Why is digital important for development?
Digital technologies are increasingly central and indispensable for our everyday lives - they continue to revolutionize the way we work, communicate, govern, learn and more. In developing countries, digital tools serve as a lifeline that connect small businesses, bring services to remote populations, and expand economic opportunities for millions. The World Bank, as the largest development agency, is dedicated to leveraging the power of digital to support developing countries as they face multiple crises.
More specifically, the global challenges of climate change, pandemic, migration, fragility and conflict, and food insecurity are growing and adversely impacting all of us, but particularly poor countries and vulnerable populations. Digital technologies have been critical in helping countries and economies respond, rebound, and rebuild longer-term resilience.
To give just a few examples, during COVID-19, countries that had digital ID and digitized registries were able to reach three times more citizens with financial support than those that don’t have these digital platforms. And research has shown that between 2011 and 2018, the arrival of high-speed internet in Senegal boosted consumption by 14 percent and reduced extreme poverty by 10 percent. What’s more, digital technologies could reduce greenhouse gas emissions in the energy, materials, and mobility sectors by up to 20 percent by 2050 according to estimates from the World Economic Forum.
We’ve heard often about the “digital divide” – is it closing?
While we have certainly seen impressive progress when it comes to getting people online and using digital technologies, too many are still being left behind. Nearly three billion people remained unconnected to the internet last year. Most live in low- and low-middle income countries, and are disproportionately female, rural residents and in lower income groups. For instance, although women account for close to half the world's population, in 2022, around 260 million fewer women had access to the internet than men. People in remote areas in developing countries are 33 percent less likely to use mobile internet. Today, when many essential drivers of development - health, education, financial services - require digitalization, the digital divide becomes synonymous with a development divide.
So, our challenge, and ambition, is to ensure that everyone can benefit in a meaningful way from being connected.
What are some of the priority areas for scaling up efforts around digital development?
The World Bank is working with governments in over 100 developing countries to build the foundations and accelerators for inclusive and responsible digital transformation, including their transition to digital economies, governments, and societies. We have contributed globally to closing the connectivity gap, especially in Africa over the past decades. Now we are increasingly focused on closing usage and access gaps, by supporting countries in developing three digital accelerators: digital public infrastructure, digital safeguards, and digital skills.
Digital public infrastructure consists of digital ID, digital payments, data sharing systems and other foundational enabling platforms, which can help expand financial inclusion, respond to crises, and provide a wide range of government services.
But people need to know that their digital interactions are reliable, safe, and secure for them to be fully embraced. Digital safeguards encourage internet and data use. Data protection, cybersecurity laws, and solid institutions must be in place to develop and enable strong interconnected digital systems that can verify identities, quickly and safely transfer payments, and responsibly exchange data.
And closing the usage gap is even more challenging in the developing world where online skills may not be as strong. Digital skills and local content, for example making online resources in local languages, are essential to bolster productive use of internet and digital technologies.
What is the World Bank’s leadership role in this space?
This institution is uniquely positioned to bring analytical rigor and on-the-ground experience to the digital development agenda.
In recent years, we have supported digital economy country and regional diagnostics in almost 50 countries to identify challenges and opportunities and support the growth of national and regional digital ecosystems. Recommendations from this work provide the analytical foundations for strategic decision-making to design and implement World Bank operations and sectoral policies.
Between 2021 and 2023 (fiscal years) alone, the World Bank committed close to $10 billion in investments, with 83 projects in around 60 countries globally, to build the foundations of the digital economy. We are looking at doubling our annual lending globally in the coming years, building on our collaboration with governments and regional economic communities.
What’s more, we are proud to provide thought leadership, facilitate the exchange of knowledge, and support development solutions at the global level.
Looking ahead, what is one important thing that only the World Bank Group can lead when it comes to digital development?
We can play a convening role to bring stakeholders from both the private and public sectors to the table. The International Telecommunication Union projects that nearly $430 billion in investment is needed to achieve universal access to broadband connectivity by 2030. The public sectors and multinational development institutions alone will not be able meet this.
It will be crucial to enable, through appropriate policy and regulation, as well as smart public investment and de-risking instruments, to stimulate much greater levels of private sector funding. Many countries are embracing this approach as they are developing their digital transformation strategies.
For example, in Ethiopia, World Bank Group engagements have helped in opening the telecommunications sector to private sector investment and supporting market liberalization. Since 2020, the World Bank has supported the government in setting up a regulator and the legal and regulatory reforms needed to open the market. That same year, IFC advised Ethiopia's Ministry of Finance and the Ethiopian Communications Authority in designing and tendering the nation's first full-service telecom licenses and associated spectrum. These efforts can help generate as much as $8 billion in new investments over the next decade.
We at the World Bank Group (World Bank, IFC and MIGA) are committed to unlocking financing to connect the unconnected and maximize the development benefits from digitalization.