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South-South Ideas: Trade Integration and South-South Cooperation – How Digitalization Matters in Africa

By Professor Myriam Ramzy & Professor Chahir Zaki

Digitalization refers to the transition from an industrial age characterized by analogue technologies to a new era in which commerce, innovation, knowledge acquisition, communication and many other aspects of modern life are driven by digital technologies. Digitalization is transforming economies and societies in multiple areas, even influencing cultural, environmental and political spheres. The introduction of digital technologies is considered disruptive to business in the sense that new technologies are rapidly reshaping business models and introducing different ways for businesses to connect with their customers and to deliver their products and services. Businesses need to reconfigure to create new sources of competitive advantages.

Digitalization presents opportunities for businesses to innovate, grow and make gains in efficiency and effectiveness. Risks to be watchful of include operational errors associated with increased automation, regulatory problems related to data privacy and cybersecurity and organizational risks related to employment displacement and the ability of firms to adapt to such changes.

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This paper investigates the importance of digitalization in fostering trade integration among Southern economies with an emphasis on intra-African trade. As the global economy experiences important changes brought about by digital technologies, South-South cooperation in a digitalized world presents new opportunities for— and areas of—cooperation among Southern countries. Many of these new opportunities have the potential to stimulate national and regional efforts to achieve the Sustainable Development Goals by 2030.

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