Digital Technologies Have Spread Rapidly, But Digital Dividends Have Lagged Behind, says New World Bank Report

May 16, 2016

DHAKA, May 16, 2016 ─ With around 130 million mobile phone subscribers, the digital technologies are spreading rapidly in Bangladesh. Yet, Bangladesh has the fifth largest number of people who are not connected to the internet. Bangladesh can accelerate growth, create more jobs and deliver better public services by enhancing access to digital technologies, said a new World Bank report.

According to the World Development Report 2016: Digital Dividends, launched in Bangladesh today, the benefits of rapid digital expansion have been skewed towards the wealthy, skilled, and influential around the world, who are better positioned to take advantage of the new technologies. Though the number of internet users worldwide has more than tripled since 2005, four billion people still lack access to the internet.

The effect of technology on global productivity, expansion of opportunity for the poor and middle class, and the spread of accountable governance has so far been less than expected. Digital technologies are spreading rapidly, but digital dividends – growth, jobs and services – have lagged behind.

“Digital technologies are transforming the world. Their potential for reducing poverty and accelerating growth is enormous. But, access to technology, on its own, is insufficient to reduce poverty, if it is not backed by reforms in the business environment, skills development, and good governance,” said Qimiao Fan, World Bank Country Director for Bangladesh, Bhutan and Nepal. “The World Bank Group is supporting the government’s vision of ‘Digital Bangladesh’ through various complementary investments for the country to fully benefit from the digital dividends.”

Digital technologies can promote inclusion, efficiency, and innovation. In Bangladesh, for example, mobile banking has broadened financial inclusion for the poor.  Further, the government has rolled out electronic government procurement (e-GP).  Bidders, even at the Upazila level have embraced the new way of doing business, which helped reduce the time and transaction costs and enhanced transparency and competition of public procurement. The government has also set up the country’s first national datacenter that is Tier-3 certified. It hosts over 200 government websites, and ensures much higher reliability and efficiency in the use of information and communications technology (ICT) by the public sector.

Bangladesh has one of the cheapest rate to make a phone call, but internet prices remain high. More than 100 million people still do not have access to the internet and the ICT sector accounts for less than 0.5% of total employment. But, digital technologies-enabled jobs such as IT and business process outsourcing services, online freelancing, mobile banking, ecommerce, and others are several folds more than ICT jobs in Bangladesh.

Bangladesh should focus on closing the digital divides by making the internet universal, affordable, open, and safe.  But digital development strategies need to be much broader than ICT strategies. “There is little doubt about the transformative potential of digital technologies. However, they are not a shortcut to development, though they can be an accelerator when used in the right way. Countries still have to build the basic foundations of economic development, but now they can use the internet to achieve them much faster – namely a favorable business climate, strong human capital and good governance,” said Deepak Mishra, Co-director of the report.

To make businesses more productive and innovative, the World Development Report 2016 suggests that countries should invest in basic infrastructure, reduce the cost of doing business, lower trade barriers, and facilitate entry of start-ups  and  competition across digital platforms. In addition, as the internet spreads, it will be essential for children to have early exposure to ICT skills.

Digital technologies can transform our economies, societies and public institutions, but these changes are neither assured nor automatic, cautions the report. Countries that are investing in both digital technology and its analog complements will reap significant dividends, while others are likely to fall behind. Technology without a strong analog foundation risks creating divergent economic fortunes, higher inequality and an intrusive state, the report concludes. 

The chief guest, Zunaid Ahmed Palak, Hon’ble State Minister for Information and Communication Technology Division launched the WDR 2016 mobile app at the conference jointly by the World Bank and Bangladesh Computer Council Dhaka today.

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