World Development Report 2016: Digital Dividends

World Bank
2016

Summary

The digital revolution has brought easier communication and information, greater convenience, free digital products, and new forms of leisure.  However, digital dividends have had much less impact on global productivity, expansion of opportunity and the spread of accountable governance than once expected.  This report argues that improving digital dividends requires digital development strategies that go beyond ICT strategies and seek to build on a strong analog foundation. It calls for institutions to take action to create an enabling environment for a more inclusive digital revolution that increases access, improves digital literacy, empowers citizens, and facilitates competition to improve and refine technology.

Increased growth, more job opportunities and greater access to services are significant returns on digital investments, although they are neither automatic nor assured. Digital technology can lower the cost of economic and social transactions, promote innovation, boost efficiency and increase inclusion. More specifically, the internet can: lead to more trade, better capital use, and greater competition; support job creation and make workers more productive; and make governments more capable and responsive.

However, these dividends are not spreading rapidly enough. To date, those who are better educated, well connected, and more capable have received most of the benefits. Nearly 60% of the world’s population are still offline and persistent societal inequalities within populations perpetuate digital divides. Further, the perceived benefits of digital technologies are offset by emerging risks:

  • Scale without competition can lead to a concentration of market power and the rise of monopolies, inhibiting future innovation.
  • Workers without the skills necessary to use technology there will be greater inequality rather than efficiency.
  • Greater access to information without government accountability will lead to more control.

Maximising the potential of digital dividends requires better understanding of how technology interacts with “analog complements” – other factors that are important for development. These complements are also the foundation of economic development:

  • regulations that create a vibrant business climate and let firms leverage digital technologies to compete and innovate;
  • skills that allow people the opportunity to seize opportunities in the digital world;
  • accountable institutions that use the internet to empower citizens.

Policy priorities that address these complements include:

  • Removing barriers to adoption of regulations, competition regulation and enforcement, and platform competition.
  • Foundational skills and basic ICT literacy, prepare for careers instead of jobs, and facilitate lifelong learning.
  • Mobile-phone based services and monitoring, -egovernment delivery and citizen engagement, and participatory policy making and digital collaboration.

Universally accessible and affordable internet should be a top global priority. It can be achieved through a combination of market competition, public-private partnerships, and effective regulation of the internet and telecom sector.  Other priorities for global cooperation are: governing the internet, creating a global digital market, and providing global public goods.

Source

World Bank. (2016). World Development Report 2016: Digital Dividends. Washington DC: World Bank.