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Digital Economy, Digital Enterprise, DIODE General

Open data platforms and development in Latin America

There is increasing excitement about the developmental effects that data released in open format could bring to the global south. The so called open data—data released in digital format, publicly available for anyone to use—promise to contribute to key development goals, such as economic growth, job creation, inclusion and access to public services. To illustrate the economic potential, McKinsey estimated in 2013 that the economic value of open data could reach between $1 and $3 trillion per year. Although these figures remain highly speculative, the rationale is that by using or re-using open data, new products and business can be created, innovation can be spurred, and productive processes can be optimised to achieve gains in productivity. That includes governments and public organisations. Open data can help improving the delivery and quality of public services and can contribute to the efficiency of internal operations. Equally important, open data is seen as central means to increase transparency, fight corruption, as well as promote inclusion and civic participation. The latter has been particularly acknowledged in the commitments that governments endorse when joining the global Open Government Partnership.

Open data in Latin America

As a region, Latin America has moved comparatively quickly in embracing open data initiatives. Mexico, Uruguay and Brazil lead the table among the developing world and are amongst the top 18 best performing countries in the 2016 Open Data Barometer, a global ranking led by the World Wide Web Foundation that ranks countries according to the publication and readiness of key government datasets and evidence of its impact. In addition, the region has now five countries within the top 20 of the 2017 Open Data Index—a survey coordinated by the Open Knowledge Foundation that measures the state of open government data around the world.

The commercial, for profit approach of open data has yet to take off in Latin America. More often, what is found in the region is a growing open data ecosystem that is moving forward an agenda of accountability, innovation and participation. The region holds its own Open Data Conference (AbreLatam/ConDatos) annually since 2013. The annual meet up has strengthened regional communities that use open data to offer tangible solutions in areas of public health, government transparency, transportation and urban planning. A self-reported survey gathered in Abrelatam reveals 196 projects from 135 organisations in these areas.

The ecosystem in Latin America means that different actors have contributed to unlock the value of open data in the region. Governments are important ones—they build open data platforms that form the supply side of the data value chain. But the realisation of the value of these platforms lie on the applications and services that are built on top of the data. The city of Buenos Aires, for example, used hackathons and apps competitions to engage developers and start-ups to co-create new services. In Montevideo, the municipality partnered with the civil society organisation DATA to run a platform called Por Mi Barrio, developed based on the UK’s FixMyStreet initiative. Por Mi Barrio helps people to report street problems like broken street lights or potholes and link it to the municipality to fix them. NGOs and local activist are, thus, another crucial actor in the ecosystem. Ciudadano Inteligente in Chile and SocialTIC in Mexico, both promote transparency, inclusion and citizen participation through open data and the use of new informational technologies. Journalists also contribute to open up government data for accountability purposes. Argentine newspaper La Nación and its data division LNData won the Data Journalism Award for their work on opening up unstructured, closed and opaque data from Argentina’s Senate expenses in times of no freedom of information laws and controversies surrounding media access to government information. In Peru, the organization Convoca opened up public data to help users understand the behaviour of extractive industries in Peru and its impact on people’s lives. The project, called Excesos sin Castigo (“Excesses Unpunished”) won the Data Journalism Award in 2016.

Research into open data platforms and their ecosystem

Despite the anecdotal evidence, the mechanisms through which open data can scale and harness developmental goals have not yet been clearly established. My current programme of research examines how open government data fosters innovation and enables economic and social development in Latin America. One of my ongoing projects, jointly with my colleague Ben Eaton, studies empirically how engagement with open government data platforms unfolds in Buenos Aires, Mexico City and Montevideo. In specific terms, we ask how the installed base (the actors in the ecosystem) is mobilised in open data platforms. Drawing from literature on digital platforms, we aim to understand the context, formation, grow and functioning of the installed base, and to offer insights on the ways actors interact to use and generate value from these platforms. The results of this work will be ready by the end of the year, so watch this space for research insights and policy implications.

Digital Economy

Defining, Conceptualising and Measuring the Digital Economy

It is generally understood that the digital economy in developing countries is growing, and growing fast.  But what is the digital economy, and how large is it?

A newly-released working paper from the University of Manchester’s Centre for Development Informatics – “Defining, Conceptualising and Measuring the Digital Economy” – addresses this question.  It was developed as part of the DIODE strategic network, which is funded by the UK’s Economic and Social Research Council as part of the Global Challenges Research Fund initiative.

“Digital economy” is typically dated back to Don Tapscott’s 1996 book of the same name.  It has been in fairly continuous use since, with a particular growth in interest in the past two-three years linked to resurgence of “digital” as a terminology.

Looking across the definitions, one can identify three scopes of definition as summarised in the figure below:

  • The core of the digital economy is the “digital sector”: more often called the “IT sector” or “ICT sector”, and based on the OECD definition of specific ICT-related manufacturing and services sub-sectors.
  • The “digital economy” as we define it is “that part of economic output derived solely or primarily from digital technologies with a business model based on digital goods or services”. It means the digital sector plus ICT-enabled business that extends the boundaries of economic activity.  The latter covers new digital business models such as platform-based firms.
  • A much wider scope encompasses all economic activity based on digital technologies; thus also including application of ICTs to intensify existing economic activity in manufacturing, services and primary production. We refer to this as the “digitalised economy”.

Digital Economy Three Scopes

Measuring the digital economy faces challenges of fuzzy boundaries, poor data quality, pricing problems, and invisibility of much digital activity.  But, reviewing the measures that are available, we estimate the digital economy as defined here to constitute around 5% of global GDP and 3% of global employment.

There is significant unevenness between and within regions.  For example, the digital economy likely constitutes a two-to-three times higher share of GDP in the global North than the global South.  Conversely, digital economy growth rates in the global South are estimated to be twice as fast as those in the global North.

Combined with higher-than-average wage and productivity levels, this points to the growing importance of the digital economy in developing countries.  Yet growth is constrained by a set of serious barriers and a lack of knowledge including policy guidance.  All this supports DIODE’s goal of strengthening the research base on digital economies in the global South.

Digital Labour

Development and crowdsourcing

A recent publication at the IFIP 9.4 conference in Indonesia “Understanding the Development Implications of Online Outsourcing” focused on analysing interviews with Upwork freelancers in the Pakistan Himalayas.  The framework we used was based on the DFID livelihoods and this was useful in making sense of the extent to which the Upwork platform was contributing to development.  The Youth Employment Programme (http://www.youthemp.com) of Pakistan’s Khyber Pakhtunkhwa (KPK) provincial government which aims to train 40,000 young people to use Upwork and similar platforms.  This is an integral part of Pakistan government policy in the region to bring marginalised people into gainful employment.  The results of our study were mixed, some of the freelancers were unable to engage at all even though they had been trained.  The frictionless marketplace was too intense and demanding for many of them. Others were seen to engage in a very limited way but a few were able to make a living and there was evidence of collectives developing into small businesses.  The success of the winners is encouraging but a lot are falling by the wayside.  There are many policy initiatives:

  • The NaijaCloud initiative in Nigeria, sponsored by the World Bank and supported by the national government, which provides awareness workshops on online outsourcing.
  • Malaysia’s eRezeki initiative (https://erezeki.my/en/home) which has trained hundreds of freelancers and now uses a “walled garden” approach with US crowdsourcing platform Massolutions: a managed portal for OO work such that the work process is controlled by government.

Protecting the individual worker from the intensity of competition inherent in multinational freelancing platforms is a facet of ERezeki .  The workers never actually engage with the platform, instead a government controlled portal mediates the work and protects the worker from bidding and managing clients.  This is not the only mechanism for reintermediating controls over the frictionless work platform marketplace.  A good example is cooperative platforms  where the workers also manage the platform thus offering a more equitable relationship for the workers.  Clearly there is more work to be done on how best to mediate plaform based “gig economy” for development exploring the limits and downsides of Upwork and other purely commercial logic driven platforms; in country alternatives such as Iran’s Ponisha to PPP arrangements and other business models including cooperatives.

Digital Labour

Platforms, crowdsourcing and the “poverty – risk” thesis

At the recent DIODE meeting in Indonesia we participants split off into groups to focus on particular topics one of which was the development implications of crowdsourcing platforms.  There is a significant critique of crowdsourcing platforms such as Amazon MTurk focussing on the same criticisms levelled at the “gig economy”: lack of any holidays, sickness, pension and health and safety.  Whether the quintessential “gig platform” Uber has employees or is just a technology company is a topic for Union activism and courtroom debate.  Amazon MTurk, Crowdflower, Upwork, Fiverr etc. have yet to come under the same level of scrutiny as Uber who remain in the spotlight of Union and other stakeholder activism.

This is perhaps because exemplary platform-based organisations such as Samasource take paid work to marginalised individuals where the work options are limited and who otherwise would either be unemployed or working in much worse conditions.  However, this does not mean the work is risk free and little is known about the nature of the work done in developing countries and the effects.

The late sociologist Ulrich Beck in his book “Risk Society”[1] argues that there is a “systematic attraction between extreme poverty and extreme risk” citing the examples of people in developing countries poisoned by engaging in work such as manual processing of asbestos brake linings, fertiliser application and afflicted by the lax safety standards that caused the Bhopal chemical disaster.

How could crowdsourcing carry such a relationship?  During the course of the discussion we focussed on some of problematic issues around the issue of content moderation.  It would appear there is some evidence of Beck’s “poverty-risk” hypothesis applying here.

The task of removal of extreme pornographic and other images considered offensive such as ISIS beheadings reported as offensive from platforms such as Facebook is undertaken by workers in the Philippines[2].  The mental health implications of this are as yet unknown but the interviews the Wired article below indicate that significant trauma is experienced by the workers who are responsible for identifying and removing many hundreds of such images per day.

There is some literature derived from other occupations such as the police who are dealing with paedophilia images as part of investigations. It is worth considering the conclusions of the study :

“The results revealed that Internet Child Exploitation (ICE) investigators experience salient emotional, cognitive, social and behavioural consequences due to viewing ICE material and their reactions can be short and long term. The degree of negative impact appears to vary markedly across individuals, types and content of material and viewing context, with variation based on individual, case-related and contextual factors both in and outside the workplace.”[3]

Viewing these images clearly has negative effect and measuring and monitoring the effect is under researched. The Police force recognise there is a problem with repeated exposure to such images and video content and have put in place policy for management of the effects such as counselling etc.

As yet there is no evidence that crowdsourcing platforms have considered the need for employee health and safety (partly because of the lack of distinction on responsibilities of platform based organisations for health and safety, ethics regarding freelance gig workers vs. employees).

There is clearly a research agenda for us to pursue regarding the ethics, training needs and mental health implications of platform based crowdsourcing.

[1] Risk Society Towards a New Modernity Ulrich Beck

[2] https://www.wired.com/2014/10/content-moderation/

[3] Powell, M., Cassematis, P., Benson, M. et al. J Police Officers’ Perceptions of their Reactions to Viewing Internet Child Exploitation Material  Police Crim Psych (2015) 30: 103. doi:10.1007/s11896-014-9148-z

Digital Enterprise

A Research Agenda on 3D Printing, FabLabs, Makerspaces, etc in the Global South

We hear a great deal about 3D printing, FabLabs, makerspaces, hackerspaces and the like.  They are emerging digital economy phenomena in the global South.  But what research has been done so far in this domain?  And what should the future research agenda be?

To answer those questions, Ryo Seo-Zindy – a doctoral researcher with Manchester’s Centre for Development Informatics – undertook a systematic literature review, which has been published as: “Researching the Emergence of 3D Printing, Makerspaces, Hackerspaces and FabLabs in the Global South: A Scoping Review and Research Agenda on Digital Innovation and Fabrication Networks” in The Electronic Journal of Information Systems in Developing Countries.

The review identified 70 papers of relevance (of which only a small minority covered the global South).  It found that the literature maps a complex and varied picture of actors, activities, locations, and technologies.  To link these all together, we propose the notion of “digital innovation and fabrication networks” (DIFNs).  We define a DIFN as “a network of people, technologies, enterprises and other organisations, which use digital fabrication tools and other digital technologies to produce and innovate products in an open, community- and workspace-based environment”.

Textual analysis of the 70 papers included creation of the wordcloud below.

DIFN Wordcloud

From this and other analysis, three overarching themes emerge from the literature.

i. Production:
– The idea of peer production as a new and collaborative mode for creation of digital artefacts and tools
– The rise of industrialised but small-scale production, using tools such as 3D printers

ii. Innovation:
– Support for grassroots, localised innovation often in physical workspaces
– Simultaneously, the emergence of new innovation intermediaries and hubs that link out into wider digital innovation ecosystems

iii. Openness:
– A cross-cutting theme within models of production and innovation, with a focus on re-usability, adaptability, and transparency
– But . . . beyond this, a vagueness or multiplicity of meanings around openness

Despite the work already undertaken, the rapid expansion of DIFNs in developing countries creates a growing series of knowledge gaps and, hence, a future research agenda.  The paper discusses these in detail, with an overview of some elements summarised in the table below.

Research Theme Future Research Agenda
Methodology ·      Extend use of conceptually-founded empirical research
·      Expand breadth of coverage to un-researched locations (Africa, Latin America, most of Asia), and expand depth of insight in East/South-East Asia
Production ·      Map the production processes taking place within DIFNs
·      Map the relationships and production models arising between DIFNs and local manufacturing
·      Analyse the tension between collaborative and individualised production within DIFNs
Innovation ·      Investigate how grassroots innovation, focused on local socio-economic problems, can be fostered
·      Examine the learning processes that occur between actors in DIFNs and the wider innovation system
Openness ·      Research the different types of openness seen in DIFNs
·      Analyse the competing worldviews that influence and are negotiated in DIFNs

Parts of this agenda are currently being taken forward with field research on DIFNs in South-East Asia.

Digital Enterprise

How Context Impacts Developing Country Digital Start-Ups

As the digital economy grows in developing countries, is it part of a “weightless economy” that floats free from the local context?  Or is it still heavily embedded within that context?

Recent research from Manchester’s Centre for Development Informatics investigates this. The paper, “Digital Start-Ups in the Global South: Embeddedness, Digitality and Peripherality in Latin America” looks at the experience of digital start-ups in the four largest economies of Latin America: Argentina, Brazil, Colombia and Mexico.  It does so through the lens of the Triple Embeddedness Framework (see below).

Geels TEF

The Triple Embeddedness Framework

Far from being free-floating, these young enterprises are strongly-rooted in local supply chains, social institutions, and policy environments.  But they also experience “hybrid embeddedness”, meaning they lie at the intersection of different domains:

  1. Product/Digital Hybridity. Digital start-ups are shaped by their product sector: the sector of the goods or services they sell – the financial services sector for an online investment start-up; the recruitment sector for a web-based employment exchange. But – unlike traditional enterprises – they are also embedded in an emergent digital sector.  Where their level of embeddedness in each sector is “just right” – what we called “Goldilocks embeddedness” – they can cross-fertilise ideas between the sectors, draw finance and staff from both sectors, and are not so heavily-embedded that their investment in the status quo constrains innovation.
  2. Local/Global Hybridity. Digital start-ups are also hybridly-embedded in both a local and a global industry regime. Local laws and social networks and capabilities are an essential part of these digital enterprises’ operations.  But they also take business models, start-up methodologies, social norms and policy priorities from the global North; primarily from Silicon Valley in the US.  Their position on the relative periphery of the global economy also seems helpful: it allows these ideas and other resources to flow in from the US but offers some relative protection from external competition.

Governments and firms in the global South need to recognise this pattern of embeddedness:

  • Governments must do more to build up local digital sector institutions which act as key intermediaries both within the local digital economy and between local and global digital economies.
  • Digital start-ups must self-analyse the constraints and freedoms imposed by their embeddedness. And they must customise models and methods from the global North; for example, rescoping the Lean Start-Up methodology to take a broader bi-sectoral and socio-political remit.

In research terms, we need to understand more about how the digitality and peripherality of these start-ups affects their development trajectories.  This and other items will form part of the DIODE Network discussions on future research agendas around development implications of digital economies.

Digital Labour

Harnessing the Digital Revolution for Inclusive Prosperity

I had the pleasure of attending the Digital Development Summit 2017 on 13 March 2017 where digital interest groups from around the world gathered together to discuss the future of work in the digital economy. Hosted by the Institute of Development Studies (IDS) in collaboration with the World Wide Web Foundation and Nesta in London, the Summit featured thought leaders from think tanks, government, the private sector and academia, and offered new perspectives, actionable takeaways, and access to a phenomenal and diverse network of like-minded digital evangelists.

The overall theme of the Summit was based around the future of work in a digitised world where advances in digital technologies threaten to disrupt labour markets around the world. Some of the big questions deliberated at the Summit were – What would be the impact of technology in the next 10-15 years? And how could we ensure that no one was left behind in the digital economy?

 It is believed that the huge technological change brought about by the digital revolution could spawn mass unemployment especially in developing countries. It is difficult to comprehend that 2/3 of jobs may be under threat due to automation in developing countries and likely to be more disruptive than in the developed world. Interestingly, though there is huge emphasis on Decent Work and Economic Growth in the newly established UN Sustainable Development Goals (SDGs), there is no mention of digital technologies in work-related outcomes.

New technologies are bringing opportunities and challenges to working lives in the global South. However, significant and urgent changes are needed to prepare for the impacts, whether intended or unintended, brought about by automation and digitisation. A key discussion that struck me at the Summit was the dilemma of automation and artificial intelligence and its consequences.  As Ben Ramalingam of IDS put it, it could lead to people being accountable to “robo bosses”.  Duncan Green from Oxfam also pointed out that AI will enable lots of consumers but no human producers.

Yet, with innovations moving at a faster pace than regulation, and policies being put into place, how well-prepared are developing countries – envisaged to receive the greatest impacts from these new technological developments – to cope with these future impacts?

The Summit allowed for deeper discussions on these aspects by incorporating a few practical and interactive exercises using grids and the World Café method that allowed all delegates to engage in discussions on the future of work in developing countries. Using real-life examples from research carried out in emerging economies the first exercise explored how different jobs fare within the digital economy, keeping in mind the adaptive capacity (high or low) and exposure (high or low) to digital technologies by each individual. Using a four quadrant grid, this exercise helped elevate thinking into the current scenario of workers, whether they are in full-time jobs, entrepreneurs or freelancing in the gig economy. It opened up conversations on the complexity of issues related to the impact of digitisation on individual working lives.

Exercise 2 (World Café) then led to deeper thinking on the actions that would be required by different stakeholders to help build prosperity and resilience in the face of the digital economy. This interactive discussion resulted in an interesting and extensive input of ideas and perspectives through several conversational rounds from delegates from diverse backgrounds – from transnational interactions and conversations required by developed and developing countries’ governments to establishing universal minimum wages, bringing in new standards and regulations and training for those with low digital capacity and low exposure, among others, being proposed. Of course, it was noted that different countries have different priorities and needs, which need to be considered as well.

Such on-going multi-stakeholder gatherings bring out diverse discussions and help shape the futures of vulnerable people in developing (and developed) economies through conversations that matter. Of course most at the Summit had a very optimistic view (including myself) about the future of the digital economy but as we all left the Summit it was evident that there was much to be done in terms of securing the future of work in developing countries and an ingrained understanding that there is a need for all stakeholders … including and not limited to – the government,  private sector, academics, unions, think tanks, NGOs, etc… to put people at the forefront and to work together to ensure decent work for all.