CAREC Digital Strategy 2030

Accelerating Digital Transformation for Regional Competitiveness and Inclusive Growth

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• Publisher: Asian Development Bank
• Year: 2022
• Print ISBN: 9789292693640
• eBook ISBN: 9789292693657
• Topic: Computer Science
• Subtopic: Artificial Intelligence (AI) & Semantics
• Index: Computer Science

Digital transformation can positively impact economic growth, jobs creation, and social inclusion. As the Central Asia Regional Economic Cooperation (CAREC) region deals with the challenges posed by the coronavirus disease (COVID-19) pandemic, investing in national broadband infrastructure is more crucial than ever to enable connectivity and improve service delivery. Digitalization will allow CAREC member countries to develop robust solutions for areas including agriculture and water, e-commerce and trade, education and skills, energy, finance, health, transportation, and tourism. The CAREC Digital Strategy 2030 is intended as a catalyst for regional cooperation, promoting policy design, capacity building, and dialogue to address economic and social challenges in the region with the help of digital technologies.

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Introduction

Multiple studies indicate that digital transformation based on effective data management can have an impact on economic growth, new jobs creation, and social inclusion.¹ Today, as the world is dealing with the unprecedented challenges posed by the coronavirus disease (COVID-19) pandemic, it is becoming increasingly evident that countries that have invested in a national broadband infrastructure and whose people and businesses are connected through digital platforms are faring better than others. As the pandemic carries on, digital technologies have enabled many activities including contact tracing, lockdown enforcement, cooperation on vaccine development, online education, and teleworking. As millions shifted to teleworking and online schooling, in just the first few months of the crisis, data traffic increased by at least 20%, while cyberattacks on the health sector infrastructure and mobile networks have increased by 150%.²

Countries without a national broadband infrastructure have been caught off guard by the pandemic and the sudden transition to telework and distance learning has posed a challenge for many countries. In Central Asia Regional Economic Cooperation (CAREC) member countries, more than half of the population remains unconnected.³ The COVID-19 crisis has also exposed the severity of the rural and urban digital divide, exacerbating social and economic inequalities, hitting disadvantaged populations in remote areas, especially women, children, the elderly, the sick, and the disabled. Some CAREC member countries, such as Kazakhstan, the Kyrgyz Republic, and the People’s Republic of China (PRC) were able to shift to distance learning at scale.⁴ In other countries, children were left without schooling for many months, as not everyone was able to benefit from online education.⁵

The COVID-19 pandemic has also brought significant disruption at the regional level. As countries imposed lockdowns and quarantines, supply chains were disrupted, trade slowed, and tourism and business travel stalled. It is crucial to start looking outward again during the recovery period while taking stock of the lessons learned from the COVID-19 crisis and utilizing digital technologies that have proven essential to managing the pandemic. Focusing on regional cooperation and digitalization can enable CAREC member countries to lay the basis for a sustainable economic recovery.

Regional organizations worldwide place digital technologies at the heart of their economic development and COVID-19 recovery strategies. The European Commission considers the digital economy as “the single most important driver of innovation, competitiveness and growth in the world.”⁶ The Association of Southeast Asian Nations (ASEAN) intends to accelerate its digital integration, which has the potential to generate a $1 trillion uplift in the gross domestic product by 2025.⁷ The United Nations Economic Commission for Latin America and the Caribbean also aims to develop the regional digital market to boost socially just and environmentally sustainable development in the region, drive the growth of connectivity for citizens and business, and simplify the online exchange of goods and services. The Gulf Cooperation Council—particularly the governments of the United Arab Emirates, Bahrain, and Saudi Arabia—“have been directing vast resources toward the digitalization of their infrastructure by creating the needed institutions, amending legislation, partnering with ‘Big Tech,’ and building local human capital.”⁸ The Eurasian Economic Union (EAEU) has adopted the EAEU Digital Agenda 2025 aimed at creating a common digital space and a single digital economy in the region and achieving associated digital dividends expressed in higher regional economic growth, new jobs creation in the digital and non-digital sectors, and new and better services.⁹ Similarly, boosting regional cooperation for digital transformation in the CAREC Program will allow leveraging of digital technologies to strengthen old ties and create new ones to help accelerate the COVID-19 recovery process.

1.1 Purpose and Approach

The CAREC 2030 Strategy prioritizes information and communication technology (ICT) as a cross-cutting issue across its operational clusters (Appendix 1), providing the institutional basis for the CAREC Digital Strategy 2030. CAREC leaders at the Asian Development Bank’s (ADB) 54th Annual Meeting of the Board of Governors on 4 May 2021, outlined several priorities for digital transformation at the regional level.¹⁰ Those priorities included bridging the digital divide through investing in broadband infrastructure, leveraging digital technologies to cope with the COVID-19 crisis and its fallout, harmonizing regulation and legislation to enable e-commerce across the region, and developing digital solutions for CAREC’s operational clusters.

The CAREC Digital Strategy 2030 is intended as a catalyst for regional cooperation on digital matters and a mechanism to promote policy design, capacity building, and dialogue on the ways social and economic challenges in the region can be addressed with the help of digital technologies. The rapid development of disruptive technologies, coupled with the challenges of the COVID-19 crisis, requires stronger regional cooperation and trust to accelerate digital transformation. This is an opportunity in crisis: leverage digital technologies to recover and build–back–better for a resilient and inclusive economy and society.

1.1.1 Adopting a Holistic Digital Transformation Framework

A holistic digital transformation framework (Appendix 2) will allow CAREC member countries to take advantage of complementarities and synergies, align the CAREC Digital Strategy 2030 with the development agenda outlined in the CAREC 2030 Strategy, and support the implementation of the six priorities for CAREC regional digital cooperation identified by CAREC public and private sector stakeholders (Appendix 3). The digital transformation framework comprises digital foundations, which act as enablers of the digital transformation process and include digital leadership, policies and institutions, digital infrastructure, digital platforms, digital skills, digital data, the digital innovation and entrepreneurship ecosystem, and digital industry and support services. Digital foundations rest on nondigital foundations such as the business environment, education, competition, financial policies, governance, access to electricity, etc. Digital solutions cover ICT applications in key economic sectors such as education, health, tourism, trade and finance, transport, energy, urban development, and agriculture.¹¹ Strong digital foundations are fundamental to extracting digital dividends from sectoral transformation initiatives. Moreover, a holistic approach to digital strategy is essential to maximizing the digital dividends and securing equitable benefits and inclusive economic growth.¹² Digital transformation cuts across all sectors at the local, national, and regional levels and requires the engagement and collaboration of the entire ecosystem: the public and private sectors, the expert and academic community, the innovation ecosystem, development partners, and citizens.

1.1.2 CAREC Digital Strategy 2030: Preparation and Inputs

The CAREC Digital Strategy 2030 has been prepared by the CAREC Secretariat supported by ADB. The CAREC Secretariat partnered with the CAREC Institute and the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP). The draft strategy was also shared with other development partners and feedback was received from the Eurasian Fund for Stabilization and Development (EFSD), Islamic Development Bank (IsDB), and the World Bank.

The CAREC Digital Strategy 2030 is a collaborative effort relying on consultation sessions with stakeholders from the CAREC region. The sessions were held in the summer of 2021, supported by a number of analytical exercises including an analysis of stakeholder inputs received through responses to CAREC questionnaires (Appendix 3); a review of national digital transformation strategy documents of CAREC member countries (Appendix 4); a strengths, weaknesses, opportunities, and threats (SWOT) analysis of the enabling environment and the nondigital and digital foundations of digital transformation across the CAREC region (Appendix 5); a review of global best practices in driving digital transformation at the regional and country levels (Appendix 6); and an analysis of secondary sources including global development organizations reports, global digital development indexes, scientific papers, and notes and articles on digital development (Appendix 7).

1.2 Document Structure

The strategy document consists of the main text of the CAREC Digital Strategy 2030 and supporting appendixes. The main text opens with the strategy’s vision, mission, and objectives and provides an overview of the current state of digital development across the CAREC region. It then discusses the six CAREC stakeholder priorities for digital transformation in the region and addresses the five pillars that constitute the foundations required to support CAREC stakeholders’ regional digital transformation agenda, including priority areas for cluster-level digital adoption. The main text concludes with strategy implementation guidelines. The appendixes provide more context, research, analytical and background material, and more detailed recommendations to various sections of the strategy.

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CAREC Digital Strategy 2030: Vision, Mission, and Objectives

In line with the overarching CAREC 2030 vision of “Good Neighbors, Good Partners, and Good Prospects,” the CAREC Digital Strategy 2030 vision is to create a common CAREC Digital Space—an interconnected digital ecosystem that enables the development of new digital products and services, powers digital transformation, and supports a freer flow of data across the CAREC region. The CAREC Digital Space will generate higher digital dividends across the region, expressed in inclusive economic growth and social well-being, new jobs (including for the disadvantaged and minority populations), better services, and higher regional competitiveness.

To achieve this vision, the CAREC Digital Strategy 2030 adopts the mission of creating a data-driven digital economy with fast and reliable online access to relevant information and trusted, real-time, user-friendly digital services for all citizens, businesses, and administrations across the CAREC region. This mission will be based on high-speed internet and secure, scalable, and interoperable digital platforms and digital infrastructure that are resilient to cyberattacks and other crises.

The mission translates into the following objectives, which have been derived from the priorities identified by the CAREC stakeholders:¹³

Encourage investment in the digital infrastructure across the region to close connectivity gaps.

Harmonize digital and data legislature to promote an enabling environment.

Develop new digital skills, including for women, disadvantaged, and minority populations, to create jobs.

Attract talent into the region to strengthen CAREC’s innovation ecosystem.

Reduce regional trade barriers to increase cross-border trade and expand business opportunities for co...

Table of contents

• Front Cover
• Title Page
• Copyright Page
• Contents
• Table and Figures
• Abbreviations
• Executive Summary
• 1 Introduction
• 2 CAREC Digital Strategy 2030: Vision, Mission, and Objectives
• 3 Digital Adoption across CAREC: Current State Overview
• 4 Aligning the Nondigital Foundations for Digital Development
• 5 CAREC Digital Strategy 2030 Pillars: Strengthening the Digital Foundations
• 6 CAREC Sector and Cluster Transformation
• 7 Implementing the CAREC Digital Strategy 2030
• 8 Conclusion
• Appendixes
• References
• Footnotes
• Back Cover