The global economy is experiencing the impact of two transformative forces: digitalisation and sustainability. Digital transformation has revolutionised industries, reshaped economies, and connected billions of people worldwide. At the same time, sustainability has emerged as a defining imperative, as the world grapples with climate change, resource depletion, and widening socioeconomic inequalities. While both forces hold immense promise, their potential remains unevenly distributed across the globe.
The Global North, with its advanced infrastructure and resources, leads in digital adoption and sustainability achievements. In contrast, the Global South, despite significant progress, faces challenges of limited access to technology, financial constraints, and competing developmental priorities. This disparity raises an urgent question: How can digital transformation and sustainability be leveraged inclusively to benefit all regions?
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Collaboration key to sustainability
The intersection of digitalisation and sustainability presents a unique opportunity to address global challenges collaboratively. By embracing digital tools and innovative practices, economies can unlock efficiencies, reduce environmental impact, and create new pathways for growth. However, success in this endeavour depends on the ability of the Global North and South to learn from each other’s strengths, overcome their respective challenges, and co-create solutions.
For instance, the South’s frugal innovation and agility offer lessons in resource efficiency, while the North’s established innovation ecosystems and advanced technology provide a foundation for scaling sustainable solutions. Bridging this divide requires a comprehensive understanding of the current gaps, a commitment to shared learning, and a focus on sustainability-oriented innovation that serves the collective future of humanity.
Digital divide: Mapping the global disparities
A glaring divide exists in internet penetration rates between the Global North and South. In the Global North, more than 70% of the population are internet users, while in many parts of the Global South, less than half the population has access to the internet. This foundational disparity in digital inclusion highlights the need for targeted interventions to bridge this gap. Furthermore, the concentration of technology suppliers is heavily skewed toward a handful of countries. The United States, China, India, Germany, and the United Kingdom host 70% of all IoT companies, with the United States alone accounting for nearly half. Although India and China are rapidly catching up in technological innovation, the Global South lags in fostering indigenous high-tech solutions.
The disparity extends to sustainability development goals (SDGs). Countries in the Global North have made substantial progress in achieving these goals, as reflected in their high SDG index scores. Conversely, many nations in the Global South remain far from achieving the same milestones. This digital and sustainability gap underscores the urgency of adopting context-sensitive strategies that align with local realities and resources.
Challenges to digital transformation
At the individual level, the challenges differ significantly between the Global North and South. In the Global North, resistance to change remains a key obstacle despite the availability of digital tools. Many individuals hesitate to adopt new technologies or translate sustainability awareness into concrete action. By contrast, the Global South grapples with limited digital literacy and often prioritises immediate economic needs over long-term sustainability, given the pressing requirements for better living standards and economic growth. However, the opportunities are equally compelling.
Growing awareness of sustainability in the Global North could serve as a catalyst for digital innovation, while the youthful population and widespread adoption of mobile technology in the Global South present immense potential for deploying digital tools to enhance education, agriculture, and commerce.
At the organisational level, businesses in the Global North often struggle with legacy systems and entrenched processes that act as barriers to transformation. Many companies resist adopting new practices, particularly if their existing models are profitable. Meanwhile, organisations in the Global South face financial constraints and lack access to advanced technologies, hindering their ability to compete globally. Yet, the opportunities for both regions are abundant. In the Global North, regulations promoting sustainability and access to green financing incentivise companies to innovate. In the Global South, leapfrogging older technologies allows organisations to adopt cutting-edge solutions directly, bypassing inefficiencies.
On a broader business ecosystem level, both regions face unique challenges. The Global North is constrained by strict privacy laws and siloed approaches that limit innovation, while the Global South contends with inconsistent regulations and insufficient infrastructure, making it difficult to scale sustainable solutions. However, the Global North’s established ecosystems, which integrate universities, governments, and industries, provide a valuable model for fostering innovation. In the Global South, public-private partnerships and informal sector collaborations offer a platform for leveraging local knowledge and creating scalable, sustainable practices.
Addressing these challenges requires a comprehensive framework that operates across three levels: individual, organisational, and business ecosystems. At the individual level, the focus should be on empowering employees through continuous learning and relearning. Organisations need to develop dynamic capabilities and cultivate a culture of innovation, while the broader business ecosystem must foster collaboration among stakeholders and provide supportive infrastructure. The interdependence of these levels ensures that progress at one level reinforces advancements at others, creating a holistic transformation that aligns with sustainability goals.
Lessons from the Global South and North
The Global North can learn a great deal from the South in terms of resourcefulness, agility, and adaptability. Having historically operated with limited resources, the Global South has developed innovative, cost-effective solutions that the North could emulate. Moreover, the pace of adaptation and the ability to seize opportunities quickly are hallmarks of businesses in the South, in stark contrast to the slow-moving approaches of their Northern counterparts. This flexibility and creativity, evident even in the informal sectors of countries like India and China, demonstrate the untapped potential of local ecosystems.
Conversely, the Global South stands to benefit from the Global North’s established systems for fostering innovation. Trust and transparency between stakeholders, robust collaboration frameworks, and integration into global value chains have enabled the North to achieve remarkable advancements. These mechanisms provide not only technical expertise but also access to markets, knowledge sharing, and skill development.
India’s rise as an IT and outsourcing hub, its integration into global value chains, and its burgeoning middle class are prime examples of how the South can leverage Northern models to achieve sustained growth. However, these successes come with challenges, including rising income inequality and job displacement for low-skilled workers, issues that require proactive solutions.
The divide between the Global North and South is not insurmountable. By fostering collaboration, embracing digital transformation, and prioritising sustainability, these regions can co-create solutions that address both local and global challenges. Frugality and agility from the South, combined with systematic innovation frameworks from the North, can drive progress for all.
The convergence of digital technology and sustainability goals presents a unique opportunity to redefine global development. This moment calls for bold action and visionary leadership from businesses, policymakers, and individuals alike. It can ensure that future generations inherit a planet that is not only technologically advanced but also sustainable and equitable.
(This article has drawn from a presentation by Ju Liu, Associate Professor, Department of Urban Studies, Malmö University, Sweden, at an online event organised by EGROW Foundation, a Noida-based think tank.)