Supply: Data Connectivity and Capacity

Conclusions: Toward Sustainable National Data Ecosystems

As the universe heads inexorably into the data era, there are winners and losers. Consumers have access to "free" content and services in exchange for their personal information and time spent posting information. It has also been great for content platforms that get free user-generated content and even more valuable, their personal information that is sold to digital advertisers and data analytics firms. On the other hand, the emerging data economy is requiring adjustments for telecommunication carriers who are finding it difficult to fund investment needed for rising data use. The money they are making from data access has not offset falling revenue from traditional sources due to OTT. Governments are finding it increasingly challenging to deal with concerns such as net neutrality, privacy, computer crime, and false or incendiary information on the internet, as well as automated platform censorship.

The globalized nature of the internet is its beauty, but also its peril. Users can access content from Argentina to Zambia using free platforms to store data and run applications. SMEs in developing countries have benefited from free online tools and global platforms to increase their visibility. This "free lunch" has resulted in just two U.S. companies – Google and Facebook – dominating the platforms by which many of the world's internet users interact, earning the majority of online ad revenue, controlling vast amounts of personal data, and generating much of the traffic. They are also extending their operations horizontally and vertically, from online shopping to the provision of telecommunication services. This has made some governments anxious about the power a few U.S. companies wield over the internet:

Several recent attempts have been proposed by other countries such as Brazil, Germany, China, and Russia to better regulate their data sovereignty requirements against the domination of the US communications infrastructure and services. These technical proposals are national email, localised routing of internet traffic, undersea fiber optic cable and localised data centre.

The rise of dominant internet platforms affects the development of national data ecosystems. Developing country telecom operators not only pay for a physical link abroad, they also need to pay for data traffic to be exchanged for transmission to an overseas hyperscale data center. Local digital businesses struggle to develop new applications and services already dominated by a few free platforms that have achieved giant scale because of network effects. The development of local internet infrastructure facilities such as IXPs and data centers suffers, since so much content resides abroad.

The challenge for many lower-income countries is how to develop a relevant and sustainable data ecosystem in the current environment. Much of the data consumed around the world is entertainment oriented. Yet governments need development-oriented data to enhance social and economic growth.

A starting point is boosting linguistically and contextually relevant local content. This needs to be accompanied by investment in infrastructure such as fiber-optic backbones and data centers to bring data closer to users. Applications and services that can enhance health and education, such as telemedicine and online learning, need to be implemented rather than talked about. National infrastructure deployment and the take-up of local content and services can be encouraged by taking a page from mobile tariff structures. Access to locally hosted sites and services such as e-government can be stimulated with a low "on-net" internet access price, particularly since access to locally stored content is cheaper than content stored overseas. Furthermore, digital literacy has to be boosted so that taxi drivers can use GPS and not just play smartphone games, and SMEs need to move from streaming music in their shops to using e-commerce. Digital scientist skills are needed, so instead of being overwhelmed by data, developing countries can analyze it and put it to good use. And rather than digital advertisers using personal data to sell something, developing country digital scientists can use data to pinpoint the locations of those living in poverty to better target assistance.

In short, developing nations need to leverage data to drive development through locally relevant content and a thriving employment-generating digital ecosystem. This will require better understanding of data's potential, investment in core infrastructure such as data centers and IXPs, and development of data-driven development applications and services.