World’s least developed countries need urgent digital transformation. Here’s what to do

Also, most of the new frontier technologies that have the potential to fuel a green economic transformation are powered by digital technologies. As the total market value of these technologies is likely to increase from $1.5 trillion in 2020 to $9.5 trillion in 2030, the LDCs need to catch up fast, before the relatively narrow window closes for them.

The LDCs face several challenges that constrain their ability to harness their digital potential.

Although 83% of the 1.4 billion people who live in the LDCs are covered by mobile broadband signals (3G or above), only 36% are connected online. Coverage of fixed-line broadband remains abysmally low in LDCs, with only 1.6 subscriptions per 100 inhabitants in 2022. The price of a benchmark mobile broadband basket comprising a 2GB monthly allowance amounts to almost 6% of the average monthly income in the LDCs, four times the global average.

Many LDCs lack both enabling policies (e.g., to enhance affordability), which help the state, firms and individuals take advantage of the digital opportunities. They also lack mitigating policies (e.g., to protect privacy), which help overcome obstacles emanating from the use of digital technology.

Considering these challenges, a few pathways — derived from concrete initiatives — could be followed by the LDCs to change course and leapfrog into digital technologies:

For infrastructure, an innovative approach that stands out is the Mozambique-Malawi Interconnector project to link Malawi to the Southern African Power Pool via a newly constructed power transmission line. The project leveraged the fibre-optic capacity required to operate the transmission line to increase digital connectivity in both countries. Kreditanstalt für Wiederaufbau mobilized €108 million from multiple sources through an innovative financing mechanism combining grants and loan.

Moreover, the Digital Trade for Africa initiative jointly launched by the WTO and the World Bank on the margins of the 13^th Ministerial Conference of the WTO last month in Abu Dhabi could be a game-changer for many African LDCs. Through this initiative, LDCs such as Benin, Burkina Faso, Rwanda and Togo, which have joined it, can attract sizeable investment on digital infrastructure.

Policies have a major role to play. For example, imposing universal service obligations to internet service providers (ISPs) to provide a minimum volume of data for free and charging prices above the threshold could help significantly boost affordability.

Similarly, a competition policy aimed at telecom companies can significantly reduce cost, as seen in LDCs like Bangladesh, Bhutan, Cambodia and Nepal, which are among the top 25 cheapest countries for mobile data. LDCs considering joining the WTO Information Technology Agreement to cut the cost of devices and equipment by reducing their tariff on IT products can follow the examples of other LDCs such as Lao PDR and Timor-Leste.

In relation to skills development, a pathbreaking Technology Makers Lab initiative currently being implemented by the UN Technology Bank for Least Developed Countries in Niger and Togo can be a game-changer. This initiative provides training in the skills of the future for the youth in these countries.

Without having to reinvent the wheel, LDC governments should commit themselves to digital transformation with strong political will, and the international community should provide them with the support necessary to help them close the digital gap.

This article previously appeared in the World Economic Forum.