The $800 billion gorilla

We have heard of the American expression of the 800-pound gorilla… but this note is about the $800 billion dollar gorilla that we will need to contend with and tame.

Gartner Research estimates that governments around the world will spend over $800 billion on technology in 2024. A closer look reveals that 88% of this amount will be spent by “mature economies”, with approximately 2.5 billion people. If the other 160 countries -- approximately 5.5 billion people – want to have the similar digital capabilities that these mature economies have, the current dominant model of silo digitization will only ensure that these countries will be in a deep debt trap for many decades to come.

In addition to perpetual indebtedness, the expensive silo digitization model takes time to build, because digitizing each business process means a new RFP, a new vendor, a new contract with big $$ (often funded by a US dollar denominated loan), and a lot of time to build a new full stack solution.

Basically, this means that more money goes into the hands of tech companies, and less money into people’s hands. In countries that are already indebted and starved for financial resources, this kind of (mis)allocation of resources becomes a moral question, especially when a smarter approach to digitization is available.

And all of this slows down countries from making progress towards SDGs.

But as we all know, funders (for good or for bad) can have a major role in shaping behavior or countries. If funders, both multilateral and bilateral, insist on smarter ways of digitization which emphasizes reuse of digital assets, we can see important changes in how the ecosystem of countries, consultants, tech companies will respond.

At the ‘Economics of DPI’ event that we co-hosted with Digital Impact Alliance on the sidelines of the IMF/ WB Annual meetings in Washington DC a few days ago, it became abundantly clear that there was a strongly felt desire for more evidence to understand the implications of DPI approach to digitization. And we must build more evidence.

While it will take a few years to compile well researched evidence, there are perhaps some self-evident aspects that we may agree upon. As a starting point, let me postulate the following:

• Reusing digital artefacts across use-cases, across countries is more cost effective than rebuilding each time. This will save time and money for countries.
• Reusing digital artefacts thoughtfully is smarter technology for any country, not just for the so called ‘global south.’
• Creating public infrastructure will enable greater innovation and competition, than if infrastructure is controlled by private corporations. (Rhetorical question: Would we have had more innovation had the internet and GPS – the original layers of DPI – been privately controlled?)
• It would be a terrible waste of scarce financial resources to keep rebuilding expensive silo digital solutions, putting many countries into a debt trap.

What other such obvious aspects that many of us might agree on come to your mind?

Could we commit to a ‘reuse, don’t rebuild’ policy, starting now??

#Re-set

Priya Vora Jean-Louis Arcand Bruna Santos (宝煊) Nalongo L. Nshuti Mbabazi Jordan Sandman