To the G20: It’s time for universal connectivity and to digitalize small enterprises

Just as electrification transformed the world in the 20th century, digitalization is shaping the 21st century. It is a global engine of sustainable economic growth, a lever to fight climate change and a powerful enabler of social inclusion.

Yet, digitization’s progress has been uneven, with an estimated 2.7 billion people still without access to connectivity, according to the International Telecommunication Union’s (ITU) latest State of Broadband report. Addressing this challenge requires broad and innovative efforts, including reaching micro-, small- and medium-sized enterprises (MSMEs), which account for around 90% of global enterprises, 50% of global GDP and two-thirds of all jobs.

MSMEs were often left behind in a rush to digitalize during the COVID-19 pandemic. However, greater MSME adoption of digital technology will yield economic benefits and increase demand for digital capacity.

The G20 (group of 20) Summit in Indonesia brought together 19 leading countries plus the European Union in a crucial gathering to meet various global challenges.

When the southeast Asian republic assumed the G20 presidency at the start of 2022, the government set out three priority issues for its tenure – global health architecture, sustainable energy transition and digital transformation.

For the past three years, I have co-chaired the Digitalization Taskforce within the group, known as the B20, representing the global business community. The international business community provided concrete recommendations and policy actions in a common voice to the G20 leaders at the B20 summit in Bali, Indonesia.

Ahead of the B20 and G20 summits, the taskforce – comprising over 100 enterprise representatives – created a policy paper with four main recommendations for G20 governments. Taskforce co-chair Hans-Paul Bürkner explained in a conversation with Ericsson’s Mikael Bäck that governments must:

Universal connectivity – where everyone has access to the internet – has been a top priority in previous years and remains a foundational recommendation to G20 members in 2022. The taskforce urges governments to prioritize private sector network expansion, including promoting fair competition and global standards and removing network deployment barriers.

With the largest economy in Southeast Asia, the Indonesian government has compiled a Digital Indonesia Roadmap for 2021-2024 as a strategic guide to drive the nation’s digital transformation. Within this context, making spectrum, which are the frequencies allocated for communication over the airwaves, available is particularly important to accelerate Indonesia’s digital transformation and boost economic growth; maximizing spectrum availability is a recommendation the taskforce has put to the G20 to remove deployment barriers.

The benefits of universal connectivity are well documented. Digital technology can potentially reduce global emissions by up to 15% by 2030. Research by Ericsson and Imperial College London shows that, on average, a 10% increase in mobile broadband adoption can increase economic growth (GDP) by up to 0.8%. This effect is significantly larger in low-income countries.

The Ericsson-sponsored Economist Intelligence Unit (EIU) report Connecting Learners: Narrowing the Educational Divide also found that for every 10% increase in school connectivity, the country’s GDP per capita could increase by 1.1%.

The ITU estimates a need for $428 billion in additional investment over 10 years to deliver high-quality broadband to the world’s unconnected population by 2030.

Ericsson is trying to close the school connectivity gap by supporting UNICEF and ITU’s Giga initiative, which aims to connect every school worldwide to the internet by 2030 and, thus, every young person to information, opportunity and choice. Through this initiative, more than 5,500 schools and 2 million children and youth have been connected to the internet over the last two years.

This year, Indonesia has brought a focus on MSMEs. The Broadband Commission’s Advocacy Target #6 emphasizes the need to get MSMEs connected and performing online to reduce the number of unconnected persons by 50% before 2025.

For MSMEs, connectivity is often a significant issue. A lack of cyber-security poses major risks and networks are too complex to manage, with in-house IT far beyond their budgets.

The uptake and use of digital technologies by MSMEs will determine the extent of overall internet economy growth, particularly in developing countries. For example, Google and International Finance Corporation, a member of the World Bank Group, estimate that by 2025, the internet economy could contribute 5.2% of Africa’s GDP.

Research from the International Trade Centre (ITC) finds that what makes a company competitive in good times also makes it more resilient during crises. Digitalization, underpinned by connectivity, can give MSMEs a competitive edge, especially in connecting to international markets.

One of the primary recommendations of the digital transformation task force is “ensuring a digital-ready mindset for individuals and MSMEs.”

The Indonesian government needs nine million new digital talents by 2030 to accelerate the digital economy. However, literacy and skills represent the single biggest self-reported barrier to internet access and one-third of people in Africa, Latin America, and East and South Asia report it as their top barrier. To bridge the digital skills gap, we need to address the high cost of devices and internet service, the availability of public services online and the lack of meaningful local content in many areas.

Ericsson Educate, a digital skills programme on key technologies, such as 5G networks, artificial intelligence and machine learning, automation and others, is an attempt to bridge this gap. Since 2020, the programme has been successfully deployed to students from universities across Asia, Africa and the Middle East. It can also be customized for different governments. The Smart Africa Digital Academy, for example, will adopt the programme to enhance the digital skill competencies of top management in ICT, policy and regulatory organizations in member countries.

Digitalization opens new possibilities to connect, engage and share with others, to earn, learn and socialize and find solutions to reduce our climate impacts.

Critically, there is a risk that the “digital divide” will grow wider if connectivity and technologies spread heterogeneously. For example, by 2027, we estimate that 90% of all mobile subscriptions in North America will be 5G, while in sub-Saharan Africa, 5G will represent only 10% of mobile subscriptions.

Networks need to be put in place at scale, fast and affordably. More than this, people need access. They need devices they can afford and the skills and education enabling them to use those devices and thrive as digitally connected, opportunity-enabled people.

This issue is one of the pressing topics of our time and it requires a united effort: industry, governments, institutions and civil society pulling together. Will you join us?