AI Readiness of the US vs China

What is the status of AI rivalry between the United States and China?

In recent years, the emergence of China as the world’s second digital superpower has led to talk of a “digital cold war”, with global competition between the US and China in fields such as telecommunications infrastructure, e-commerce and digital governance[i] and with China judged to be neck-and-neck with – if not ahead of – the US innovation frontier in a number of digital technologies including 5G, 6G, e-commerce, fintech and drones[ii].

The same terminology has also been used in the field of artificial intelligence to talk of an “AI cold war” between the two countries[iii].  Some, however, have questioned the reality of this particular cold war being fought by two global AI superpowers[iv].  In this post, therefore, I look at what the annual Government AI Readiness Index has to say about the idea that the US and China are two matched AI heavyweights.

The most recent Index, for 2023, shows limited sense of China being on an equal footing with the US in artificial intelligence[v], as summarised in the table below:

2023 Index	Overall Global Ranking	Global Ranking in AI-Related Government	Global Ranking in AI-Related Technology Sector	Global Ranking in AI-Related Data and Infrastructure
US	1st	4th	1st	2nd
China	16th	22nd	10th	29th

Overall, the US ranks first in the world; a position it has held since the current form of the Government AI Readiness Index was created in 2020.  China meanwhile is sandwiched between Estonia and Austria in 16^th place.

The Index consists of the three pillars of AI readiness: government, technology sector, and data & infrastructure.  Under each of these are three or four dimensions, such as digital capacity of government, or innovation capacity of the technology sector.  And each dimension is created from a handful of indicators, such as UN e-government online services index score for digital capacity of government, or AI research papers score from Scimago for innovation capacity of the technology sector (though the measures of these indicators are only publicly available for 2023).  Digging down into the data, one can tell a little more about China’s AI readiness.

While China makes its way into the world top 10 in terms of its AI technology sector, this rests on the maturity of the sector (ranked 3^rd in the world behind the US and UK) while it is outside the top 30 in terms of human capital.  Other individual areas of weakness where it lies outside the top 30 include data availability (ranking poorly in terms of open data and statistical capacity), data representativeness (due to relative absence of low-cost access to internet-enabled devices), governance and ethics (ranking relatively poorly on regulatory quality and very poorly on accountability), and adaptability (such as effectiveness and responsiveness of government).  The US was ahead in all categories: most in tech sector maturity; least in digital capacity of government.

One can also investigate change over time, with the position in 2020 shown in the table below:

2020 Index	Overall Global Ranking	Global Ranking in AI-Related Government	Global Ranking in AI-Related Technology Sector	Global Ranking in AI-Related Data and Infrastructure
US	1st	2nd	1st	7th
China	19th	14th	11th	52nd

Overall, China has progressed from 19^th in the global ranking in 2020 to 16^th position in 2023.  Because of changes to the constituent components in a few measures, analysing change over time is far from an exact science but, between 2020 and 2023, China made most progress in three areas: data representativeness, innovation capacity and infrastructure.  But it fell back particularly in governance and ethics and to a smaller degree in human capital.  Relative to the US, China gained ground most in data & infrastructure across all dimensions: infrastructure, data availability and data representativeness.  And it slipped back most in governance and ethics, and next most in terms of technology sector maturity[vi].

All of this must be taken with a pinch of salt.  Indexes have to be comprised of the measures that are available rather than of those one would want: of the 39 indicators making up the index, only three are explicitly about AI.  In these in 2023 – AI strategy, number of AI unicorns, and AI research papers – China is respectively equal to the US[vii], 2^nd globally to the US 1^st position, and 1^st globally compared to the US in 3^rd place[viii].  China has also been investing very heavily in AI both financially and institutionally, spurred on by initiatives such as the 2017 New Generation Artificial Intelligence Development Plan and the prominence of AI in the 2021 Fourteenth Five-Year Development Plan[ix].

Nor do any of the Government AI Readiness Index rankings or measures deny the frictions between the US and China in this domain where, “in the growing geopolitical tensions between the United States and China, AI has emerged as the new frontier of their rivalry”[x].  However, the Index authors make the argument that, overall, the Index’s constituent measures represent the broad foundations required for AI success, and their work thus provides at least some support for the notion that this has not yet become a rivalry between AI superpower equals.

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[i] Heeks, R., Ospina, A.V., Foster, C., Gao, P., Han, X., Jepson, N., Schindler, S. & Zhou, Q. (2024) China’s digital expansion in the Global South: Systematic literature review and future research agenda, The Information Society, 40(2), 69-95

[ii] The Economist (2024) How Xi Jinping plans to overtake America, The Economist, 31 Mar

[iii] Thompson, N. & Bremmer, I, (2018) The AI cold war that threatens us all, Wired, 23 Oct

[iv] Bryson, J. J., & Malikova, H. (2021). Is there an AI cold war?. Global Perspectives, 2(1), 24803

[v] Oxford Insights (2024) Government AI Readiness Index 2023, Oxford Insights, Oxford, UK

[vi] As another indicator of this, in 2022 there were 542 newly-funded AI companies in the US compared to 160 in China: HAI (2023) Artificial Intelligence Index Report 2023, Human-Artificial Intelligence, Stanford University, Stanford, CA

[vii] Though equal also with several other countries as the only scores available in the category were 0, 50 or 100

[viii] India ranked 2^nd globally

[ix] Though with a history of activity on AI stretching back to the 1980s: Zhou, L. (2023) A historical overview of artificial intelligence in China, Science Insights, 42(6), 969-973.

[x] Zhang, H. & Khanal, S. (2024) To win the Great AI Race, China turns to Southeast Asia, Asia Policy, 19(1), 21-34

What AI Role for the Global South?

What role will countries of the global South play in the artificial intelligence (AI) economy?

I recently participated in a fascinating discussion on AI run by Technology Salon Accra, and the points reminded me of a model I developed a few years’ back: the ladder of ICT4D roles which can readily be modified to apply to AI (see Figure 1).

Figure 1  Ladder of AI-Related Roles

The Ladder of AI Roles

AI Non-User:

In these roles, global South individuals are not direct users of AI:

• Delinked: there is no obvious use or impact of AI for the individual.
• Indirect: there is no direct connection to AI but it does have some impact.  An example would be use of AI by lead firms in global value chains that impact working conditions of those in the global South at the upstream end of the value chain.  Another example would be an individual in the global South creating data that is harvested as an input to AI models.

AI Consumer:

In these roles, individuals in the global South make direct use of either AI or the outputs it produces:

• Intermediated consumer: the individual benefits from the outputs of AI systems but they do not directly use AI; instead someone else – an intermediary (see below) – does that on their behalf.  An example would be a farmer benefitting from use of AI by an agriculture extension officer e.g. to diagnose or predict crop disease.
• Passive consumer: a role in which there is direct use of AI but just to receive “broadcast” information; for example, someone using an AI-assisted search engine.
• Active user: digitally-enabled interaction with AI; for example, by a prompt engineer.

AI Producer:

In these roles, individuals in the global South make direct use of AI to create something:

• Creator: creation of enduring digital content.  This is a “consumer-plus” role in which publicly-available models are fed with specific local datasets in order to produce new knowledge, but without amending the model.
• Enabler: provision of goods or services that assist others in making use of AI.  Examples include the intermediaries noted above, AI data labellers and other model trainers, AI skills trainers, local hosts of AI data and models, those who facilitate use of AI in organisations, etc.
• Producer: creation of customised AI goods and services.  Examples include individuals who use existing code or models to create a new model for a niche market.
• Innovator: development of new AI.  Overlapping into the previous category, this involves AI R&D, ranging up to the creation of new foundation models.

National AI Roles

The AI roles above can be scaled up to national level and, in the Salon, four roles were the main focus for discussion; roles that could be seen as archetypes that global South countries may fill:

• Data Mine: an indirect role to feed local data into large language and similar models.  While potentially beneficial in helping address the biases and other problems arising in those models due to their lack of global South data, this is unlikely to produce value for global South countries.  Rather the value would be captured by the – typically Western or Chinese – owners of the model.
• Consumer: simple use of existing e.g. generative AI can help to a certain extent to substitute for expertise that is often in short supply in the global South.  But the generality, lags, biases, hallucinations, lack of transparency, etc of these models severely limits the potential value of this role.
• Consumer-Plus: using existing models but solely with local datasets will overcome a number of the shortcomings of the consumer approach.  But resource requirements are greater, dataset quality may be a challenge, and value may be somewhat constrained.
• Local Niche Producer: this covers, for example, building small language models in specific sectors – health, education, legal were all examples offered at the Salon.  But the focus is always within-country; hence bounding the value generation.

From what was discussed, it appeared that local niche producer was the aspiration, or maybe one should say the highest value-adding role that many global South countries could aspire to.  But the question remains whether countries could look beyond their own borders: for example to develop niche AI products that could be exported regionally or globally.  Or even to take on global innovator roles given that the resource requirements for AI development are coming down.

In many ways, these are exactly the same strategic decisions that global South countries faced 20-plus years ago in relation to their software industries.  One interesting line of enquiry will be to look back at the lessons learned, and see how they apply to the nascent AI industries of the South.

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An Adapted Digital-Transformation-for-Development Organisational Strategy Framework

What issues should shape organisational digital-transformation-for-development (DX4D) strategy?

One way to answer this is through adaptation of one of the most widely-cited guides to digital transformation strategy, the Digital Transformation Framework[i].  The Framework provides a series of strategic questions that managers “have to address when embarking on digital transformation”, divided into four areas: use of technologies, change in value creation, structural changes, and finance.  They do not per se constitute a strategy, and nor should they be seen as exhaustive but they provide a frame for digital transformation strategy.

These questions derive from experiences of German private sector media companies, and so have been adapted below to make them more relevant to the context of development organisations.  We start with an adapted definition of strategy itself:

A digital transformation strategy signposts the way toward digital transformation and guides managers through the transformation process resulting from the integration and use of digital technologies. A digital transformation strategy impacts an organisation more comprehensively than an IT strategy and addresses potential effects on interactions across organisational borders with clients, collaborators and suppliers

DX4D Organisational Strategy Framework

1. Use of Technologies

Involves assessment of the role of ICTs and of the IT/ICT department in the organisation.

Question	Strategic Options	Description
1a. How significant is your organisation’s ICT to achieving strategic goals?	Enabler	ICT is an enabler of strategic goals
	Supporter	ICT is seen as a support function to reach strategic goals
1b. How ambitious is your organisation’s approach to new digital technologies?	Innovator	The organisation is at the forefront of innovating new technologies
	Early adopter	The organisation actively looks for opportunities to implement new technologies
	Follower	The organisation relies on well-established solutions

2. Changes in Value Creation

Involves assessment of the way in which digital technologies alter the organisation’s core business model[ii].

Question	Strategic Options	Description
2a. How is digital tech used in external client engagement and delivery?	Enhanced	External-facing systems are fully digitalised
	Extended	External-facing systems’ data structures and work processes are redesigned and optimised through use of digital
	Redefined	External-facing systems are creating new sources of value for clients through use of digital
2b. How is digital tech used in the organisation’s internal systems?	Optimised	Internal-facing systems are fully digitalised
	Integrated	Internal-facing systems are fully digitally-integrated
	Leveraged	New sources of value are leveraged from the data available within integrated organisational systems

3. Structural Changes

Involves assessment of the implications of transformation of organisational structures.

Question	Strategic Options	Description
3a. Who is in charge of digital transformation?	Organisational CEO	Overall Chief Executive Officer
	Organisational CDO	Overall Chief Digital Officer
	Organisational CIO/CITO	Overall Chief Information/IT Officer
	Departmental head	Head of individual department or function within the organisation
3b. Do you plan to integrate new operations/business models into existing structures or create a new entity?	Integrated	Digital operations for new business models will be fully-integrated into the organisation’s current structures
	Separated	Digital operations for new business models will be implemented separate from the existing core organisation
3c. What type of operational changes do you expect?	Services and products	New organisational services and (if relevant) products
	Business processes	New / improved business processes
	Skills	New skills because of digital and other changes
3d. How will any new competencies be acquired?	Internally	Relying on existing resources
	Partnership	Fostered via links with external partners
	External sourcing	Sourcing additional competencies from outside

4. Finance

Involves assessment of the pressures and financial resources that digital transformation will entail.

Question	Strategic Options	Description
4a. How strong are financial and other pressures for change?	Low	Core activities are subject to few external pressures for change
	Medium	Core activities are sustainable but subject to external pressures for change
	High	Current core activities are not sustainable due to external pressures for change
4b. How will your organisation finance digital transformation?	Internal	From existing internal funds
	External	Additional external funding will be required

As noted, this is not an exhaustive list and revision suggestions are welcome, but this can be at least a relevant starting point for organisational DX4D strategy.

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Image source: Digital Transformation Vectors by Vecteezy

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[i] Hess, T., Matt, C., Benlian, A., & Wiesböck, F. (2016). Options for formulating a digital transformation strategy. MIS Quarterly Executive, 15(2), republished as Hess, T., Matt, C., Benlian, A., & Wiesböck, F. (2020). Options for formulating a digital transformation strategy in: Strategic Information Management, R.D. Galliers, D.E. Leidner & B. Simeonova (eds), Routledge, New York, NY, 151-173.

[ii] Adapted from ideas in: Collins, K. (2018) Strategy, leadership and team building. In: Transformational Leadership and Not for Profits and Social Enterprises. Wiltshire, K., Malhotra, A., Axelsen, M. (eds.) Routledge, London, 239-263.

China’s digital expansion in the Global South: Systematic literature review and future research agenda

What are the implications for the global South of China’s emergence as a digital superpower?

A recently-published literature review from myself and colleagues at the University of Manchester identifies seven key issues that have so far emerged:

• Chronology: a steady progression of Chinese investment in the global South up the digital stack (see Figure 1) since the 1990s.
• Synergies and Tensions: an external image of “Team China” with strong state financial and political support for overseas growth of Chinese tech firms but, underneath, some strains between state and firms, and competition between the firms themselves.
• State Strategy that espouses mutual “win-win” between China and global South countries in public, but which has been single-minded in delivering benefits for China from its external digital strategy.  Perhaps not so different from the approach of some Western nations.
• Design and Implementation: just a few nuggets suggesting Chinese digital developers may undertake “South-South” knowledge transfer e.g. from experiences in Chinese rural markets, but also that practice may differ quite a lot from the Principles for Digital Development.
• Impact: a delivery of economic and political benefits for China; a likely delivery of economic and political benefits for recipient countries in the South but with few well-researched examples; and a whole set of “concerns”.  Talked up by Sinophobic researchers and talked down by Sinophilic researchers, the concerns include data security and sovereignty; control over digital infrastructure; dependency and vulnerability to Chinese state leverage; digitally-enabled inequalities both between and within countries; and environmental impact.
• “Digital Authoritarianism”: rhetoric in US-origin literature about China exporting digital authoritarianism seems to run well ahead of evidence, to ignore the many Western nations exporting surveillance systems to the global South, and to ignore that demand-pull from the global South dominates supply-push.  But one should not swing too far the other way: China is now the South’s primary surveillance supplier, and the relationship between Chinese firms and Chinese state is not an exact mirror of Western equivalents.
• Global Digital Governance: a divergence of worldviews between the West and China on internet governance, digital standards, and data governance, with each side actively recruiting global South countries to their cause.

Figure 1: The Chinese technology stack

Although this research has been helpful, the rather small corpus of work so far published leaves not just a general knowledge gap around China’s digital expansion but also a specific six-part future research agenda:

1. More Southern Voices: more Southern-based researchers, more South-focused empirics, and more evidence from Southern policy-makers, implementers, local tech firms, consumers, etc.
2. Moving Up the Tech Stack: given the main research focus to date has been on telecom infrastructure there now needs to be more investigation of application platforms and services including e-commerce, smart cities, artificial intelligence, ICT4D projects, etc.
3. Beyond “Team China”: moving beyond specu­lation to understand the actual coherence, collabora­tion, competition, and conflict between different Chinese state agencies, between Chinese state agencies and tech firms, between Chinese tech firms, and between Chinese ICT and non-ICT businesses.
4. Between Sinophobia and Sinophilia: steering between the stereotypically-extreme views of some US and Chinese literature, and simultaneously steering between Sino-exceptionalism (treating China as a unique case) and Sino-identicaism (seeing China as just replicating patterns of Western (US particularly) digital imperialism).
5. Local Agency: pushing past the neocolonialism of much current literature that focuses on Chinese and Western actors and sees those in global South as mere pawns in a new Great Game; to ask – for example – what room for manoeuvre global South actors have in procurement, in digital policy and in international forums; and to ask what digital alignment strategies they can best adopt.
6. Local Development Impact: assessing the true cost-benefit of Chinese telecom infrastructure, data centres, platforms, etc., and the macro-level impact on local polities, debt, labour markets, etc.

Content in this post summarises the paper, “China’s digital expansion in the Global South: Systematic literature review and future research agenda”, published in the journal, The Information Society.

Get the full picture by reading the paper at: https://www.tandfonline.com/doi/full/10.1080/01972243.2024.2315875

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Pragmatism and Development Studies

What role can pragmatism play in development studies research?

Pragmatism is a philosophy that emerged in the late 19^th century in the aftermath of, and as a response to, the destructiveness of the US Civil War.  It has subsequently fractured into a number of different shards but at root it “emphasizes practical consequences and real-world outcomes as the criteria for evaluating the truth or value of beliefs, theories, or actions”[i].

At present, it plays little overt role in development studies research, at least to judge from recent literature searches (using “pragmatism” and “pragmatist” as keywords):

• A title search in eight of the top development studies journals produced six papers discussing “what works” in policy or development approaches, and contrasting this with more dogmatic or ideological approaches.  While their worldview might have been consistent with philosophical pragmatism, these papers made no reference to it or its literature.
• A full-text search of World Development, Development and Change, and the Journal of Development Studies likewise threw up many papers but again referencing the everyday pragmatism of development actors or approaches but not the philosophy of pragmatism.
• A general literature search adding the keyword “development studies” produced hundreds of hits.  The vast majority of items reviewed were unrelated to international development or used the term pragmatism in the lay sense of a practical approach to politics, economics, healthcare, education, etc.  There were just three examples of explicit engagement between development studies and philosophical pragmatism[ii].

What these searches do highlight is the relevance of pragmatism to development studies because of the general orientation of the discipline towards practice.  The specific value of using pragmatism is that it provides a foundational rationale for the following in development studies research:

• Prioritising the practical outcomes of research so that the “development” in development studies does not get lost
• Being sensitive to the specificities of context, and steering away from deterministic and universalistic grand theorising
• Orienting towards participative methods that value and respect the knowledge and experience of local stakeholders
• Undertaking an iterative dialogue and learning process between theory and practice
• Flexibility in use of theory and methodologies and methods

Of course, one could just do all these things in one’s research, but pragmatism provides a coherent basis for them.

Pragmatism has, though, been criticised[iii].  That sensitivity to context means its findings may not readily be transferable between contexts, severely limiting generalisability of research.  Pragmatism has an agenticism that can mean it fails to recognise the deeper structures of power that need to be transformed if inequality, marginalisation and oppression are to be addressed.  And pragmatism tends towards an ethical relativism: its focus on “what works” provides no inherent judgement around “issues of whose problems are attended to, of who wins and who loses from practice”.

Given these three are all points that are addressed by critical realism, we are currently working to understand how pragmatism and critical realism might usefully be combined to inform development studies research.

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[i] ChatGPT (2023) What is pragmatism? Dec 15. https://chat.openai.com/

[ii] The three examples are:

– An excellent overview of the potential role of pragmatism in development studies: Farahani, A. F., & Esfahani, A. H. (2020). Exploring possibilities for a pragmatic orientation in development studies. In The Power of Pragmatism, J. Wills & R. Lake (eds) (pp. 244-264). Manchester University Press.

– A paper focusing on organisational research but which uses international and community development NGOs as its sample: Kelly, L. M., & Cordeiro, M. (2020). Three principles of pragmatism for research on organizational processes. Methodological Innovations, 13(2).

– A series of chapters and papers emerging from a research project on citizenship practices in East Africa, starting with: Holma, K., & Kontinen, T. (2012). Democratic knowledge production as a contribution to objectivity in the evaluation of development NGOs. Forum for Development Studies, 39(1), 83-103 and particularly in Holma, K. & Kontinen, T. (eds) (2020) Practices of Citizenship in East Africa: Perspectives from Philosophical Pragmatism, Taylor & Francis.

[iii] Heeks, R., Ospina, A. V., & Wall, P. J. (2019). Combining pragmatism and critical realism in ICT4D research: an e-resilience case example. In Information and Communication Technologies for Development. Part II, P. Nielsen & H.C. Kimaro (eds), (pp. 14-25). Springer International Publishing.

Image from: Free Stock photos by Vecteezy

X-Washing: When “Digital Transformation” Isn’t Digital Transformation

When is “digital transformation” not digital transformation?

Answer: when it’s just the same as mainstream digitalisation.

We’ve recently produced a set of 13 principles for digital-transformation-for-development (DX4D) research and consulting, but a key essence is that transformation is special and different.  Digital transformation means doing something different from the kind of digitalisation that has been undertaken for decades:

Digitalisation:

Digital Transformation:

Source

Yet the term “digital transformation” is now being applied to all sorts of initiatives, some of which are not digital transformation.  As greenwashing is to sustainability, some of this looks like “X-washing”: labelling a project as transformation even when it patently is not.

To identify if something is digital transformation, a simple substitution test can help.  Replace the term “digital transformation” with “digitalisation”[i] (defined here as “adaptation of a system, process, etc. to be operated with the use of computers and the internet”[ii]).  If it still makes sense, it’s not digital transformation.

I give some examples below, though kept simple by just dealing with definitions:

EXAMPLE 1

Here’s a fairly-obvious example:

Original:

“digital transformation … goes beyond the digitalization of process, and it is a deep transformation of the organization activities, processes, competences, and patterns to face challenges and take advantage of the emerging technology opportunities and its accelerated impact on society”[iii]

Substitution:

“digitalisation … goes beyond the digitalization of process, and it is a deep transformation of the organization activities, processes, competences, and patterns to face challenges and take advantage of the emerging technology opportunities and its accelerated impact on society”

This does not make sense.  Quite apart from the obvious problem of contrasting digitalisation with itself, digitalisation (“adaptation”) is not the same as “deep transformation”.

EXAMPLE 2

From the same source, here’s a reverse example:

Original:

“digital transformation (DT) is the organizational alignment between processes, people, and technology with the aim of complying efficiently with all the relevant activities of the company”

Substitution:

“digitalisation is the organizational alignment between processes, people, and technology with the aim of complying efficiently with all the relevant activities of the company”

The substitution text could pass as a definition of digitalisation, and there is no sense of transformation e.g. disruption or radical change.  So the original does not appear to be referring to actual digital transformation.

EXAMPLE 3

Lastly, here’s a more shades-of-grey example:

Original:

“Digital transformation can be defined as the migration of companies and societies to a stage in which digital technologies become the backbone of their products and services, giving rise to the development of new forms of operation and new business models”[iv]

Substitution:

“Digitalisation can be defined as the migration of companies and societies to a stage in which digital technologies become the backbone of their products and services, giving rise to the development of new forms of operation and new business models”

The substitution text could work but it is quite a bold definition of digitalisation.  You could argue that it fits with those approaches that see digitalisation encompassing all digital change from the incremental to the transformative.  However, it seems to be ignoring the incremental improvement and redesign elements of the digitalisation spectrum.  Since it also takes things beyond the individual process / system focus of digitalisation, I would lean towards saying the original definition passes the test and does reflect actual digital transformation.  But it’s debatable.

CONCLUSION

The substitution test only focuses on one aspect of what digital transformation truly means: you can find the other DX4D principles here.

However, it will in some cases help to identify definitions and other usages which can appear to be X-washing: the re-badging as “digital transformation” of something that is not.

The test can also be used for more than just definitions; for example, in the assessment of policies or strategies or projects – are they transformative or are they actually just standard digitalisation, re-badged to make them look more modern and innovative.

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[i] Terms other than “digitalisation” can also be used for substitution e.g. “digitisation” or “automation”.

[ii] Google/Oxford Languages definition

[iii] Serna Gómez, J.H., Díaz-Piraquive, F.N., Muriel-Perea, Y.D.J. and Díaz Peláez, A. (2021). Advances, opportunities, and challenges in the digital transformation of HEIs in Latin America. In: D. Burgos & J.W. Branch (eds), Radical Solutions for Digital Transformation in Latin American Universities, Springer, Singapore, 55-75.

[iv] CEPAL (2020). Food Systems and COVID-19 in Latin America and the Caribbean N° 8: The Opportunity for Digital Transformation. CEPAL, Santiago, Chile.

Digital Economy, Labour, Transformation, Data: New Research Outputs from CDD Manchester

Recent outputs – on Digital economy; Digital labour; Digital transformation; Data-for-development – from Centre for Digital Development researchers, University of Manchester:

DIGITAL ECONOMY

Aligning Digital and Industrial Policy to Foster Future Industrialization (open access) by Chris Foster & Shamel Azmeh. Data is a key component of the digital economy. Many countries in the technology race are “digital latecomers” that lag behind the digital cutting edge. Industrial policies to support the technological capability of latecomers are well known, but less is known about how these can be aligned with strategies for the digital economy. Consequently, data policies are key for creating and capturing value in the digital economy. This paper discusses four emerging approaches.

Intellectual Property Rights and Control in the Digital Economy: Examining the Expansion of M-Pesa (open access) by Chris Foster. This study focuses on IPR in the Kenyan mobile money service M-Pesa. It charts how M-Pesa expanded from a development-orientated innovation in Kenya to become part of a global enterprise, with IPR central to tensions within the firm. This case study highlights the role of IPR and innovation in the digital economy more broadly examining the connection between global intellectual property regimes and power relations.

Shaping a Digitalising Infrastructure: Logistics and the Dynamics of Chinese-Southeast Asian E-Commerce (open access) by Chris Foster. Business models around e-commerce are shaped by logistics, yet there is little analysis of rulemaking. The paper to examine tensions in the case of Southeast Asia. It makes a critical discussion of emerging global rules. At the same time, it also examines the merits of Chinese “cross-border e-commerce” models which are becoming important to in the global south.

DIGITAL LABOUR

Analysing the Development Impact of the Gig Economy using Sen’s Capability Approach: A Case Study of the Physical Gig Economy in India (open access) by Hiroto Yanaka & Richard Heeks, analyses the development impact of the gig economy in India using Sen’s capability approach.  It finds some capabilities being realised for some workers, but more widespread constraints on achievement of capabilities.  Recommendations are made to improve development of freedoms through gig work.

Digital Platforms, Surveillance and Processes of Demoralization (open access) bySung Hwan Chai, Brian Nicholson, Robert Scapens & Chunlei Yang, conceptualizes a theoretical link between digital platforms and morality drawing on the eminent sociologist Zygmunt Bauman.  The analysis focuses on a case study of a hotel in Vietnam and explains how surveillance from digital platforms suppressed workers’ moral impulse and fostered moral ambivalence towards such issues as invading others’ privacy, pressuring others outside working hours, and increasing surveillance in the workplace.

Gig Worker Response to Algorithmic and Other Management Practices in India: A Study of Drivers from Ride-Hailing Platforms (open access) by Ipshita Chakraborty & Richard Heeks, examines the lived experience of gig workers in India and the role of contextual factors in influencing management processes and evolution of the psychological contract with the platform organisation over time.

DIGITAL TRANSFORMATION

The Principles of Digital Transformation for Development (DX4D): Systematic Literature Review and Future Research Agenda (open access) by Richard Heeks, Bookie Ezeomah, Gianluca Iazzolino, Aarti Krishnan, Rose Pritchard, Jaco Renken & Qingna Zhou, reviews DX4D literature and proposes 13 principles that can be used as a starting point to guide a better understanding and operationalisation of digital-transformation-for-development research and consulting.

DATA-FOR-DEVELOPMENT

Extracting Reproductive Condition and Habitat Information from Text Using a Transformer-based Information Extraction Pipeline by Roselyn Gabud, Nelson Pampolina, Vladimir Mariano & Riza Batista-Navarro, proposes a natural language processing pipeline for analysing the forestry compendium of the Centre for Agricultural and Biosciences International Digital Library. Information extracted by the pipeline can enrich information in biodiversity databases.

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Lessons from Transformation Studies for DX4D

What can digital-transformation-for-development (DX4D) learn from transformation studies?

To recap from an earlier blogpost, “Transformation studies … refer to an interdisciplinary field of research and scholarship that focuses on understanding and analyzing processes of fundamental change in various domains of human life and society.”[i]

Transformation studies very largely focuses on transformation of nation-states, and a useful overview of the sub-discipline offers the following definition of transformation: “a political, social, and economic change of a substantial systemic character that has been initiated in a revolutionary and target-oriented way by identifiable actors”[ii]

Immediately, one can draw out some parallels with the 13 Principles for DX4D:

1. Transformation studies recognises that change must be “substantial”; akin to Principle 2 stating that DX4D must entail “significant systemic disruption”.
2. Transformation studies recognises that change must occur in several parallel domains at once (“political, social, and economic”); akin to Principle 3 stating that DX4D involves change in data, technology, structures, processes, institutions and resources.
3. Separate from this definition, transformation studies differentiates between transformation and transition: “‘Transformation’ analyses radical systemic change from the intentional policy point of view while ‘transition’ describes the historical path along which such change is taking place.”[iii].  This is similar to the distinction between imminent and immanent development.  The former is the “willed, intentional actions of individuals and organisations”; what we refer to in Principle 5 as “digital-transformation-for-development”.  The latter is “the broad societal changes that emerge over time”; what we refer to as “digital-transformation-of-development”.
4. Also not in this definition, transformation studies specifically differentiates transformation from more evolutionary change, but finds that “transformation” is sometimes being mis-applied to situations of much more incremental change.  Our review of DX4D literature found exactly the same.

Beyond the parallels, though, there are some intriguing additional considerations for DX4D:

1. Transformation studies sees transformation as entailing “revolutionary” change: a terminology more extreme than “substantial” and than the term used in our DX4D definition: “radical”.  Its quintessential example of transformation is the Russian Revolution.  Viewed from that perspective, how many organisational or national DX4D initiatives could justify their inclusion: are they really “revolutionary”?  Is this a standard that DX4D should be held to, or is it too extreme?
2. Transformation studies requires that transformation – including its target of revolution – is the intentional act of identifiable actors.  Again, do DX4D actors have a clear, revolutionary target that they are aiming for when introducing their initiatives?  Again, is this too high a standard for DX4D?
3. Transformation studies highlights the contingency of transformation, shaped for example by “initial conditions and path dependencies” and the uncertainty of transformation which “is a complex and long-term event with many beginnings and many ends, undetermined at least in the medium term as to its outcome and its paths”[iv].  DX4D Principle 9 acknowledges this to some extent but could be modified to make this clearer e.g. “the impact of digital-transformation-for-development emerges not deterministically from technology alone but uncertainly and from a contingent mix of social and technological factors.”
4. Transformation studies deals with a wide variety of transformations but its normative recommendations tend to be dominated by a Eurocentric assumption that Western liberal and market-oriented democracy is the ideal goal of transformation.  In an earlier post, we argued that different development paradigms – neoliberal, structuralist, sustainable, human, decolonisation – could produce quite different visions to guide DX4D.  However, our review of literature found two-thirds of the papers we reviewed adhering to a neoliberal paradigm.  Is advice for DX4D policy and practice also going to be like this and like the picture painted by transformation studies: dominated by a particular Western worldview; for example, orienting towards neoliberal transformation?
5. The political economy strand of transformation studies focuses attention more on the mechanics of transformation than on issues such as strategy and impacts.[v]  It would therefore encourage DX4D research and practice to think more about “who” and “why” and “how”.  Who initiates DX4D initiatives, and why do they do so?  What drives them to seek significant change in the status quo, and how do factors such as crisis, self-interest, and external pressure play a role?  How is DX4D best undertaken – top-down or participatively, big bang or gradual – and what are its critical success factors?

Although based on just a couple of readings, these insights from transformation studies have been stimulating, and suggest that its literature can be of value to DX4D research and practice.

Follow @CDDManchester

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[i] OpenAI (2023, Oct 31) GPT 3.5: “What are transformation studies?”. Retrieved from https://chat.openai.com

[ii] Merkel, W., Kollmorgen, R. & Wagener, H.-J. (2019) Transformation and transition research. In: The Handbook of Political, Social, and Economic Transformation, W. Merkel, R. Kollmorgen, H.-J. Wagener (eds), Oxford University Press, Oxford, UK, 1-14.

[iii] Merkel et al (ibid.)

[iv] Merkel et al (ibid.)

[v] Bonker, F (2019) Political economy approaches, in: The Handbook of Political, Social, and Economic Transformation, W. Merkel, R. Kollmorgen, H.-J. Wagener (eds), Oxford University Press, Oxford, UK, 124-131

Image: Digital Transformation Vectors by Vecteezy

Implications for the Global South of US-China Rivalry in State Platform Capitalism

Richard Heeks & Seth Schindler

What are the implications and research agenda for Global South states following the advent and worldwide spread of “state platform capitalism” from the US and China?

A recent paper, “The US–China Rivalry and the Emergence of State Platform Capitalism” defines state platform capitalism as “the ways in which Beijing and Washington instrumentalise and mobilise domestic platform firms in pursuit of geopolitical–economic objectives, while platforms become increasingly interdependent with their home state institutions”.

State platform capitalism clearly has important implications for the US and China, but it also significantly shapes the digital landscape for third countries, including those of the Global South given that their “technology sectors are increasingly absorbed into the geographically extensive national stacks of the United States and China and governed by a mixture of public and private actors residing principally within the two digital superpowers”.

Domains of Sino-US state platform capitalism competition include:

• Digital currencies, with China’s Cross-Border Interbank Payment System and central bank support for digital renminbi systems seeking to undermine hegemony of the US-backed SWIFT system and of the dollar as the dominant currency of global transactions.
• Cybersecurity, with legislation in both the US and China seeking to allow state access to private data, to replace local with foreign technology, and to localise storage of data.
• Standards, with China seeking to influence de jure standards through greater activity in international bodies, and promoting its own standards de facto through support for the spread of Chinese infrastructure and systems via strategies such as the Digital Silk Road component of the Belt and Road Initiative.

Existing research is very limited but suggests three things about the positioning of Global South states within this “Digital Cold War”[i].  First, that there is local agency with, for example, decisions about acquisition of digital tech being much more a case of demand-pull from the Global South than superpower supply-push[ii].  Second, that attempts – at least by the US – to sway Southern strategies by raising concerns about risks of Chinese technology in relation to data privacy, security or export of “digital authoritarianism” seem to have rather fallen on deaf ears, over-ridden particularly by considerations of cost[iii].

Third, that there is little evidence of Global South states clearly digitally aligning themselves with one side rather than the other (as, for example, Russia has done in recent years[iv]).  Instead, while they might sometimes lean more towards one superpower, they are generally steering some kind of middle path.  For example, analysis of some projects from South America shows governments adopting a “mix and match” approach: a surveillance system involving Spanish, Swedish and Chinese suppliers; a telecommunication infrastructure project built by Chinese, US, Italian and Japanese suppliers; and another surveillance project using Chinese and US technology combined with British training[v].

However, the evidence base overall is extremely thin, and it sets up a significant need for new research on areas that include:

• Domains: identification and categorisation of the domains in which Global South national governments are making alignment decisions of relevance to Sino-US digital competition.
• Strategies: alongside uni-alignment to one superpower and the balancing act of duo-alignment, one can hypothesise a number of other strategies that may adopted.  Omni-alignment would bring other external powers into the picture: the EU, Japan, regional bodies, etc[vi].  Passive drifting could be distinguished from active steering; external direction from internal arbitrage.  And there may be different strategies in different domains.  But, as yet, there is no evidence-based characterisation.
• Determinants: as noted above, cost seems to often outweigh concerns about security or dependency, but this comes from a very small number of mainly anecdotal sources and relates only to project-level sourcing of technology.  So, more generally, what factors shape the strategies followed by Global South states?  How do considerations of personal gain, domestic politics and wider geo-politics weigh on strategic directions?  Are there technological path dependencies or bilateral conditionalities that constrain choices?
• Impacts: we need to understand the implications of different strategies for national digital and wider economic and socio-political development.  And what of the impact on the superpowers: how do the alignment strategies of those on the periphery of superpower networks affect the two countries at the centre[vii]?
• Other Stakeholders: the focus here is on the strategies of national governments, but research is also needed into other actors who may be making alignment decision: state entities at other levels, local digital firms, and organisational and individual consumers. The impacts of their decisions will have far-reaching consequences on people and places worldwide: how does the Digital Cold War map onto fault lines of national and urban politics, and animate micro-geopolitical contestations[viii]?

We propose to take this research agenda forward and welcome hearing from others working on these topics.

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[i] Lilkov, D. (2020). Europe and the digital cold war. LSE European Politics and Policy (EUROPP) blog, 18 Sep.

[ii] Gagliardone, I. (2020). The Impact of Chinese Tech Provision on Civil Liberties in Africa, Policy Insights 99, South African Institute of International Affairs, Johannesburg; Erie, M. S., & Streinz, T. (2021). The Beijing effect: China’s Digital Silk Road as transnational data governance. New York University Journal of International Law and Politics, 54(1), 1-92.

[iii] Triolo, P., Allison, K., Brown, C., & Broderick, K. (2020). The Digital Silk Road: Expanding China’s Digital Footprint. Eurasia Group, New York, NY; Malena, J. (2021). The Extension of the Digital Silk Road to Latin America. Brazilian Center for International Relations, Rio de Janeiro.

[iv] Bendett, S., & Kania, E. (2019). A New Sino-Russian High-Tech Partnership. Australian Strategic Policy Institute, Canberra; Hsiung, C. W. (2021). China’s technology cooperation with Russia: Geopolitics, economics, and regime security. The Chinese Journal of International Politics, 14(3), 447-479.

[v] Vila Seoane, M. & Velasco, C.A. (2023) The Chinese Surveillance State in Latin America?, Digital Development Working Paper 99, University of Manchester, UK; Majerowicz, E. & De Carvalho, M.H. (2023) China’s Expansion into Brazilian Digital Surveillance Markets, Digital Development Working Paper 100, University of Manchester, UK.

[vi] Schindler, S., Alami, I., DiCarlo, J., Jepson, N., Rolf, S., Bayırbağ, M. K., … & Zhao, Y. (2023). The Second Cold War: US-China competition for centrality in infrastructure, digital, production, and finance networks. Geopolitics, 1-38.

[vii] Schindler et al. (ibid.)

[viii] Pollio, A. (2023).Cities as Geopolitical Testbeds of Digital Infrastructure, Working Paper. The Chicago Council on Global Affairs, Chicago, IL.

Image by kjpargeter on Freepik

Three Perspectives on Development as Transformation: Implications for DX4D

How is transformation understood in international development, and what are the implications for digital-transformation-for-development (DX4D)?

An earlier blogpost pointed out that digital transformation is not the goal of DX4D, “Instead, development transformation is the goal and starting point”.  That blogpost considered what transformation means under different development paradigms, and what role digital would play in helping deliver those different meanings of development transformation.

In this blogpost, three active perspectives on transformation in international development are analysed – structural transformation, transformational development, and transformative development studies – and some DX4D implications drawn out.

1. Structural Transformation

“Structural transformation is defined as the reallocation of economic activity across three broad sectors (agriculture, manufacturing, and services) that accompanies the process of modern economic growth”[i].

That reallocation is associated with a steady decline of agriculture in terms of share of employment and share of GDP, a steady increase in services, and a more mixed picture (e.g. an inverse-U of relative growth then decline) for manufacturing.  This is transformation that is readily measured and that is associated with other developments: urbanisation, economic growth and rise in incomes, changes in income distribution, etc[ii].

For DX4D, structural transformation offers a very tangible and big picture vision of what transformation means, and it supports the idea of technology being not merely an enabler but one of the main driving forces behind (this form of) transformation[iii].  Indeed, it is sometimes argued that emergence of what has variously been known as the information economy, or knowledge economy, or digital economy represents a fourth main economic sector that emerges directly as a result of digital innovation[iv].  From this perspective, DX4D would be analysed through an economic lens and in terms of its contribution to sectoral change.

Adhering to a modernisation paradigm of development, structural transformation would be criticised for its techno-centricity and its preoccupation with economic growth.  However, it does argue that more than just technology is required for transformation: for example, change in processes such as growth in trade, and wider structural changes such as development of formal and informal institutions[v].

2. Transformational Development

“Transformational development is a process through which children, families and communities move toward wholeness of life with dignity, justice and hope. The scope of transformational development includes social, spiritual, economic, political, and environmental aspects of life at the local, national, regional and global levels”[vi].

This definition of transformational development gives a limited sense of its core values which derive from its origins in a 1983 conference of evangelical Christians, from which one derived definition is: “Transformation is to enable God’s vision of society to be actualized in all relationships, social, economic and spiritual, so that God’s will may be reflected in human society and his love be experienced by all communities, especially the poor”[vii].

The terminology of transformation was specifically embraced by the conference in opposition to a prevailing view of development that was seen as “intrinsically related to a mechanistic pursuit of economic growth that tends to ignore the structural context of poverty and injustice and which increases dependency and inequality”[viii].  It thus sets itself in opposition to the ideas of structural transformation and, notwithstanding its strongly anti-secular and evangelical core, its social action strand has many affinities with the human development paradigm given concerns to address poverty, health, education, injustice and inequality[ix].

While there is a big-picture vision (e.g. the attainment of the Kingdom of God), the actual focus tends to be much more human-scale.  Transformation in practice focuses on the personal transformation of individuals within their communities to “facilitate the acceptance and application of the values of the kingdom of God” including “freedom, stewardship, generosity and selflessness, reconciliation, grace and compassion for the excluded”[x].

Of relevance to DX4D, transformational development takes a balanced view of technology, recognising that “technology and science are an inseparable part of working for human transformation” but that technology must not be fetishised as it is “a false god … that speaks to us of power, not limits; speaks to us of ownership, not stewardship; speaks to us only of rights, not responsibilities; speaks to us of self-aggrandizement, not humility”[xi].  Transformational development thus argues for technology to be seen only as one tool among many, and that central to transformation should be development of individuals, their values, and their relationships.  That transformation of relationships extends to a need for change in wider “social structures that exploit and dehumanize”[xii].

There is also criticism of bandwagon-jumping: widespread and inappropriate adoption of the transformation label without staying true to its underlying values (“a vision of society where God’s will was done and his love experienced”): “many organizations adopted and used transformation to describe any and every form of mission and involvement with poor people from welfare based development backed by a spiritual message, to plain economic growth without any spiritual input at all”[xiii].  The same risk occurs with DX4D: that incremental digitalisation initiatives are inappropriately labelled as “digital transformation”.

One possible reason this mis-labelling has occurred with transformational development, however, is because it has been more of “a narrative, a framework, a way of thinking” rather than either a clear theory of transformation (as offered by structural transformation) or a clearly-defined set of practices that can be followed in the field[xiv].  DX4D similarly could benefit from strong theorisation underpinning clear guidance on practice.

3. Transformation Studies

“Transformation studies, also known as transformative studies, refer to an interdisciplinary field of research and scholarship that focuses on understanding and analyzing processes of fundamental change in various domains of human life and society. These changes can encompass a wide range of areas, including individual transformation, cultural shifts, social and political change, technological innovations, and environmental transformations. Transformation studies aim to explore the underlying causes, mechanisms, and implications of such changes.”[xv]

As per the quote, transformation research broadly can be seen as interdisciplinary and as covering a wide range of theorisations, research approaches and methods[xvi].  However, a particular approach has arisen in application to development, of what could be called transformative development studies or transformative global studies, that can be related to a post-structural, post-colonial development paradigm.

Where structural transformation is strong on theory with some implications for practice, and transformative development is a-theoretical and focussed on vision-based practice, transformative development studies (TDS) is more of a way of doing research.  At root, TDS challenges the way in which knowledge is produced.  Study of DX4D would thus begin by questioning the mode of study and seeing “transformative scholarship” as the starting point.  Any research should be founded on a “counter-Orientalist, post-Eurocentric … process of de-colonizing knowledge”[xvii].

From a TDS perspective, technology cannot certainly deliver particular transformations and it is thus a direct challenge to the views of structural transformation and even transformational development about technology.  Instead, “transformation is an open-ended, highly unpredict­able (uncertain) process resulting from the interactions between human as well as non-human actors”[xviii].  The interest here is more in the process of transformation than its outcomes, with the latter part of the quote suggesting DX4D should be studied through lenses such as those of actor-network theory, to understand how networks of transformation interact and build or disperse.

Like transformational development, transformative development studies challenges conventional notions of development, seeing them as associated solely with positive, progressive improvement.  Instead, to the extent TDS is interested in the wider outcomes of transformation, it would advocate that DX4D be interrogated for all impacts; asking who benefits from transformation, but also who loses, and why.

Conclusion

These three discourses on development as transformation do not represent the totality of the picture.  For example, one can find discussion of transformative development taken to mean generic change to social structures that challenges existing dispositions of power[xix].

In addition, while structural transformation is widely understood within development economics, transformational development and transformative development studies represent limited niches that have yet to be widely recognised within development studies more broadly. However, these perspectives do provide three quite different views of transformation and three quite different intellectual substructures that could be used for future DX4D research and practice.

Follow @CDDManchester

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[i] Herrendorf, B., Rogerson, R., & Valentinyi, A. (2014). Growth and structural transformation. Handbook of Economic Growth, 2, 855-941.

[ii] Syrquin, M. (2006) Structural transformation. In: The Elgar Companion to Development Studies, D.A. Clark (ed), Edward Elgar, Cheltenham, UK, 601-607.

[iii] Herrendorf, B., Herrington, C., & Valentinyi, A. (2015). Sectoral technology and structural transformation. American Economic Journal: Macroeconomics, 7(4), 104-133.

[iv] Berger, T., & Frey, C. B. (2016). Structural Transformation in the OECD: Digitalisation, Deindustrialisation and the Future of Work. OECD, Paris.

[v] Syrquin (ibid.)

[vi] Byworth, J. (2003). World Vision’s approach to transformational development: Frame, policy and indicators. Transformation, 20(2), 102-114.

[vii] Samuel, V. & Sugden, C. (1999). Mission as Transformation. Regnum, Oxford.

[viii] Anon (1984) Social transformation: the Church in response to human need – Wheaton ’83 Statement. Transformation, 1(1), 23-28

[ix] Anon (ibid.), Byworth (ibid.)

[x] Sugden, C. (2003). Transformational development: Current state of understanding and practice. Transformation, 20(2), 71-77.

[xi] Myers, B. L. (2011). Walking with the Poor: Principles and Practices of Transformational Development. Orbis Books, Maryknoll, NY.

[xii] Anon (ibid.)

[xiii] Sugden (ibid.)

[xiv] Sugden (ibid.)

[xv] OpenAI (2023, Oct 31) GPT 3.5: “What are transformation studies?”. Retrieved from https://chat.openai.com

[xvi] Merkel, W., Kollmorgen, R. & Wagener, H.-J. (2019) Transformation and transition research. In: The Handbook of Political, Social, and Economic Transformation, W. Merkel, R. Kollmorgen, H.-J. Wagener (eds), Oxford University Press, Oxford, UK, 1-14.

[xvii] Hosseini, S. H., Goodman, J., Motta, S. C., & Gills, B. K. (2020). Towards new agendas for transformative global studies: an introduction. In: The Routledge Handbook of Transformative Global Studies, S.H. Hosseini, J. Goodman, S.C. Motta & B.K Gills (eds), Routledge, Abingdon, UK, 1-10.

[xviii] Alff, H. & Hornidge, A.-K. (2019). ‘Transformation’ in international development studies. In: Building Development Studies for the New Millennium, I. Baud, T. Kontinen & S. von Itter (eds), Palgrave Macmillan, Cham, Switzerland, 141-162.

[xix] Koff, H., & Maganda, C. (2016). The EU and the human right to water and sanitation: Normative coherence as the key to transformative development. The European Journal of Development Research, 28, 91-110.; Kontinen, T. & Holma, K., (2020). Introduction. In: Practices of Citizenship in East Africa: Perspectives from Philosophical Pragmatism, K. Holma & T. Kontinen (eds), Routledge, London, 1-12.

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