Part II: Financing the digital public goods ecosystem. Read part I and part III in the financing series.
As the world faces the worst economic recession in eight decades due to COVID-19, countries have expanded social protection, leveraging digital financial services. With that, the need for ensuring that everyone can verify their identity in order to access such services and benefits has never been more urgent. Instead of being built merely for administrative purposes, digital ID systems are increasingly seen as an opportunity to accelerate development by connecting marginalised communities to vital public services and social benefits. Likewise, the ability to share data in a secure and privacy-sensitive manner is important for being able to reliably validate or exclude the eligibility of beneficiaries.
Put simply, the countries that already had in place these foundational digital public infrastructures – digital payments systems, digital ID, and trusted data ecosystems – have been better equipped to mitigate the socio-economic impacts of the pandemic. The same can be said for the delivery of vaccines, for which the same tools have been used by those countries to more efficiently and equitably roll out one of the most critical mass vaccination campaigns for generations.
With this, there are lessons to be learned and optimism for the challenges that lay ahead. The borderlessness of COVID-19 has helped spark global agreement that the world needs to be better prepared for future pandemics. Utilising inclusive digital public infrastructure is one key way to do that.
In our previous blog on how to strengthen the digital public goods ecosystem, we described the need for sustainable core funding for foundational digital public goods as generic state of the art solutions. In this sequel, we want to drive attention to the need for providing comprehensive technical assistance for countries to assess, pilot, deploy, and manage these technologies.
What technical assistance means in the context of implementing foundational digital public infrastructure
Countries are at different points in their journey to digitising services. Laying a digital foundation is a monumental task, often requiring moving away from antiquated, sometimes paper based systems. In many cases these are greenfield circumstances – where there are no legacy systems to build from. In this scenario, foundational systems can be the most complex given the expertise and time needed to implement them. That’s why support requires a multi-faceted approach that reflects the needs of each country.
Enabled by sustained funding, support to countries can have the greatest impact when it is holistic and optimised to achieve good principles and practices. Design of these digital public infrastructures to maximise inclusion, trust, and developmental impact requires support of the broader enabling environment including institutional and legal frameworks (especially data protection and cybersecurity), end-user engagement, capacity building, and assessment of appropriate technologies, among others. In the context of digital public goods – often a new approach for many government actors – there is a need for a mindset shift in terms of how systems are conceived: not as vendor-supported products but as country-owned platforms.
International development partners are increasingly more active in supporting the digitisation of services. This, combined with the urgent need for foundational digital public infrastructure, has led to a surge in demand for timely technical assistance that is context-appropriate and based on best practices.
For instance, the World Bank has two multi-sectoral initiatives to help countries realise the transformational potential of digital ID and G2P ecosystems: Identification for Development (ID4D) (funded by the Bill & Melinda Gates Foundation, UK Government, French Government, and Omidyar Network) and G2Px (Digitizing Government-to-Person Payments) (funded by the Bill & Melinda Gates Foundation). The cohesive approach of these sister initiatives harnesses the power of combining the foundational digital public infrastructures (or ‘digital stack’) for maximising a variety of development outcomes, from financial inclusion and effective delivery of social assistance to women’s economic empowerment and digital transformation, while mitigating the exclusion, data protection, and technology lock-in risks.
Over the last couple of years, ID4D significantly increased its technical assistance engagement with more than 30 countries. In the midst of the pandemic, G2Px also quickly scaled up to provide technical assistance to 35 countries that were facing the challenge of how to leverage digital technology to deliver social assistance payments effectively and safely in the context of the pandemic.
The United Nations Development Programme (UNDP) has similarly seen significant increases in country demand for broader digital transformation support, with 20 developing countries requesting such assistance. Guided by an inclusive digital transformation framework, UNDP has supported national governments to conduct digital readiness assessments for identifying gaps and priorities, developing national digital strategies, advising on the design of agencies that would drive the national effort of digital transformation beyond individual ministries, as well as suggesting global solutions (including DPGs) and partners, while strengthening local governments and ecosystems.
The case for open source solutions and open standards
Countries must be supported in their efforts to rapidly deploy and adapt digital public goods to meet their relevant infrastructure needs. The alternative – pursuing proprietary options – may not be conducive at the speed and scale needed. Additionally they may lack localisable features, and lock countries to singular vendors and particular technologies. Many ID projects have faced vendor lock-in, preventing implementing governments from achieving interoperability or modifying or adding functionalities without significant change request fees. This leads to low country ownership, weak results, and often the need for these projects to start again and thus deal with difficult legacy challenges.
On the other hand, digital public goods provide the ability to establish a digital foundation based on more easily integrated, interoperable and adaptable solutions. They can also enhance country sovereignty and long-term sustainability. By being able to see ‘under the hood’ staff can understand the technology they are using. Growing a country’s internal capacity can ensure software can be built and maintained locally or with less dependence on external suppliers. Beyond that, it can help foster competition in local implementation and customisation, and stimulate the local information technology market.
The way forward for country technical assistance
Together with sustainable core funding for generic technologies, increased technical assistance which enables countries to successfully deploy these solutions is needed to unlock the broad potential of digital public goods to help address today’s most urgent global challenges.
The next blog in our series on financing needs in the DPG ecosystem will expand the conversation from assisting countries to deploy DPGs, to enabling countries to deploy, create, manage, and iterate digital solutions to address future needs.