Can digitization mitigate the economic damage of a pandemic? Evidence from SARS

Abstract

Este trabajo utiliza evidencia empírica para resaltar el rol importante de las tecnologías digitales para mitigar los efectos económicos negativos de una pandemia. Al no estar disponibles aún bases de datos robustas del efecto del COVID-19, este estudio analiza lo ocurrido durante la pandemia del SARS en el año 2003. Los resultados son robustos en indicar que los países con mayor conectividad de banda ancha han sido capaces de mitigar una parte de las pérdidas económicas incurridas en aquel momento. Los resultados proveen elementos rigurosos que apoyan el rol clave de las telecomunicaciones y la digitalización para mantener la economía en funcionamiento en tiempos de pandemia. Estos resultados son valiosos para analizar lo que ocurre en el mundo a la luz de los confinamientos masivos ocasionados por el COVID-19. Entendemos que los sectores públicos y privados deben cooperar y trabajar en conjunto para promover al ecosistema digital. A largo plazo, un marco regulatorio propicio es crucial para estimular las inversiones necesarias para el cierre de la brecha de oferta, así como promover la digitalización de los procesos productivos y las habilidades digitales de la fuerza de trabajo. A corto plazo, discutimos diversas medidas que podrían tomarse para acomodar los incrementos de tráfico en tales circunstancias, manteniendo la calidad de servicio.

The work presented in this paper uses empirical evidence to highlight the important role digital technology plays in mitigating a pandemic’s economic disruption. As extensive datasets including the effect of the current COVID-19 pandemic are still unavailable, this study provides an assessment of the role of digitization at the time of SARS in 2003. Results are robust in pointing out that those countries with better broadband connectivity were able to mitigate some of the economic losses incurred by the pandemic. While anecdotal evidence is plentiful even for COVID-19, this study provides rigorous analysis to support that a reliable telecommunications infrastructure and a high level of digitization is crucial to keep the economy running under pandemic conditions. These results provide valuable evidence for the current context of COVID-19, which has resulted in several national lockdowns around the world. In consequence, we believe that the public and private sectors must collaborate and work together to promote the enhancement of the digital ecosystem. In the long run, a suitable regulatory framework seems crucial to stimulate private investments to close the digital supply gap, as well as promoting the digitization of business process and the training of the workforce to acquire digital skills. In the short term, we discuss several measures that can be taken to accommodate the expected increases in internet traffic in such circumstances and maintain the quality of service.