Week 8.2 - Digital Development in the Age of Global Production Networks Flashcards
(130 cards)
1
Q
Why do tech firms prefer general terms like ‘digital technology’, ‘digitalisation’, and ‘data’?
A
To make their strategies seem inevitable and universal, rather than contestable transformations
2
Q
Who are some actors that tech platforms must contend with in digitalisation efforts?
A
Public policy actors, politicians, civil society, and other businesses
3
Q
Do tech platforms act alone when entering the development space?
A
No, they often collaborate with other actors despite having core commercial interests
4
Q
How do some media and economic accounts misrepresent digitalisation?
A
By equating technological affordances with actual impacts and ignoring the difficulty of scaling and power dynamics
5
Q
Is it easy for developers to scale digital technologies to poorer or rural users?
A
No, scaling requires extensive outreach and an iterative process due to the influence of informal power brokers
6
Q
What makes disintermediation difficult in rural or low-income settings?
A
Informal intermediaries are deeply embedded, making it hard to bypass them
7
Q
How do tech firms integrate themselves into public policy?
A
By investing in infrastructure, training, and offering cost-saving services
8
Q
How do tech firms use research to influence policy?
A
By funding research in areas like fintech and behavioural economics that align with their capabilities
9
Q
What role do tech firms play in academic research?
A
They provide access to big data and collaborate directly with researchers
10
Q
How do tech firms present themselves in global governance discussions?
A
As experts in forums like the ITU and WTO e-commerce meetings
11
Q
What political tactic do tech firms use to shape regulations?
A
Lobbying
12
Q
Does technical affordance automatically lead to impact?
A
No, affordance does not equal impact
13
Q
What is a common issue in respected publications regarding digital technologies?
A
They often contain unverified claims about digital applications
14
Q
What myth exists around disintermediation in digital development?
A
That it will occur almost magically without confronting real-world complexities
15
Q
Are claims about digital apps like Digifarm always verified before being celebrated?
A
No, many apps are labelled successful before proper evaluation
16
Q
How are low-income countries represented in digital trade talks?
A
They remain underrepresented
17
Q
What does underrepresentation of low-income countries risk?
A
It risks creating one-size-fits-all global rules driven by advanced economies
18
Q
What is the consequence of excluding low-income country voices in digital discussions?
A
Legitimate development concerns may be overlooked
19
Q
How should revolutionary digital development claims be treated?
A
With skepticism until solid evidence is available
20
Q
What specific metric should be scrutinised in digital impact assessments?
A
The difference between users and active users
21
Q
What shapes people’s experience of digital connectivity?
A
It is shaped by both physical geography and social-political context
22
Q
What is digital governance?
A
It includes standards, laws, policies, and norms governing digital systems
23
Q
What do ICTs complement rather than replace?
A
They complement infrastructures like electricity, roads, finance, literacy, political power, and more
24
Q
What percentage of non-users in low- and middle-income countries cite digital literacy issues?
A
Nearly 70% are held back due to digital literacy deficiencies
25
What cost reductions does digital infrastructure offer?
It lowers the cost of retrieving information, coordination, and transactions
26
How does transport infrastructure improve trade?
By reducing the costs of physically moving goods across borders
27
What impact do electricity, water, and waste infrastructure have?
They reduce domestic production costs per worker
28
How do knowledge infrastructures help production?
They lower the cost of innovation and skilled labor production
29
What is required to achieve higher value production and better trade terms?
All four infrastructures—digital, transport, utilities, and knowledge—must be developed together
30
Can countries leapfrog development by focusing on digital infrastructure alone?
No, infrastructural complementarity is necessary, and leapfrogging is not possible without it
31
What challenge do low and middle-income countries face with ICT professionals?
They are educating ICT professionals but not retaining them due to brain drain caused by large wage differentials
32
What are some common areas of digital governance policy?
Internet filtering, privacy, security, and censorship
33
What is the purpose of digital tariffs or taxes?
To regulate and monetise digital services provided by foreign firms
34
Why has the US pushed for digital freedom in trade agreements?
Because such agreements are enforceable and can shape global digital rules
35
Why do countries like China and India have more leverage in digital trade?
Because US firms are eager to access their large markets
36
Why do African countries have less leverage in digital trade?
Because their markets are smaller and less valuable to US firms
37
Which African countries have pushed back against WTO digital rules?
South Africa and Rwanda, as part of the Africa Group
38
How has the US changed its WTO e-commerce agenda recently?
It has backed away and is moving to end the de minimis exemption to counter China’s digital policy
39
What is the de minimis exemption in digital trade?
It allows small-value imports to enter without duties, fueling US imports from Chinese platforms
40
Which companies have benefited most from the de minimis exemption?
Temu and Shein, which are estimated to account for 30% of such US imports
41
What do neoliberals believe about regulating digital technologies globally?
That global rules are needed to harmonise digital services so firms can maximise efficiency
42
What is currently being done about digital protectionism?
There is a push to build evidence against it
43
What is the problem with informal property rights?
They create risks, dissuade investment, and limit access to credit
44
What problems arise from information asymmetries?
Poor access to information leads to misallocation of resources and exploitation by middlemen
45
What issues stem from high transaction costs?
Lack of trust leads to inefficient investment choices based on familiarity, not merit
46
Why are market information and agronomic apps important?
They address information asymmetries and compensate for underinvestment in public services
47
What do digital marketplaces aim to do?
Reduce transaction costs and cut out the middleman
48
How do digital financial services help users?
By offering small credit to build financial identities and credit histories
49
What is the traditional and updated understanding of structural transformation?
Traditionally industrialisation, now adapted to include technological changes
50
What determines which countries can carve out exceptions in global rules?
Their bargaining power and political economy
51
What do private businesses typically seek?
Profit maximisation for themselves, not necessarily aligned with public interest
52
Do high-income countries always follow the same economic paradigm domestically and abroad?
No, they may disguise industrial policies at home as national security or environmental concerns
53
What is Business Process Outsourcing (BPO)?
BPO is when internal business tasks like call centers, accounting, or engineering are outsourced to countries like India, the Philippines, or Kenya
54
What enables the rise of BPO?
The global penetration of digital technologies and infrastructure enables BPO by stretching global value chains and transforming firm processes
55
How are tasks simplified in Welch’s system?
Tasks are progressively simplified to reduce skill and cognition in non-core tasks while identifying high-value core tasks
56
Where do high-skill tasks remain and why?
In high-wage economies with existing investments and lower risks, protected by barriers to entry (Schumpeterian rents)
57
How are simplified tasks relocated?
By seeking the lowest cost-capability ratio through outsourcing or FDI, aiming for cost arbitrage despite risks
58
What does the smile curve represent?
It shows the skill and complexity levels at different production stages from R&D to sales
59
What does the World Bank say about data-enabled services in global trade?
They create new trade opportunities for countries that previously lagged in global market access
60
What role did ISI play in India’s BPO development?
It helped establish domestic conglomerates in the 1970s
61
What enabled India’s success in upgrading?
Long-term investment in engineering and labour migration to the US built networks and credibility
62
What are the outcomes of India’s BPO strategy?
It achieved job creation and upgrading but also increased inequality and limited linkages
63
How has India’s upgrading affected others?
It has restructured production and removed knowledge rents, making its development path harder to replicate
64
What characterises the Philippines’ BPO sector?
It is almost entirely foreign-owned and focused on slotting into multinational networks
65
What is the economic impact of the BPO sector in the Philippines?
High employment but low domestic capability development and dependence on foreign firms
66
Where have BPO-generated rents flowed in the Philippines?
Into real estate, imports, and urban services
67
What limited Kenya’s BPO success?
Domestic ownership lacked experience and could not manage production or reputation effectively
68
Why did government support in Kenya fail?
It lacked targeted investment and reciprocal control mechanisms, damaging the sector’s credibility
69
What is Kenya’s current BPO direction?
It’s shifting toward software, startups, social impact sourcing, and attracting foreign BPOs
70
Why has Kenya struggled to become a low-cost hub?
Despite having software skills, it faces brain drain and hasn’t established cost competitiveness
71
What is the aim of China’s Digital Silk Road?
To lead the global digital economy and break barriers against China-based digital firms
72
What milestone occurred in 2015 for the Digital Silk Road?
Four cross-border cables were built connecting China and ASEAN, praised for advancing regional integration
73
What is the basic purpose of the Digital Silk Road?
To enhance China’s influence in the global digital communication order
74
What policies define China’s digital state capitalism?
State-led R&D, loans, the Belt and Road Initiative, and support for state-linked and private tech firms
75
What are the impacts of Chinese e-commerce access?
Cheaper goods for consumers but increased competition undermines local producers and ‘natural protection’
76
What role does ‘de minimis’ play in digital trade tensions?
It facilitates Chinese coordination of small trades, increasing imports and competition
77
How is the global economy changing?
It is becoming increasingly digital, affecting trade in both goods and services
78
Why is the internet important for trade today?
It, along with cross-border data flows, has become a key channel for international trade
79
How are countries using internet governance policies?
They use them for economic and trade purposes, creating challenges to existing trade rules and prompting demands for new ones
80
What role is the US playing in digital trade?
The US is leading efforts to create new digital trade rules that discipline national internet policies and liberalise digital trade
81
What does digital trade include?
All trade that is digitally enabled, whether goods or services are delivered digitally or physically
82
What are examples of digital trade?
E-commerce, digital services like software, music, cloud computing, IoT, and autonomous vehicles
83
How is digitalisation affecting trade classifications?
It blurs the lines between goods and services and challenges traditional product classifications
84
What is the role of data in trade?
Data is now crucial for trade, yet existing trade agreements don’t fully account for it
85
How do powerful states use trade agreements?
They use them to promote their own economic agendas
86
What are classification issues in digital trade?
Products that were once physical, like books or software, are now digital, raising questions over whether they fall under GATT (goods) or GATS (services)
87
Why are new digital trade rules being proposed?
Because national internet policies increasingly impact trade and need to be regulated or liberalised
88
What is China’s approach to digital trade and governance?
China uses internet filtering, data localisation, and forced technology transfers to promote domestic tech firms and integrate digital trade into industrial policy
89
What are other countries like India, Brazil, and Nigeria doing?
They adopt policies like data localisation and content regulation
90
How does the US promote digital trade rules?
Through lobbying by major tech firms and USTR policies supporting free data flows and protections from liability
91
What is the WTO’s position on digital trade rules?
The US and EU support them, but developing countries like India and the Africa Group resist moving forward
92
What role do regional and bilateral agreements play?
They include binding digital trade rules, as seen in the CPTPP, USMCA, and EU's more privacy-focused approach
93
What are the main goals of the digital trade agenda?
To prohibit digital tariffs, ensure free data flows, ban localisation, prevent forced code transfers, facilitate paperless trade, and harmonise liability rules
94
How are digital technologies impacting industrial manufacturing?
They are transforming manufacturing by enabling optimisation, automation, and data-driven processes
95
What role do Industrial Internet Platforms (IIPs) play in global value chains (GVCs)?
They enable process optimisation, predictive maintenance, and data-driven decision-making within GVCs
96
Why is data considered an important intangible asset in GVCs?
Because it holds increasing value and supports efficiency, innovation, and decision-making
97
What trend is seen with intangible assets across industries?
They are generating a growing share of revenues across sectors
98
What does the Internet of Things (IoT) enable in manufacturing?
It allows real-time data collection and analysis
99
How do IIPs facilitate manufacturing digitalisation?
By providing platforms for data-driven industrial solutions
100
What are innovation platforms in industry?
Platforms that integrate complementary software into a shared ecosystem
101
What are transaction platforms used for?
They facilitate B2B trade by connecting manufacturers with suppliers
102
How do platforms generate revenue?
Through subscriptions, transaction fees, and value-added services
103
What are intangible assets and what role do they play in monopoly capitalism?
Intangibles are non-financial, non-physical, partially appropriable assets (e.g. know-how, digital data) whose IP protections lock in monopoly power through information rents, scale economies, and network effects
104
How have intangible assets shaped GVCs over time?
Since the 2000s, their value in final products has increased, with concentration occurring in distribution stages for buyer-driven chains and pre-production stages for producer-driven chains
105
How do IPRs contribute to monopolisation in the digital age?
Stronger IPRs like patents and trademarks limit access to intangibles and support natural monopolies in markets with scale and network externalities, such as Google’s two-sided data-advertising model
106
How do ICTs affect coordination and fragmentation in GVCs?
ICTs reduce communication costs, enabling global coordination but requiring standardization and codification of tasks to replace lost tacit knowledge, deepening labour fragmentation
107
What is the “smile curve” and how is it affected by intangibles?
The smile curve shows value concentration at R&D and distribution stages; it steepens with tighter IPRs, oligopoly power, and competition among suppliers and labour in lower-value segments
108
What drives the steepening of the smile curve in GVCs?
Factors include stronger IPRs, natural monopoly effects, uneven distribution of intangible assets, and lead firms’ innovation advantages through chain control
109
How do natural monopolies arise in GVCs?
They emerge from scale economies, sunk costs, and network interdependencies where GVC coordination (e.g. Germany’s Industry 4.0) increases value and lock-in, favoring dominant firms
110
How does intellectual monopoly lead to financialisation and stagnation?
IP-rich firms face little competitive pressure, leading to low reinvestment, higher payouts, reduced innovation, and slower economic growth alongside rising inequality
111
What does the WDR 2021 argue about the potential of data in development?
It frames data as an untapped resource capable of transforming public service delivery, enhancing citizen agency, and supporting private sector growth in low- and middle-income countries (LMICs)
112
What kind of data ecosystem does WDR 2021 advocate for?
The report promotes open, interoperable, cross-border data flows and places global data firms at the center of digital transformation in LMICs
113
What are the main critiques raised by Mukiri-Smith, Mann, and Azmeh against WDR 2021?
They critique its weak evidence base, bias toward market-driven governance, and misrepresentation of LMIC positions in global data governance debates
114
What are the key criticisms of the WDR’s evidence base?
It relies heavily on data from high-income countries and unverified success stories, like DigiFarm in Kenya, while citing econometric studies that omit caveats and LMIC data, leading to techno-deterministic thinking
115
What stance does WDR 2021 take on trade and data governance?
It promotes WTO-led digital trade rules and dismisses concerns about reduced policy space, advocating against data localization, taxation, or domestic platform regulation
116
How does the WDR misrepresent LMIC voices in global data debates?
It attributes underrepresentation to capacity gaps, ignoring active opposition by African nations, India, and South Africa to digital trade rules that could entrench global inequities
117
What are IT-enabled services (ITES), and why have they been promoted in development?
Also called Business Process Outsourcing (BPO), ITES includes services like call centers, data processing, and back-office work; it’s been promoted as a leapfrogging path for LMICs to skip manufacturing and integrate into the digital economy
118
How does the global reality of production challenge traditional product cycle theory?
Instead of innovation shifting gradually from high- to low-income countries, today’s fragmented GVCs offshore low-value work while high-value knowledge and innovation remain concentrated in advanced economies
119
Why is value capture in ITES value chains difficult for LMICs?
While ITES offers potential for digital integration, it provides limited learning unless countries achieve value capture, as the sector is unstable, low-margin, and vulnerable to automation
120
What are the three modes of strategic coupling in global value chains?
Structural coupling (foreign firms exploit cheap labor), functional coupling (domestic firms handle higher-value tasks), and indigenous coupling (domestic firms lead and organize production); most LMICs remain in low-value structural coupling
121
What factors contributed to India's strategic success in ITES?
India benefited from an educated, English-speaking workforce, 1990s policy reforms (e.g. STPIs, telecom liberalization), diaspora networks, and global crises (e.g. Y2K); Indian firms evolved from low-end services to global delivery and indigenous coupling, coordinated by NASSCOM
122
What were the outcomes of India’s ITES development?
India became a global ITES leader with significant export revenues and jobs, but benefits were urban, middle-class concentrated, and now threatened by automation reducing lower-end opportunities
123
What characterizes the Philippines' ITES sector and its limitations?
Dominated by foreign MNCs (93%), focused on US voice-based services, with limited domestic firm participation or upgrading; government supported training and infrastructure but lacked strategic intervention, leaving sector vulnerable to automation
124
What challenges limit ITES value capture in the Philippines?
Domestic firms lack capital and skills, real gains accrue to adjacent sectors (e.g. real estate), and there's minimal linkage to domestic productivity or technological upgrading
125
What explains Kenya’s struggles with ITES development?
Despite early optimism and infrastructure investments, Kenya suffers from weak firms, poor coordination, lack of networks and reputational capital, reliance on intermediaries, and exploitation—still struggling to achieve even structural coupling
126
How has Kenya shifted its ITES strategy recently?
The focus has moved toward domestic/regional markets, social impact sourcing, and local tech innovation (e.g. mobile money), but continued emphasis on being acquired by foreign firms may hinder value capture and structural transformation
127
What are three myths about ITES and development according to the authors?
That services can leapfrog manufacturing (they don’t generate mass employment), India’s success is replicable (it was context-specific), and that digital infrastructure ensures market access (access is shaped by firm hierarchies and networks)
128
What does ‘upgrading’ mean in ITES, and why is it difficult?
Upgrading means moving into higher-value GVC tasks, but it's hard in ITES due to ease of outsourcing, automation, and firms prioritizing cost-cutting over long-term investments in human capital or infrastructure
129
How does the role of manufacturing compare to ITES in development terms?
Manufacturing supports broader learning and transformation due to high entry barriers and longer rent sustainability, while basic ITES is easier to commodify, more prone to automation, and less likely to deliver widespread productivity gains
130
How do technological innovation and knowledge rents differ between manufacturing and ITES?
Innovation in manufacturing historically created wage premiums and rents; by contrast, basic ITES lacks such rent generation due to low barriers, cost competition, and automation threats
