Why we need to ramp up tech diplomacy to harness opportunities of the digital economy

Digital technologies have not only transformed the global economy but have become integral to our social fabric over the past two decades, with the share of the digital economy already accounting for more than 15.5% of global gross domestic product (GDP).

Indeed, an estimated 70% of the new value created in the economy over the next decade will be based on digitally enabled platform business models. Emerging technologies and trends like artificial intelligence (AI), data governance, digital trade, digital rights and cyber threats are redefining international relations.

Yet, the expansion of the digital economy also unveils substantial challenges. Among other things, achieving universal broadband – which is crucial for digital inclusion – demands an investment of about $430 billion.

At the same time, the swift advancement of automation poses a threat of considerable workforce displacement, potentially impacting more than 20% of jobs in advanced economies and 10% in emerging countries by 2030.

Furthermore, the pace of these transformations is outstripping the current capacity of global cooperation mechanisms to adapt and respond effectively.

In response to these challenges, nations are weaving digital strategies into their core political and economic plans. More than that, they have started embracing tech diplomacy, acknowledging the need for a collaborative approach to effectively represent and advocate for their interests in the global digital economy.

Denmark's appointment of the first tech ambassador in 2017 marked a watershed moment, leading to more than 20 countries establishing similar positions. The United Nations’ appointment of a tech envoy in 2022 further emphasizes the growing importance of tech diplomacy in shaping a collaborative digital future.

Tech diplomacy, both at the bilateral and multilateral levels, goes beyond harnessing the power of technology to forge stronger, more resilient international ties, it also establishes a dialogue on standardized regulations, mutual frameworks, and joint projects that benefit all stakeholders involved.

It is also a key tool to promote countries’ and entities’ interests in the digital economy, foster innovation by joining resources, and adeptly navigate the complexities of the digital landscape.

Recognizing that in this new era, digital access is a right, not just a privilege, governments need to urgently prioritize digital cooperation, regionally and internationally.

The relevance of tech diplomacy will only grow in the upcoming years, and its internationalization and expansion will become imperative to enable the emergence of common synergies and sustainable growth.

Despite these advancements, tech diplomacy's reach remains uneven. Many lower-income countries lag behind, hindered by limited resources and expertise.

This gap risks marginalizing these nations from critical discussions on the digital economy, exacerbating the digital divide when less developed economies are already disproportionately affected by digital risks (Figure 1).

For instance, 64% of the population in least developed countries (LDCs) have no internet access, compared with 8% in high-income countries. This divide is not just about connectivity; it is about accessibility, and the ability and opportunity to participate in and accelerate the growth of the digital economy.

While digital challenges disproportionately affect their populations, low-income economies and the most marginalized stakeholders need more than ever to be heard on the global digital scene and to participate in global tech discussions.

Their perspectives and experiences are invaluable in addressing digital challenges, as they bring unique insights and real-world solutions that cater to their specific contexts and needs.

For tech diplomacy to be truly effective, it must be inclusive, bringing together diverse perspectives, from governments, private sector, civil society and academia.

It is important to ensure low- and middle-income economies are equally involved in this conversation. These varied perspectives are crucial in addressing the unique challenges and opportunities presented by the digital divide.

Tech diplomacy needs to be elevated to the highest political levels, integrating it alongside other critical global issues like climate change and economic development. It is in the interest of all to institutionalize tech diplomacy even at the leaders’ level.

Several initiatives are leading the way in fostering inclusive tech diplomacy. The Digital Cooperation Organization (DCO), established in 2020, focuses on accelerating the inclusive growth of the digital economy by fostering global multi-stakeholder cooperation on the digital economy.

The ASEAN Digital Framework Agreement (DEFA), launched in September 2023, aims to establish a cohesive and inclusive digital economy in the region. In November 2023, the UK hosted the first-ever global AI Safety Summit, laying the groundwork for international AI governance.

To further enhance global tech diplomacy, participation in digital cooperation initiatives must be broad and inclusive. This means engaging not just governments but also the private sector, academia, civil society, and marginalized or vulnerable groups like women and youth.

Moreover, tech diplomacy should not be confined to bilateral or multilateral negotiations. It should also encompass a broader range of activities, including capacity building, knowledge sharing, and the development of common standards and frameworks.

This approach will help ensure that all countries, regardless of their economic status, can participate meaningfully in the global digital economy.

As we stand at the crossroads of a rapidly evolving digital landscape, the need for comprehensive tech diplomacy has never been more urgent. By embracing an inclusive approach and expanding the scope of tech diplomacy, we can ensure that all nations have a voice in shaping the digital future.

This goes beyond economic growth; it's about ensuring equity, security, and sustainability in our digital era. The future of our global digital economy depends on our ability to collaborate, innovate, and navigate these challenges together.