Building sustainable digital economy, where are the watch areas?

In the last decade, Sub-Saharan Africa has experienced significant growth in digitalisation.

The International Monetary Fund (IMF) estimates that every second, one person in Sub-Saharan Africa gets connected to the internet.

The rapid pace of digitalisation is expected to lead to greater system reliance, efficiency, improved service delivery, open access to the global market, and increased transparency and accountability.

Moreover, it is anticipated to create a wealth of new jobs in the digital sector, offering a promising and hopeful future for employment and economic growth. Despite the enormous benefits of the digital revolution, there are complex challenges that require attention and resolution.

They border on digital infrastructure, systems quality, affordability, local content, and digital literacy and skills. Other concerns include cybersecurity, data privacy, climate change, and automation of traditional jobs.

Urgent action is needed to address these challenges to optimise the full benefits of the digital epoch. Now, I will delve into these emerging issues below.

First

The first concern relates to the high electricity usage by digital infrastructures. It has been observed that the backend infrastructure and systems that support digital services are increasingly consuming more electricity.

This situation is a significant concern, particularly for developing and emerging countries where many citizens still lack access to modern forms of energy. Electricity demand by data centres, artificial intelligence (AI), and cryptocurrency are the major drivers of electricity use in the technology space.

The International Energy Agency (IEA) predicts that by 2026, the electricity consumption from digital infrastructure will be equivalent to Japan’s annual electricity needs.

The fast pace of digitalisation in many regions of the world means that data centres will need more electricity to support the services rendered electronically. For instance, in 2022, data centres consumed about 460 terawatt-hour (TWh) of electricity globally. This demand is expected to double to a high of 1,000 TWh by 2026.

The ramifications of the increasing electricity demand from data centres could be dire for global electricity supply and climate change without technological improvements and enhanced regulations.

Second

The second concern relates to the complex interconnectedness between digitalisation and cybersecurity. The risk of cyberattacks on digital infrastructure is apparent and cannot be overlooked.

Cyberattacks on any critical infrastructure- electricity, water systems, hospitals, etc.- could jeopardise system reliability and result in loss of lives, incomes, and businesses without apt defence systems.

Fortunately, many sovereigns have cybersecurity policies and plans to guide and guard their cyberspace. However, the rapidly evolving landscape of cybersecurity makes it challenging to put a tap on cyber threats; hence, the need for a thorough governance architecture.

The pace of digitalisation is also having dire consequences on climate change, especially due to inefficient technologies being deployed across countries. Technology-driven emissions currently account for about four per cent of the global carbon footprint, similar to the airline industry.

Tools

Without a doubt, the introduction of efficient digital tools will have a positive impact on the global ecosystem and humanity. However, the digital space is still evolving, and many innovations are being developed that are not necessarily energy-efficient.

The swift adoption of AI by tech giants -Google, Amazon and Microsoft- appears to accelerate technology-based emissions. For instance, Google has indicated that its greenhouse emissions for 2023 surged by 48 per cent compared to the 2019 baseline due to the expansion of its data centres and the rollout of AI.

Not only will Google be unable to meet its net-zero emissions target by 2030, but it highlights the enormous challenge the world faces in reducing emissions. Microsoft also recently announced that its emissions increased by 30 per cent between 2020 to 2023 as the IT giant races to expand AI infrastructure and cloud computing systems.

Reversing the adverse effects of digitalisation on climate change would require improving innovations. It is clear that climate change-related externalities from data centres, AI, and cryptocurrency are complex and difficult to predict, posing a real challenge that cannot be ignored.

The tech giants’ planned massive investment in AI-driven power-intensive systems presents a monumental threat to humanity.

The lax global governance regime appears to exacerbate the situation. We cannot rest on our oars because digital infrastructure expansion will continue to consume more energy and harm humanity if left unchecked.