7. Determining national priorities in the 4th industrial revolution

Elizabeth Stuart
Digital Pathways at Oxford
  • Few countries have yet managed to successfully implement a comprehensive digital transformation, even those with a digital strategy and where some sectors are digitalised.

  • The Digital Economy Kit shows great potential for guiding countries through their digital transformation by identifying opportunities, determining feasible actions given their capabilities, and ensuring the widest societal and stakeholder input in the process.

  • Development co-operation providers can support nationally led priorities for digital transformation in three ways: 1) support country-driven analytical processes; 2) use the outcomes of analytical processes to align in-country programmes and funding; and 3) support the elaboration of context-specific regulatory environments.

Digital transformation, as the term suggests, is a whole-of-economy, whole-of-society process – one that, in its fullest expression, could be as epochal a change as the First Industrial Revolution. But such a grandiose description belies the reality of where many developing countries, their governments and societies stand right now. Reeling from the impacts of COVID-19, which heightened awareness of the urgent need to develop and master digital technologies, few countries have yet managed to successfully implement wide-scale transformation. Many do have strategies in place, and digitalisation has occurred in some sectors to a significant degree, the most notable being in the development of FinTech and the provision of mobile money.1 But, based on anecdotal evidence, sweeping digital transformation – or the so-called the “Fourth Industrial Revolution” – is looking increasingly daunting to many developing country governments. They also have justified concerns that the downsides of digital technologies will override their enormous potential benefits if the digitalisation process is not properly managed.

It may be helpful at this stage, as countries grapple with the challenge of digitalisation, to rein in ambitions and focus on what is practical. This means adopting an approach that builds on countries’ existing capacities and carefully defines a series of feasible yet still ambitious priority actions that fully consider the national context, stakeholder demands, and the political and economic status quo.

Digital Pathways at Oxford, building on insights developed by the Pathways for Prosperity Commission on Technology and Inclusive Development, has been supporting countries to develop realistic strategies for leveraging connectivity and digital technology for inclusive growth. To date, the governments of eight developing and emerging economies have either completed or are on their way to completing a process that aims to ground digital transformation in their particular reality. The process is centred around the Digital Economy Kit and conducted through a close partnership between Digital Pathways at Oxford and the government, ideally with a domestic implementing partner. The first step is a diagnostic process and a multistakeholder dialogue series to identify a country’s digital comparative advantage; that is, opportunities across its entire economy and population, including the most marginalised. An assessment then follows to determine what immediate, practicable priority steps can be taken. The outcome is a strategy primer for action that is country-owned with built-in political buy-in. The kit is based on an analytical framework with four pillars of the digital economy: (1) infrastructure; (2) human capital; (3) finance; and (4) policy and regulation (Pathways for Prosperity Commission, 2018[1]). Inclusion is a cross-cutting theme, as the objective is to support a country in achieving the greatest possible inclusive growth by leveraging digital technologies.

As the process is ongoing in two of the eight countries (Indonesia and Lesotho), only the results in the other six countries are discussed here. However, it is evident that the drive for reality-based reform has been strikingly successful in the other six countries engaged in the process (Bangladesh, Benin, Ethiopia, Malawi, Mongolia and South Africa), even if the strategy primer has yet to be fully implemented in any of these countries.

In some cases, the process has produced national-level change within six months; in others, it is being incorporated into national planning strategies with budgets and delivery deadlines attached. In Mongolia, for example, 181 government services were digitalised in six weeks as a direct result of the kit (Access Solutions LLC, 2019[2]).2 In South Africa, many of the recommendations developed through the Digital Economy Kit process were integrated into the president’s plan to accelerate economic development;3 some were implemented by self-organising industry groups outside of government; others were implemented through a whole-of-government master planning process (Genesis Analytics, 2020[3]). In Ethiopia, the government prioritised implementation of a new digital strategy (Ethiopian Ministry of Innovation and Technology, 2020[4]) and is now establishing a venture capital fund for tech start-ups.

Three key features are responsible for the success of the approach taken by the Digital Economy Kit. The kit identifies opportunities for digital transformation that are context-specific. The participatory dialogue phase engages a wide range of private and public stakeholders, with an emphasis on left-behind communities. Additionally, a high degree of political buy-in and ownership is assured by the early engagement of senior-level government figures who initiate and then shepherd the process.

The initial diagnostic phase gathers all available and relevant supply-side and demand-side disaggregated data, including, importantly, data generated by previous diagnostics and analyses, and reviews all relevant strategies and development plans. In Benin, new primary data were also generated. The data are then used to build a hypothesis as to which sectors may provide the greatest opportunity for digital transformation in that country, and this is then used as an entry point for conversations during the dialogue phase about how to get the fundamentals of digital transformation right. These conversations may include discussion of how to build interoperable systems, how to encourage infrastructure sharing, and how to standardise and incentivise skills training and upgrading. By investing in core fundamentals, governments can achieve the sort of cohesive, scalable digital transformation that allows them to explore new areas of economic opportunity and job creation.

Where relevant, the Digital Economy Kit also considers regional strategies, especially when regional integration is a sensible priority for a country because of its economic isolation or small domestic market. In Benin, for instance, it was important to consider the role of regional policy-setting bodies such as the Central Bank of West African States4 (BCEAO) and the Economic Community of West African States5 (ECOWAS) in discussions around digital financial services and national identity (ID) projects. The BCEAO governs directives associated with cross-border transactions, and all national ID projects would need to be interoperable since the ECOWAS region allows for free movement of people and goods between member states.

The opportunities identified in each country recognise the specific level of (digital) development there – areas that present opportunities for quick gains from sensible digitalisation or market facilitation. This approach is different from the seemingly homogenous “Fourth Industrial Revolution”-type analyses that focus on frontier technologies regardless of whether the country has the capability to deploy them.

In some respects, the process pointed to similar opportunities across the six countries using the Digital Economy Kit. All countries, for instance, explored ways digital platforms could make agricultural value chains more efficient and improve agricultural outputs through better extension services. Each of the countries also considered how its informal economy might benefit from connecting informal workers to digital financial services and e-commerce and sharing economy platforms (see Chapter 18). However, there were also clear differences in the identified opportunities; for instance, Ethiopia was the only one of the six countries that identified tourism as an opportunity.

The opportunities identified in each country recognise the specific level of (digital) development there – areas that present opportunities for quick gains from sensible digitalisation or market facilitation. This approach is different from the seemingly homogenous “Fourth Industrial Revolution”-type analyses that focus on frontier technologies regardless of whether the country has the capability to deploy them.   

Once identified, the opportunity hypothesis is tested in a multistakeholder dialogue phase. In any reform process, there are trade-offs, and the dialogue provides space to understand these as fully as possible. This phase also ensures that multiple views and perspectives are built into the analysis, including those of civil society, and focusing, where possible, on representing the views of left-behind communities, such as academia, the private sector, and, specifically, tech entrepreneurs. In other words, the technology’s users and potential users are the focus of the dialogues, as fully understanding their perspective is vitally important if final products and services are to be as useful and efficient as possible.

During a dialogue session in Mongolia, where inclusive policy making has not been practiced until now, a representative from a slum district described its patchy service provision. What the community was experiencing had not shown up in the official statistics and thus, government leaders heard and understood this for the first time. Such user accounts helped shape the final strategy primer. This phase also provides an opportunity to garner additional qualitative data, for instance on access to mobile and Internet, for which data gaps exist, and to gain a broader understanding of the wants and needs of marginalised communities.

The findings of diagnostic and stakeholder engagement components inform the development of a strategy primer that sets out achievable priority actions for the identified opportunities. These primers vary widely from country to country in both style and content. Priority actions identified range from reforms around telecommunications liberalisation to action plans for more effective use of universal service funds.

In most of the six countries, the international community had already conducted multiple assessments, helped develop frameworks and produced diagnoses on different aspects of the digital economy. While some of these offered useful insights for the country, many were instead focused on the (albeit important) needs of international development organisations, for instance data to inform the World Bank’s investment or lending strategy in that country. Such diagnoses can only ever be of limited utility if the country has not first conducted a bottom-up exercise to ascertain its own priorities and digital opportunities. Through the Digital Economy Kit, a country first conducts its own assessment in the hope that donors will use this to inform or ideally direct their programming and funding.6

Underscoring its emphasis on political buy-in and country ownership, the kit has only been implemented in countries that asked for it; that is, countries that had already identified digitalisation as a priority in their development plans. The governments in the six countries had signalled that they wanted to embrace the potential of digital technologies and would prioritise this politically, either in public statements or via strategies such as “Benin Révélé” (Revealing Benin) in Benin (Présidence de la République de Bénin, 2021[5]) and Lesotho’s National Strategic Development Plan II (Government of Lesotho, 2018[6]).

The kit was also implemented based on demand. In each case, a senior policy maker with the political clout to spearhead transformation specifically requested collaboration with Digital Pathways at Oxford. A senior government figure from either the presidency or the prime minister’s office, as well as by a steering committee comprising senior figures from the relevant ministries, also frequently sponsored the process. In Ethiopia, for example, the Office of the Prime Minister and the Ministers of Innovation and Technology and of Finance provided leadership; the prime minister’s digital adviser, formerly an adviser to the Minister of Innovation and Technology, personally played a proactive role in the process. In South Africa, demand for the kit came from a multistakeholder leadership group (BusinessTech, 2020[7]) with the endorsement of the presidency’s technology commission. In Mongolia, the prime minister himself launched the strategy primer (Ariunzaya, 2020[8]).

This leadership from the top not only expedited implementation, but also ensured that the right coalitions – both inside and outside the government – could be quickly convened, bypassing at least some of the usual political jostling for power. The involvement from the outset of a range of line ministries also promoted full ownership and smoothed implementation, as senior policy makers participated in building the process and officials could clearly see how its outcome would benefit their mission. Table 7.1 shows the key implementing partners in the governments of the countries that have implemented or are implementing the kit approach.

[This] leadership from the top not only expedited implementation, but also ensured that the right coalitions – both inside and outside the government – could be quickly convened, bypassing at least some of the usual political jostling for power.   

In addition to government partners, in-country implementing partners such as a local research institute or consultancy undertake the analytical elements of the kit and the necessary network building for the process. This is important, as Oxford-based researchers will only have a partial understanding of the day-to-day political economy of the country.

Some lessons are already emerging from the experience of countries that have used the Digital Economy Kit to establish sensible, realistic priorities and areas where digitalisation will have optimal benefits. Some relate to managing relationships among government agencies; others pertain to challenges in implementing digital strategies.

The distribution of responsibility for digitalisation efforts within governments can impact the success and sense of ownership of a country’s transformation strategy. Many countries place all digital issues under a single line department, often a niche technical agency. Too often, senior political sponsors from these agencies only engage closely with issues relevant to their narrow mandate. The risk of such a structure is that ideas about the transformation with the most potential, such as automating factory production lines or creating new digital marketplaces, will be overlooked.

In some countries that used the kit, government leaders with broader mandates were brought into the process to ensure a whole-of-economy perspective. One example is Benin, where the project was co-led by the Ministry of Digitalization and the presidency. Another is Malawi, where the National Planning Commission, which already had a broad whole-of-economy mandate, was the main government sponsor. Bangladesh, meanwhile, has built on its whole-of-government adoption of digital payments to expand digitalisation throughout government services. Box 7.1 outlines Bangladesh’s progress in digitalising its economy and society for inclusive growth and development.

Despite countries’ success in establishing a wide range of implementing agencies, translating the strategy primer into specific reforms has been challenging. Once the primer is completed, capacity constraints require governments to determine which of their priorities are most urgent. None of the six governments have (yet) been able to simultaneously implement every component of their strategy primer, which is partly a result of financing constraints rather than implementation capacity constraints.

Even when the strategy primer has been enthusiastically embraced by the relevant line ministries and endorsed by the presidency or prime minister’s office, more junior officials are the ones who must deliver its constituent elements. If those officials have not been briefed on the approach and do not understand the potential upside, there may be impediments to their capacity and motivation to implement it. In Ethiopia, a training session for next-level officials in the Ministry of Finance provided space for them to socialise and discuss the actions outlined in the strategy primer. Similar efforts may be needed in other countries. For instance, in Bangladesh, it would be advantageous to tie up with a2i’s new Civil Service 2041 initiative to implement the strategies from the kit.

The international development community can best help countries define and set their national digital priorities by supporting processes such as the Digital Economy Kit rather than undertaking their own separate, individual analysis. This support could take the form of financing kits or similar analytical processes. Funding for the kits discussed here was provided by the UK Foreign, Commonwealth and Development Office; the Dutch Ministry of Foreign Affairs; and the United Nations Economic and Social Commission for Asia and the Pacific. In each case, the country or agency allowed the process to be country-led as determined by the methodology.

Using the outcomes of kit-like processes to align their country programmes and funding would also be useful so that digital transformation efforts stay focused on those areas that countries determined to be most realistic and sensible. Providing finance for at least part of the implementation of the strategy primer would be an optimal funding modality.

Finally, experience to date with inclusive, context-specific and country-led approaches to setting national priorities for the digital transformation suggest that international development actors can play an important supporting role by supporting the design of regulatory systems, rules, behaviours and norms that are suitable for partner countries. Indeed, these may be better solutions for a country’s domestic digitalisation than adopting external models such as, for example, those of the People’s Republic of China, the European Union or the United States.


[2] Access Solutions LLC (2019), National Digital Strategy Primer for Mongolia, Access Solutions LLC, https://artnet.unescap.org/sites/default/files/file-2019-11/MDA%20Strategy%20Primer.%20FINAL.%2009.13.pdf.

[8] Ariunzaya, A. (2020), “Mongolia in the digital age project”, Mongolian Economy, https://mongolianeconomy.mn/en/power-of-the-hiding-hand (accessed on 27 September 2021).

[7] BusinessTech (2020), “Is this a blueprint for mass job creation in South Africa?”, BusinessTech, Lyttelton, https://businesstech.co.za/news/cloud-hosting/367692/is-this-a-blueprint-for-mass-job-creation-in-south-africa (accessed on 27 September 2021).

[4] Ethiopian Ministry of Innovation and Technology (2020), Digital Ethiopia 2025: A Digital Strategy for Ethiopia Inclusive Prosperity, Federal Democratic Republic of Ethiopia, https://mint.gov.et/wp-content/uploads/2020/12/Digital-Ethiopia-2025-Strategy-English.pdf.

[3] Genesis Analytics (2020), Pathways to Digital Work: A Strategy Primer for South Africa’s Digital Economy, Genesis Analytics, Johannesburg, https://pathwayscommission.bsg.ox.ac.uk/sites/default/files/2020-01/South%20Africa%20Strategy%20Primer.pdf.

[6] Government of Lesotho (2018), National Strategic Development Plan II 2018/19 to 2022/23, Government of Lesotho, https://www.gov.ls/wp-content/uploads/2021/06/National-Strategic-Development-Plan-II-2018-19-2022-23.pdf.

[1] Pathways for Prosperity Commission (2018), Charting Pathways for Inclusive Growth: From Paralysis to Preparation, Pathways for Prosperity Commission, https://pathwayscommission.bsg.ox.ac.uk/sites/default/files/2019-11/charting-pathways-report.pdf.

[5] Présidence de la République de Bénin (2021), “Revealing Benin”, web page, https://beninrevele.bj/en (accessed on 27 September 2021).


← 1. In sub-Saharan Africa, for instance, 21% of adults had a mobile money account in 2017, nearly twice the share in 2014 and easily the highest of any region in the world. See: https://globalfindex.worldbank.org/sites/globalfindex/files/2018-04/2017%20Findex%20full%20report_0.pdf.

← 2. For more information about Mongolia’s current digitalised services, see eMongolia website: https://e--mongolia-mn.translate.goog/home?_x_tr_sl=mn&_x_tr_tl=en&_x_tr_hl=en&_x_tr_pto=nui,sc

← 3. For more information on the South African Economic Reconstruction and Recovery Plan, see: https://www.gov.za/sites/default/files/gcis_document/202010/south-african-economic-reconstruction-and-recovery-plan.pdf.

← 4. For additional information on the BCEAO, see: https://www.bceao.int/index.php/en.

← 5. For additional information on ECOWAS, see: https://www.ecowas.int.

← 6. Efforts are underway to co-ordinate frameworks related to digitalisation, among them the work of the Digital Impact Alliance. The GovStack initiative also plans such an effort.

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