60% of world population excluded from digital economy – World Bank

Sixty percent of the world’s population remains excluded from the ever-expanding digital economy, a new World Bank report released last Thursday has indicated.

The World Bank report says that while the internet, mobile phones and other digital technologies are spreading rapidly throughout the developing world, the anticipated digital dividends of higher growth, more jobs and better public services have fallen short of expectations.

According to the new ‘World Development Report 2016: Digital Dividends,’ authored by co-directors, Deepak Mishra and Uwe Deichmann and team, 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.

It further notes in addition that though the number of internet users worldwide has more than tripled since 2005, 4 billion people still lack access to the internet.

The World Bank Group says it has invested a total $12.6 billion in ICTs over the last decade, noting that countries already transforming into a digital economy, the main task is to address the difficult problems that the internet causes.

The main message of the report is that digital development strategies need to be much broader than ICT strategies, as “Connectivity for all” remains an important goal and a tremendous challenge.

“Digital technologies are transforming the worlds of business, work, and government,” Jim Yong Kim, president, World Bank Group, says.

“We must continue to connect everyone and leave no one behind because the cost of lost opportunities is enormous. But 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,” according to the report.

Although there are many individual success stories, the effect of technology on global productivity, expansion of opportunity for the poor and middle-class, and the spread of accountable governance have so far been less than expected. Digital technologies are spreading rapidly, but digital dividends – 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,” Kaushik Basu, World Bank chief economist, says.

“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, this is also occasion to be mindful that we do not 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.”

The report suggests that to reap the greatest benefits, countries must create the right environment for technology: regulations that facilitate competition and market entry, skills that enable workers to leverage the digital economy, and institutions that are accountable to people. Digital technologies can, in turn, accelerate the pace of development, the report notes citing China where there are 8 million entrepreneurs – one-third of them women – who use an e-commerce platform to sell goods nationally and export to 120 countries.

India has provided unique digital identification to nearly 1 billion people in five years, and increased access and reduced corruption in public services. And in public health services, simple SMS messages have proven effective in reminding people living with HIV to take their lifesaving drugs.

To deliver fully on the development promise of a new digital age, the World Bank suggests two main actions: closing the digital divide by making the internet universal, affordable, open, and safe; and strengthening regulations that ensure competition among business, adapting workers’ skills to the demands of the new economy, and fostering accountable institutions – measures which the report calls analogue complements to digital investments.

Onyinye Nwachukwu