Digital colonialism in the age of AI - the economics

A blog by, Raj Nair, Public Sector Governance Adviser at the Commonwealth Secretariat.

Recently, I had the privilege of speaking at an AI for Security conference staged at the international affairs think tank Chatham House and hosted by the Parliament of the United Kingdom. My topic, Digital Colonialism, was as thought-provoking as it is urgent. As with any speaking engagement, I arrived early to gauge the mood of the audience, writes Raj Nair, Public Sector Governance Adviser at the Commonwealth Secretariat.

Policymakers feel helpless in the face of the AI revolution?

I quickly learned that the conference’s atmosphere had been largely sombre, dominated by discussions of the numerous challenges AI presents - and the notable absence of solutions. This sense of helplessness has been a common theme at many government workshops I’ve attended. Policymakers often seem overwhelmed by the rapid pace of AI’s evolution, uncertain of where it’s heading and how to manage it.??

Digital colonialism describes the modern manifestation of economic and political power imbalances in the digital realm. It operates through control over data, public digital infrastructures, and global supply chains. In this context, powerful nations and dominant tech firms extract value from less developed regions through vast data flows and network effects, often without equitable returns.??

Central to digital colonialism is the concentration of power among a few major tech companies which are not only building the foundational AI infrastructure but also consolidating data and market influence. Their ability to leverage vast resources and network effects deepens global inequalities, creating AI hubs where economic value is generated at the expense of local innovation and employment in developing regions. Many experts characterise these tendencies of big tech and large nations as being insidious or sometimes even evil.?

There is nothing insidious about digital colonialism - it’s just economics?

Having spent my career moving between the private sector and the public sector - from strategy consulting to international development, AI product management, and now as a governance technology advisor at the Commonwealth Secretariat - I’ve observed a common thread. Yes, the private sector is profit-driven, as companies are obligated to deliver returns to their shareholders. But rarely are their actions driven by malice. In most cases, the forces at play are simply the natural outcome of economic dynamics.??

To understand this better, let’s consider a framework for looking at the future of AI ecosystems. The bottom layer would be the core AI infrastructure – providing computational power to some of the most challenging problems. AI-powered applications will be developed on top of the core AI infrastructure to transform traditional ecosystems. As AI is implemented to upgrade processes, jobs will become redundant.??

Consider a call centre located in a developing country. When AI chatbots are implemented, many of those jobs, generally in developing countries, will be made redundant. Many of those calls will now be answered by AI-powered avatars with servers based in developed countries. ?

In such a case, the economic value has eroded from the developing country to big tech in those larger countries hosting the AI infrastructure. This will be the characteristic of digital colonialism in the AI age – economic value will shift and will impact individuals, families and communities. ?

However, the story doesn’t end there. Using AI infrastructure, an entirely new set of applications will also be developed to solve problems that were previously intractable. This will create an entirely new category of jobs. How (and when) a country thinks about positioning its workforce will determine the winners and losers of the AI age.?