From crisis to opportunity in China: stepping up digitalisation amid COVID-19

By Margit Molnar, Head of China Desk, OECD Economics Department and Kensuke Tanaka, Head of Asia Desk, OECD Development Centre


This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.


digitalisationDigitalisation as a way to lift growth potential

COVID-19, or the new Great Depression, is likely to have a lasting impact on economies and societies worldwide. Pandemics are shown to be followed by sustained periods with depressed investment opportunities, and/or heightened desires to save (Jorda et al., 2020), thereby reducing potential growth. To mitigate the impact of COVID-19, many governments, in addition to emergency measures to save lives and keep firms afloat, have also adopted investment stimuli. China is among those countries where the composition of stimulus is tilted towards public investment. While continuing to strike a delicate balance between keeping the pandemic under control and resuming activities, it is crucial to accelerate processes that will counter the fall in growth potential. China’s growth potential is set to decrease as the country catches up with more advanced economies and its rapid ageing also weighs on it. However, China can still reap the “reform dividend” with measures that also boost growth in the long term.

Digitalisation is a promising candidate to lift China’s long-term growth potential. Digital technologies are shown to boost productivity (Gal et al., 2019), which is the key to sustainable growth. At the current juncture, introducing digital technologies can also help jumpstart the economy as it creates new jobs and meets new demand (OECD, 2018). Indeed, in the first quarter of the year, it was the IT and software sector growing at over 13% and the financial sector at over 6% (partly thanks to surging online payments), that held up services growth. Continue reading

Least developed countries can become authors of their technological revolution

By Ratnakar Adhikari, Executive Director of the Enhanced Integrated Framework Executive Secretariat, World Trade Organization and Fabrice Lehmann, Associate, Enhanced Integrated Framework (EIF)

SIGI-Digital-Human-RightsThe fourth industrial revolution is charting a new and uncertain course for the world economy. Least developed countries must prepare for the opportunities and risks that it brings. It is characterised by the confluence of new technologies, fusing the digital, physical and biological spheres.

Rapid technological change is expected to have a profound impact on economic and social development in countries at all levels of income. Opportunities include harnessing the possibilities of digitalisation for sustainable development and social empowerment. Risks involve marginalisation and a widening chasm between poor nations and their emerging and industrialised partners.

Can countries in the early stages of development reap the benefits and become authors of their technological revolution? Continue reading

Digital economies at global ‘’margins’’

By Mark Graham, Professor of Internet Geography, Oxford Internet Institute, University of Oxford; Turing Fellow, The Alan Turing Institute; and Research Affiliate, School of Geography and the Environment, University of Oxford

digital-economies.jpgBillions of people at the world’s economic ‘’margins’’ are experiencing a moment of changing connectivity. In Manila, Manchester, Mogadishu, the banlieues of Marseille and everywhere in between, the world is becoming digital, digitised and digitally mediated at an astonishing pace. Most of the world’s wealthy have long been digitally connected, but the world’s poor and economically marginal have not been enrolled in digital networks until relatively recently. In only five years (2012–2017), over one billion people became new Internet users (ITU 2016). In 2017, Internet users became a majority of the world’s population. The networking of humanity is thus no longer confined to a few economically prosperous parts of the world. For the first time in history, we are creating a truly global and accessible communication network.

Continue reading