3rd LD: Wealth creation in digital economy highly concentrated in U.S., China: report

0 Comment(s)Print E-mail Xinhua, September 5, 2019
Adjust font size:

UNITED NATIONS, Sept. 4 (Xinhua) -- Wealth creation in the digital economy is highly concentrated in the United States and China, according to the first-ever Digital Economy Report 2019 released by the UN Conference on Trade and Development (UNCTAD) on Wednesday.

"Wealth creation in the digital economy is highly concentrated in the United States and China, with the rest of the world, especially countries in Africa and Latin America, trailing considerably far behind," according to the report launched at the UN headquarters in New York, together with Geneva, New Delhi and Tokyo.

The United States and China account for 75 percent of all patents related to blockchain technologies, 50 percent of global spending on the Internet of Things (IoT), more than 75 percent of the cloud computing market and as much as 90 percent of the market capitalization value of the world's 70 largest digital platform companies, the report said.

Under the current policies and regulations, this trajectory is likely to continue, further contributing to rising inequality, UN Secretary-General Antonio Guterres said in the report.

"We must work to close the digital divide, where more than half the world has limited or no access to the Internet. Inclusivity is essential to building a digital economy that delivers for all," Guterres added.

UNCTAD Secretary-General Mukhisa Kituyi said: "We need to respond to the desire of people in developing countries to take part in the new digital world, not just as users and consumers, but also as producers, exporters and innovators, for creating and capturing more value on their path towards inclusive prosperity."

The report, which maps the flow, data and funds in the world's digital economy, outlines the enormous potential gains and possible development costs as more of the world moves, connects and buys online.

Referring to the burgeoning data flows, the report said that global Internet protocol (IP) traffic, a proxy for data flows, has seen dramatic growth. In 1992, there was about 100 gigabytes (GB) of traffic per day. By 2017 such traffic had surged to more than 45,000 GB per second.

"Yet the world is only in the early days of the data-driven economy. By 2022 global IP traffic is projected to reach 150,700 GB per second," the report said.

The surge in data traffic reflects growth in the sheer number of people using the Internet and the uptake of frontier technologies such as blockchain, data analytics, artificial intelligence, 3D printing, IoT, automation, robotics and cloud computing.

An entirely new "data value chain" has evolved, comprising firms that support data collection, the production of insights from data, data storage, analysis and modelling, the report said.

As for the edge of platforms, the report said that businesses that build digital platforms have a major advantage in the data-driven economy. "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."

The report noted that 40 percent of the world's 20 largest companies by market capitalization have a platform-based business model.

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.

The combined value of the platform companies with a market capitalization of more than 100 million U.S. dollars was estimated at more than 7 trillion dollars in 2017, 67 percent higher than in 2015, according to the report.

Some digital platforms have grown to dominate key niches. Google has some 90 percent of the market for Internet searches, while Facebook accounts for two thirds of the global social media market and is the top social media platform in more than 90 percent of the world's economies.

In China, WeChat (owned by Tencent) has more than 1 billion active users. Its payment solution and Alipay (owned by Alibaba) have captured virtually the entire Chinese market for mobile payments. Meanwhile, Alibaba is estimated to have close to 60 percent of the Chinese e-commerce market.

These companies are aggressively consolidating their competitive positions, including by acquiring potential competitors and expanding into complementary products or services, lobbying in domestic and international policymaking circles and establishing strategic partnerships with leading multinationals in traditional sectors, such as automotive, semiconductor and retail industries. Enditem

Follow China.org.cn on Twitter and Facebook to join the conversation.
ChinaNews App Download
Print E-mail Bookmark and Share

Go to Forum >>0 Comment(s)

No comments.

Add your comments...

  • User Name Required
  • Your Comment
  • Enter the words you see:   
    Racist, abusive and off-topic comments may be removed by the moderator.
Send your storiesGet more from China.org.cnMobileRSSNewsletter