The digital era for all

Digital technologies are ushering in a new era in development—by transforming economies, creating jobs, and improving the lives of even the most vulnerable and remote populations. They have dramatically changed the way we communicate with each other, how we conduct business, and our interaction with the environment. The international community has an unprecedented opportunity to help developing countries reap the benefits of digitalization while mitigating the risks and ensuring that, working together, through accelerated investments and policy reforms, we can close the digital divide.  

Embracing digitalization is no longer a choice. It’s a necessity. The critical services that support development—like hospitals, schools, energy infrastructure, and agriculture—all run on connectivity and data. Without access to the internet and the skills to use digital technologies effectively, too many, unfortunately, are essentially locked out of the modern world. A new digital era that is accessible to all holds the potential to shape a more inclusive, resilient, and sustainable world for generations to come.  

The data is undeniable. When fast internet becomes available, people are 13 percent more likely to have a job and businesses can nearly quadruple their exports. Faster internet coverage also reduces extreme poverty. In Senegal and Nigeria, 3G coverage has been linked to declines in extreme poverty of 10 percent and 4.3 percent, respectively. At the same time, analytics and data-driven decision-making boost the sales of small and medium enterprises. Digital technologies also generate benefits for the planet—with the potential to reduce emissions by up to 20 percent by 2050 in the top three highest-emitting sectors—energy, materials, and transportation.   

Against this global backdrop, digital progress has been uneven, exacerbating the gap between the digital haves and the have-nots. One-third of the global population remains offline, a stark contrast to the 90 percent online in high-income countries. As businesses in advanced countries integrate artificial intelligence into their products and services, less than half of the businesses in many developing countries have a basic internet connection. And when they do have internet access, it’s often slow. Broadband in wealthier countries is five to ten times faster than in low-income countries. These gaps in internet speed, data traffic, and digital use are hampering digital gains for individuals and firms in low- and middle-income countries. 

The digital divide in production is even more pronounced. While the digital sector is growing nearly twice as fast as the global economy and creating tens of millions of new jobs, more than half of the value created is captured by just two leading countries. Usage of digital products and services as production inputs has doubled in high-income and upper middle-income countries during the past two decades, but barely increased in lower income countries.  

We need to know which countries are leading digital trends and support those that are falling behind in today’s digital era.  The World Bank’s new “Digital Progress and Trends Report 2023”—to be released next week—tracks the global progress of digitalization, details emerging technology and market trends, and highlights policy shifts and debates, with a focus on developing countries. The report also points to two clear emerging trends that are reshaping our digital future: the importance of digital public infrastructure and the transformative emergence of artificial intelligence.   

We also must prepare to manage the new risks of digitalization. Accelerated automation can displace workers. Social media and algorithms can spread misinformation. Every additional internet connected device and system creates new cybersecurity vulnerabilities. And rapid digitalization is increasing electricity consumption and greenhouse gas emissions. 

So how can developing countries better position themselves to reap the benefits of digitalization while mitigating the risks and ensuring that they are not left behind?  

A focus on fundamentals and a sense of urgency is key.   

Accelerating investment in high-speed connectivity and data centers is a must to power the digital economy. Africa cannot thrive in the age of artificial intelligence with 2 percent of the world’s data center capacity for 17 percent of the global population. But infrastructure alone is not enough—internet access and digital devices need to be affordable to all. People also need to be empowered with the digital skills to use digital technologies productively and safely, access services, and improve their livelihoods.  

This situation is improving with more people getting online every year, but progress is too slow.  

Now is the time for leaders to think creatively and act boldly to tackle stubborn policy bottlenecks and overcome business as usual to unlock digital investment and innovation. Digital access should be seen as a must for every citizen rather than a luxury for a few. Leaders cannot be afraid to look beyond their borders, integrating with regional and global digital markets to help create the economies of scale needed to attract more digital investment and open new growth opportunities for digital services exports. Now is also the time for development partners, including the World Bank, to step up our focus on digital—increasing our financing and knowledge support to help countries harness this opportunity and navigate the risks. 

Global digital transformation is moving at lightning speed. The digital divide is depriving too many people and businesses of transformative opportunities to access services, create value, and cut emissions. It’s time for the global community to work together to carve out a new development path to prepare for the increasing digital disruption that all countries will face over the decades to come. 

To learn more about Accelerating Digital for Development, please join us for the World Bank Group's Global Digital Summit here.