World Development Report 2016: Digital Dividends

Digital technologies are spreading rapidly, but digital dividends the broader benefits of faster growth, more jobs, and better services are not. If 40 percent of wage earners in Somalia can receive their pay through mobile phones, why can't the rest of us? If eight million entrepreneurs in China, a third of them women, can use an e-commerce platform to export goods to 120 countries, why can't [200] million entrepreneurs worldwide do the same? And if India can provide unique digital identification to a billion people in five years and save billions of dollars in reduced corruption by doing so, why can't all developing countries replicate its success? Indeed, what's holding countries back from realizing the profound and transformational effects that digital technologies are supposed to deliver? Two main reasons. First, nearly 60 percent of the world's people are still offline and can't participate in the digital economy in any meaningful way. Second, and more important, the benefits of digital technologies are offset by growing risks. Startups can disrupt incumbent firms, but not when vested interests and regulatory uncertainty hold back competition. Employment opportunities may be greater, but not when the labour market is polarized. The internet can be a platform for universal empowerment, but not if it is used as a tool of state control. Although the digital revolution has forged ahead, its analog complements the regulations that promote entry and competition, the skills that enable workers to access and then leverage the new economy, and the institutions that are accountable to citizens have failed to keep pace. And when analog complements to digital investments are absent, the development impact will often be disappointing. What, then, should countries do? They should formulate digital development strategies that are much broader than current ICT strategies. They should create an environment for technology to deliver the largest benefits. In short, they should build a strong analog foundation to deliver more prodigious digital dividends in faster growth, more jobs, and better services