Numerous virtual marketplaces have been created for the benefit of online platforms, resulting in a gap between the real and digital economy. Corona is driving more people online than ever before in search of products, services and jobs. As a result, the gap is widening.
The foundation of the Fourth Industrial Revolution is that in today’s economy, measurable and non-measurable elements can coexist, creating new productive combinations. The measurable aspect of the economy provides the infrastructure, and the immeasurable aspect helps these processes to achieve maximum efficiency.
Measurable economy is a prerequisite for measurable economy. Digitization can become measurable, beyond measure, and beyond the traditional limitations of quality. The process of growth has so far been positive for all types of countries, big and small, as it is highly transactional and capital intensive.
However, this idealistic description of the Fourth Industrial Revolution ignores the recent separation between the digital and real sectors of the economy. Companies that have made a profit by excluding conventional components of production are growing faster than they were before Covid-19.
Shares of Facebook, Amazon and Apple have more than doubled in the epidemic. Apple became the first company to reach a value of two trillion dollars. Shares of Netflix and Alphabet (Google) have not doubled, but they are trading at or near the all-time high. On the other hand, Apple’s decision to split the stock has been dropped from the index by veteran members like ExxonMobil, S&P 500 and former icons of measurable economy. While the tech giants are making more money, the rest of the world continues to collapse.
A K-shaped corporate recovery has emerged as real economy assets have fallen far below digital financial assets. Apparently, there is no limit to the growth of digital companies, while the development of others depends on the limited environment in which they operate. This trend is not only challenging the neo-liberal notion of value creation; This is pushing us into a situation where government policy on price restructuring is no longer a viable option.
To address this, some in the public and private sectors have proposed something, such as a tax on digital assets. But proponents of a free economy still insist that any government intervention would only signal further distortion of the market.
We are proposing three other solutions. First, government grants and subsidies can be used to promote technology and bridge the technical gap between platforms and small and medium enterprises. The government can fund programs that reach out directly to smaller companies without expecting the market to provide fair access to technology such as artificial intelligence.
Second, we should work on a more vibrant, multi-partnership innovative model, where issues such as inclusion and representation can be addressed without impeding technological progress. The goal here is to reduce tensions between the winners and losers in the new value chain of the economy.
Third, it is time to identify the appropriate areas for digital security. Just as some countries use trade tariffs to encourage local innovation, digital tariffs can be used to encourage local innovative ecosystems. It will not work everywhere. However, in places where technology has reached the doorstep, such a policy will encourage grassroots innovation.
We are facing a severe crisis of technological opportunities and access. The reason for this is the aggressive business model, which is incapable of embracing justice and inclusion. The price is too high, the market will not solve the problem. There are ways to ensure the benefits of many, not just a few, through the digital revolution; But for that we have to think anew about how we will look at innovation in the 21st century.
Translated from English, all rights reserved: Project Syndicate
● Mark Esposito, co-founder of Nexus Frontiertech, co-director of the 4 IR Research Initiative at Arizona State University
● Laundry Sinie is Professor and Senior Director of the Thunderbird School of Global Management at Arizona State University. Member of the Regional Action Group for Africa at the World Economic Forum
Nicholas Davis Head of the Society and Innovation Department at the World Economic Forum