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COVID-19 CORONAVİRUS – transition to digital economy

23.04.2020,12:59


April 23, Fineko/abc.az. The world is currently on the verge of new global changes. The innovations brought to our lives by the Fourth Industrial Revolution (Industry 4.0) - the wider use of information and communication technologies, the use of the Internet by about 60% of the world's population (increased due to the COVID-19 pandemic), robotics and artificial intelligence technologies, Internet of Things, consumption of large amounts of data and consequently, rapid digitalization have opened up new opportunities. These opportunities are becoming more pronounced these days.

With the coronavirus infection that started in China earlier this year, which was declared the pandemic by the World Health Organization (COVID-19) on March 11, people in millions of homes and offices around the world are now more actively using digital platforms. The global coronavirus pandemic is similar to the "Black Swan" (a term used in the book "The Black Swan: The Impact of the Highly Improbable" by American economist and writer Nassim Taleb, meaning an event with far-reaching consequences, though it is hard and almost impossible to predict globally). The emergence of a new type of coronavirus turns the digitalization of various sectors of the economy and the acceleration of the transition to the digital economy into the most discussed subject around the world.

 

Coronavirus encourages the use of new generation technologies, digital technologies are advancing

 

At present, this "Black Swan" can lead to global economic changes, as well as change the behavior of each of us - both people and organizations. The leaders of some countries are already abandoning international meetings and conferences in the face of the fact that it is safer to communicate via Skype, Zoom and other means, and business, education and various fields are moving to the online platform. Remotely managed workplaces and video conferencing, as well as the wider use of connectivity services, allow millions of people to manage their work from home without going to the office, resulting in a sharp reduction in costs. Experts believe that in the fight against the pandemic, unmanned and contactless fast delivery fully demonstrates its advantages. Service robots, self-service shops without sellers, etc. are becoming a new trend, helping to reduce the risk of infection.

As we see, the spread of the infection around the world has isolated most cities in the United States, Europe and Asia and has had serious impact on the development of digital technologies in the economy. Due to the fear of getting infected with the virus, people and companies prefer to shop online rather than offline, which will further increase the share of e-commerce.

The current situation leads to an increased need for online applications and digital technologies, which makes it necessary to have and build a sustainable infrastructure in the world. Thus, with millions of people already working from home, the need for connectivity services is growing, the volume of content transmitted on the Internet is growing, which makes it necessary to develop infrastructure.

Competent authorities, private companies and scientists are now trying to find new ways to fight the virus. In China, police tracked people not wearing medical masks in dangerous areas using drones. Internet giants (Google, Facebook, Amazon, etc.) have launched a campaign to combat fake news relating to the virus. The Canadian company “BlueDot” collects data on new cases around the world and uses artificial intelligence to predict whether there are new cases in China or other parts of the world. The American startup AIME (Artificial Intelligence in Medical Epidemiology) has been using artificial intelligence since 2015 to analyze and predict the spread of epidemics.

China's experience in the fight against coronavirus in real time has shown the world the power of modern technology and superApps (including special mobile applications that combine dozens of services). The cases of infection, which started in China in late December 2019, began to decline in early February with the mobilization of China and the use of all possible means. Various applications backed by artificial intelligence technology of large Chinese companies Baidu, Alibaba, Alipay and others have had an extraordinary effect in the fight against the pandemic. More than 50% of all calls to the healthcare system switched to online, as carriers of the virus could spread it when they went to the doctor. For this purpose, a high-speed 5G network and the telemedicine system was widely used. At the same time, a variety of mobile medical applications were launched, providing patients with communication with doctors, pharmacies, giving useful advice in the fight against the virus.

The results show that the means used to reduce the damage caused by epidemics have greatly increased thanks to information technology, including the Internet, and digitalization has changed the way people approach the diagnosis and monitoring of many diseases.

 

Digital transformation in Azerbaijan

 

Today, digital technologies are also applied in Azerbaijan, and the country is already on the way to digital transformation. The country's leadership is working hard to digitize the economy and build a digital economy in Azerbaijan. Azerbaijan has already become a transport and energy center connecting Asia and Europe, and work is underway to turn our country into a digital and technological center (Digital Hub).

Amid the current global changes and new conditions created by the pandemic, Azerbaijan's main goals are to digitalize the economy, build a digital economy, increase the country's competitiveness, investment attractiveness and information sovereignty by ensuring technological independence and infrastructure security.

Against the background of changes in the world and the fight against the pandemic, Azerbaijan also needs to respond to the ongoing challenges and reach new horizons in economic development. As in developed countries, the digitalization of the economy, the establishment of a digital economy, the application of innovations is a priority for Azerbaijan. The country's favorable geographical position and natural resources, human potential, as well as state programs adopted in recent years, decrees and orders of President Ilham Aliyev create all prerequisites for these objectives. The primary goal here is to apply digital technologies in all spheres of public life, from various fields of the economy to urban infrastructure. It consists of five areas: education, infrastructure, information security, scientific and technological development and normative regulation.

Education - the most important point here is to improve the system to provide the digital economy with skilled labor. The population must have appropriate "digital" skills. During the current pandemic, we see the need to move the education system to a fully online mode.

Infrastructure - infrastructure development is a priority, as it is necessary to create a single system that will help store and process all data. Building a digital economy is closely linked to sustainable infrastructure, since modern technological infrastructure is the basis of digitalization and digital economy.

Information Security - development of cybersecurity will protect users' data from both internal and external threats as we see the growing number of data leaks observed around the world at the moment. To achieve this, it is necessary to increase the literacy of the population in the field of information security. At the same time, all hospitals, schools, universities and settlements in the country must be connected to the Internet.

Scientific and technological development – researches in the field of digital economy ensure the development of latest technologies. Such technologies include artificial intelligence, robotics, digital medicine, augmented and virtual reality technologies, big data, quantum technology and blockchain.

Normative regulation - the development of the digital economy, the introduction of new technologies and their use require to create a regulatory environment that will not hinder their use.

 

Sustainable infrastructure is a basis of digitalization and digital economy

 

Amid the ongoing COVID-19 pandemic, the need for infrastructure is growing with the transition of the world from offline to online. Today, the modernization of fixed technological base and the development of new technological infrastructure in Azerbaijan is important in terms of improving international connectivity services and increasing the number of Internet users. Digitalization and the development of connectivity services form the basis of the “Azerbaijan Digital Hub” program, which is currently being implemented and aimed at turning Azerbaijan into a regional digital center. Building a sustainable infrastructure under this program, implemented by “AzerTelecom”, a backbone internet provider that is a subsidiary of “Bakcell”, Azerbaijan's first mobile operator, is a priority. The project, implemented jointly with “Azerbaijan Railways” CJSC in the field of infrastructure building, provides for the construction of backbone fiber-optic cable lines along the railway protection strip and the establishment of network connections with telecommunications operators in neighboring countries in the North-South and East-West directions. Projects involving the construction of backbone cable lines between Azerbaijan and Central Asian countries via the bottom of Caspian Sea generally envisage the creation of a Digital Silk Road along the historic Silk Road between Europe and Asia.

The volume of Internet traffic between Europe and Asia is increasing and the Internet is being used more widely with the application of various digital solutions and online platforms by governments and businesses. The implementation of various projects under the “Azerbaijan Digital Hub” program will make Azerbaijan a key country in the transmission of Internet and content from Europe to Asia.

 

“Azerbaijan Digital Hub” is a useful platform for digital economy

 

Changes in the world show that, like all countries, Azerbaijan needs intensive digitalization and, in general, a digital economy. At present, significant reforms, and large-scale public and private programs are being implemented to build a digital economy in Azerbaijan. A public-private partnership is established to promote the country as a digital hub at the global level and to apply digital technologies.

It should be noted that the “Azerbaijan Digital Hub” program and various projects within this program create a favorable opportunity for the establishment of fixed technological infrastructure to build a digital economy, bring major content providers (Facebook, Google, Netflix, Amazon, Alibaba, Tencent, etc.) to Azerbaijan, meet the data traffic needs of Asian countries through Azerbaijan, and as a result, to become a digital hub. Successful implementation of the program will ultimately create conditions for the formation of a digital ecosystem in Azerbaijan, the establishment of a digital economy, increasing the share of the digital sector in the economy. If we look at the economic indicators of different countries, it is clear that the share of the digital sector in the economy is 12% in South Korea, 8.6% in Sweden, 8.3% in Finland, 7.4% in the United States and 7.1% the United Kingdom. According to the World Economic Forum, in the next decade, 70% of new values ​​in the economy will be created on the basis of digital platforms. Google predicts that by 2025, the digital economy in Southeast Asia will triple to $ 240 billion.

Given the importance of the digital economy, countries around the world are taking different initiatives. Countries such as the United States, the United Kingdom, France, Norway, Qatar, China and Russia have established specialized agencies and adopted national programs in this area, and are making progress in building a digital economy by making digital transformation processes more efficient.

In the current situation, Azerbaijan also has the opportunity to use its potential to accelerate the process of digital transformation, build a digital economy and achieve rapid sustainable development through a unified state policy and coordination.

 

Author: Fuad Allahverdiyev

Director General, “AzerTelecom” LLC

“Azerbaijan Digital Hub” Program Head

 

About the author: Fuad Allahverdiyev has over 20 years of work experience in the ICT and telecommunication sector of Azerbaijan. He was a founder of different start-ups and several successful companies in the telecommunications industry. Mr. Allahverdiyev graduated from Baku State University and Moscow State University named after M.V.Lomonosov (Executive MBA program).  Currently, Mr. Allahverdiyev is the Director General of “AzerTelecom” LLC. At the moment “AzerTelecom” is implementing the "Azerbaijan Digital Hub" program to turn the country into a Regional Digital Center, in addition to the status of the Energy and Transport Center owned by Azerbaijan.