Information technology (IT) has become an essential driver of economic growth in the modern world. The digital economy has been rapidly evolving, and the COVID-19 pandemic has accelerated the pace of digital adoption to breakneck speeds. The history of the digital economy is a story of constant evolution, shifting, and changing as the internet has grown from a niche technology into a fundamental aspect of daily life. Today, two-thirds of the world’s population have come online, with more joining every day.
The digital economy spans an ecosystem of “digitally-transformed enterprises” that are not only major consumers of technology but also producers of digital-first products and services. With time, these firms will increasingly move their operations out of traditional on-premises data centres into cloud and edge networks. Digital technologies have unlocked innovation opportunities for both private and public organizations, and bolstered access to goods and services across every tier of society. Digitalization is reshaping industries, creating new opportunities, and changing the way we live and work.
The productivity growth that will come from the digital sector will drive economic growth for the next few decades. In many countries, growth in the digital economy is seen to outpace that of the overall economy as most firms are still focused on “general purpose technologies” that have helped drive 10% of total income growth. For all industries, being digitally progressive is the only way to be more competitive.
Nigeria, since independence, has largely depended on oil revenue as its major source of revenue. Oil prices globally have negatively impacted Nigeria’s oil revenue, placing a burden on the Nigerian government to diversify into other sources of revenue.
Investment in digital technology has become the best investment opportunity for Nigeria, given the potential of digital technology to drive the economy in a positive direction. Nigeria’s government must therefore be intentional about its attention to IT.
The current Minister of Communications, Innovation and Digital Economy, Dr Bosun Tijana, has started in the right direction with a number of carefully selected digital technology drives. No country in the world succeeds in developing its IT sector alone; private investment in IT helps to accelerate growth and drive adoption.
Nigeria’s government must therefore develop a deliberate IT policy to enable IT to thrive, and these policies must be matched by action. Most government policies fail because of poor implementation. If Nigeria must leverage the advantage of digital technology to drive its economy, it must be intentional about it by ensuring that policy direction in the IT sector becomes an economic enabler.
How government can drive economic growth using IT policies
Governments can drive economic growth by implementing IT policies that promote innovation and the development of the digital economy. Governments can support innovation and the development of the digital economy through a mix of traditional policy instruments and new regulatory approaches.
One way governments can drive economic growth is by investing in the right kinds of capital and infrastructure. The future of people and the planet will be shaped by the capital investments realized over the next 10-20 years, capital that can drive clean, green, job-rich, and much healthier economic growth than what came before. Governments can also encourage firms to innovate by providing incentives for research and development, and by promoting the adoption of new technologies.
Another way governments can drive economic growth is by promoting the digital transformation of industries. By 2025, the added value of core digital economy industries is expected to account for 10 percent of GDP, up from 7.8 percent in 2020 according to “Policies for Economic Growth”. Governments can also support the transition towards a digital economy by adopting policies aimed at boosting growth through innovation and technological upgrading.
Conclusion
In conclusion, Nigeria must make conscious investments in digital technology to drive economic growth. The digital economy is rapidly evolving, Government can drive economic growth by investing in the right kinds of capital and infrastructure, encouraging firms to innovate, promoting the digital transformation of industries, and adopting policies aimed at boosting growth through innovation and technological upgrading.
Nigeria is capturing only a fraction of its digital economic potential and will need to make strategic investments to develop a dynamic, transformative digital economy. A thriving digital economy will create employment opportunities for the teeming population and support in lifting millions of Nigerians out of poverty. Furthermore, a digital economy will accelerate the attainment of key objectives of improving security, reducing corruption, and expanding the economy.
As the biggest economy in Africa with one of the largest populations of young people in the world, Nigeria is well-positioned to develop a strong digital economy, which would have a transformational impact on the country. Through innovations and investments, the Nigerian economy can harness digital data and new technologies, generate new content, link individuals with markets and government services, and roll out new, sustainable business models.
By making conscious investments in digital technology, Nigeria can create sustained economic growth and transform its economy while tackling the social and ecological stresses caused by our current economic models.
By: DESTINY YOUNG
Technology Infrastructure and IT/Cybersecurity Engineer
