Supply chains are the backbone of the global economy, especially for least-developed countries (LDCs). Today, the world needs resilient and sustainable supply chains more than ever, given the environmental challenges and unpredictable economic instability. While LDCs aim to reach their sustainable development goals, digitalization presents game-changing solutions and assists these nations in building resilient supply chains. These then support both global climate goals and economic growth by increasing transparency, efficiency, and inclusivity.
Even so, LDCs encounter several obstacles when implementing digital technologies because of inadequate infrastructure, low digital literacy, and restricted financial resources. It is also important to note that while LDCs make up only 14% of the world’s population, they represent 27% of the offline population, with 720 million people still lacking internet access. It is crucial to close these gaps to leverage digitalization in helping these vulnerable nations.
Due to poor infrastructure, scarce resources, and remote locations, supply chains in LDCs are frequently susceptible to interruptions. These systems are readily destabilized by natural disasters, unstable political environments, and economic shocks.
Furthermore, a lot of LDCs continue to use paper-based procedures, which slow down transactions and raise the risk of mistakes. The lack of transparency makes it difficult to monitor the environmental and social impacts of supply chains.
Digitalization can help streamline processes, reduce costs, and improve visibility. However, this comes with its own set of hurdles. Digitalization plays a major role in supporting resilient and sustainable supply chains by increasing productivity and cutting waste. One example is the Electronic Single Window initiative in Vanuatu, which digitalized the processes for issuing biosecurity certificates.
This initiative reduced paperwork by 95% and cut down physical trips from six days to ten minutes, resulting in a significant decrease of 5,827 kg of CO2 emissions.
In Bhutan, a real-world example of digitizing corporate processes is a project, “e-infrastructure for trade and services.” The Food Corporation of Bhutan spearheaded the ambitious initiative, which aided in the country’s shift to a digital economy. In the southern town of Phuntsholing, the initiative assisted in the installation of machine grading and an electronic auction system for potatoes, which boosted pricing transparency, decreased cartelization, and decreased transaction costs.
There’s still a big digital divide between less developed and more developed nations, even with these encouraging advances. The infrastructure required to effectively embrace digitalization is lacking in many LDCs, including dependable electricity and internet access. These gaps risk exacerbating economic inequalities and limiting LDCs’ ability to improve supply chain sustainability.
Experts emphasized the significance of resolving these discrepancies at the Fifth United Nations Conference on the Least Developed Countries. They underlined the importance of international collaboration, creative finance options, and legislation that promotes digital transformation.
LDCs require increased access to reasonably priced digital tools and platforms in addition to improved infrastructure. Here, the private sector is vitally important. By establishing connections with regional companies and investing in digital technologies that promote sustainable supply chain practices and by fostering partnerships with local businesses. The cooperation between the public and commercial sectors can result in major improvements in digitalization, enhancing both economic resilience and environmental sustainability, as evidenced by the Aspire to Innovate program in Bangladesh.
In addition to being necessary for business, resilient and sustainable supply chains are also crucial for achieving the world’s climate goals. Reducing supply chains’ carbon footprint is essential to limiting global warming to 1.5°C, as it makes up a significant amount of world emissions. Businesses in LDCs can significantly contribute to global climate efforts by using digital tools to track and cut emissions along the supply chain.
By investing in digitalization, and fostering public-private partnerships, LDCs can build resilient, sustainable supply chains that can contribute to achieving global climate change and economic goals.