While the internet, mobile phones and other digital technologies have spread rapidly in the developing world, the benefits of more jobs and better public services have fallen short of expectations, a new World Bank (WB) report warns.
About 60 percent of the world’s population remains excluded from the ever-expanding digital economy, according to a just released WB report.
The benefits of rapid digital expansion have been skewed towards the wealthy, skilled, and influential around the world, who are better positioned to take advantage of the new technologies, said the study, World Development Report 2016: Digital Dividends.
However, the report said the number of internet users worldwide has more than tripled since 2005, but 4 billion people still lack access to the internet.
“Digital technologies are transforming the worlds of business, work, and government,” said Jim Yong Kim,
President of the World Bank Group. “We must continue to connect everyone and leave no one behind because the cost of lost opportunities is enormous.”
For digital dividends to be widely shared among all parts of society, countries also need to improve their business climate, invest in people’s education and health, and promote good governance, he said.
In spite of success stories, the effect of technology on global productivity, expansion of opportunity for the poor and middle class, and the spread of accountable governance has so far been less than expected, the report cautioned. Digital technologies are spreading rapidly, but growth, jobs and services have lagged behind.
“The digital revolution is transforming the world, aiding information flows, and facilitating the rise of developing nations that are able to take advantage of these new opportunities,” said Kaushik Basu, the World Bank chief economist.
“It is an amazing transformation that today 40 percent of the world’s population is connected by the internet. While these achievements are to be celebrated, leaders must mindful not to create a new underclass.
With nearly 20 percent of the world’s population unable to read and write, the spread of digital technologies alone is unlikely to spell the end of the global knowledge divide, Basu said.
To deliver fully on the development promise of a new digital age, the World Bank suggested making the internet universal, affordable, open, and safe.
Regulations must ensure competition among businesses and digital development strategies need to be much broader than information and communication technology (ICT) strategies.
To reap the greatest benefits, countries must create the right environment for technology, regulations that facilitate competition and ease of market entry, and skills that enable workers to leverage the digital economy.
If institutions are accountable to people, digital technologies can, in turn, accelerate the pace of development.
Investing in basic IT infrastructure, reducing the cost of doing business, and lower trade barriers are ways boost the economy, the report said.
In addition, basic literacy remains essential for children, in addition to the teaching of advanced cognitive and critical thinking skills and foundational training in ICT systems. Teaching technical skills early and exposing children to technology promotes ICT literacy and influences career choices, the report said.
Digital technologies can transform economies, societies and public institutions, but the changes are neither assured nor automatic, the report warned. Countries that are investing in both digital technology and its analog complements will reap significant dividends, while others are likely to fall behind.
The lack of effective government planning and development can create divergent economic fortunes, higher inequality and an intrusive state, the report said.
Over the last decade, the World Bank group has invested a total US $12.6 billion in ICTs.
The full report, World Development Report 2016 Digital Dividends, is available at http://www.worldbank.org/wdr2016