Naveed Sultan

Charlotte Branfield

Julie Monaco

Download

Governments are beginning to play a key role in the digitization of their country’s economy which is impacting industry and citizens — digitizing government ministries, government services, and every interaction with society. While governments will have a more direct role in driving the transformation of government services, governments investing in building a digital infrastructure will be a key enabler for digitization of the economy as well as society. It will improve how citizens access public and private transportation, healthcare, education, and all of their financial transactions. A strong digital economy requires a robust digital infrastructure, with digital money, payments, and identity being ubiquitous enablers required for the transformation of any industry or society. Citi’s Digital Money Index, published annually since 2014, helps governments understand the readiness of their respective countries for usage of digital money. Each step made progressing towards digital money readiness can significantly enhance a nation’s ability to digitally transform its economy. National digital identity systems are a foundational element of a robust digital economy and will deliver transparency and efficiency for citizens, government, and businesses. The ability of an individual to identify themselves and for governments/ businesses to validate that identity is crucial for the effective functioning of a digital economy. Digital identity systems are also fraught with risks which require governments to play a key role providing sound regulation and oversight. As countries and economies become digitized, governments must remain vigilant to cyber threats and have cyber risk mitigation strategies in place. Cyber resilience is a shared responsibility by all parties to ensure a high level of trust is embedded in every transaction between citizens and public sector entities. It will protect their data, help foster innovation and enable financial inclusion. Political and economic leaders play a critical role in ensuring public policy, regulation, and enforcement is in place to support integrity across the network Wherever governments are on their digital journey, by leveraging emerging technologies, they have a tremendous opportunity to deliver more efficient services while reducing costs and freeing up funds to reinvest in new digital infrastructure. This report concludes with several public policy recommendations we have seen governments make to put their digital agenda in motion. Authors: Julie Monaco,Naveed Sultan,Charlotte Branfield,

Governments are beginning to play a key role in the digitization of their country&rsquo;s economy which is impacting industry and citizens &mdash; digitizing government ministries, government services, and every interaction with society. While governments will have a more direct role in driving the transformation of government services, governments investing in building a digital infrastructure will be a key enabler for digitization of the economy as well as society. It will improve how citizens access public and private transportation, healthcare, education, and all of their financial transactions. A strong digital economy requires a robust digital infrastructure, with digital money, payments, and identity being ubiquitous enablers required for the transformation of any industry or society. Citi&rsquo;s Digital Money Index, published annually since 2014, helps governments understand the readiness of their respective countries for usage of digital money. Each step made progressing towards digital money readiness can significantly enhance a nation&rsquo;s ability to digitally transform its economy. National digital identity systems are a foundational element of a robust digital economy and will deliver transparency and efficiency for citizens, government, and businesses. The ability of an individual to identify themselves and for governments/ businesses to validate that identity is crucial for the effective functioning of a digital economy. Digital identity systems are also fraught with risks which require governments to play a key role providing sound regulation and oversight. As countries and economies become digitized, governments must remain vigilant to cyber threats and have cyber risk mitigation strategies in place. Cyber resilience is a shared responsibility by all parties to ensure a high level of trust is embedded in every transaction between citizens and public sector entities. It will protect their data, help foster innovation and enable financial inclusion. Political and economic leaders play a critical role in ensuring public policy, regulation, and enforcement is in place to support integrity across the network Wherever governments are on their digital journey, by leveraging emerging technologies, they have a tremendous opportunity to deliver more efficient services while reducing costs and freeing up funds to reinvest in new digital infrastructure. This report concludes with several public policy recommendations we have seen governments make to put their digital agenda in motion.
<h1>&nbsp;</h1>
 Authors: Julie Monaco,Naveed Sultan,Charlotte Branfield,

The Journey to Enacting a Digital Agenda

Digital technologies — especially connectivity, big data, and artificial intelligence, among others, are transforming every facet of the economy. With public sector expenditure in most countries accounting for anywhere from one-third to two-thirds of gross domestic product (GDP), it has become an imperative for governments to actively drive digitization efforts.

Digitizing Governments

David Lubin

Jason Channell

Elizabeth Curmi

Vikram Rai

Cities may generate 80% of global GDP currently, but while they have historically pulled in resources as they grew via industrialization, this phase of urbanization is being driven as much by populations being pushed into cities by rural poverty and deprivation. This switch to 'growth being the engine of cities' has profound implications: it is the people that need the city, not the city that needs the people. Some 4 billion people, representing 54% of the global population currently live in cities; the UN expects this to grow by 1 billion by 2030, and 2 billion by 2050, by which time 66% of us will be living in cities. To put that in context, that is one and a half extra 'China's' or 'India's', or six extra 'USA's' all living in cities over the next 30 years. Cities may only occupy 2% of our global landmass, but they already consume 75% of all global resources and generate 70% of direct CO2 emissions. These new urban populations will require basic services such as water, energy, sanitation, food, and housing, as well as the 'luxuries' of employment, education, culture, and recreation. What impact will an extra 2 billion people add? The challenge though is even greater than this. Of our 2 billion new urbanites, 1.2 billion will come from Asia, and 800 million from Africa. These cities already have chronically limited revenue bases and offer meager services even to those already living there. With the lack of accompanying economic growth and financial contribution from this new populous, how can cities finance the vast investment needed to accommodate them? If these rapidly growing cities cannot finance themselves through income, and if central governments will not contribute more, then the capital must come externally. And so with challenge comes opportunity. The good news is that trillions of dollars in capital is looking to invest in long-dated, income-generating assets, especially if they are sustainability focused. And what an opportunity! In our Citi GPS report Infrastructure for Growth from October 2016, we estimated that global infrastructure spend to 2040 was $58.6 trillion, with the bulk of that urban — but cities are not just about physical infrastructure, they are about people, and hence there is a similarly vast 'social' spending opportunity. So how do we make it happen? In this report we contrast the vicious and virtuous circles of urban investment, and set out our 'Seven Steps for Sustainable Cities', which examine how cities can make the most of the money which they have, and gain access to greater funding via innovative new financial structures. Those seven steps will require central governments, industry, the financial community, and cities to all do their part to tackle what is one of the greatest challenges of the coming decades. With much of the infrastructure yet to be built, and with a typical life span of 30 -100 years, our choices now may resonate over centuries; we have the opportunity to reshape our future, by creating new and sustainable cities which can once again operate as 'beacons of light' radiating out into the world, or we can let the darkness of unplanned urban squalor continue to sprawl. As Aristotle once said, "A great city is not to be confounded with a populous one" — let us seize the opportunity to ensure that our cities of the future are once again truly great cities and beacons of light, and not just populous ones. Authors: Jason Channell,Elizabeth Curmi, PhD.,David Lubin,Vikram Rai, CFA,

Cities may generate 80% of global GDP currently, but while they have historically pulled in resources as they grew via industrialization, this phase of urbanization is being driven as much by populations being pushed into cities by rural poverty and deprivation. This switch to 'growth being the engine of cities' has profound implications: it is the people that need the city, not the city that needs the people. Some 4 billion people, representing 54% of the global population currently live in cities; the UN expects this to grow by 1 billion by 2030, and 2 billion by 2050, by which time 66% of us will be living in cities. To put that in context, that is one and a half extra 'China's' or 'India's', or six extra 'USA's' all living in cities over the next 30 years. Cities may only occupy 2% of our global landmass, but they already consume 75% of all global resources and generate 70% of direct CO2 emissions. These new urban populations will require basic services such as water, energy, sanitation, food, and housing, as well as the 'luxuries' of employment, education, culture, and recreation. What impact will an extra 2 billion people add? The challenge though is even greater than this. Of our 2 billion new urbanites, 1.2 billion will come from Asia, and 800 million from Africa. These cities already have chronically limited revenue bases and offer meager services even to those already living there. With the lack of accompanying economic growth and financial contribution from this new populous, how can cities finance the vast investment needed to accommodate them? If these rapidly growing cities cannot finance themselves through income, and if central governments will not contribute more, then the capital must come externally. And so with challenge comes opportunity. The good news is that trillions of dollars in capital is looking to invest in long-dated, income-generating assets, especially if they are sustainability focused. And what an opportunity! In our Citi GPS report Infrastructure for Growth from October 2016, we estimated that global infrastructure spend to 2040 was $58.6 trillion, with the bulk of that urban &mdash; but cities are not just about physical infrastructure, they are about people, and hence there is a similarly vast 'social' spending opportunity. So how do we make it happen? In this report we contrast the vicious and virtuous circles of urban investment, and set out our 'Seven Steps for Sustainable Cities', which examine how cities can make the most of the money which they have, and gain access to greater funding via innovative new financial structures. Those seven steps will require central governments, industry, the financial community, and cities to all do their part to tackle what is one of the greatest challenges of the coming decades. With much of the infrastructure yet to be built, and with a typical life span of 30 -100 years, our choices now may resonate over centuries; we have the opportunity to reshape our future, by creating new and sustainable cities which can once again operate as 'beacons of light' radiating out into the world, or we can let the darkness of unplanned urban squalor continue to sprawl. As Aristotle once said, "A great city is not to be confounded with a populous one" &mdash; let us seize the opportunity to ensure that our cities of the future are once again truly great cities and beacons of light, and not just populous ones. Authors: Jason Channell,Elizabeth Curmi, PhD.,David Lubin,Vikram Rai, CFA,

Beacons of Light Against the Shadow of Unplanned Urbanization

As Theodore Parker once said, "Cities have always been the fireplaces of civilization, whence light and heat radiated out into the dark." While great cities have shaped our civilizations over the millennia, sucking in resources both natural and human before radiating hem out to the world through commerce and culture, this received wisdom that 'cities are the engines of growth' is, we believe, failing.

Sustainable Cities

Georgios Ierodiaconou

Thomas A Singlehurst

Mark May

Catherine T O’Neill

Dan F Homan

John Bowman

Jan Wittrodt

Ingvild Næss

Alexander Hanff

Telefonica

In our first Citi GPS report on ePrivacy and Data Protection (Who Watches the Watchers?, March 2017), we highlighted that the focus on data privacy is on the rise and forthcoming changes to regulation in the European Union (this year), will fundamentally alter the risk/reward of using data and, with it, alter the perception of the long-term opportunity from data. In this follow-up GPS report, with Europe’s General Data Protection Regulation (GDPR) less than a month away, we consider how prepared consumers, corporates, and regulators are for the tightening regulatory landscape. More broadly, we consider what the potential implications could be as we move from an environment where organizations have become accustomed to untrammeled access to data, to one where data minimization and transparency presides, consumers are empowered to take more control of personal data, and organizations are forced to think carefully about their use of data. To investigate this we surveyed those involved in implementing the GDPR across a range of organizations and conducted a series of interviews with industry experts from Telefónica, Schibsted, Zalando, and specialist consultancies. The majority of companies believe they will have to change how consumer data is used which brings with it rising costs (i.e., of compliance). Trust plays a fundamental role and unless consumers believe the value trade is beneficial, access to personal data could fall as consumers are prepared to use their enhanced rights. The application of the regulation (unintentionally) favors those closest to the consumer and large companies vs. small companies. Murky data supply chains are set to see a shakeout. Advertising funded models have been one of the key planks supporting the Internet’s development and the online advertising industry appears to be right at the heart of the challenges that regulation presents. As one survey respondent commented: “The range of plausible outcomes includes total destruction of the online ad ecosystem in Europe all the way to a minor blip.” Companies claim to be well prepared for the EU regulation change. The 25th of May is D-Day, when the regulation will come into effect, but this is not going to be the end of the process. In fact, it may well be the start of a step change in the approach to data protection regulation globally. We worry corporates and investors are being complacent about the risks. Authors: Catherine T O’Neill,Thomas A Singlehurst, CFA,Dan F Homan,Georgios Ierodiaconou,Mark May,John Bowman,Jan Wittrodt,Ingvild Næss,Alexander Hanff,Telefonica,

In our first Citi GPS report on ePrivacy and Data Protection (Who Watches the Watchers?, March 2017), we highlighted that the focus on data privacy is on the rise and forthcoming changes to regulation in the European Union (this year), will fundamentally alter the risk/reward of using data and, with it, alter the perception of the long-term opportunity from data. In this follow-up GPS report, with Europe&rsquo;s General Data Protection Regulation (GDPR) less than a month away, we consider how prepared consumers, corporates, and regulators are for the tightening regulatory landscape. More broadly, we consider what the potential implications could be as we move from an environment where organizations have become accustomed to untrammeled access to data, to one where data minimization and transparency presides, consumers are empowered to take more control of personal data, and organizations are forced to think carefully about their use of data. To investigate this we surveyed those involved in implementing the GDPR across a range of organizations and conducted a series of interviews with industry experts from Telef&oacute;nica, Schibsted, Zalando, and specialist consultancies. The majority of companies believe they will have to change how consumer data is used which brings with it rising costs (i.e., of compliance). Trust plays a fundamental role and unless consumers believe the value trade is beneficial, access to personal data could fall as consumers are prepared to use their enhanced rights. The application of the regulation (unintentionally) favors those closest to the consumer and large companies vs. small companies. Murky data supply chains are set to see a shakeout. Advertising funded models have been one of the key planks supporting the Internet&rsquo;s development and the online advertising industry appears to be right at the heart of the challenges that regulation presents. As one survey respondent commented: &ldquo;The range of plausible outcomes includes total destruction of the online ad ecosystem in Europe all the way to a minor blip.&rdquo; Companies claim to be well prepared for the EU regulation change. The 25th of May is D-Day, when the regulation will come into effect, but this is not going to be the end of the process. In fact, it may well be the start of a step change in the approach to data protection regulation globally. We worry corporates and investors are being complacent about the risks. Authors: Catherine T O&rsquo;Neill,Thomas A Singlehurst, CFA,Dan F Homan,Georgios Ierodiaconou,Mark May,John Bowman,Jan Wittrodt,Ingvild N&aelig;ss,Alexander Hanff,Telefonica,

Privacy Matters: Navigating the New World of Data Protection

“We’ve lost control of our personal data”, Sir Tim Berners-Lee, inventor of the World Wide Web, said in March 2017. The widespread collection of data has led to the rise of data asymmetry and, consequently, consumer trust is low. Some would argue that it has led to the prioritization of profit over privacy. Consumers believe cybersecurity and privacy risks are amongst the biggest risks facing society. The ramifications should not be overlooked by corporates and investors.

ePrivacy and Data Protection

Ashwin Shirvaikar

Walter H Pritchard

Dalibor Vavruska

Mark Kelley

An MIT Sloan Management Review report in 2015 bears this out. Forty-three percent of surveyed companies indicated that a lack of appropriate analytical skills is a key challenge. And why is this? It is of course because the opportunity from big data, data analytics, machine learning, artificial intelligence, and the Internet of Things is perceived to be enormous and data scientists are the potential key to unlocking it. But for data scientists to exist, we must have data. Indeed all of these opportunities rely on continued untrammeled access to significant underlying data sets — an assumption that we think investors can no longer fully take for granted. In this report we look at how consumers are tracked, and how the data that is collected and analyzed is then used by organizations. We then look at how consumers themselves perceive the topic of privacy and why regulators increasingly feel the need to intervene. Finally we conduct a series of case studies with third-party contributors such as Vodafone, Aviva, and even Citi to assess the challenges associated with adapting to the new landscape. The conclusions are quite stark. Focus on privacy and data protection is on the rise and forthcoming changes to regulation in the European Union (EU), to be implemented in 2018, will fundamentally alter the risk/reward of using data and with it, alter the perception of the long-term opportunity from data. It’s important to say that this does not necessarily unwind the longer-term upside from big data, data analytics, artificial intelligence, and machine learning. But we do think the path will be muddied by new regulation and that from a corporate perspective, this will require a systemic change of approach with respect to ePrivacy and data protection. And this is not, for the moment, properly understood or appreciated by many corporates or investors. Authors: Thomas A Singlehurst, CFA,Mark Kelley,Ashwin Shirvaikar, CFA,Catherine T O’Neill,Mark May,Walter H Pritchard, CFA,Dalibor Vavruska,

An MIT Sloan Management Review report in 2015 bears this out. Forty-three percent of surveyed companies indicated that a lack of appropriate analytical skills is a key challenge. And why is this? It is of course because the opportunity from big data, data analytics, machine learning, artificial intelligence, and the Internet of Things is perceived to be enormous and data scientists are the potential key to unlocking it. But for data scientists to exist, we must have data. Indeed all of these opportunities rely on continued untrammeled access to significant underlying data sets &mdash; an assumption that we think investors can no longer fully take for granted. In this report we look at how consumers are tracked, and how the data that is collected and analyzed is then used by organizations. We then look at how consumers themselves perceive the topic of privacy and why regulators increasingly feel the need to intervene. Finally we conduct a series of case studies with third-party contributors such as Vodafone, <a href="http://www.aviva.co.uk">Aviva</a>, and even Citi to assess the challenges associated with adapting to the new landscape. The conclusions are quite stark. Focus on privacy and data protection is on the rise and forthcoming changes to regulation in the European Union (EU), to be implemented in 2018, will fundamentally alter the risk/reward of using data and with it, alter the perception of the long-term opportunity from data. It&rsquo;s important to say that this does not necessarily unwind the longer-term upside from big data, data analytics, artificial intelligence, and machine learning. But we do think the path will be muddied by new regulation and that from a corporate perspective, this will require a systemic change of approach with respect to ePrivacy and data protection. And this is not, for the moment, properly understood or appreciated by many corporates or investors. Authors: Thomas A Singlehurst, CFA,Mark Kelley,Ashwin Shirvaikar, CFA,Catherine T O&rsquo;Neill,Mark May,Walter H Pritchard, CFA,Dalibor Vavruska,

Who Watches the Watchers? – How Regulation Could Alter the Path of Innovation

If The Graduate were to be re-released today it is almost certain that the career advice from Mr. McGuire to the film’s main protagonist – recently graduated Benjamin Braddock – would be different. Indeed, we would go one step further and argue that it is almost certain that the one word offered by the 2017 version of Mr. McGuire would be ‘data’.

ePrivacy & Data Protection

Global Equities

International Markets

Trade

Macroeconomics

Environment Social Governance (ESG)

Sustainable Finance

Geopolitics

Citi Global Perspectives & Solutions

Banking, Capital Markets & Advisory

Securities Services

Commercial Bank

Global Insights

Leadership

Private Bank

Treasury & Trade Solutions

Markets

Issuer Services

Citi Digital Assets

Research

Wealth

Column 1

Column 2

About Us

Programs

Knowledge Center

Apply for Funding

Column 3

Column 4

Column 5

Links

Footer

Citi Foundation

Businesses

Our Impact

News

Insights

Investors

Careers

My Account

Para Sport

Emergency

Disclosures

Privacy Notices

Hidden

Citi Gpa

Europe, Middle East and Africa

North America

Latin America

Asia Pacific

Social Welfare Funds

Development Organizations

SOEs

Multilateral Development Bank

Central Banks

Central Governments

Ministry of Finance

Local Governments

Ministry of Foreign Affairs

Regional Development Bank

Fraud Prevention

FinTech

iBuyers

Mortgage

Origination

PropTech

Real Estate

Single-Family Rental

Data

GDPR

Privacy

Regulsyion

Auto

Demand

Food

Industrial

Metals

Russia

Shortage

Supply

Supply Chain

Tariff

Ukraine

Asteroids

Imagery

Logistics

Mining

Moon

Rockets

Satellites

Space

Space-Based Solar Power

Aware

Do No Harm

Impact

Investing

Monitoring

Risk

Sustainability

Taxonomies

Augmented Reality

Cryptocurrency

dApps

DeFi

Metaverse

Money

Virtual Reality

VR/AR

Auction

Disruption

Money Laundering

Online

Regulation

Virtual

Entrepreneur

Equal Opportunity

Equality

Global Growth

Innovation

Venture Capital

Women

Women Entrepreneurs

Education

Eliminating Poverty

Health

Multidimensional Index

Poverty

Standard of Living

Sustainability-Linked Bond

UN SDG

Inflation

Just in Case

Just in Time

Production

Transportation

Charity

Donations

Multiplier

Philanthropy

Service

Technology

Growth & Prosperity

Risk & Resilience

Sustainability & Society

Technology & Innovation

Health & Wellness

Citi Blog

Press Release

Regulatory

Product Marketing

Wealth Publications

Newsletter

Global Markets and Economy

Business Strategies

Community Impact

Wealth Management

Retail Banking

Diversity, Equity, and Inclusion

ICG Insight Detail Template

As our premier thought leadership product, Citi Global Perspectives & Solutions (Citi GPS) is designed to help our clients navigate the global economy’s most demanding challenges, identify future themes and trends, and prosper in a fast-changing and interconnected world. 

Keep Exploring CITI GPS Content

Keep up to date with our latest insights.

Subscribe to Citi GPS

Digitizing Governments

UP NEXT

Sustainable Cities

ePrivacy and Data Protection

ePrivacy & Data Protection

Sign up to receive the latest from Citi.