Rapid scientific and technological advances, and subsequent global digital transformations, have disrupted businesses and economic models worldwide, with more changes expected to impact all countries in the wake of a fourth industrial revolution. Participants at the 13th World Islamic Economic Forum (WIEF), organised from 20 to 23 November in Kuching in the Malaysian state of Sarawak, agreed that current technological advances require expanding investment and the transformation to a digital economy to keep up with changes that are widely seen as inevitable. The idea of the digital economy refers to economic activities that result from the hyper-connectivity of people, organisations and machines through mobile and Internet technology. Egypt has been expanding its digital economy over the last few years. According to the Ministry of Communications and Information Technology, the current value of Egypt's digital economy is estimated at $3.1 billion, with 10 per cent growth expected by the end of 2017 due to plans for expansion in many governorates. Online commerce is also growing in Egypt because of the expansion of Internet usage. There are now about 33 million subscribers in Egypt, up from 27 million in 2016, with revenues reaching $2.5 billion in 2016 and expected to move up to $4 billion by the end of 2017. The global digital economy is currently valued at about $3 trillion. Speaking about the disruptive change caused by technological innovations and the Fourth Industrial Revolution, Tun Musa Hitam, chairman of the WIEF Foundation, said that technological advances were moving at a very fast pace with unprecedented technological innovations that required special global attention to prepare for their impacts, challenges and opportunities. The most important thing Hitam highlighted was education, which he believes must be updated to confront challenges that come with change and benefit from it. “Any policy or strategy for education that doesn't go in sync with rapid technological advancements will result in long-term disaster,” he stressed, adding that many countries, including Malaysia, had started to change their economies to digital economies. However, the world still needed to communicate more in order to find the best ways of applying new ideas and knowledge, he said. Hitam pointed to the widening reach of artificial intelligence in machines and robots that has sparked worldwide debate on the effects of such developments on jobs and human life. But artificial intelligence has no dangers for human life unlike its presentation in science fiction movies, Steve Wozniak, co-founder of Apple, said during the WIEF meeting. “There is no sign that this would lead to machines with artificial intelligence thinking and programming themselves,” Wozniak said. This is because it is not known how the brain works in detail, he said, and machines do not have the intuitions or life experiences that can help them to develop intelligence capacity. “I do not know if artificial intelligence will ever get to level five where it can function on its own,” he said. However, Wozniak believes that humans also lost the battle with machines hundreds of years ago when factories were established to make textiles in the First Industrial Revolution and workers lost their jobs because machines were more effective. That was a disruptive change, he said. “Today, big companies should be afraid of being disrupted by new ideas and innovative products,” Wozniak said. “Chief disruptive officer” should be a new position added to big companies, he added, to report about new innovations and products that might disrupt the growth and production of a company. “The effects of an innovation can take years to happen, and they can happen suddenly,” Wozniak noted. He encouraged governments to stand behind digital growth, as technology will “take over all aspects of life”. He also stressed that governments should modify school curricula and include software, hardware and robotics as early as primary school. He emphasised that in primary and university level education students should orient themselves towards the parts of technology that are going to be important in the future. One important innovation that has brought disruptive change to the international trade system in recent years is block chain technology, for example. Block chains are considered by some experts as the next age of the Internet, as they allow users to transfer digital property to others in a secure way. Block chains are the technology behind bitcoins, a form of digital currency that is created, held, and exchanged electronically. “One of the main manifestations of block chains are crypto-currencies or bitcoins,” said Farzam Ehsani, block chain lead at the Rand Merchant Bank of South Africa. The technology has brought changes to how the world's traditional financial systems work, he said. Bitcoins, also known as crypto-currency, are different from conventional money in that the currency is decentralised, meaning that no institution like a central bank controls it. Consequently, bitcoins can avoid traditional processes when paying for goods and services. While the Internet allows the exchange of cross-border information such as e-mails sent directly from sender to receiver, block chains allow people to send anything of value as well, including money, art, and intellectual property, explained Armin Osmancevic, chief executive officer of MyBazar, at the WIEF meeting. They can even go to new markets at zero cost, he added. The impact of block chains on businesses and international trade in the future can be defined by their potential to establish a framework in which suppliers can deal safely and directly with buyers. “The biggest problem for e-commerce, or online trading, is the trust factor, and this is provided by block chain technology,” Osmancevic said. Block chain technology eradicates the need for a third party between consumers and suppliers, keeping transactions secured on a network of computers that is verified by everyone on it, he explained. “This completely disrupts the model of e-commerce today,” Osmancevic noted, adding that it allows many people, especially start-ups and small and medium-sized enterprises, to find new markets without restrictions. “The magic of block chain technology lies in its ability, for the first time in humanity, to create digitally scarce assets without requiring them to be trusted by entities like banks that make sure they remain scarce,” Ehsani pointed out, adding that the block chain system keeps such assets scarce. Currently, there are 16.7 million bitcoin units in circulation worldwide, with a total value of around $160 billion. The value of one bitcoin is currently more than $9,000, almost seven times the value of an ounce of gold. Bitcoins were created with a cap of 21 million units, and the name Satoshi Nakamoto is used to refer to the anonymous person or group who created the digital asset that came into existence in 2009. What has helped bitcoins to gain popularity in recent years, Osmancevic said, has been that security experts announced in 2013 that it was impossible to hack the bitcoin system. “Its security is based on solving complicated mathematical problems that cannot be solved by computers,” he added. The popular use of crypto-currency and its impact on international trade have led to talks about the need for regulation and its interaction with national currencies. Raja Teh Maimunah, chief executive officer of Malaysia's Am Investment Bank, believes crypto-currency is a brilliant idea and hopes regulators will allow its continued usage. However, she thinks that the trading of the currency should be closely regulated, so that it is not used as a speculative tool, but rather as a means of exchange. “I support crypto-currency because it is a global trade that I believe will evolve into another form of medium of exchange and could become an alternative universal currency in the future,” she stressed. The three-day WIEF meeting also discussed fostering entrepreneurship amongst women, technology in agriculture, the prospects for new technologies in Islamic finance, renewable energy, and reimagining education. The annual World Islamic Economic Forum promotes discussion of greater economic cooperation between countries through meetings between business groups from each participating country, in addition to discussions between experts, politicians and industry leaders. It has facilitated investment and trade agreements between Muslim and non-Muslim countries to a total value of $13 billion over the last five years. Over 3,000 participants from 77 countries took part at this year's WIEF event, with 16 memoranda of understanding signed to a value amounting to $2.43 billion, the highest in the history of the WIEF.
