EO has potential benefits and risks associated with developing countries economies.
FREMONT, CA: Satellite Earth observation (EO) has proven beneficial for sustainable development, but there is still room for more research on the broader advantages of EO for developing countries.
Let's explore the effects of a specific emphasis on EO's contribution to digitization.
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Global EO contribution from developing countries is small but growing
Developed economies like the US, Europe, and Japan have dominated the development and use of EO, from manufacturing to developing products and services that employ EO data. On the other hand, the EO industry's market share is lower in emerging nations. According to a London Economics report, 241 EO enterprises were active in developing nations in 2019, employing 1,250 people and contributing €82 million (or 2.2 percent of the worldwide EO industry) to the market. Nonetheless, development in the developing world is faster than elsewhere, with a 14 percent CAGR between 2012 and 2019 compared to 9 percent internationally.
The low participation of developing nations can be attributed to the high capital costs of upstream activities (satellite design, build, launch, and operation) and the investments necessary in digital capabilities, such as human and physical capital, software, and internet connectivity, required for downstream activities (analysis of EO data to address an end user's challenge). Entry barriers are created by the high fixed costs of data gathering, which leads to the underutilization of EO by suppliers and users in downstream activities and high prices for EO data.
By capitalizing on a keen cultural and contextual understanding of the unique local problem, such as monitoring smallholder farms, improving crisis preparedness, mapping poverty, and mapping tropical rainforests, organizations in those countries would be able to create EO products that are highly tailored to local needs. Developing EO sectors in emerging countries also encourages entrepreneurship and the creation of skilled jobs.
The ability to enhance a data-driven decision-making process is what gives EO data its worth. Compared to aerial, in-situ, or manual data-gathering methods, EO data has a few advantages: price, coverage, speed, continuity, impartiality, and anonymity.
Exploiting EO data also benefit other
economic sectors in the underdeveloped world. The establishment of businesses and skilled jobs by EO industries benefit other sectors of the economy.
The distribution of human, material, and intangible assets is made possible through investments in digital capabilities, such as IT infrastructure and people skills, both within and from the EO sector to other industries. These "digital spillovers" have been demonstrated to hasten knowledge transfer, productivity, and innovation both within and between businesses, as well as across supply chains, industries, and even between competitors.
In international development assistance, GDA will fully harness the power of EO
ESA is the driving force behind GDA, which is carried out in collaboration with the WB and the ADB, focusing on technical solutions. These partners have additional financial resources totaling $70 million that are coordinated with related capacity-building and skills-transfer initiatives and will subsequently promote the expansion of EO industries in developing nations. The WB Resilience Academy, which "transfers digital technologies and practical risk management skills to assist the next generation," is an example of the kind of skills transfer program that an IFI would execute.
Nonetheless, despite the advantages of EO, ESA, IFIs, and policymakers in underdeveloped nations should be conscious of many related issues. They include worries about data sovereignty, the government's requirement to invest significantly in digital capabilities, and the possible harmful effects of digitization on employment.
