Launch of the Digital Economy Report 2019 (UNCTAD) - Press Conference (4 September 2019)

Press conference by Chantal Line Carpentier, Chief of the United Nations Conference on Trade and Development (UNCTAD) New York office on the launch of the Digital Economy Report 2019.

Concerted global efforts are required to spread the rapidly expanding digital economy’s gains to the many people who currently reap little benefit from it, says a new United Nations report, released today (4 Sep).

Presenting the UN Conference on Trade and Development (UNCTAD) Digital Economy Report 2019, the Director of UNCTAD’s Division of Technology and Logistics, Shamika Sirimanne, said the divide between developed and developing countries, “does not apply to the digital economy” and noted that “in terms of wealth creation, it is basically a tale of two countries, United States of America, and China.”

Sirimanne told reporters that “together these two counties account for 90 percent of the market value of the world’s largest digital platform companies.”

In contrast, she said, “Europe’s share in platforms, these mega platforms, are only 3.6 percent, and Africa owns 1.3 percent of platforms.”

Also, Sirimanne added, “China and the United States have 75 percent of all patents related to blockchain technologies, and more than 75 percent of cloud computing markets, and these two countries also present half the global spending on internet of things.”

Businesses that build digital platforms have a major advantage in the data-driven economy, according to the report, which argues that by acting as both intermediary and infrastructure, they are positioned to record and extract data related to online actions, interactions and transactions conducted by users.

Seven “super platforms” – Microsoft, followed by Apple, Amazon, Google, Facebook, Tencent and Alibaba − account for two thirds of the total market value of the top 70 platforms.

Sirimanne said, “the combined value of the platform companies, the big ones, grew by 67 percent between 2015 and 2017. 67 percent growth in the platform economies.”

The UNCTAD official said, “we look at Google and Facebook and we find 60 percent of their profits are created outside the United States. But 90 percent of taxes are paid in the US. So, in this report we call for more work on effective taxation, and also we look at the policies to protect workers on line.”

The report says governments have a critical role in shaping the digital economy by defining the rules of the game, the report notes. This involves the adaptation of existing policies, laws and regulations, and the adoption of new ones in many areas.

Policy responses need to consider increased difficulties of enforcing national laws and regulations with respect to cross-border trade in digital services and products, the report recommends.
Further, they should explore new pathways for local value creation and capture, and structural transformation through digitalization.

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