The Digital Transformation Journey; And Regulation as A Facilitator

Digital transformation projects are taking shape across industries the world over. The recent Covid-19 pandemic may lead us to a lasting exponential growth in the provision of digital services through digitization (e.g. merely downloading forms online), digitalization (e.g. filling out forms online) and digital transformation (i.e. full-service delivery online). The rapid rate of technology adoption obviously brings to light the case for regulatory compliance and some governments have taken the first bold steps. For instance, the Government of Ukraine recently instituted a Ministry of Digital Transformation to oversee the implementation of state policy on digitization, open data, national electronic information resources, interoperability, electronic services, electronic trust services, digital skills development, and certification.

It is no doubt that emerging technologies are posing a serious challenge to governments around the world. This article hopes to provide some guidelines on how governments may leapfrog industries to lead the digital journey.

The current digital regulatory challenge

The regulatory challenge has been broken down into four main streams

• Organization for Economic Co-operation and Development (OECD) defines the first of these challenges as the pacing problem. The pacing problem occurs when digital technologies tend to develop faster than the regulation that governs them. The introduction of various innovations like Neuro-linguistic Programming (NLP), fifth generation (5G), Artificial Intelligence (AI) & Machine Learning (ML), Robotic Process Automation (RPA), Edge computing, Software Defined Networks, etc. have widened the gap between technological innovation and regulation even further, showing no signs of slowing. The pacing challenge is further complicated by the combinatorial effect of emerging technologies, shown in figure 1.

Figure 1: The combinatorial effect of emerging technologies

• The second challenge is defined as the fit-for-purpose design problem. Fit-for-purpose design ensures that regulatory principles and considerations are adapted to country-specific legislative and regulatory frameworks and aligned with the specific social and environmental goals (safety, privacy, certifications, capacity building, etc.).
• The third challenge is defined as the regulatory enforcement challenge. The regulatory enforcement challenge arises when the complexity or sheer innovativeness of digital innovations make it difficult to enforce regulation.
• The final challenge is that of institutional and transboundary challenges: Whiles digital innovations are rapidly expanding, cross-border flows and transactions are also on the increase as businesses strive to achieve a global-reach business objective. The nature of our fragmented regulatory framework (spectrum licensing, e-commerce and payment systems, data protection, aviation systems, cybersecurity, etc.) further undermines the effectiveness of regulatory actions taken and hence trust in policies.

Overcoming the digital regulation challenge

• The “Whole” approach: The first suggested step in overcoming the digital regulation challenge is ensuring a “whole government” and “whole stakeholder” approach to rulemaking. This will ensure synergies across the already fragmented regulatory landscape. It will also ensure overall regulatory oversight and enforcement for digital transformation regulations. Key examples of such “whole government” initiatives include the United Kingdom’s Ministerial Group on Future Regulation and the Centre for Data Ethics and Innovation, and Ukraine’s Ministry of Digital Transformation.
• Pace faster than industry: To overcome the pacing challenge, governments need to adopt a collaborative approach. For instance, the creation of a consortium of digital technology experts from government, enterprises, solution providers, vendors, and original equipment manufacturers (the agile digital transformation team) who would be given the mandate to get first-hand information on technologies that are being sold and adopted in the country by all businesses. For instance, when an ICT vendor approaches a business to sell a product or service, this team must know the important details and backed with data science, gain insights into the regulatory aspects of these technologies.
• International collaboration whiles fitting the agenda for purpose: In the global age of technology, it is important for governments to engage international regulatory agencies in defining policies. This should however be aligned towards domestic need and challenges, providing good regulatory practice for local consumption. For instance, adopting the Digital Single Market initiative proposed by the European Union should be governed by its fit for purpose in the specific country of adoption.

Concluding remarks: a case for Ghana

The introduction of the Fintech and Innovation center by the Bank of Ghana is a great step towards the regulation of the vast digital service terrain in Ghana. This is however not enough as their focus is primarily on e-commerce, increasing the regulatory framework fragmentation problem. As more digital technologies evolve and digital services are provided, their mandate will have to evolve rapidly to overcome the challenges identified. This paper suggests that a “whole government” and more collaborative approach be explored in ensuring the effectiveness of digital service regulation in Ghana. Beginning with stakeholder identification, an agile digital transformation team must be created and equipped with the necessary skills, tools, authority and financial resources with the aim of bringing about effective digital regulation.

Author: Kwadwo Akomea-Agyin; | Digital Solutions Expert & Business Analyst | Member, Institute of ICT Professionals Ghana

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