Building a sustainable digital economy, where are the watch areas?
In the last decade, Sub-Saharan Africa, just like other emerging and developing regions, has experienced a significant leap in digitalisation, with attendant positive improvements in service delivery. The IMF estimates that every second, one person in Sub-Saharan Africa gets connected to the internet. This surge in digitalisation promises to transform African economies and the lives of the people of the continent.
The rapid pace and improvements in digitalisation are expected to lead to greater system reliance and efficiency, improved service delivery, open access to the global market, and increased transparency and accountability. Moreover, it is anticipated to create a wealth of new jobs in the digital sector, offering a promising and hopeful future for employment and economic growth.
Despite the enormous benefits of the digital revolution, there are complex challenges that require immediate attention and resolution. These challenges are multifaceted and have both immediate and long-term implications. They encompass digital infrastructure and systems quality, which still lag behind those in other regions. Affordability concerns, the need for solid and relevant local content, and inadequate digital literacy and skills persist in many African countries.
The creation and promotion of strong and appropriate local content is crucial for cultural representation in the digital space. Also, the high variability in digital connectivity across the continent presents a more significant challenge for social and economic integration and cohesion. Other concerns include cybersecurity threats, data privacy breaches, climate change, and impact of automation on traditional jobs.
Urgent action is needed to address these challenges and to optimise the full benefits of the digital epoch. Below, I delve into some emerging issues in the digital ecosystem. These issues, if left unaddressed, could potentially undermine the efforts of emerging and developing countries to digitalise their economies. This, in turn, will chip away the efficiency gains, transparency, and accountability. It’s clear that digital services have become integral in our daily lives, and we must strive not only to maintain them but also to continually enhance and improve them.
The first concern for digital penetration relates to the high electricity usage by digital infrastructures. It has been observed that the backend infrastructure and systems that support digital services are increasingly consuming more electricity, thereby crowding out electricity access to other critical sectors of society. The high electricity consumption is primarily linked to the rapid growth of the digital sector and the evolving technologies, which may not be energy-efficient. This situation is a significant concern, particularly for developing and emerging countries where many citizens still lack access to modern forms of energy.
Electricity demand by data centres, artificial intelligence (AI), and cryptocurrency are the major drivers of electricity use. The International Energy Agency (IEA), in its 2024 Electricity Report, predicts that by 2026, the electricity consumption from data centres, AI and cryptocurrency sources will be equivalent to Japan’s annual electricity needs. The fast pace of digitalisation in many regions of the world means that data centres will need more electricity to support the services rendered electronically.
For instance, in 2022, data centres consumed circa 460 terawatt-hour (TWh) of electricity globally. This demand is expected to double and could reach a high of 1,000 TWh by 2026. The ramifications of the increasing demand for electricity from data centres could be dire for global electricity supply, demand dynamics and climate change without improvements in technology and efficiency and enhanced regulations.
The other concern relates to the complex interconnectedness between digitalisation and cybersecurity. Indeed, the risk of cyberattacks on digital infrastructure is apparent and cannot be overlooked. Cyberattacks could have debilitating effects on countries, businesses, and individuals. In the event of a cyberattack, whether individual or state-sponsored, countries’ national security could be compromised. For instance, a cyberattack on any critical infrastructure- electricity, water systems, hospitals, etal- could jeopardise system reliability. It could also result in loss of lives, incomes and businesses. Given their lasting negative impacts, adequate defence systems must be implemented to forestall and obliterate them.
Fortunately, many sovereigns have recently put in place sufficient cybersecurity policies and plans to guide and guard cyberspace. If emerging and developing countries are to maximise gains from digitalisation, they will need to establish robust and functioning cybersecurity policies that are forward-looking, apt, sophisticated, and comprehensive. The rapidly evolving landscape of cybersecurity makes it challenging to put a tap on it. However, most of the challenges could be dealt with with a thorough governance architecture.
The pace of digitalisation is also having dire consequences on climate change, especially due to inefficient technologies being deployed across developing countries. Already, the world is suffering from increasing temperatures and erratic weather patterns, and indeed, there is an impending climate emergency that must draw the attention of all.
The existential threat of climate change to humanity is evident by record-breaking temperatures recorded since the beginning of 2024, surpassing 1.5°C pre-industrial levels. Also, in the first quarter of 2024, the world has experienced more floods and droughts than ever before. Technological advancements contribute circa 4% to global emissions, similar to the airline industry.
Without a doubt, the introduction of efficient digital tools will have a positive impact on the global ecosystem and humanity. However, the digital space is still evolving, and there are many innovations being developed that are not necessarily energy-efficient. The swift adoption of AI by tech giants -Google, Amazon and Microsoft- appears to accelerate technology-based emissions.
For instance, Google, in its latest annual environmental report, has indicated that its greenhouse emissions for 2023 surged by 48% compared to the 2019 baseline on the back of the expansion of its data centres and rollout of AI. Google’s emissions for 2023 reached 14.3 million tonnes of carbon, an increase of 13% over the 2022 levels. Not only will Google be unable to meet its net-zero emissions target by 2030, but it highlights the enormous challenge the world faces in reducing emissions.
Microsoft also recently announced that its emissions increased by 30% from 2020 to 2023 as the IT giant races to expand its backend infrastructure for AI and cloud computing systems. The company elucidated in their annual sustainability report that “Our challenges are in part unique to our position as a leading cloud supplier that is expanding its data centres.”
Also, the improper disposal of digital gadgets such as used phones and computers has become hazardous and threatens the sustainability of the global ecosystem. The high electricity use by digital data centres, AI, and cryptocurrency also negatively impacts climate change. Reversing the adverse effects of digitalisation on climate change would require improving innovations.
It is clear that climate change-related externalities from expansion in data centres, AI, and cryptocurrency are complex and difficult to predict, posing a real challenge that cannot be ignored. The tech giants’ planned massive investment in AI-driven power-intensive tools and systems presents a monumental threat to humanity. The lax global governance regime for managing digital systems appears to exacerbate the situation further.
We cannot rest on our oars because digital infrastructure expansion will continue to consume more energy and harm humanity if left unchecked. There is the urgent need for the introduction of technologies that are energy efficient. Digital innovation must aid work delivery and invariably help reduce emissions from technology use. We cannot but make conscious efforts to ensure humanity maintains a healthy and sustainable world for future generations.