By Nagy Hanna, author of Economic Development in the Digital Age and Driving Digital Transformation in Developing Nations.

We are living in the digital age. Are developing countries and aid agencies prepared for the disruption? How can they do better?

The digital revolution is creating unprecedented opportunities and challenges for economic development. Digital transformation is not just about Internet connectivity or access to digital technology by individual users. It is about learning to drive digital transformation by the whole society, especially if its full benefits are to be reaped. It is about using digital technologies to initiate and support deep and sustainable change in institutional structures and processes, modes of production and consumption, value creation from available resources, and/or substantial increases in access to and use of data and knowledge.

I argue that access to digital technology must be accompanied by “social software” to secure much of the promised productivity increase and socio-political sustainability. That means building and orchestrating collateral policies, governance, and institutional changes. A digital transformation ecosystem would include enabling digital policies and regulations, governing cyber security and artificial intelligence. It also includes national information and communication infrastructures, ICT services sector capabilities, artificial intelligence and data sharing infrastructure, digital competencies, public digital platforms, digital identification infrastructure, digital payment platforms, digital innovation and entrepreneurship ecosystems, and the interactions with the transforming (analog) economy.

I explore approaches to the challenges and opportunities of the digital revolution in my two books, Economic Development in the Digital Age and Driving Digital Transformation in Developing Nations. 

In Economic Development in the Digital Age, I assess formal World Bank corporate strategies for digital transformation practice. Did these strategies address the foundations necessary for building vibrant digital transformation ecosystems? Did they cover strategic applications in key economic sectors? Were they owned by the operating regions within the Bank? Were they seriously followed, monitored and evaluated? Have aid agencies practiced what they preach?

I discuss the critical challenges to institutional learning and the need for aid organizations to reinvent their services to strategically integrate digital technologies into their products and services—if they are to keep up with the pace of technological change and stay relevant to their clients. These challenges go beyond skill mix and organizational structure and include inertia, risk aversion, short termism, and poor cross-sector collaboration, among others.

I recommend for aid and financing agencies four key elements of a strategy to accelerate institutional learning: strengthening corporate leadership and strategy for the whole ecosystem of digital transformation; mobilizing staff and other resources for digital disruption and the digital future; nurturing a learning and innovation culture; and promoting cross-sector collaboration within and among international aid agencies and country stakeholders.

In Driving Digital Transformation in Developing Nations, I share my experience in assisting countries, cities and regions to digitally transform. How did countries respond? What roles did the governments, enterprises and civil societies play in energizing and governing the digital transformation process? What kinds of processes and interactions between the country and aid agencies can lead to broad local ownership, empowerment, inclusion, and agile implementation?

I explore two broad themes: transforming government (demand for good government, DFGG) and smart cities. In an era of growing political and economic polarization, can the DFGG movement strengthen the demand for transparent, responsive, and effective government?  In view of growing urbanization and concerns about climate change, would smart city applications help city leaders and stakeholders manage these challenges, despite turf rivalries? Smart cities represent another promising area in support of resilience, innovation, inclusion, sustainable growth, and responsive public service delivery.

Drawing on emerging research, I compare the ways countries adopt national digital transformation strategies to advance sustainable development goals. While national ambitions and goals for pursuing digital transformation do vary, key foundations and dynamics are shared. They present a rich learning agenda for practitioners: what scope and time horizon to take? What public-private balance to create? How to foster local learning, innovation, and inclusion? Much can be learned from comparing diverse country experiences, and in-depth evaluation of the innovations of pioneering countries. 

I conclude with a synthesis of diverse country experience in economy-wide digital transformation. Lessons of experience are organized into five fundamental challenges: enabling holistic and sustained transformational change; local empowerment and broad ownership; leadership development, institutional and human resources development; experimenting, learning and evaluating; and inclusion and diffusion. I suggest how these challenges should be addressed by policy makers of developing countries and their counterparts in aid agencies.

Digital transformation is not a quick technological fix, independent of context. It is a whole-of society learning process. It requires openness to institutional change and learning, political leadership, continuous adaptation, and socio-economic transformation. Countries are still at an early stage of an exciting and demanding digital transformation process, and much can be learned from systematic and timely evaluation of evaluation. 



Nagy K. Hanna advises countries and aid agencies on development economics and digital transformation programs. For more than three decades, he held senior positions in operations and strategic functions at the World Bank. Hanna was the World Bank's first senior advisor focused on digital economy. He was Visiting Professor at University of the Witwatersrand in Johannesburg, South Africa as well as Senior Fellow and Board Member at the Center for Policy on Emerging Technologies. He is Cofounder of People-Centered Internet, a global forum for inclusive digital transformation. Hanna has published extensively on digital leadership and national digital strategies.