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Global Digital Economy and the Developing World Time:2017/10/19

By Academician Dato Ir. Lee Yee Cheong Malaysia Commissioner, UN Broadband Commission for Sustainable Development/Honorary Chair, Governing Board, UNESCO International Science Technology Innovation Centre for South-South Cooperation

Famous Last Words in Digital World

"I think there is a world market for maybe five computers."

Thomas Watson, Founder. IBM, 1943

"There is no reason anyone would want a computer in their home."

Ken Olsen, Founder, Digital Equipment Corporation, 1977

"I predict the Internet will in 1996 catastrophically collapse."

Robert Metcalfe, founder 3Com, 1995

"Apple is already dead."

Nathan Myhrvold, former Microsoft CTO, 1997

"Two years from now, spam will be solved."

Bill Gates, Founder, Microsoft, 2004

The Lasting Words in Digital World

Moore’s Law: processor speeds, or overall processing power for computers will double every two years, Gordon Moore Co-Founder, Intel 1995.

UN Broadband Commission “State of the Broadband 2015” Report

Global IT and Telecom spending will grow to around US$ 3.8 trillion for 2015 alone.

By the end of 2015, the total number of mobile cellular subscriptions will nearly rival the total global population (7.3 billion) . ITU forecasts 7.1 billion mobile cellular subscriptions (as opposed

to subscribers).

Mobile broadband is the fastest-growing ICT service in history, taking just five years to achieve one billion users

From UN Broadband Commission State of Broadband Report 2015

Many markets worldwide are now fully saturated with regards to mobile phone penetration – ITU estimates that there will be 121 countries with mobile cellular penetration in excess of 100% by end 2015.

Even Moore’s Law is slowing due to the heat that is unavoidably generated when more and more silicon circuitry is jammed into the same small area.

Top-of-the-line microprocessors currently have circuit features that are around 14 nanometres across, smaller than most viruses.

Technologies such as Network Function Virtualization (NFV), Software Defined Networking (SDN) and Heterogeous Network (HetNet) are being deployed by IT and Telecom operators to help create a hyper-connected society, alongside the development of 5G.

Global Digital Economy Facing the 4th Industrial Revolution

Klaus Schwab, Founder and Executive Chairman of the World Economic

Forum, Spoke in Davos January 2016 about the 4th Industrial Revolution:


The possibilities of billions of people connected by mobile devices, with

unprecedented processing power, storage capacity, and access to knowledge,

are unlimited.

These possibilities will be multiplied by emerging technology breakthroughs in fields such as artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing.


In fact, exponential growth of the global ICT and Digital Industry had given rise to terms like “Industry 4.0” (2012), “ Industrial Internet” (2013) and

“Network Manufacturing” (2014).

Now Schwab raised the hive to new level in Davos by calling it “ 4th Industrial Revolution.

1st Industrial Revolution 1784  Steam and Mechanical Power

2nd Industrial Revolution 1870  Electric Power and Mass Production

3rd Industrial Revolution  1969  Electronics and ICT

4th Industrial Revolution      ?    Cyber-Physical Systems

According to the 3-Year OECD Study “Data Driven Innovation: Big Data for Growth and Well Being” 2015, the current digital economy is driven by the widespread availability of Big Data and its associated technologies in capacity and cost of data storage and dramatic reduction of cost in applications.

tMcKinsey Global Institute May 2013

From OECD “Data Driven Innovation” Report

OECD DDI Report Definition of Data Value Cycle

Major Global Social Concern of 4th Industrial Revolution

Schwab regards inequality as the greatest societal concern associated with the Fourth Industrial Revolution. The largest beneficiaries of innovation tend to be the providers of intellectual and physical capital—innovators, shareholders, and investors which explains the rising gap in wealth.

OECD Data Driven Innovation (DDI) Report notes that data driven services are concentrated in USA where more than 50% of the top Internet sites are located. USA plays a central role in the global data ecosystem.

According to the UK Guardian Newspaper on US Wealth Inequality: In past three decades, the share of household wealth owned by the top 0.1% has increased from 7% to 22%. The share of wealth owned by the top 0.1% is almost the same as the bottom 90%

From OECD “Data Driven Innovation” Report

OECD DDI Report Acknowledges

DDI may favour concentration and greater information asymmetry;

Shifts in power: away from individuals to organisations; from traditional

businesses to data-driven businesses; and from governments to data-driven

businesses (the latter can gain more knowledge about citizens than


These shifts could exacerbate existing inequalities and lead to a new digital (data) divide that could undermine social cohesion and economic resilience if not addressed.

OECD Data Driven Innovation (DDI) Report highlights two clusters of challenges to be met by policy makers in the transition towards a data-driven economy

1. Governments should address the negative effects of “creative destruction” while stimulating investments in:

The infrastructure needed for DDI,

The public sector, health care, science and education,

organisational change and entrepreneurship in the private and public sector,

Continuous education training and skills development beyond science, technology, engineering and mathematics (STEM) fields

2. Governments should aim to understand and strike the right balance between the social benefits of “openness” and individuals’ and organisations’ legitimate concerns of such openness by encouraging:

The free flow of data across nations and organisations.

The responsible usage of personal data and the prevention of harm caused by privacy violations.

A culture of digital risk management across society, involving all stakeholders of the data ecosystem.

Data sharing and the appropriation of returns on investments (ROI) .

Coherent assessment of market concentration and competition barriers.

Improved measurement to help better assess the economic value of data assets, prevent base erosion and profit shifting (BEPS), and design better DDI policies.

OECD DDI Report is Positive that DDI will help to address Global Social and Global challenges:

Climate change and natural disasters,

Health and ageing populations,

Water security,

Food security,

Energy security, and

Mass urbanisation.

Public Administration, Research and Education, Healthcare and Cities as  Innovation Hubs are DDI low hanging fruits highlighted in the OECD DDI Report as Bridging both Growth and Wellbeing.

OECD “DDI” Report on E-Government

My Concerns on the Global Digital Economy

  1. Capitalistic Model of Economic Growth

As driven by US, economic growth is based on more and more consumption, fuelled by incessant advertisements in mass media. Smart phone giant Apple announces new models every few months making smart phones like costume jewellery.  Older phones are thrown away like junk. Even social media giants like Google and Twitter earn their billions by advertisements advocating consumption.

The unbridled consumption cannot be sustained by the limited resources of the Earth, especially if the developing world emulates the US consumption habits.

As Pope Francis twitted, “the throwaway culture of today calls for a new lifestyle.  The earth, our home, is beginning to look more and more like an immense pile of filth."

2. Wealth and Employment Creation

The Global Digital Economy is replacing human by things. The reduction of blue collar and white collar jobs in the US has had very adverse impact on the middle income strata in wealth and employment. The US is also grappling with the loss of manufacturing in traditional industries and the impact of robotics and Internet of Things (IOT) in high-tech manufacturing on growing unemployment.

If the above trends are repeated in the developing world with large population and high birth rates, the negative implications of massive youth unemployment in the South on the social and economic stability of the South and of the world will be immense.

3. Child Obesity

The US has been confronted by obesity due to its lifestyle. It may surprise most people that a developing country like Malaysia is having very serious “Child Obesity” problem. The incidence of diabetes and heart problems of the young is a healthcare time bomb for Malaysia.

I attribute the broadband high definition multimedia that bombards our children with advertisements on fast food 24/7 as a contributory factor, so also the addiction to computer games and the like, making them couch potatoes.

WHO regards child obesity as a global problem and has set up “Commission on Ending Childhood Obesity”.

One solution is health education in schools. Another may be regulation of advertisement in media by developing countries.

4. Mass and Social Media Spreading Unrest

The West attacked Iraq and unsettled Syria, causing the rise of ISIS or ISIL in Syria and Iraq. ISIL growth has been attributed to expert use of social media. Using global ICT connectivity, ISIS/ISIL has spread fundamentalist ideology throughout the world. Well educated youth from developed world in US, Europe and Australia and from Muslim countries like Malaysia and Indonesia are going to Syria to fight as jihadists and suicide bombers.

On the other hand, Western developed nations have been funding mass and social media to propagate “democratic values” like human right, gay right, individual liberty and freedom of speech and induce regime change by violent mass demonstrations. They are not adverse of using military might.

4. Mass and Social Media Spreading Unrest

Are the fruits of the Arab Spring, Afghanistan and Ukraine etc etc better for societal and human welfare in those countries and those regions?

Without political and social stability, there cannot be any sustainable development in the developing world.

Europe is reaping the whirlwind of mass refugee migration and terrorist attacks like those in Paris and Brussels.

A “Cyber-Military Curtain” is also descending across Eastern Europe.

Digital technologies help to exacerbate the above problems, can they be also  part of the solutions?

5. Mega-Cities

Capital cities are the engines of economic growth in the world. They provide better education, employment and other facilities lacking in smaller communities.

However, in the developing world, they are home to slums and hot beds of crime and other social ills. In making them more vibrant by IOT and other innovations of the digital economy, they will act as magnets for more rural youth and migrant workers, legal or otherwise.

Besides aggravating the social problems of the capital cities, they deplete the rural areas of farm labour. The resultant population explosion in mega-cities of the developing world will also aggravate the challenge of natural and human made disasters.

6. Mega-Cities

I would like to suggest that the facilities of the digital economy should also be applied to smaller cities and rural areas.

Then the attractions for education, employment and good living are available at home.

With good physical transportation like highway and high speed railway as proposed and practised by China in her “One Belt One Road” programme, the amenities of the capital cities are also within physical reach.

7. Human Capital Development in Developing Countries

As the OECD DDI Report points out, there is a shortage of big data professionals in the West due to tertiary education curricula in ICT being too focused on the nitty gritty of computer components and devices rather than on system approaches to big data and the digital economy.

There is also lack of attention given in schools to curriculum in STEM in general and algorithm writing and mathematical modelling in particular.

The situation in the developing world must be worse.  The South must pay urgent attention to develop human capital capacity in big data systems and in the digital economy overall, from pre-school upwards.

From OECD “Data Driven Innovation” Report


The UNESCO International Knowledge Centre for Engineering Science and Technology (IKCEST) Training Program on “Big Data Technology Application and Knowledge Service”

The objective of the one week program is aimed at helping developing countries cultivate talent and build capacity in the field of information technology and improving the data aggregating, processing, mining, analysing capabilities of professionals. The program covered i) Infrastructures for Big Data; ii) Deep Search; iii) Knowledge Graph Population via Deep Learning, iv). Large-scale Visual Data Analysis; v) CADAL: A Big Digital Library Project in China; vi) Bibliometric and Patent Analysis for Technology Foresight; vii) Medical Data Integration and Knowledge Service; and viii) Practice and Reflection on Construction of Agricultural Professional Knowledge Service System.

LAMAP France

the La main à la pâte Foundation plans on launching in 2016/2017 an ambitious project on computer science in primary schools and junior high schools in France. This project, entitled “Computer Science at School and Junior High School” will implement a full course on computer science for pupils aged 3 to 15 years.

The project is a multidisciplinary project, overlapping sciences, technology, mathematics, language proficiency, history, and more. The project is centred on a turn-key pedagogical guide addressing different themes: history of science and techniques, algorithms, languages, programming, machines, and so on, highlighting a pedagogy based on inquiry and project.

Target: 10,000 classes of 250,000 students by the end of 2018.

Disruptive Impact on Education

Top Billionaire Business Tycoons Who Are College Dropouts

Bill Gates                                    Microsoft

Larry Ellison                              Oracle

Mark Zuckerberg                      Facebook

Sheldon Adelson                         Las Vargas Sands

Michael Dell                                Dell

Steve Jobs                                    Apple

Ralph Lauren                              Luxury Brand

Elizabeth Holmes                        Theranos

Jack Dorsey                                 Twitter

Noah Glass                                   Twitter

Biz Stone                                      Twitter

Ted Turner                                    CNN

Michael Lazaridis                        Blackberry

Top Billionaire Business Tycoons Who Do Not Have PhD Degree

Jack Ma                                      Alibaba

Jeff Bezos                                    Amazon

Larry Page                                  Google

Sergey Brin                                 Google

Naryana Murthy                        Infosys

and 6 Partners                            Infosys

Latest School Dropout as Tycoon : Ben Pasternak

NEW YORK (FOX 5 NEWS) 22 April 2016- They say if you can make it New York you can make it anywhere, and now younger and younger people are taking that mantra for a test drive. Introducing a 16-year-old CEO. Ben Pasternak just moved here from his native Australia after receiving funding for his third app. Pasternak's latest venture is called Flogg. After just one week on the market, Flogg is getting traction.

EL PAIZ -Ben Pasternak, el genio adolescente de moda

Con solo 16 años se resiste a fichar por los grandes de Silicon Valley.

MAIL ONLINE UK- Meet the 16-year-old tech tycoon with his own apartment in Manhattan,  and a million-dollar app that just launched worldwide.

Die Welt: Ben Pasternak New Yorks jüngster Start-up-Millionär ist gerade mal 16.

Australia is an innovative developed nation, yet Ben had to move to New York to commercialise successfully!

Impact of Successful Dropouts on Formal Education in Digital Economy

The above lists of dropout tycoons in the digital economy will act as role models for our youth, their teachers and parents as their successes go viral in mass and social media.

Are the increasing number of highly successful dropouts a cause of the debate in US whether costly college education is necessary? Is it also an influence for UN Education Sustainable Development Goal No. 4 to focus on TVET (Technical Vocational Education and Training)

For the developing world, we need to seriously re-orientate our education in STEM subjects to inquiry based science education (IBSE) so that the creative and innovative instincts of children are nurtured and enhanced for the global digital economy. We also need to re-examine our investment in scientific research and development in our universities and its lack of return.

R&D Investment in Developing Countries

Developing countries aim to raise the gross domestic expenditure on R&D (GERD) as percentage of GDP.  Malaysia’s target is from 1.1% to 2.0% by 2020.

We should not use % terms with regards to R&D expenditure but in absolute terms in order to determine whether increasing it will significantly improves its STI ranking with respect to high income countries. For example in 2015,

Country          GDP(US$)           GERD(%)              Annual R&D (US $)

Malaysia          375 billion            1.1                          4.0 billion

USA              17500 billion            3.0                          535.0 billion

China           11000 billion             2.0                          220.0 billion

The most striking outcome of post graduate R&D in developing countries is brain drain to developed countries.

More Investment in IBSE and STEM from Pre-School Upwards in Developing Countries

I would strongly advocate instead of increase in GERD, developing countries should invest much more in STEM education the IBSE way for the continuous career development of science and maths teachers in schools, technical colleges and universities.

As demonstrated by the billionaire dropouts, their spectacularly successful digital innovations and apps are the fruits of their innovative and creative minds nurtured by IBSE savvy teachers and aided by freely available knowledge from the Internet.

I would suggest this is the most cost effective way to participate in the global digital economy value chain and gain slices of the growing economic pie.

My Solution for Reducing Global Unrest: Fusion of Civilizations STEM Education Curriculum

Wearing my hat as the Chair of the Global Council of the InterAcademy Partnership Science Education Program, I am advocating  a Fusion of Civilizations STEM Education Curriculum for the Developing World.

The Proposed Curriculum is inspired by LAMAP Thematic Program “Discoveries in Muslim Countries” based on the ground-breaking discoveries in the Golden Age of Islam and LAMAP “Discoveries in European Countries”

that followed. Through the Silk Road, the Islamic discoveries interacted with India and China in the East. The Tenets of the Islamic Golden Age were:

Seek and Share Knowledge freely throughout the World,

Be knowledgeable not only in science, but also in religion, poetry, literature, music and the arts.

My Solution for Reducing Global Unrest: Fusion of Civilizations STEM Education Curriculum

The Fusion of Civilisations Education Curriculum should reemphasize Ancient Universal Values:

Education and Respect for Teachers;

Hard Work;


Care of Extended Family.