What’s an ‘essential service’? Not knowing could block access to key digital services during COVID

(Credit: Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Erin Ennis, Senior Director, Global Public Policy, Dell Technologies & Jimena Sotelo, Project Lead, Digital Trade, World Economic Forum

  • The supply of services was as disrupted as the supply of goods during the pandemic.
  • A coordinated definition of ‘essential services’ could mitigate disruptions as the world tackles second and third waves of the coronavirus.

As the COVID-19 pandemic disrupted the supply of global goods, it also disrupted the supply of services. Varying definitions of “essential services” across countries created unintentional trade barriers as some exporting countries allowed for operations while other importing countries did not (and vice versa). A coordinated understanding of “essential services”, and ensuring that each country counts digital services as essential, could help alleviate disruptions in global supply of services, especially if the global economy faces “second” or “third” waves of the COVID virus in the months ahead.

What is the World Economic Forum doing about digital trade?

What is the World Economic Forum doing about digital trade?

The Fourth Industrial Revolution – driven by rapid technological change and digitalization – has already had a profound impact on global trade, economic growth and social progress. Cross-border e-commerce has generated trillions of dollars in economic activity continues to accelerate and the ability of data to move across borders underpins new business models, boosting global GDP by 10% in the last decade alone.Embracing Digital Trade

The application of emerging technologies in trade looks to increase efficiency and inclusivity in global trade by enabling more small and medium enterprises (SMEs) to repeat its benefits and by closing the economic gap between developed and developing countries.

However, digital trade barriers including outdated regulations and fragmented governance of emerging technologies could potentially hamper these gains. We are leading the charge to apply 4IR technologies to make international trade more inclusive and efficient, ranging from enabling e-commerce and digital payments to designing norms and trade policies around emerging technologies (‘TradeTech’).

Surges in demand for IT services and digitally-enabled services

The pandemic pushed the world to rely more heavily on digitally-enabled services to sustain social distance while keeping our societies connected and our economies running. The graph below shows the sharp increase in app usage in the US during the pandemic, with videoconferencing apps experiencing the highest growth.

Changes in app usage behavior
Changes in app usage behavior Image: Ericsson

Such increases were seen across a range of digital tools. For instance, this March, Facebook reported a 50% increase in the use of its online messaging service, with voice and video traffic doubling in countries hard hit by the pandemic. Some countries saw massive shifts, such as the 1,000% increase in time spent on Facebook group calls in Italy or the 828% increase in the number of Zoom users in Thailand.

With these changes came a surge in demand for IT services. In some surveys, 74% of consumers reported significant increases in Internet usage with jumps of an hour a day for mobile and 2.5 hours a day for fixed broadband.

Significant time spent online during the crisis
Significant time spent online during the crisis Image: Ericsson

Supplying IT services – and managing disruptions

As countries around the world began to implement their COVID-19 responses, the differences in how governments treated information technology goods and services became apparent.

In the United States, a broad definition of essential services included not only the manufacture of IT goods that enable work from home and telework solutions (such as laptops and cell phones), but also the delivery and servicing of those products for customers who needed to use them. This inclusiveness helped to reduce disruptions as millions of Americans began to work and learn from home.

Some countries’ policies included exemptions for the manufacture of IT goods, but not the delivery or servicing of them. For instance, if telecommunications were included among a country’s essential services, terminology made it unclear if that category included ICT services, or only Internet and phone services.

In some countries, Internet services, IT and some IT-enabled services were exempted from stay-at home orders. Yet, some IT services such as cloud service providers – quite global in nature given their business model – and IT infrastructure were subject to movement or lock-down restrictions. The BSA Software Alliance, including companies like Salesforce, Amazon Web Services and Microsoft to name a few, addressed letters to these governments asking for the inclusion of these services as “essential”. Cloud services, software and hardware platforms and other IT infrastructure services are key for the correct functioning of both services and goods supply chains.

Some of these letters also urged for the continuation of on-going construction and installation of new facilities – also to be considered “essential” as they make a difference in Internet congestion in times of unprecedented reliance on remote services. With much of the world’s population without good quality Internet, this remains one of the main barriers for access to telemedicine.

Moreover, some countries restricted goods imports to only essential products, but ICT products were not included among these essentials, making it difficult to provide needed inventory to banks, hospitals, schools, and businesses in need of IT systems to keep their operations running remotely.

Unintentionally, the disparity in the definition of “essential services” around the world affected not just trade, but also investment decisions. Narrower definitions in some developing countries made some headquarter companies question their reliance on offshoring and reconsider further AI utilization in BPO tasks. Some have started to hire for some functions, such as call centers, on their home soil. With global revenue in ITO and BPO offshoring activities around $92.5 billion USD in 2019, reshuffling of task allocation could significantly affect the employment and income streams of countries such as India and China that are leading the provision of offshore services globally.

A coordinated definition of ‘essential services’ can ensure that countries are more resilient during future crises.

What can be done to avoid disruptions in global supply of services?

If predictions for second and third waves are accurate, policy makers should use the coming weeks to critically evaluate which policies worked best to stem the spread of the disease while still allowing critical economic functions to continue.

Members of the services sector, including the Global Services Coalition, have already called for solutions to address the “uncoordinated patchwork of country lockdowns” to “avoid constricting the global supply of essential enabling services”. As GSC noted, ICT services must be available so that digital options can help governments and citizens work through any future quarantine restrictions.

While there are many policies that will need to be evaluated, the definition of what constitutes essential goods and services should be among the first discussed. A single, global definition of what falls in that category is unrealistic, and probably undesirable as countries at different levels of the health crisis would want to both protect their citizens while preserving economic activity when possible. Yet an explicit inclusion of ICT goods and also IT services should be at the top of the list to ensure the remote functioning of our economies and societies during the lockdown, where IT services are needed the most given their enabling function to consume so many other services, from teleconference to telemedicine.

Discussions on this topic – whether at the G20, OECD, the World Economic Forum through the COVID Action Platform or any other level – will be key to bringing a range of voices together to find long-lasting solutions. Such solutions won’t just help economies weather lockdown measures to come, they will ensure that countries are more resilient during future crises.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Brexit talks stalled at launch; issues with European Court’s authority in Britain

Climate change: Parliament’s blueprint for long-term CO2 cuts

To end deforestation, we must protect community land rights

What the Women’s World Cup can teach us about capitalism

Trump enrages the Europeans and isolates the US in G7

DR Congo: Ebola outbreak spreads to eastern ‘no-go’ zone surrounded by rebels

CLIMATE CHANGE FOCUS: Climate-proofing Timor-Leste

New Eurobarometer survey shows: The majority of Europeans think the EU should propose additional measures to address air quality problems

FROM THE FIELD: What do you want to be when you grow up? One day I will…

Medical Students Can Help to Protect Women Rights

It’s time to end our ‘separate but unequal’ approach to mental health

FROM THE FIELD: Enduring freezing winter in a war zone

Commission paralysed before the banking leviathan

There’s a new global technology race. It needs better trade rules

These are the countries best prepared for the fight against cancer

The time is up but the game is still not over for Greece: negotiations continue in anticipation of a new deal

Commission’s Youth Initiative fails first hurdle by not sufficiently consulting young people

What the next 20 years will mean for jobs – and how to prepare

This AI tool helps healthcare workers look after their mental health

Internet milestone reached, as more than 50 per cent go online: UN telecoms agency

75 years after Auschwitz liberation, antisemitism still threatens ‘foundations of democratic societies’

Does hosting a World Cup make economic sense?

UN rights chief ‘strongly’ condemns ‘shocking’ mass executions in Saudi Arabia

Georgia: EU report highlights importance of maintaining reform momentum and depolarising the political environment

Coronavirus: Commission launches data sharing platform for researchers

Women’s leadership ‘critical’ to future of Niger

MEPs boost support for EU research and Erasmus

Who is responsible for public health? The tendencies and its benefits –or not– on Health Education around the world

A 3-step plan for carbon-neutral cars

VP McGuinness on women’s rights: “Not an option, but a duty”

Copyright: MEPs update rules for the digital age

From the boardroom to the consulting room: pharma’s role in curing gender bias

Why people with disabilities are your company’s untapped resource

Mental health in medical students: the deciphered quandary

De-escalation of fighting in Hodeida is key to ‘long-overdue’ restart of Yemen peace talks: UN envoy

What have the banks done to the markets making them unable to bear cheap oil?

An expert explains: how to help older people through the COVID-19 pandemic

EU Commission: Banking and energy conglomerates don’t threaten competition!

How civil society can adapt to the Fourth Industrial Revolution

Junker for Commission President: What were the stakes in this affair

Coronavirus: the truth against the myths: Lockdown by a novel coronavirus, named 2019-nCoV

Future-proofing the European banking market – removing the obstacles to exit

UN health agency to gauge global threat, as China confirms coronavirus transmission between humans

Moving from a promise made in Sweden towards hope for peace in Yemen

Twenty days that may remold the future of Europe

Tomorrow’s UK general election: Will Tories win majority to shoot an abrupt Brexit or a hung parliament will prolong January’s exit to 2050?

We have the tools to beat climate change. Now we need to legislate

What we take for granted: The EU is not perfect

These countries have the most doctors and nurses

These are the next big products in consumer technology

EU prepares a banking union amidst financial ruins

World Wildlife Day: UN chief urges ‘more caring’ relationship with nature

Database of businesses linked to Israeli settlements ‘important initial step’ towards accountability: rights expert

Bosnia and Herzegovina: EU allocates additional €3.5 million to support vulnerable refugees and migrants

Ending the era of dirty textiles

New volunteering programme for young people in Europe and beyond agreed

From battlefields to boardrooms: 3 steps to building high-morale teams

Hundreds of thousands migrants ready to cross the Mediterranean. Only a local matter?

To achieve the Great Reset, we will need more than just the actions of the powerful

More Stings?


Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s