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Speeches & Transcripts December 4, 2017

Bridging the Digital Divide and Maximizing Digital Dividends for All

Good afternoon ladies and gentlemen.  First of all, I would like to thank the Development Research Center of the State Council, Cyberspace Administration of China, and Zhejiang Provincial Government for organizing this event and for the invitation.   

Today’s inroads in Science, Technology and Innovation (STI) have the potential to accelerate progress towards a dignified life, in peace and prosperity, for all people. Even among the poorest 20 percent of households, almost 7 out of 10 have access to a mobile phone. This is more than have access to clean water, improved toilets, or electricity in their homes. And more than some 3 billion people now have access to the internet.

These boundless revolutions and adaptations will be central to for every country to achieve the Sustainable Development Goals (SDGs). Indeed, much like the Financing for Development agenda, STI was adopted by the United Nations as key “Means of Implementation” of the SDGs.  The 4th industrial revolution has taken center stage at the World Economic Forum and in G7 and G20 summit deliberations.

This rapid technological change has brought many benefits to the poor and has been nothing short of transformational:

  • For example, in Kenya, after the introduction of the M-Pesa digital payment system, the cost of sending remittances for workers in urban areas with families in the countryside dropped by up to 90 percent.
  • In India, the Aadhar digital identification system has already reached more than 1 billion people, enabling many of the poor to access services more easily and saving the government billions each year by reducing corruption and waste.
  • The small country of Estonia is perhaps closest to becoming a digital society as citizens can access more than 3,000 public and private services using nothing more than their mobile phones.
  • And here in China, Alibaba’s e-commerce platform has created more than 8 million netprenuers (net entrepreneurs), of which 62 percent are small-scale entrepreneurs, one-third are women, and one percent are people with disabilities.

Our World Development Report 2016 Digital Dividends documents many more examples like these where digital technologies have promoted inclusion, efficiency and innovation. The payoff is considerable: faster economic growth, more jobs, and better services—what we call digital dividends.

And yet, the claim that the benefits of this digital revolution will automatically trickle down to everyone and everywhere is far from clear: we all know that many people around the world have yet to see these benefits. Our data shows that digital adoption by firms in developing countries has been slow. Automation is disrupting labor markets, and will displace a significant number of jobs over the next few decades.

So why are these benefits not being shared universally?

One big reason is the persistent digital divide. Six billion people lack access to high speed internet and four billion still have no internet access at all. So, we must invest in infrastructure, in particular by incentivizing the private sector to expand access of telecom and internet services to all.

But connectivity is not enough. That alone is not going to solve basic development problems that have persisted for decades. That alone will not get us to ending poverty and boosting shared prosperity—the two goals that direct everything we do at the World Bank Group.

Indeed, countries need broader digital development agendas that promote connectivity, but also much more. They need to strengthen the analog foundations of the digital revolution.

First of all, countries need to invest in people for stronger human capital and skills to match the demands of this new economy--because using digital technology requires literacy and critical thinking, skills which are not acquired without healthy bodies and healthy minds.

They need better business climates with pro-competitive regulations so technology can take root fast.

And they need good governance and robust institutions that promote accountability and uphold the necessary legal frameworks.

Connectivity, investing in people, better business environments, good governance: These are the true bedrock of a digital revolution.

The business of the World Bank Group—supporting countries in development—can be harnessed with the promise of technology to deliver results faster and cheaper. We have seen dramatic achievements in fragile or remote countries through technology. Where these investments already exist, we incentivize regulatory reform to improve business climates and encourage growth. And we encourage and support countries to invest in health and education for long-term inclusive growth.

And we take our own advice seriously. Inside the Bank, we are leveraging technology in our own projects everyday­—this means being more agile and responsive to clients to improve project delivery, generate knowledge development, and embrace the open data movement.

The World Bank Group supported China during its G-20 presidency to take this agenda global. But true international progress starts locally. Here in China, the World Bank Group has been helping the government to proactively develop an appropriate regulatory framework for fin-tech and supporting the education of consumers to ensure they benefit.  Moreover, IFC, the private sector arm of the World Bank Group, has been working with a number of leading fin-tech players such as Ant Financial, Baidu Financial, F-Road, and Welab to bring more efficient financial services to the unbanked and under-served population at lower cost.

More needs to be done to ensure that the full benefits of the digital revolution are widely shared. The World Bank Group therefore welcomes the various global efforts underway—including policies undertaken in China to foster a more inclusive, efficient, and innovative digital economy.

The greatest rise of information and communication in history will not be truly revolutionary until it benefits everyone in every part of the world.