Digital Transformation-G20-highlights-2023

The growing importance of data as an economic and strategic asset, particularly in light of the changes brought about by the pandemic. It highlights how digital technologies have played a crucial role in maintaining and growing economies during lockdowns, especially through cross-border data communications.

The Digital Transformation Policy Paper highlights the rapid growth in internet use, underlining that while over 60% of the population in certain regions like the Arab states and Asia-Pacific countries is online, only around 40% in Africa and even less in the Least Developed and Landlocked Developing Countries have internet access.

The evolving digital economy is characterized by big data handling and intelligent processing pools which can be analyzed and scrutinized to feed into systems where Artificial Intelligence (AI), Machine Learning (ML), Generative Pretrained Transformation (GPT), and automated decision-making can be used to enhance and drive the entire digital ecosystem. A combination of emerging technologies such as AI, big data, Internet of Things (IoT), metaverse/immersive technology, distributed ledger technology, quantum technology, and Machine-to-Machine (M2M) are being used to further extend research and are being adopted across enterprises.

The big data and AI market is expected to reach ~USD 4.5 trillion by 2025 and IoT is projected to unlock value of USD 15 trillion for global GDP by 2025. The benefits of e-commerce and digital trade can also be leveraged to vitalise SMEs by structurally increasing their market access across borders and improving productivity. Digital technologies, underpinned by transformational connectivity, can enable reductions in carbon emissions across the economy. Digital tools like big data analytics and ML can help to better understand energy demand and mobility choices which can in turn provide the basis for digital solutions for smart mobility options and energy networks. The Exponential Climate Action Roadmap underscores the potential of digital technologies to reduce global carbon emissions by up to ~15%.

Though digital transformation augments new opportunities for addressing developmental challenges and well-being creation, it also intensifies current concerns, such as enhanced access to and sharing of data, data protection, cybersecurity, disinformation/misinformation, and digital fraud.

B20-Recommendations and Policy Action :

Recommendation 1: Bridge the digital divide by ensuring widespread, high-quality, and reliable internet access across all regions and communities. This will boost digital penetration, drive investment, and promote inclusive growth.

Policy Action 1.1: Improve the investment climate and implement reforms to encourage private sector involvement in providing high-quality internet through various technologies (fixed, mobile, satellite). This includes measures like removing deployment barriers, ensuring affordable spectrum availability, and maintaining a fair and transparent regulatory environment.

Policy Action 1.2: Complement private sector efforts with targeted public interventions to enhance internet affordability and accessibility. This involves inclusive financing schemes for networks, services, and devices, as well as balanced taxation approaches to encourage widespread adoption.

Recommendation 2: Address digital literacy and skill gaps by establishing global minimum standards for digital literacy. This aims to enable international skills portability, promote inclusivity, and measure digital literacy levels worldwide.

Policy Action 2.1: Create a global body responsible for setting unified standards and metrics for digital literacy. This includes adopting a global competence framework, accrediting institutions and teachers, and developing learning materials through multi-stakeholder partnerships.

Recommendation 3: Promote digital transformation for Micro, Small, and Medium Enterprises (MSMEs) through access to sustainable finance, a recognized digital toolkit, and a favorable regulatory environment.

Policy Action 3.1: Expand efforts to provide sustainable financing to MSMEs for adopting digital technologies and complementary services.

Policy Action 3.2: Establish a globally recognized digital toolkit supported by a favorable regulatory environment. This toolkit will facilitate the creation of a digital ecosystem and offer comprehensive support to MSMEs in their digital transformation journey.

Recommendation 4: Foster digital trust by developing harmonized cybersecurity standards and frameworks, and addressing the cybersecurity skill gap. This includes promoting multilateral cooperation in cyberspace and enhancing trust in digital systems and processes.

Policy Action 4.1: Establish a global body to harmonize and advocate for cybersecurity standards and enhance multilateral cooperation in cybersecurity efforts.

Policy Action 4.2: Advocate for cyber-awareness at all levels, including grassroots, to improve the trustworthiness of the digital ecosystem.

Policy Action 4.3: Bridge the cybersecurity skill gap by investing in cyber-skilling institutes and building National Cyber Academies through public-private partnerships.

Importance of digital technologies in addressing economic, environmental, and social challenges. It also highlights the need for a coherent and internationally interoperable digital legislation to ensure equal access while maintaining privacy and cybersecurity standards. The recommendations build on previous efforts and aim to strengthen digital infrastructure, accelerate adoption, empower enterprises, and promote trust in the digital ecosystem.

G20 New Delhi Leaders’ Declaration

Technological Transformation and Digital Public Infrastructure:

Technology can enable rapid transformations for bridging the existing digital divides and accelerate progress for inclusive and sustainable development. Digital public infrastructure (DPI), as an evolving concept and as a set of shared digital systems, built and leveraged by both the public and private sectors, based on secure and resilient infrastructure, and can be built on open standards and specifications, as well as opensource software can enable delivery of services at societal-scale. In our voluntary efforts to make digital public infrastructure interoperable, we recognize the importance of data free flow with trust and cross-border data flows while respecting applicable legal frameworks. We also reaffirm the role of Data for Development.

Building Digital Public Infrastructure: We recognize that safe, secure, trusted, accountable and inclusive digital public infrastructure, respectful of human rights, personal data, privacy and intellectual property rights can foster resilience, and enable service delivery and innovation. To this end, we: i. Welcome the G20 Framework for Systems of Digital Public Infrastructure, a voluntary and suggested framework for the development, deployment and governance of DPI. ii. Welcome India’s plan to build and maintain a Global Digital Public Infrastructure Repository (GDPIR), a virtual repository of DPI, voluntarily shared by G20 members and beyond. iii. Take note of the Indian Presidency’s proposal of the One Future Alliance (OFA), a voluntary initiative aimed to build capacity, and provide technical assistance and adequate funding support for implementing DPI in LMICs.

Building Safety, Security, Resilience and Trust in the Digital Economy: An enabling, inclusive, open, fair, non-discriminatory and secure digital economy is increasingly important for all countries and stakeholders while respecting applicable legal frameworks. We will share our approaches and good practices to build a safe, secure and resilient digital economy. To this extent, we:

i. Welcome the non-binding G20 High-level Principles to Support Businesses in Building Safety, Security, Resilience, and Trust in the Digital Economy.

ii. Welcome the G20 Toolkit on Cyber Education and Cyber Awareness of Children and Youth.

Crypto-assets: Policy and Regulation: We continue to closely monitor the risks of the fast-paced developments in the crypto asset ecosystem. We endorse the Financial Stability Board’s (FSB’s) high-level recommendations for the regulation, supervision and oversight of crypto-assets activities and markets and of global stable coin arrangements. We ask the FSB and SSBs to promote the effective and timely implementation of these recommendations in a consistent manner globally to avoid regulatory arbitrage. We welcome the shared FSB and SSBs workplan for crypto assets. We welcome the IMF-FSB Synthesis Paper, including a Roadmap, that will support a coordinated and comprehensive policy and regulatory framework taking into account the full range of risks and risks specific to the emerging market and developing economies (EMDEs) and ongoing global implementation of FATF standards to address money laundering and terrorism financing risks. Our Finance Ministers and Central Bank Governors will discuss taking forward the Roadmap at their meeting in October 2023. We also welcome the BIS Report on The Crypto Ecosystem: Key Elements and Risks.

Central Bank Digital Currency: We welcome discussions on the potential macro-financial implications arising from the introduction and adoption of Central Bank Digital Currencies (CBDCs), notably on cross-border payments as well as on the international monetary and financial system. We welcome the BIS Innovation Hub (BISIH) Report on Lessons Learnt on CBDCs and look forward to the IMF Report on Potential macro-financial implications of widespread adoption of CBDCs to advance the discussion on this issue.

Fostering Digital Ecosystems: We resolve to deploy all available digital tools and technologies and spare no effort in fostering safe and resilient digital ecosystems, and ensuring that every citizen on our planet is financially included. To support this, we:

i. Commit to promote responsible, sustainable and inclusive use of digital technology by farmers and an ecosystem of Agri-Tech start-ups and MSMEs.

ii. Welcome the establishment of the Global Initiative on Digital Health (GIDH) within a WHO-managed framework to build a comprehensive digital health ecosystem in compliance with respective data protection regulations.

iii. Will leverage digital technologies for the protection and promotion of culture and cultural heritage and adopt digital frameworks for the development of cultural and creative sectors and industries.

Harnessing Artificial Intelligence (AI) Responsibly for Good and for All: The rapid progress of AI promises prosperity and expansion of the global digital economy. It is our endeavour to leverage AI for the public good by solving challenges in a responsible, inclusive and human-centric manner, while protecting people’s rights and safety. To ensure responsible AI development, deployment and use, the protection of human rights, transparency and explainability, fairness, accountability, regulation, safety, appropriate human oversight, ethics, biases, privacy, and data protection must be addressed. To unlock the full potential of AI, equitably share its benefits and mitigate risks, we will work together to promote international cooperation and further discussions on international governance for AI. To this end, we:

i. Reaffirm our commitment to G20 AI Principles (2019) and endeavour to share information on approaches to using AI to support solutions in the digital economy.

ii. Will pursue a pro-innovation regulatory/governance approach that maximizes the benefits and takes into account the risks associated with the use of AI.

iii. Will promote responsible AI for achieving SDGs.