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The digital transformation of society and the economy requires state regulation | D + C

Society and economy are changing from the industrial age, which was shaped by analog technologies, to the age of knowledge and creativity, which is shaped by digital technologies and innovations. This transformation is taking place worldwide, but differs from region to region.

Interestingly, developing and emerging countries have the edge when it comes to some technical innovations. One reason for this is that analog processes in rich industrial countries are often so established that the necessary transformation steps only take place slowly. Examples are paying by mobile phone and the use of digital processes in administrations, so-called e-government. While in Germany payments are still mostly made in cash or by direct debit from a bank account, the M-Pesa mobile payment system has been established in Kenya since 2007. The situation is similar in countries like China or India, where payment by mobile phone is growing rapidly.

Digitized processes have many advantages for both service providers and customers. They are often a convenient, fast and inexpensive alternative to analog technology and allow easy access to many previously inaccessible services. However, there are also many dangers and uncertainties, because very few know exactly what the digital transformation means and which areas of life will be affected. Even experts cannot accurately predict the development.

Disadvantages are:

  • Risk of repression through state digital surveillance,
  • Loss of privacy due to the digital capture of all personal data and digital activities,
  • Loss of jobs due to automation processes,
  • Dependence on technologies that are susceptible to malfunction, abuse or criminal attack and
  • cut off by people who lack technical equipment and knowledge.

Many experts warn of these dangers and call on politics and society to be vigilant. The German Advisory Council on Global Change (WBGU), an expert committee set up by the German government, is also concerned with digitization. He warns that digital growth goes hand in hand with excessive resource consumption, accelerating environmental damage and global warming. The Council demands that the digital transformation should take place in harmony with the conservation of natural resources.

It is therefore essential that every individual is made aware of the risks of digitization. Policy makers need to address these risks and protect citizens from them. Digitization should benefit everyone, not just those who drive it. This means that the digital transformation must take place according to certain rules.

This requirement applies equally to rich and poor countries, with rich countries being obliged to support developing and emerging countries and to provide the necessary know-how. In order for this to succeed, people – whether citizens, politicians or entrepreneurs – must first understand what digitization means and how it can be used. This should be taught to children from elementary school.

Sabine Balk is a member of the editorial team of D + C Development and Cooperation / E + Z Development and Cooperation.
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