ADB and the Fourth Industrial Revolution

Devex
By Pete Troilo

Workers at a locomotive assembly plant in Astana City, Kazakhstan. Photo by: Asian Development Bank / CC BY-NC-ND

How technology solutions can accelerate development impact and drive efficiency was among the many important crosscutting themes addressed during the four-day Asian Development Bank 50th annual meeting, which wrapped up Sunday.

From achieving the Sustainable Development Goals to infrastructure design and implementation to youth engagement, the ADB forum continuously highlighted the role technology and innovation should play in the bank’s portfolio and engagement across the Asia-Pacific region.

“We are trying to use technologies as much as possible to support our projects, and infrastructure projects should include more advanced technologies to strengthen resilience, lower costs and provide good models,” asserted ADB President Takehiko Nakao.

The government of Japan announced it will donate $40 million over two years to a High-Level Technology Fund to support technical assistance and recruitment of technology experts. “Japan welcomes and supports ADB’s initiative to incorporate advanced technologies into projects,” said Taro Aso, Japan’s Deputy Prime Minister and ADB Governor.

In a session titled “Where to Invest in ICT for Biggest Economic Impact,” ADB officials and partners discussed various ways digital technology can expand opportunities for developing countries. The session revealed that companies — particularly those in developing economies — often lack the technological knowledge to use and implement state of the art technologies which slows economic growth.

Panelists argued that digital technology can accelerate growth by raising trade, productivity and competition, but only if people in those economies have the right skills. World Bank Senior Economist Marc Schiffbauer characterized this as a “race” between technology adoption and the quality of institutions, skills, regulations and other complements necessary to realize what the World Bank calls “digital dividends.”

According to ADB Research Economist Alisa DiCaprio, the bank and other public sector institutions have an important role to play in technology diffusion and adoption. Specifically, they should invest where progress is not inclusive, and employ the full range of policies to smooth the transition to digital.

“Trade is such a ripe space for disruption because trade is incredibly inefficient and it’s also not particularly inclusive,” said DiCaprio, a trade expert who also believes ADB should prioritize high-impact technology projects that reach marginalized populations. “We’ve come to realize that physical infrastructure is more than building roads, ports, and submarine cables … you have to address the last mile problem.”

Simon Wilkie, chief economic policy strategist at Microsoft, used the terms “the Fourth Industrial Revolution” and “universal ambient intelligence” to describe the digital disruption the world is experiencing today. Wilkie forecasted a world of new markets, organizations, social and business contracts, and jobs that can benefit developing countries, but only if the right policies and investments are in place.

Devex sat down with ADB’s DiCaprio and Microsoft Public Sector Vice President Stefan Sjoestroem to dig deeper into trends in technology disruption and the role international organizations can and should play to advance ICT for development. Watch the interviews below.