Mitigating the risks to growth in the era of digital transformation
March 20th, 2021
The digital economy is the new primary economic value creator for civilization, the disruption being caused by the 4th Industrial Revolution has, without doubt, been accelerated by COVID-19. The world has changed forever, and if you’re standing there flatfooted waiting for the old world to come back, you will be left behind. Adaptation, agility, digital transformation is the new normal, so either digitize-or-die. As globalization is sped up by digital, an estimated 70% of new value created over the next decade will be based on digitally enabled platform business models, according to the World Economic Forum on Global Issues. However, while ever-advancing technology has the potential to enable new value creation and wealth, wealth distribution will be uneven, digitization will exacerbate unequal concentration of power, causing deeper inequality in the world. One of the areas that are often forgotten in leader’s exuberance to digitize the Caribbean’s economies, is cybersecurity, as a risk to sustainable long-term growth and prosperity. Technology provides great benefits, but so too comes related risks. Addressing those systemic risks to the Regional economy, and developing ecosystems to strengthen resilience, will be essential to the future growth and prosperity outcomes of the Caribbean people.
As the region build’s its digital infrastructure, digital networks will connect to the world and will have multiple amounts of digital soft spots that unscrupulous individuals and criminals will undoubtedly try to penetrate.
It would be a mistake and building on shaky ground if policymakers do not build robust resilience against outside threats to the economy, if the US 2016 elections can be influenced by cyber, it will be a walk in the park to hold our regional economy suspended, or hostage from time to time by outside influencers and economic competitors. Intelligence ecosystems that help with export pricing, market intelligence systems, trending data…could all be purposefully corrupted against Caribbean enterprise assets by global competitors.
Enterprising Caribbean entrepreneurs engaged in smart farming, manufacturing, export shipping information—will all depend on accurate cost-pricing and distribution models. In the service sector, the tourism industry which accounts for close to 40% of our real economy GDP, in the new digital economy tourism-hospitality will increasingly rely on digital for business operations. Market research and data analytics in the post-COVID tourism world will be a basic business requirement, to effectively compete. In short, in the new economy, data intelligence—artificial intelligence and machine learning will become an indispensable business asset in a globalized competitive world. Make no doubt, competitors will compete in ways that are unfamiliar now but will be the norm soon. It is good advice to be well prepared for things to come.
“So-called data fusion, or methods by which organizations can collect, filter, and identify disparate intrusion information, must be constructed in such a way that they maximize cyber-situational awareness. Governments and businesses can use data fusion to test defense systems and more accurately identify cyber attacks, in order to rapidly respond” (WEF, Curation: McGill University).
For a developing region, not securing its economic future by not building resilience against cyber insecurity would be a massive failure, setting a course to making sustained prosperity ever more elusive. However, with foresight, actions today, and determination to prosper the future can be bright, but only if we act to make it so.
The region needs to train, and quickly, a new generation of software engineers and enterprise architects, not only to build resilience but to have our own independent digital intelligence unit. Continuously assessing the risks and also the opportunities.
A competitive cyber strategy is in the national interest, we can’t rely on outside contractors to defend our cyber shores, we need our own applied intelligence units to protect and help our economy prosper through digital transformation and beyond.
Methods by which organizations can collect, filter, and identify disparate intrusion information, must be constructed in such a way that they maximize cyber-situational awareness. The challenges are immense, but there is no choice in the matter if we want to compete in a digital, globalized world. Cybersecurity must be part of our inclusive growth agenda. The engineers who will be tasked with these jobs will need the right AI and ML technologies in place, leveraging the benefits from automation to be on par with other countries and industries around the world.
To mitigate the sure-coming cybersecurity risks to Caribbean enterprises and institutions, ‘building-maximum-resilience’ must be a priority embedded all our economic growth plans, it's fundamentally in our national economic-security interest to do so. The information must be efficiently and accurately processed to ensure we are getting ‘clean’ data and not deliberate misinformation, which is now a competitive tactic in globalized commerce competition. Competitors are using cyber to compete more and more, so our regional leaders can’t be naive to the reality of the world in which we exist.
A good place for leaders, both government and business to start, is to formulate, expand on, and optimize cyber resilient strategies to protect our growing economies, securing the necessary runway for economic lift-off.
Making incremental changes while your global competitors are making bold moves, is essentially baking-in future economic threats and chaos for Caribbean economies—this is no time to sit and see how things unfold.
Cybersecurity touches all of our lives, the Internet of Things ties everything together, from our cars to our phones, our medical devices and our houses, through internet connectivity. As devices more deeply penetrate our lives, we face new privacy and security vulnerabilities. With so much data being created by the cyber second and without consumer consent, it is then transferred to anyone and everyone who can pay. To be used to influence our future consumer behaviour and to predict and steer our consumption patterns. The research firm Gartner has estimated that the total number of connected “things” will more than double to 20.4 billion by 2020 from 8.4 billion in 2017, while security spending related to the Internet of Things will reach $1.5 billion in 2018, a 28% increase compared with the prior year.
“The proliferation of related devices brings educational and other benefits, but also creates security concerns and raises ethical questions - such as, for example, to what degree insurance companies should be able to use personal biometric data to calculate premiums, particularly from unconsenting customers. Even Barbie Dolls now collect and analyze data. In 2015, the toy company Mattel released a Wi-Fi connected "Hello Barbie" doll that uses speech-recognition software and progressive learning features to “talk.” (WEF, Curation: McGill University)
As the Caribbean seeks to “get-into” the global digital economy, our people’s data, security, and general privacy mustn’t be compromised; and we need to build forward with honesty and dignity for our people.
A report published by the World Economic Forum in 2017, Advancing Cyber Resilience; Principles and Tools for Boards, outlined a cyber-attack in 2016 that blocked access to services including Twitter and the New York Times’ website; the attack took advantage of specific strategic choices that had been made by the companies involved, including a “speed-to-market” strategy for hardware that made a significant number of devices vulnerable to hackers, and a decision to concentrate resources on one or a few servers rather than spreading the load across several. The report laid out a series of principles for bolstering resilience, including having corporate boards accurately gauge risk appetite, and ensuring that one, the fully authorized corporate officer is accountable for reporting on the organization’s capability to manage the implementation of cyber resilience. This report might be a good place to start for CARICOM leaders (government and business, and all related stakeholders) who need to quantify the magnitude of the economic risks associated with not building cyber-secure resilience into our economies.
Rules governing how customers' data must be treated by companies, based on personal characteristics need to begin to be more clearly defined. We live in a world where many of the services and products that we purchase, right here in the Caribbean, our information just “gets out there” so we can’t bury our heads in the warm beach sand any longer. These cyber challenges are not going away, just becoming more profound. The desire to digitally transform our SIS economies is the prime narrative heard around the region from our leaders every day, particularly and more intensely due to COVID-19 shocks. However, while we build the basic infrastructure of the internet and our prosperity, we can’t forget that technology will touch people’s lives in a transcending way. Therefore, simultaneously, we must make privacy and cybersecurity an essential part of our inclusive digital transformation agenda.
Leadership must always place the people’s interests first!
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