Digital Transformation Lessons from IMF/WB Spring Meetings

Context

Are digital technologies the magic bullet for sustainable development and good governance? Technology optimism and pessimism was on display at the annual International Monetary Fund and World Bank Spring Meetings last week in Washington. I was fortunate to attend numerous sessions, augmented by watching webcast replays.
My takeaways on sustainable development, good governance, and government digital transformation have been collected in 3 blog entries. This includes summary takeaways followed by takeaways from each session. Webcast replays are embedded.

Top 10 Digital Transformation Takeaways

Technology discussions at International Financial Institutions suffer from a broad range of understanding technology. Economists and development experts often have strong opinions about technology without having the requisite knowledge. And, technology experts often speak a different language. That’s why it helps to be from a company that builds technology for country development. It helps me to clarify what was meant and what is valid:

  1. Digital transformation is about transformation: the application of technologies to automate current practices is basically “paving the cow path”, where significant benefits are achieved only by reimagining current practices enabled by digital
  2. Information drought to tsunami: country development decision-making is hampered by the lack of timely and accurate economic, financial, and statistical data that could be partly solved by using non-traditional data
  3. Youth enablement: demographic shifts, including so many Africans under the age of 15, provides a promise of technology leapfrog for education, innovation and entrepreneurship with some early positive results, yet patterns do not seem to have emerged
  4. Digital divide directions: although there are many potential benefits for digital technology in emerging economies, there are dangers that the divide will increase, and there is evidence that it is doing so, particularly between urban and rural communities
  5. Digital identity silver bullet: encrypted smart technologies for digital identity promise to improve citizen services while reducing corruption (i.e. tax avoidance, social service fraud, ghost workers, election fraud) but has the risk of putting too much private information in the hands of the State
  6. Fourth Industrial Revolution changes everything: Industry 4.0 promises to enable technology innovation and jobs on one hand, economic disruption on the other as manufacturers increase automation and reduce labour forces
  7. Country and government transformation: the distinction between government uses of technology to improve decision-making or citizen services, and government encouragement of private sector and citizen digital use through regulations and public investments, also lacked clarity
  8. Solution categories needed: there was little attempt to classify technology solution and problem sets in ways that can assist decision-makers such as our analysis of systems of record, systems of engagement, systems of intelligence and systems of innovation or our guidance on blockchain use
  9. Prioritization framework needed: it’s unclear, based on the event, how governments and donors should prioritize and sequence digital technologies and methods to encourage digital innovation based on the country context, otherwise has the risk of poor public investments on shiny technology objects
  10. Personal data monetized for development: even the very poor have behaviour and health information that is monetized by large companies, it’s time that this shifts to benefit people directly

Illuminating Economic Growth – Tapping Big Data to Improve


This session explored the use of big data analytics of satellite images to better track country growth. Big data, in this case, leveraged NASA night light satellite images based on the premise that more night lights indicate more economic activity.

Some takeaways:

  • Big data can overcome the lack of accurate and timely statistical information about emerging economies
  • It is not yet feasible to use big data analytics for sources of information like day images that show more detailed economic activities because of processing power and data storage cost limitations
  • It’s becoming clearer that governments can benefit from data outside traditional back-office system and economic statistics to improve decision-making

A Machine Learning Approach to Forecasting GDP


This session described a unique use of machine learning using the SimRank and Elastic Net  algorithms to forecast GDP based on border flow information, also covered in a publication: Algorithm Crystal Ball. Some takeaways:

  • Lack of timely economic data means that governments unable to nowcast effectively – by the time economic data is confirmed, it’s too late for action
  • Machine learning is typically used when there is too much data for human pattern recognition, this is an example where machine learning was used where data is too sparse
  • The limitations of machine learning was discussed including some of the ethical issues

Mission Billion: Transforming Countries and Empowering People through Digital Identity


This session combined a panel discussion about use of digital identity followed by pitches of digital identity solutions focused on the World Bank Group Identification for Development (ID4D) Initiative. Some takeaways:

  • World Bank has earmarked $1B for digital identity projects in developing countries suggesting that this is a necessary foundation for digital transformation
  • The positive impact of digital identity technology requires privacy built in and trust in government, requiring risk mitigation strategies – however, the risk of putting so much personal information in the hands of the State was not discussed
  • Lack of identification and lack of connectivity hurts the very poor, especially refugees
  • Much of the discussion centred around the FinTech KYC (Know Your Customer) concept applied to the public space
  • Benefits of the digital technology includes financial inclusion and anti-corruption assuming that there is interoperability among systems
  • Data is a personal natural resource that has benefited large internet firms, it’s time that this is monetized by people

All Africa Digital Economy Moonshot


The notion of a moonshot was popularized at Google as “as the intersection of a big problem, a radical solution, and breakthrough technology.” This session focused on using digital technology to solve poverty, equity, and economic growth issues in Africa. Some takeaways:

  • This is, by definition, more of a Big Hairy Audacious Goal (BHAG) because the solution doesn’t appear to be radical and existing technology is at the heart
  • The promise of digital to enable youth education, innovation, and employment in wake of the African population explosion was discussed in the context of a big problem in search of many solutions, with no framework of how to prioritize
  • The session looked more like a technology corporate event than something from a donor, more about publicizing the World Bank than providing effective information

GovTech: Putting People First with Simple, Efficient and Transparent


This session included two panel discussions about the use of government technologies. Some takeaways:

  • There didn’t seem to be any consensus about what GovTech is, and whether it differs from traditional technologies used in government
  • The narrative that governments are laggard adopters of technology is getting stale, especially given all the global smart government and open data investments
  • There was no consensus about use of public cloud technologies with SAP claiming that it’s more secure than on-premises and the Government of Austria stating that they do not use the public cloud for security and regulatory reasons
  • Should governments use custom developed or off-the-shelf applications? It’s a fairly simple calculus based on uniqueness of requirement and solution flexibility, but this seemed to be missing in the panel discussions.

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