DIGITAL TRANSFORMATION IN THE EASTERN CARIBBEAN

• Economic Growth Through Digital Transformation

DIGITAL TRANSFORMATION IN THE EASTERN CARIBBEAN

By Justin Ram

•

• Background • The regulatory environment and infrastructure deficits • How to promote digital skills and literacy • Digital technologies that should be embraced by the ECCU • How to expedite digitization of government services • A digitization framework for OECS businesses • Recommendations

Content

Background

Vulnerabilities, Challenges and Opportunities

Economic Growth has been low and volatile

Debt Levels were reduced prior to COVID-19

Country

Average (2000-2018) 2019 2020

Antigua and Barbuda

96.0 77.2 81.7

63.3 67.5 57.8 57.0 61.4 67.6 62.4

85.6 82.3 72.1 76.0 97.6 70.9 80.7

Dominica Grenada

St. Kitts and Nevis

111.7

Saint Lucia

59.4

St. Vincent and the Grenadines 66.7

ECCU

82.1

Persistent Caribbean Challenges

Cross-cutting Challenges

Source: Blueprint for Caribbean Economies

Blueprint Policy Prescriptions

Blueprint for Caribbean Economies

Source: Blueprint for Caribbean economies

Challenges • Inadequate training and skills for the digital era; • Large skills-job mismatches • Significant increases in unemployment in 2020 • Digital infrastructure: reliability and access of broadband services remain challenging; • Legislation and regulation challenges; • A comprehensive cybersecurity or data protection framework remains underdeveloped and uncoordinated;

Digital Challenges and Opportunitites

Opportunities • Post-COVID-19 acceleration of growth, improve public service delivery and build resilience; • Enhanced output and productivity; online services, e-commerce; • Finance and Investment in digital technologies;

Digital Challenges and Opportunitites

Improvements

• Market liberalization and fiber-optic infrastructure upgrades • Improved capacity, reliability, and access to networks • Network upgrades • Penetration rates for internet usage and mobile telephones have improved

The Regulatory Environment and Infrastructure Deficits

Deficits

• Slow pace in adopting new technologies, low connectivity, and high pass-through costs to consumers; • Regulatory frameworks, consumer protection, data privacy, and digital security are still in infancy stages; • Eastern Caribbean region still lags behind other small states in deploying the latest generation networks and infrastructure; • The quality and affordability of broadband services pose significant challenges to digital transformation efforts across the Eastern Caribbean region

The Regulatory Environment and Infrastructure Deficits

Internet Usage in the Eastern Caribbean Region

Broadband prices 2016 vs 2019

The Regulatory Environment

Inadequate to address a rapidly evolving ICT and digital environment

Must be modernized for the region to harness the digital economy's benefits fully

The region must be able to promote consumer and business interests adequately

The investment environment must be adequate to fill market failures and remain

Regulatory challenges in payment systems infrastructure continue to hamper financial services innovation

Resilient and reliable infrastructure networks are needed to facilitate secure information systems and online transactions.

current with the rapid technology evolution

Data Protection and Privacy Law

Country

E-Commerce Law

Cybercrime Laws

Data Protection Act, 2013 No 10 of 2013

Antigua Barbuda

and

Electronic Transactions Act, No. 24 of 2013 Electronic Transactions Act, 2013 Electronic Transactions Act, 2013

Electronic Crimes Act, 2013

Dominica

No Legislation

No Legislation

Electronic Crimes Bill 2013 Electronic Communications Bill 2021 Electronic Crimes Act, 2009 Computer Misuse Act 2011, Evidence and Electronic Transactions Act 2011 2016 Cybercrime Act and 2009 Electronic Transactions Act

Grenada

No Legislation

Select ICT Legislation in the Eastern Caribbean

Data

Protection

Electronic Transaction Act no. 9 of 2011

St Kitts and Nevis

Act, 5 of 2018

Electronic Transaction Act, 2011 (not enacted)

Data Protection Act, No 11 of 2011

Saint Lucia

St Vincent and The Grenadines

Electronic Transactions Act No. 6 of 2015

Privacy Act of 2003

Security concerns over privacy and protection of data and increased threats of cybercrimes

Increased threat to consumer privacy is driven by the vulnerability of consumer data due to the widespread use of digital services Digital transformation has resulted in businesses collecting more data, becoming increasingly vulnerable to hackers, stolen data, and other cyberattacks Such risks can deter individuals and businesses' willingness to utilize digital services, ultimately impeding the region’s digital transformation progress An enabling environment for the region’s digital economy should prioritizes consumer protection, data protection, and cybersecurity

Security and Consumer Protection

Existing national legislation and National Cybersecurity Strategies in the OECS countries

Key Complete In progress None No information

Legislation

National Cybersecurity Strategy

Country

Consumer Protection

Privacy and Data protection

Cybercrime

Antigua and Barbuda

Dominica Grenada Montserrat St. Kitts and Nevis St. Lucia St. Vincent and the Grenadines

Source: CDB 2019, IDB 2020

Promoting digital skills and literacy to ensure that citizens can participate in the digital economy

Education, Private Sector, Public Sector

Education Sector: • Focus on high-level ICT related training and skill development; • Training in digital competencies, including soft skills; • Teachers and education providers should be trained with requisite ICT knowledge and skills; Private and Public Sector • Employees should formally train staff to increase the percentage of the workforce with formal training in advanced ICT-related areas;

Promotion of digital skills

Digital technologies

Automation, Artificial Intelligence, Machine Learning, Big Data Analytics, Smart Home Technology, Cloud Computing

• Artificial intelligence (AI) • Robotics • Blockchain • Internet of Things (IOT) • Big Data • Smart Home Technology • Cloud Computing • 3D Printing

DIGITAL TECHNOLOGIES

Digital Readiness Index

Three pillars : • Digital Infrastructure • Digital Platforms • Facilitation

The Digital Readiness Index is a composite index: Step 1: determining the components necessary for digital transformation; Step 2: selecting and compiling proxy indicators; Step 3: applying normalization methodology to data; and Step 4: computing and aggregating the index.

Constructing the Index

Data used for the Digital readiness index

INDICATOR

Antigua and Barbuda

Dominica Grenada St. Kitts & Nevis

Saint Lucia

St. Vincent and the Grenadines

Aggregate Weight

Weights %

Digital Infrastructure

Mobile Cellular Subscription (per 100 people) (2019)

192.8

105.8

102.0

147.7

101.7

92.9

25

40

Fixed Broadband Penetration (per 100 people) (2019)

9.4

16.1

22.8

55.8

17.7

19.5

25

Active Mobile-Broadband subscription (per 100 people) 2017

50.3

93.9

58.0

51.6

42.5

54.0

25

% of Individuals using the Internet (2017)

73.0

67.0

55.9

76.8

43.1

55.6

25

Digital Platforms

Cybersecurity Index - National Cybersecurity Index (2019)

11.7

3.9

14.3

10.4

9.1

9.1

25

40

Global Cybersecurity Index (ITU 2017)

0.2

0.0

0.1

0.1

0.1

0.2

25

% of Population with 3-G coverage

99.0

95.0

81.9

100.0

37.1

100

25

E-Gov. Index (2019)

0.7

0.6

0.6

0.6

0.5

0.6

25

Facilitation

Digital Financial Services [Proxy with Number of ATMs per 100,000 population]

66.0

34.3

44.5

99.7

41.5

34.9

20

20

Ease of Doing Business Score (2020)

60.3

60.5

53.4

54.6

63.7

57.1

20

Human Capital Index

0.6

0.5

0.6

0.6

0.6

0.5

20

Regulatory Environment (2018)

40.8

72.5

74.0

46.0

85.0

80.0

20

Digital Entrepreneurship [Proxy with Trading Across Borders]

68.7

74.3

61.5

81.0

73.9

77.4

20

• Level of subjectivity in indicators selection, based on access to data and preference • Weighting is subjective • Proxy indicators compiled in most cases by internationally recognized agencies and with a comprehensive coverage of countries

Readiness Index Limitations

Overall digital readiness index scores ranged between 4.4 and 6.0 out of a maximum possible total of 10

Key Findings

The overall average readiness score was 5.3. No country obtained a perfect score on any of the 3 pillars examined

The scores indicate that the ECCU region is in the middle stage of digital readiness. The pillar which is at the lowest level of development (infancy stage) is that of facilitation

The average score for facilitation is 3.0, with the highest country score in St. Kitts and Nevis (3.3).

The most developed pillar was digital infrastructure, with St. Kitts and Nevis leading with a score of 8.1

Digital Readiness Index Result

DIGITAL READINESS (DRI) SCORE

ITU IDI READINESS SCORE 2017

COUNTRY

SCORE

RANK (ECCU)

SCORE

RANK (WORLD)

6.0

1

7.2

37

ST. KITTS AND NEVIS

5.8

2

5.7

76

ANTIGUA AND BARBUDA

5.5

3

5.5

82

ST. VINCENT AND THE GRENADINES

5.3

4

5.8

73

GRENADA

4.6

5

5.7

77

DOMINICA

4.4

6

4.6

104

SAINT LUCIA

PILLAR

Digital Infrastructure

Digital Platforms

Facilitation

Overall Score

8.1

6.5

3.3

ST. KITTS AND NEVIS

6.0

6.8

7.7

2.9

ANTIGUA AND BARBUDA

5.8

6.2

7.3

3.0

ST. VINCENT AND THE GRENADINES

5.5

6.1

7.0

2.8

GRENADA

5.3

6.1

4.7

2.9

DOMINICA

4.6

5.4

4.6

3.2

SAINT LUCIA

4.4

REGIONAL AVERAGE

6.4

6.3

3.0

5.3

Conclusion

Developing a digitally ready economy requires a holistic approach across multiple components that will entail: • Expansion of government services to ensure that all citizens can have equal access and reduce the digital divide • Building the technical skills that can drive a service-driven digital economy • Providing entrepreneurship opportunities that will advance vibrant, creative and technology-savvy businesses and a more inclusive economy • Facilitation and affordability necessary to create a business-friendly environment with support for start-ups and investment by the private sector

A Digitalization Framework for OECS Businesses

A Digitalization Framework for OECS Businesses

• Move to e-commerce platforms • Understand consumer behavior • Digitization and process automation • Modernization of payment systems

• Investments in cybersecurity • Human resource development • Use of data for continuous growth and improvement.

Recommendations

Recommendations

Regulatory environment development

Upgrade infrastructure

Data protection and cybersecurity enhancement

Education reform

Training to upskill existing employees in the private sector and public sector

Digitize internal systems and processes

Thank You Justin Ram

justin@justinram.com https://justinram.com

To build resilience, policymakers in the Eastern Caribbean will need to “change the wheels while the bus is moving”.