Displaying items by tag: World Economic Forum

International tax on digital giants expected in 2020

Written on Monday, 28 January 2019 12:07

An international levy on digital conglomerates such as Google, Facebook, Microsoft and Amazon are expected to be imposed in 2020.

The admission was made by OECD Secretary-General Angel Gurria when speaking at the World Economic Forum in Davos. However, the implementation of the tax is highly complex, with many countries threatening to go it alone, whilst Europe remains divided on the issue.

Gurria said, “It is possible. I believe that the conditions exist to lay the foundations for an agreement this year that could be approved and enter into force in 2020.”

The prediction comes just a year after the tax scheme looked dead in the water as member countries failed to agree on a proposal that was tabled at G20. The Secretary General believes there is space for consensus and acknowledged that 2020 is a more likely timeline for the introduction of the digital tax.

Faced with the difficulties of reaching an agreement within the OECD and even the EU, countries such as Britain, France and Spain have already announced their intention to unilaterally tax the giants.

Surprisingly, some of the digital enterprises at the center of the tax welcome the new levy and said they support the initiative being pursued by the OECD.

During the World Economic Forum in Davos, Google vice-president Ruth Porat supported the negotiations overseen by the Paris-based OECD, which groups advanced economies.

Porat said, “We are very frank, we support the OECD initiative.

In France, Finance Minister Bruno Le Maire had initially defended, without much success, the adoption of a tax on digital giants at the European level.  However, Ireland, Denmark and Sweden have blocked the plan by the EU, while in addition to this powerful Germany was lukewarm, fearing US retaliation against its car industry.

Published in Finance

UAE’s telecommunications sector leads the Arab community

Written on Thursday, 14 July 2016 13:25

The UAE is ranked ahead of all Arab states in the 2015 Networked Readiness Index (NRI) issued by the World Economic Forum, and twenty-third among all 143 countries assessed, moving up one position from twenty-fourth place in 2014.

International indices ranking a range of information and communication technology (ICT) indicators demonstrate the robust nature of the UAE’s telecommunications sector and the government’s success in leveraging advances in information and communication technologies to drive economic productivity and social development.

Internationally, the UAE is ranked first in ICT use and government efficiency, first in mobile network coverage, in terms of the percentage of the population covered, first in the importance of ICT to the government’s vision of the future, first in the impact of ICT on access to basic services, second in impact of ICTs on new services and products, second in government procurement of advanced technology products, fourth in laws relating to ICT, fifth in the impact of ICT on new organizational models, seventh in mobile phone subscriptions per 100 inhabitants, and seventh in firm level technology absorption and in business-to-business internet use.

In terms of the individual indicators analyzed, the UAE ranked first among Arab states in business-to-consumer internet use, e-participation index, internet access in schools, secure internet servers, low software piracy rates and percentage of software installed.

UAE companies are also actively involved in satellite telecommunications regionally and globally. Thuraya in which Etisalat is an investor, is providing reliable and robust satellite communications, using Thuraya IP and satellite handheld phones, in many of the world’s remotest locations.

Another UAE company, the Mubadala-owned Al Yah Satellite Communications Company, or Yahsat, is the region’s first hybrid military and commercial satellite company. Yahsat’s satellites provide complete satellite communications solutions to 140 countries across the Middle East, Africa, Europe, Central and South West Asia.

Published in Government

Ahead of CommunicAsia2016, Alan Marcus, Head of ICT Agenda, Member of Management Committee, World Economic Forum, and speaker at Asia ICT Innovation Forum 2016 at CommunicAsia, shares his thoughts on some of the changing dynamics, as well as rulemaking opportunities in the digital world.

Rapid advancements in digital technology are redefining society. The plummeting cost of advanced technologies (a top-of-the-range smartphone in 2007 cost $499; a model with similar specifications cost $10 in 2015) is revolutionising business and society. In addition, the ‘combinatorial effects’ of these technologies – mobile, cloud, artificial intelligence, sensors and analytics, etc. – are accelerating progress exponentially. This revolution could significantly improve the quality of life of billions around the world, and technology is the multiplier.

However, with the advent of digital technologies, a number of accelerated and new market dynamics are dramatically transforming the environment in which regulatory bodies govern.  While this has the potential to dramatically change their role, it also provides access to new instruments and rulemaking opportunities for regulators. Here are some of these changing dynamics, as well as rulemaking opportunities:

  1. Speed

 The speed of innovation of digital technologies stands in stark contrast to the pace of regulation. Jack Ma, CEO of Alibaba, rightly pointed out that “seven- to twelve-year regulatory policy timelines do not reflect the speed of the internet.” New technologies that used to have two-year cycle times now can become obsolete in six months, and the pace of change is not slowing. These technologies can be developed, deployed, and iterated faster than ever. The challenges of the digital world require the ability to answer faster than classical instruments of regulation allow.

One key area affected by the speed of innovation is the protection of consumer interests. As innovation takes place at a far greater speed than regulation can keep up with, regulatory frameworks originally put in place to protect consumers are no longer always appropriate. For example, the logistics industry alone contributes 13% to global emissions, but stakeholders need to act quickly to develop safe and trustworthy approaches to unlocking benefits from digital technologies such as drones. With the promise of reducing emissions by up to 90% and costs by 25% in last-mile deliveries, drone technology is ‘ready’, but regulation is not.

  1. Emergence of Business (Eco)Systems

 Business (eco)systems have been described as “dynamic and co-evolving communities of diverse actors who create and capture new value through both collaboration and competition.”  These networks of organisations operating across industries are enabled primarily by digital technologies, and constitute a stark departure from the siloed and self-contained organisations of the past. The emergence of these business systems gives rise to new requirements for regulation and policy; they can no longer narrowly target individual industries, but need to take into account developments of common trends and patterns across sectors.

Digital technologies have also reduced barriers to entry for traditional and non-traditional organisations, often undermining long-standing sources of product differentiation. For example, online service providers tap markets without having to build distribution networks of offices and local agents.

This changing landscape presents real challenges for regulators. Not only is the number of services and products they regulate growing, but so is the number of suppliers and consumers, increasing the complexity of the environment they govern in.

  1. Globalised Networks

 We live in an increasingly interconnected world. Just as it is no longer sufficient to look at policy and regulation within siloed sectors, one can no longer create policy frameworks without taking global and trans-regional developments into account. While policy will continue to be mostly created at the national level (for the near-term future, at least), globalised networks require regulators to take into account a broader and more complex scope of geographical dimensions.

One example of this phenomenon is the convergence of global supply and demand.  Digital technologies know no borders, and the customer’s demand for a unified experience is raising pressure on global companies to standardise offerings. Consumers and businesses have come to expect payment systems that work across borders, global distribution, indiscriminate access and rights, and a uniform customer experience. Harmonised regulation across regions can greatly accelerate innovation and leverage existing technologies to realise these goals, while heterogeneous approaches risk stinting development. 

Several ongoing regulatory changes are impacting world trade – for example, Safe Harbor, Google versus the EU Commission, and the Federal Aviation Administration and unmanned aerial vehicles (drones) – and are creating challenges to national boundaries, unfair competition and consumer protection.

  1. New Business Models

 It is widely recognised that digital technology is an enabler of fundamental innovation and disruption, for business and society. One of these sources of disruption is a multitude of new business models (e.g. on-demand model, access-over-ownership model). Whether it’s adaptations of existing market models or completely new models, the current regulation is still not in a position to respond to these disruptions in a timely manner.

While many of these models are sources of new value creation, income opportunities, or employment, there are also inherent risks to society. For example, who is responsible for the public health and safety of a passenger who chose a rideshare in the case of an accident?  The sharing economy is just one recent example of technologies disrupting traditional business models, and there may be more disruptions ahead as entrepreneurs find new ways of meeting consumers’ needs.

Published in Featured

A new global dialogue focused on getting the next 1.5 billion unconnected people online was forged at a special session of the UN Broadband Commission for Sustainable Development held at the World Economic Forum in Davos in late January.

The session was part of the Commission's efforts to build momentum and reach out to world leaders to push the issue of broadband connectivity to the top of the global agenda. According to the ITU, "It is the first time that so many world leaders have affirmed the vital importance of broadband to national growth and coalesced around a common broadband vision."

A new discussion paper developed by ITU as a contribution to the work of the Commission was presented at the session. It estimates that it will take a global investment of $450 billion in network infrastructure to connect the next 1.5 billion unconnected people worldwide. The estimate is based on the Broadband Commission's own research combined with recent studies undertaken by governmental bodies such as the European Commission, global organizations including the World Bank, and industry bodies such as the GSMA, which represents many of the world's mobile operators.

The paper is open for comment from expert stakeholders, who are invited to send their contributions to This email address is being protected from spambots. You need JavaScript enabled to view it. .

The session culminated in the release of a joint statement by the group: Working Together to Provide Internet Access to the Next 1.5 billion by 2020. The statement noted that only 3.2 billion of the world's 7.4 billion people are online. In the 48 UN-designated Least Developed Countries, Internet penetration is less than 10 percent, falling to under two percent in six of the world's most disadvantaged nations.

The joint statement pledges a concerted global effort to connect 60 percent of the world's people to the Internet by 2020, in line with ITU's Connect 2020 Agenda agreed by the organization's 193 Member States in 2014.

It also stresses the importance of striving for meaningful access, so that all those connected can take full advantage of the power of the online world. At present, the statement notes, only five percent of the world's languages are represented online, an estimated 781 million adults are illiterate, and 100 million children have not had access to complete primary education - creating large pockets of the 'digitally excluded'.

Published in Featured