Singh (2019) explains, especially since it was accompanied by a US diplomatic offensive designed to present it not only in strategic but also in ideological terms. “States will soon have to choose between an Internet based on “Western values” and an Internet based on “the principles of an authoritarian communist regime”, recently stated US Secretary of State Mike Pompeo (New York Times, 2019).

For Singh (2019), there is therefore a real risk that “global digital offerings [will] organise and split around the two global digital poles of US and China, while also becoming more integrated”. This would leave other countries facing “a dilemma of momentous proportions”, i.e. “to make the decision to digitally align with either the US or China”, but at the risk of ending up “in a helpless situation, quite worse than industrial age dependencies”.

What responses from Southern States ?

Faced with these various challenges, however, States from the Global South appear – here as elsewhere – largely disunited. One example among others is the ongoing WTO negotiations on “electronic commerce”, which Jane Kelsey of the University of Auckland believes “extend far beyond any legitimate notions of trade. They seek to impose global rules on governance of the digital domain – perhaps the most complex, multi-dimensional and hence controversial subject confronting states and societies this century, alongside climate change” (Kelsey, 2018 ; see also Leterme, 2019a).

But while Southern countries, in particular, have much to lose from a liberalization of “e-commerce” that would primarily benefit the “GAFAM” and their state supports, Singh notes that the negotiations involve not two, but three camps, which, in his view, follow “a North-South divide, as is traditionally the case at the WTO, but also, interestingly, a South-South divide” (Singh, 2017b). Alongside the sceptics, such as India or many African countries, which are for the moment more or less firmly opposed to the very principles of these negotiations, there are indeed developing countries such as Malaysia, Thailand, Nigeria or Bangladesh, which are interested in the opportunities offered by e-commerce, but without necessarily sharing the vision defended by the countries of the North for its (de)regulation.

For Singh and others, however, it is urgent that States from the Global South consult each other and develop common positions on these issues, in particular so as not to jeopardize their future possibilities of “digital industrialization” and, more broadly, of “digital sovereignty”. “Trade governance venues like the WTO are for hard-nosed bargains, he explains. Developing countries will need to develop their understanding of digital business, its geo-economics and different possible governance frameworks at other fora. And then come well-prepared to the WTO” (Singh, 2017b).

Another necessity, according to him, is to develop a “digital non-alignment” that would allow the South to avoid the pitfalls posed by the growing polarization between the United States and China. “Like with the original non-aligned movement, a very important aspect of this would be to employ collective strength to, firstly, resist the very formidable digital allurements and power that these countries will be subject to, and, second, to shape more mixed and open digital options on the ground. The latter will involve and require promoting strong domestic industry participation as well as retaining sufficient digital regulatory possibilities” (Singh, 2019).

In the meantime, many states in the Global South are already developing policies of digital sovereignty or self-determination, as in the Latin American examples given by Renata Ávila Pinto (2018). However, these initiatives are still too often isolated and fragmented. Moreover, in many cases, they are not so much motivated by the interests of the population as by the willingness of states to put digital tools at the service of a nationalist, conservative and authoritarian agenda.

The State, an enemy or ally in the digital battle ?

According to the NGO Access Now, “Cases of government blocking of Internet access have increased from 75 in 2016 to 196 in 2018. In the first half of 2019 alone, there were even 128 such cases” (quoted in Le Soir, 2020). China is now a master in the art of using digital technologies for massive and systematic surveillance, control and repression of its population. An expertise and a technology that it does not hesitate to export and that raises fears, which however should be nuanced, according to Iginio Gagliardone (2018), not to mention that the United States does not really have lessons to give from this point of view, as Claudio Altenhain (2016) reminds us.

For his part, in a report that caused a sensation, the UN rapporteur on extreme poverty and human rights, Philip Alston, denounced the excesses of the digitization of the welfare state, which, according to him, not only served as a “Trojan horse for neo-liberal hostility towards social protection and regulation”, but could also “empower governments in countries with significant rule of law deficits by endowing them with the level of control and the potential for abuse provided by these biometric ID systems”, a prospect that, according to him, “should send shudders down the spine of anyone even vaguely concerned to ensure that the digital age will be a human rights friendly one” (OHCHR, 2019).

In this context, it is understandable that the state appears more often, in southern countries, as a more direct threat to fundamental freedoms than the “GAFAM”, a fortiori when platforms such as Facebook or Twitter can boast of having “helped” uprisings such as those of the “Arab Springs”, for example. However, it would be a bit hasty to forget the ease with which these same companies also put their technology at the service of security projects (Altenhain, 2016), and especially the interest they derive from the massive use of their technologies, whatever the purpose.

Toward digital justice

In the face of these dilemmas and difficulties, resistance is nevertheless being organised. The “Just Net Coalition” (of which several authors of the latest edition of Alternatives Sud are members) offers a good example. It is a network of organizations created in Delhi in 2014 to defend “a just and equitable Internet” [8]. Since then, it has been trying to link “on one hand, civil society actors in different social sectors who are facing digital challenges and opportunities but do not feel well-equipped to deal with them, and on the other hand, digital activists who are inclined to work on issues of equity and social justice but have not had structured opportunities to do so effectively”, all from a North-South perspective.

Recently, the network has produced a “Digital Justice Manifesto” [9], in which it advocates principles as radical as necessary, such as the idea that “data” (and the intelligence derived from it) should be seen as extensions of the individuals or communities from which they emanate (meaning that they belong to them, and to them alone), and not the first to harvest them, as is currently the case) or that basic digital infrastructures should be governed as utilities, including “computer platforms, search engines, social networks, e-mail services, basic security systems, payment services and e-commerce platforms” (JNC, 2019).

However, the authors also stress the urgency of the need for action. “There is no time to lose in taming the power of the digital. We can either surrender our digital future, or we can take ownership of it”.


Notes

[1] « Data » can be defined as the digital traces left by activities, whether they take place online or (increasingly) offline.

[2] This technology is used, for example, in the development of facial or voice recognition or for machine translations. In order for a machine to recognise a cat, to give one example, it is « trained » by subjecting it to huge quantities of cat images, among which the algorithm will detect regularities that will allow it to become increasingly accurate over time.

[3] For exceptions : UNCTAD (2019), Fritz T & Hilbig S (2019) or Gurumurthy et al. (2019).

[4] See figures here : https://wearesocial.com/blog/2019/01/digital-2019-global-Internet-use-accelerates.

[5https://www.cetri.be/Impasses-numeriques.

[6] Other authors, however, contest this analogy, such as Casilli, for whom it risks leading to the « appropriation and erasing of the specificities » of colonialism as a historically situated phenomenon, while enclosing the Global South « in a static and passive schema » (Casilli, 2018).

[7] Launched in 2013 under the name « Internet.org », the « Free Basics by Facebook » programme officially aims to facilitate access to the Internet for the half of the world’s population that still lacks it, by offering free mobile Internet access, but limited to a few sites selected by Facebook. Many critics have accused it of violating the principle of net neutrality and of serving as a Trojan horse for the commercial strategies of Facebook and its partners in the project. In 2016, India caused quite a stir by deciding to ban the application on its territory.

[8] Read the full « Delhi Declaration » here : https://justnetcoalition.org/delhi-declaration.

[9https://justnetcoalition.org/digital-justice-manifesto.pdf.


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