The World Bank on 14 January 2016 released a report titled World Development Report 2016: Digital Dividends in Washington DC, the USA.
The report explored the impact of the internet, mobile phones, and related technologies on economic development across the world including India.
Further, it concluded that potential gains from digital technologies are high, but often remain unrealized and proposed policies to expand connectivity, accelerate complementary reforms in sectors beyond information and communication technology (ICT), and address global coordination problems.
In relation to India, the authors of the report that included Kaushik Basu, Senior Vice President and Chief Economist of World Bank appreciated the Aadhaar scheme as it saved 1 billion US dollars by bringing down corruption.
Highlights of the report
• The world’s offline population is mainly in India and China, but more than 120 million people are still offline in North America and the digital divide within countries can be as high as that between countries.
• Worldwide, nearly 21 percent of households in the bottom 40 percent of their countries’ income distribution don’t have access to a mobile phone, and 71 percent don’t have access to the internet.
• The increased connectivity has had limited effect in reducing information inequality. For example, there are more contributions to Wikipedia from Hong Kong, China, than from all of Africa combined, despite the fact that Africa has 50 times more internet users.
• Digital technologies, apart from resulting in economic benefits, influenced the participation of women in the labor force, the ease of communication for people with disabilities, and the way people spend their leisure.
• By overcoming information barriers, augmenting factors, and transforming products, digital technologies can make development more inclusive, efficient, and innovative.
• Problem areas: Digital dividends are not spreading rapidly as nearly 60 percent of the world’s people are still offline and can’t fully participate in the digital economy.
• There also are persistent digital divides across gender, geography, age, and income dimensions within each country.
• Some of the perceived benefits of the internet are being neutralized by new risks like vested business interests, regulatory uncertainty, and limited contestation across digital platforms that could lead to harmful concentration in many sectors.
• Quickly expanding automation, even of mid-level office jobs, could contribute to a hollowing out of labor markets and to rising inequality.
• It also cautioned that the poor record of many e-government initiatives points to high failure of ICT projects and the risk that states and corporations could use digital technologies to control citizens, not to empower them.
• Mitigation strategies: Connectivity is vital, but not enough to realize the full development benefits. Digital investments need the support of analog complements like regulations, skills and institutions.
• Regulations are needed which help firms in leveraging the internet to compete and innovate. Improved skills will help people take full advantage of digital opportunities. And, Accountable institutions will ensure governments respond to citizens’ needs and demands.
• Market competition, public-private partnerships and effective regulation of internet and mobile operators encourage private investment that can make access universal and affordable. Public investment will sometimes be necessary and justified by large social returns.
• A harder task will be to ensure that the internet remains open and safe as users face cybercrime, privacy violations, and online censorship.
• Conclusion: The report suggested that Digital development strategies need to be broader than ICT strategies. It cautioned that when the analog complements are absent, the development impact will be disappointing.
• But when countries build a strong analog foundation, they will reap ample digital dividends—in faster growth, more jobs, and better services.
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When: 14 January 2016