22.12.2021

NEW REPORT BY TSKB ECONOMIC RESEARCH: “UNLOCKING THE TRANSFORMATION: DIGITALIZATION AND GREEN TECH”

TSKB Economic Research added a new report to its “TSKB Theme Look” publication series. The report, entitled "Unlocking the Transformation: Digitalization and Green Tech", which focuses on the transformation in economic activity brought about by digital technologies in the post-Covid-19 era and the role they will play in the transition to a green economy, offers a detailed analysis and reveals the extent of inequality in digital access while proposing solutions.

TSKB Economic Research looks to the future in its report on how digitalization and the green economy will transform economic activity in the post-Covid-19 era. The study, which focuses on the predictions for the new period, supports these with striking analyses about the present and the future. Some of the key points of the "Unlocking the Transformation: Digitalization and Green Tech" report, written by Mr. Cem Avcıoğlu, are as follows:

Frontier technologies may offer developing countries a competitive advantage

The digital economy continues to evolve with the collection, analysis and use of digital data which have been built up in almost every aspect of life. Combining these competencies with various other disciplines, new digital technologies (frontier technologies) offer a window of opportunity for developing countries. These technologies including the Internet of Things, artificial intelligence and robotics are expected to reach a total market size of USD 3.2 trillion by 2025. The application of these technologies to existing business lines has the potential to provide developing countries with a competitive advantage in the near future through the discovery of new products and services. On the other hand, cyber-attacks, which have become increasingly numerous and sophisticated, threaten the integrity and confidentiality of data, and risk disrupting the adaptation of individuals, businesses and states to the digital age, and their operations.

Information and communication technologies education to play a vital role for developing countries

The report, which states that the new era necessitates a different development policy, emphasises that the number of industrial robots used in factories reached a new peak in 2021. The use of industrial robots is still limited to a small number of industries such the automotive industry and electronics. In most industries, such as textiles and clothing, human labour remains technically and economically preferable to the automation option. In the next decade, advanced robots are expected to become cheaper, while their capabilities and efficiency are expected to increase significantly. This may lead to multinational corporations, which had moved various areas of their production processes to developing countries in order to benefit from low labour costs, to relocate their production sites to developed countries as automation gains momentum. However, digital technologies such as artificial intelligence and automation also offer opportunities for developing countries. These technologies, which replace physical work, are expected to create new areas of employment where human labour has a relative advantage. Building an education system which takes into account of the new production conditions and boosts skills, especially in the field of information and communication technologies, will play a vital role in helping developing countries struggle the middle-income trap.

Digital divide stands out as an important area of struggle

The concept of a “digital divide”, which expresses the inequality between those who can benefit from the advantages of the digital age and those left behind is considered to be the most important agenda item of the digitalization issue in the study. Emphasizing that Turkey suffers from the widest regional digital divide among the OECD countries, the report states that inequality is also observed between genders. Accordingly, there is a more than threefold difference in the ratio of individuals who have access to a computer or the Internet between regions in Turkey. When it comes to the ratio of people who have access to a computer, which is an important indicator of digital skills, the difference between men and women of working age is about 16 percentage points. In light of these figures, it is emphasized that fully obtaining the economic, social and environmental benefits of digitalization depends on the dissemination of skills throughout society.

The digital transformation must be accompanied also by a transformation in energy.

Another focus of the work is the role that green technologies, which can be expressed as technologies which reduce or reverse the negative environmental impacts of human activity, can play in the fight against climate change. While emphasising that cities, which are at the heart of economic activity all over the world, have a significant share in energy consumption and greenhouse gas emissions, the contribution of smart city solutions based on technologies such as 5G and the Internet of Things to climate action in many areas such as transportation, water supply, waste and heating is also discussed in the report. While the report states that demand for data centres, digital services and cloud computing services will grow in the near future, it is underlined that the digital transformation should be accompanied by a transformation in energy. Technologies such as the Internet of Things and cloud computing, which require vast amounts of data flow, add efficiency to all layers of the value chain, on the other hand, they have their own energy needs. This means that the establishment of these technologies must be accompanied by renewable energy production and measures to boost energy efficiency. In addition, the progress in digital technologies directly serves some of the sustainable development goals (SDGs) of the United Nations' 2030 agenda.

The full report "Unlocking the Transformation: Digitalization and Green Tech" can be accessed from the link.

Türkiye Sınai Kalkınma BankasıTurkey’s comprehensive environmental portal cevreciyiz.com is supported by TSKB.