Use of digital platforms and services fuelled by the pandemic

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The onset of the pandemic in 2020 gave rise to global acceleration in the uptake of digital platforms and services. This surge was consolidated in 2021, as it became clear – in emerging and developed economies alike – that digital is the new normal. While in some ways 2020 was reactive, with governments and businesses scrambling to implement digital approaches, 2021 was proactive, as those approaches were streamlined and synthesised. As different countries and regions went in and out of lockdown in response to successive waves of Covid-19, many businesses and institutions integrated a flexible “blended” approach, combining online and in-person operating methods. Key aspects of the ongoing digital transition include increased remote work, online payments and e-commerce. In emerging markets, these trends have led to opportunities not only for investment, but also for public-private collaboration in strengthening digital infrastructure and expanding financial inclusion.

Digital Dividends

Most developing countries have begun to adapt to this accelerated digital transition, which is already paying dividends in many cases. In Egypt, for example, the initial shift to digital led to a surge in demand for ICT services, and highlighted the need to expand both hard and soft infrastructure. The government has responded with a range of initiatives. The Ministry of Communications and IT’s CREATIVA, a network of knowledge and innovation centres, was granted LE300m ($19.1m) in March to fund its second project phase, which focuses on developing an integrated system for technological innovation. Saudi Arabia has likewise intensified its commitment to its digital agenda, enshrined in Vision 2030. The economic development strategy has helped advance the digital transformation in all aspects of daily life, from e-government services, to digital financial solutions and work-from-home options.

Financial Inclusion

Similar trends have been seen in Latin America. Peru has benefitted from the impact of increased digital innovation across key sectors such as mining, agriculture and financial services. Digitalisation is also helping to expand financial inclusion in the country – an effect that is being observed in many economies around the world. For example, in Morocco, financial technology (fintech) is advancing rapidly: the country has embraced its efficiency and low costs as a way to bolster financial inclusion, with both the government and the private sector deploying fintech tools for payments. Indeed, the development of a fully digital financial environment is an important objective in Morocco’s strategy to cement itself as a leading financial centre in the region – a transformation that has been accelerated by the pandemic.

Another emerging economy that has embraced fintech as a path to both competitive advantage and financial inclusion is Trinidad and Tobago. The country has taken significant steps to leverage its digital economy, such as the inauguration of a dedicated Ministry for Digital Transformation in July 2021. Indonesia is similarly boosting its fintech ecosystem. Launched in August 2020, the country's Digital Finance Innovation Roadmap and Action Plan 2020-24 aims to ensure stable digital financial services; extend financing to micro-, small and medium-sized enterprises; and enable inclusive financial services that are affordable, convenient and scalable.


Closely connected to the rise in digital payment methods is the worldwide boom experienced in e-commerce since the start of the pandemic. This took place in markets where e-commerce was already established, as well as those that had previously been more hesitant. In Latin America, for example, prior to the pandemic e-commerce penetration was relatively low, with uptake hindered by a substantial unbanked population, complicated logistics connections and general lack of trust in online methods. The situation has changed drastically in the years since, with the value of e-commerce transactions in the region estimated to have grown by nearly 40% in 2021. A number of homegrown companies have capitalised on the shift, chief among them the online marketplace Mercado Libre, which allows individuals and businesses to buy, sell, advertise and pay for goods on its online platform. Another is PIX, a Brazilian digital wallet that garnered more than 110m users in its first year, after coming online in November 2020.

In Africa, the pandemic has given rise to a marked increase in e-commerce use, notwithstanding ICT infrastructure constraints. This is a trend that seems likely to continue: a report by the UN Conference on Trade and Development published in March 2021 found that more than 40% of customers in four large African markets were planning to reduce their supermarket shopping in the future by purchasing food, clothing and electronics online. A number of African start-ups have emerged to capitalise on this growth. These include TradeDepot, an end-to-end distribution platform, the main focus of which is the digitalisation of micro-retail distribution. Responding to supply chain disruption caused by the pandemic, TradeDepot today supplies tens of thousands of small-scale retailers in Nigeria, South Africa and Ghana. Indeed, Africa’s tech start-up ecosystem is increasingly being recognised for its dynamism. Major tech clusters have emerged in Lagos, Nairobi and Cape Town, while in Algeria the recently appointed minister of start-ups and the knowledge economy is spearheading a drive to increase digital innovation in the country.

Growth Industries

The acceleration of digitalisation has opened up a variety of potential growth industries that some emerging economies are looking to support. One of these is the post-pandemic surge in so-called digital nomads – a term for workers who can work remotely and relocate relatively freely. A number of emerging markets sought to capitalise on this phenomenon and attract digital nomads through a series of incentives and special visas. For example, in October 2020 the Dubai government launched its virtual working programme. This was followed in March 2021 by a UAE-wide, one-year residence permit for remote workers. By mid-2021 Dubai was ranked the second-most attractive destination for digital nomads in the world in the Work-From-Anywhere index released by online platform for furnished rentals Nestpick.

“Today’s technology-driven global economy demands that people have the necessary tools to connect anywhere at any time using any device of their choice,” Ali Al Kuwari, president and CEO of Qatari satellite company Es’hailSat, told OBG. “Teledensity is high in Qatar, which supports the connectedness of both the domestic workforce and visitors to the country.”

Another growth area is cybersecurity. In Mexico – a country that is consistently ranked as experiencing among the most cyberattacks in Latin America – cybersecurity is an industry with considerable potential. The growth in prominence of these and other fields is increasingly reflected in university courses, with institutions moving to fill gaps in the employment market. A good example of this is Middlesex University Dubai. In addition to existing courses in areas such as data science, network management and cloud computing, in 2021 the school launched courses in electronic engineering, and cybersecurity and pen testing – which looks for vulnerabilities in an organisation’s networks, applications and security measures.

Closing The Gap

Another growth opportunity associated with digitalisation is related to its supportive physical infrastructure. Many emerging economies have inadequate ICT infrastructure, limiting their capacity to capitalise on the opportunities that are emerging from the digital transformation.

There are also further gains to be made in connectivity: internet user penetration stood at 53.6% in 2021, according to the UN International Telecommunication Union. In advanced economies this figure was 87%, but stood at 47% in developing countries. Although many low-income communities – in both rural and urban areas – lack reliable, affordable internet access, there are numerous examples of emerging markets that have successfully implemented programmes to expand internet access. In Colombia, the Vive Digital plan created 900 free public access internet centres in rural villages. Elsewhere, Microsoft’s W-GDP Microsoft Women’s Digital Inclusion Partnership, launched in late 2020, aims to expand the number of women with internet access around the world. The programme will invest in ICT infrastructure in rural areas of Colombia, Ghana, Guatemala, India and Kenya.

In Qatar, meanwhile, 5G connectivity is integral to the realisation of Qatar National Vision 2030, a longterm framework that aims to develop a diversified, knowledge-based economy underpinned by digital technology. It will also play a crucial role in the fan experience of the 2022 FIFA World Cup – the first such tournament to be held in an Arab country. These and related efforts should help to close the digital infrastructure gap and ensure that emerging markets can leverage digitalisation to enhance economic growth.

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