DIGITAL TECHNOLOGY AND ITS RELEVANCE TO POLITICAL AND SOCIAL ECONOMIC TRANSFORMATION. CASE STUDY OF EAST AFRICAN COMMUNITY REGION
Abstract
Digital revolution has taken place from the latter half of the 20th century, marking the beginning of the information age through political and social economic transformation. The ongoing digital transformation holds the promise of improving productivity performance by enabling innovation and reducing the costs of a range of business processes. But at the same time our economies have experienced a slowdown in productivity growth, sparking a lively debate about the potential for digital technologies to boost productivity. The digital transformation is having a wide-ranging impact on the business environment, creating both opportunities and challenges. Inter-related trends such as e-commerce, big data, machine learning and artificial intelligence (AI), and the Internet of Things (IoT) could lead to large productivity gains for the economy. However, disruption to existing business and social models, as well as established markets, will disrupt the lives of millions of citizens. The purpose of this paper was to assess the influence of digital technology and its relevance to political and social economic transformation in East African Community Region. The Cobb-Douglas production function is often used to analyse the supply-side performance and measurement of a country’s productive potential. This functional form, however, includes the assumption of a constant share of labor in output, which may be too restrictive for a converging country. For example, labor share in the East African countries gradually increased over the last decade. In this paper, we tested whether this fact renders the application of the Cobb-Douglas production function unreliable for the East Africa economy. The study applied a more general form of production function and allow labor share to develop according to the empirical data. For the period 2000–2019, the study found out that their significant difference between the digitization and adoption of ICT in East Africa Region. The results of the study showed that some firms, especially those who had embraced new technological methods of management had adopted new information technology and had established connection in all the EAC member-states. Although some countries like Burundi and Southern Sudan had not developed fully their technological infrastructure, we found out that some firms and individual businessmen within those countries had invested on appropriate information technology and were ready to use it. The results of this study showed that the application of the latest technology to promote intercountry trade had increased the volume of trade between member states
Keywords: Digital revolution, Political and social economic transformation, East African Community Region
CITATION: Rwigema, P. C. (2020). Digital technology and its relevance to political and social economic transformation. Case study of East African Community Region. The Strategic Journal of Business & Change Management, 7 (4), 1402 – 1436.
Full Text:
PDFReferences
Annan, Koffi, Gordon Conway, and Sam Dryden. 2016."African Farmers in the Digital Age: How Digital Solutions Can Enable Rural Development." Special Issue (Magazine Article),
Arntz, M., Gregory, T. and Zierahn, U. (2019). “Digitalization and the future of work: macroeconomic consequences”, in Klaus, F. (Ed.) Handbook of Labor, Human Resources and Population Economics, Zimmermann (Editor-in-Chief), pp. 19-24.
Ayodeji,A. F.,Michae, L. B. & Thomas, N. S. (2013). Is the One Laptop Per Child Enough? Viewpoints from Classroom Teachers in Rwanda. Journal of Information Technologies & International Development, Vol.9(3), PP.29–42.
Banga, Karishma, and Dirk Willem te Velde. (2018). "Digitalisation and the future of manufacturing in Africa." supporting economic transformation, March 2018.
Blix, Marten. "The Economy of digitalization: Opportunities and Challenges." Confederation of Swedish Enterprise, 2015.
Bridges, Sarah, Louise Fox, Alessio Gaggero, and Trudy Owens. (2013). “Labour Market Entry and Earnings: Evidence from Tanzanian Retrospective Data.” Background paper presented at the CSAE Conference on Economic Development in Africa, Oxford University, March.
Capital Markets Authority. (2017). Stakeholders’ Consultative Paper on Policy Framework for Implementation of a Regulatory Sandbox to Support Financial Technology (Fintech) Innovation in the Capital Markets in Kenya.
Christian Bührer, Christian D. Hagist. (2017). "The Effect of Digitalization on the Labor Market." In the Palgrave Handbook of Managing Continuous Business Transformation, 115-137.
Clive, James. 2016. "Cybersecurity, Threats, Challenges, Opportunities." ACS,
Committee, Trade Union Adversary. 2017. "Digitalization and the digital economy: Trade Unions Key Messages."
Dean, Williams, Wolfe Trenton, Marcus Wolfe, and Holger Patzelt. 2016. "Learning from Entrepreneurial Failure: Emotions, Cognitions and Actions."
Degryse, Christophe. Digitalisation of the economy and its impact on labour markets. Brussels: European Trade Union Institute,
Degryse, Christophe. 2018. "Digitalization of the economy and its impact on labor markets." European Trade Unions Institute, February 2016. Economist, The Interagency Unit. "The inclusive Internet Index 20018."
DIODE (2018). Digital Economy Policy in Developing Countries. Strategy Brief. Development Implications of Digital Economies. Manchester
EAC Facts and Figures 2014
Evangelista, R., Guerrieri, P. and Meliciani, V. (2014), “The economic impact of digital technologies in Europe”, Economics of Innovation and New Technology, Vol. 23 No. 8, pp. 802-824
Finger, G. (2007). Digital Convergence and Its Economic Implications, Development Bank of Southern Africa
Fossen, F.M. and Sorgner, A. (2018). “The effects of digitalization on employment and entrepreneurship”, conference proceeding paper, IZA – Institute of Labor Economics
Freddi, D. (2018). “The employment effects of digitalisation – a literature review”.
Fabunmi, B.A., Paris, M. & Fabunmi, M. (2006). Digitization of library resources: challenges and implications for policy and planning. International journal of African & African American studies, 5(2), 23-36.
Gigineishvili N, P Mauro and K Wang (2014). “How Solid Is Economic Growth in the East African Community?” IMF Working Paper No. 14/150.
Government of Uganda (2011), National Information Security Strategy, available at: www.sicurezzacibernetica. it/it/[Uganda]%20National%20Cyber%20Security%20 Strategy%20-%202011%20-%20EN.pdf (accessed 7 September 2020)
Ibrahim, Gamal, Witness Simbanegari, Anita Prakash, William Davis, Wilson Waseke, and Ashraf Patel Wasike 2019. "Industrial development in Africa: Opportunities, Challenges and Way Forward." Cooperation with Africa,
IMF (2019a). World Economic Outlook, Spring 2019. Washington, DC
Irniger, A., (2017). Difference between Digitization, Digitalization and Digital Transformation.
Katz, R. (2017). Social and Economic Impact of Digital Transformation on the Economy, International Telecommunication Union (ITU)
Katz, R., Koutroumpis, P., & Martin Callorda, F. (2014). Using a digitization index to measure the economic and social impact of digital agendas. info, 16(1), 32-44.
Koutroumpis, P. (2009). “The Economic Impact of Broadband on Growth: A Simultaneous Approach.” Telecommunications Policy 33 (9): 471–85. Available at http://www.sciencedirect.com/science/article/pii/ S0308596109000767
Kunming, H.W.I. (2019). “Digital industry plays a bigger role in economic growth | China daily”
Laura Schelenz, Kerstin Schopp. (2018). "Digitalization in Africa: Interdisciplinary Perspectives on Technology, Development, and Justice." International Journal of Digital Society (IJDS), Volume 9, Issue 4, December 2018.
Mahaldar, O., & Bhadra, K. (2015). ICT: A Magic Wand for Social Change in Rural India. In Handbook of research on cultural and economic impacts of the information society (pp. 501- 525). IGI Global.
Makulilo, Alex Boniface. 2012. "Privacy and Data protection in Africa: A state of the art." International Data Privacy Law,
Mariscal, Judith, Gloria Mayne, Urvashi Aneja, and Alina Sornger. 2019. Bridging the Gender Digital Gap. Economics E-journal,
Master Card. 2019. "Digital Commerce and Youth employment in Africa." White Paper, Master Card Foundation, 2019.
McKinsey Global Institute (2018). “Notes from the AI frontier – modelling the impact of AI on the world economy”, Discussion Paper
Meagher K (2016). The scramble for Africans: Demography, globalisation and Africa’s informal labour markets. The Journal of Development Studies, 52(4): 483–497.
Ministry of Finance and Economic Planning. (2014). Shaping Our Development” A Journey to Middle Income Status". Kigali - Rwanda: Government of Rwanda.
Ministry of Information Technology and Communications. (2017). ICT Sector Strategic Plan (2018-2024) “Towards digital enabled economy”
Moavenzadeh, John. 2015. The 4th Industrial Revolution: Reshaping the Future of Production. Amsterdam: World Economic Forum, 2015.
Ndung’u, N. (2017a). M-Pesa – a success story of digital financial inclusion. Practitioner’s Insight, Blavatnik School of Government, University of Oxford.
Ndung’u, N. (2017b). Digitization in Kenya: Revolutionizing Tax Design and Revenue Administration. In Gupta, S., Keen, M., Shah, A. and Verdier, G. (eds.), Digital
Njuguna, Ndung’u. 2018. Harnessing Africa’s digital potential: New tools for a new age.
Ntareme, H. and M. Issa. (2012). “Case Study: Academic Networking in Burundi.” Royal Institute of Technology, KTH
Organisation for Economic Co-operation and Development (OECD) (2017), “Going digital: the future of work for women”, Policy brief on the future of work.
Park, H. and Choi, S.O. (2019). “Digital innovation adoption and its economic impact focused on path analysis at national level”, Journal of Open Innovation: Technology, Market, and Complexity, Vol. 5 No. 3, p. 56
Parviainen, Päivi, Maarit Tihinen, Jukka Kääriäinen, and Susanna Teppola. 2017. "Tackling the digitalization challenge: how to benefit from digitalization in practice." (International Journal of In formation Syst ems and Project Management) 2017: 2-3.
Perci, Okay, and Gyasi Kojo. 2013. "Internet Penetration in Africa Compared to the Rest of the World." Scientific and Academic Publishing, 2013.
Prakash, Anita. .2019. "Industrialization and Growth in Digital Age: Disruptions and Opportunities for Employment Led Growth in Asia and Africa." G20 Japan 2019.
Spigel B (2017). The relational organization of entrepreneurial ecosystems. Entrepreneurship Theory and Practice, 41(1): 49–72.
Stiglitz, E.J., ‘East Asia’s lessons for Africa’, The Independent, 14 June 2013, http://www.independent.co.ug
Svensson, Mans, Calle Rosengren, and Fredrik Astrom. 2016. "Digitalization and privacy: A Systematic Literature Review." Lund University, 2016.
"Toward a Social Compact for Digital Privacy and Security." 2015.
Trendov, Niclos M, Samuel Varas, and Meng Zeng. "Digital Technologies in Agriculture and Rural Areas." FAO, 2019.
UNIDO & UNCTAD, (2011). Economic Development in Africa: Fostering industrial development in Africa in the new global environment, Report.
UN (2019). World Economic Situation and Prospects, UN, New York, NY
UNCTAD (2012b). Trade and Development Report 2012: Policies for Inclusive and Balanced Growth (United Nations publication, Sales No. E.12. II. D.6. New York and Geneva).
UNESCO (2019). UNESCO’s Internet Universality Indicators: A Framework for Assessing Internet Development. Paris
UNSC (2016). Report of the Partnership on Measuring Information and Communications Technology for Development: Information and Communications Technology Statistics. United Nations Statistical Commission. E/CN.3/2016/13. New York, NY.
UTU. "ICT Facts and Figures." 2017.
Wamda. (2013). How digitization spurs economic growth and job creation around the world. Retrieved September, 13, 2013,
World Trade Report 2010: Trade in natural resources
World Bank Group (2016). World Development Report 2016: digital Dividends, World Bank Publications.
Velde, Karishma Banga and Dirk Willem te. Digitalisation and the Future of Manufacturing in Africa. Supporting Economic transformation, 2018.
Vries, Peer. "The Industrial Revolution." 158-161. Oxford University Press, 2008.
Xu, Min, Jeanne McDavid, and Hi Kim. (2018.) "The Fourth industrial Revolution: Opportunities and Challenges." International Journal of Financial Research (Online Publication).
DOI: http://dx.doi.org/10.61426/sjbcm.v7i4.1870
Refbacks
- There are currently no refbacks.
This work is licensed under a Creative Commons Attribution 3.0 License.
PAST ISSUES:
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.