There have been some debates and arguments in recent times about why industrialization is better and needed in Ghana than digitalization even to the extent that some politicians have declared that they would promote industrialization than digitalization should they assume political office.

Today I will delve into the link between digitalization and industrialization and why both are important in promoting financial and economic growth as well as human development. One cannot be implemented successfully without the other.

In order to ensure that a country is industrialized or attain the level of industrialization, it needs machines and equipment to produce; that’s to process raw materials that are either produced within or imported into value-added products for both domestic consumption and exports.

These machines are described technically as computers or intelligent systems. They have been programmed to operate as intelligent machines to process raw materials through communication technology. So this is where technology operates to promote industrialization.

Digitalization business model greatly improves operational efficiency which leads to better productivity. Automation of all the processes in a business helps reduce manpower, saves time, and improves overall quality. Errors on the part of humans can be avoided to a large extent in the digitalization business mode.

Digitalization can be compared to industrialization in what would be its eventual impact on economic and social institutions. As industrialization places machine power at the center of the economy, digitalization makes digital intelligence its new fulcrum.

According to Oxford Academic, The world economy is undergoing a period of structural and technological transformation, driven by the increasing digitalization of economic activity.

Digitalization is influencing innovation, production, trade, consumption, and a host of business processes, though to what degree is an empirical question that will yield different answers across industries and geographies.

Part of this transition, sometimes described as the ‘fourth industrial
revolution’ (variously referred to as Industry 4.0 and 4IR) relates to the digitalization of production.

The key technologies are at different stages of maturity; they include advanced robotics and factory automation, data from mobile, and ubiquitous internet connectivity (variously referred to as the Internet of Things, IoT, and industrial Internet of Things, IIoT), cloud computing, big data analytics, machine learning, and artificial intelligence (AI).

Associated with this technological transition is the development of new ‘platform’ business models and modes of value creation.

The technologies and business models emerging in this ‘digital economy’ have already disrupted traditional industries and created entirely new ones, such as social media.

Aside from these dramatic developments, ongoing digitalization is raising concerns about the dislocation and job losses that might result from technologies such as robotics and artificial intelligence.

Since many of the relevant technologies are skill-biased, the ability to develop countries to compete in traditionally labor-intensive industries that have supported their industrialization may be undermined.

Digitalization is being experienced differentially across the globe, reflecting the range of opportunities it offers as well as the challenges specific countries face in investing in and successfully adopting advanced technologies.

Developed countries are embarking on the same transition to ‘green’ and digital societies in order to achieve their development goals, including poverty reduction and universal access to energy and the Internet.

This dual transition is a vital element of their industrialization strategies but LDCs face a major challenge in keeping up with the rapid pace of technological progress.