Bridging the Digital Divide: Digital Infrastructure Driving Jobs and Economic Growth

Synopsis

The World Bank Group (WBG) is helping countries unlock the investment in digital infrastructure to connect people, create jobs, and grow economies. By working with governments and the private sector, WBG supports connection of people in hard-to-reach areas, improving connectivity quality and closing network gaps - delivering affordable, resilient access where it matters most and driving job creation and economic growth.

Development Challenge

Digital infrastructure is the backbone of modern economies, enabling communication, commerce, services, and AI-driven innovation across all sectors. Its impact is proven: a 10 percent rise in broadband adoption can boost GDP by up to 2 percent in low- and middle-income countries, while fast internet access increases individual employment probability by up to 13 percent. Yet over 2 billion people, mostly in developing countries, remain offline, excluded from these gains.

World Bank Group Approach

The World Bank Group supports countries and regions where connectivity gaps are widest and development impact is greatest, deploying solutions across three fronts.

Connecting Underserved Segments — First to Last Mile. The World Bank Group supports policy reforms and investments to address critical network gaps, including subsea cable landings in small and island markets; terrestrial backbone links—including cross-border connections that are essential for landlocked countries such as Malawi; and expanded rural and remote connectivity. In fragile, conflict-affected, and climate-vulnerable contexts, the World Bank Group also helps connect schools, clinics, and displaced communities, with resilience built in from the outset.

Making Devices and Data Affordable. WBG works with governments, mobile operators, and financial institutions to lower the retail cost of devices and data — advising on tax reform, promoting device refurbishment markets, and expanding consumer financing schemes for low-income users with little or no credit history.

Crowding in Private Investment to Reshape Markets. WBG supports regulatory reform, structuring blended finance to de-risk investment, leveraging public procurement to drive investment and market creation, and developing public private partnerships to deliver strategic digital infrastructure.

Results

Malawi: The Digital Malawi Project supported extension of connectivity to 8.5 million people, brought Wi-Fi to over 83,000 students across over 80 higher education campuses, and high-speed fiber connections to more than 500 hospitals and schools. The approach leveraged large-scale government procurement of broadband services to not only meet administration and public service delivery needs, but to also drive private investment in fiber network infrastructure throughout the country. Gap financing under the project helped mobile operators to extend networks and affordable services into remote and low-income communities. Policy and regulatory reforms helped boost market competition, lower infrastructure deployment costs and spurred investment. In parallel, International Finance Corporation (IFC) client West Indian Ocean Cable Company (WIOCC) has invested in subsea and terrestrial cable networks, significantly increasing wholesale capacity flowing into Malawi, enabling local internet services providers like “inq” to expand networks and improve speeds for businesses and communities nationwide.

The Philippines: With the World Bank Group support, the Philippines eliminated restrictions on foreign ownership in public services, streamlined construction permits and adopted common tower policy, enabling private investment and IFC’s participation in building rural towers in underserved areas, contributing to the increase of individuals aged 10 and older using the Internet, from 43.0 percent in 2019 to 67.3 percent in 2024. The Digital Transformation Development Policy Loan (DPL) series (2024-2026) supported a legislative reform, Konektadong Pinoy Act, to lower barriers to entry and investment, promote competition and reduce the cost of internet service. The Digital Infrastructure Project (2024-2028) is further supporting climate-resilient, secure, and inclusive broadband connectivity by investing in government fiber optic backbone and expanding connectivity to rural schools and health facilities.

Kosovo: The World Bank Group helped Kosovo enhance access to high-quality, high-speed broadband for 240 schools and 4,500 households. The Kosovo Digital Economy (KODE) project leveraged private capital and brought a digital lifeline to remote locations where it was needed the most – schools, health centers, and homes. As a direct outcome of these targeted investments, Kosovo now boasts one of the highest rates of high-speed internet subscriptions per household in Europe, surpassing leading EU countries according to EUROSTAT (2021).

Contribution to World Bank Group Targets and Jobs

Digital infrastructure investment supports the World Bank Group Jobs agenda by expanding employment, boosting firm productivity, and catalyzing digital transformation in key sectors such as tourism, healthcare, and agriculture. It advances WBG targets: the World Bank Group Scorecard's "broadband connectivity" and "digitally enabled services" indicators; Mission 300 for climate-resilient infrastructure; and the Gender target of 300 million more women connected by 2030, contributing to the overarching ambition of one billion people using broadband or digitally enabled services by 2030.

Lessons Learned

Connectivity investments deliver jobs and growth more effectively when paired with demand-side interventions. While infrastructure investments are essential, the affordability of devices and data remains one of the most persistent barriers to internet adoption, particularly for low-income users. In Malawi, despite significant connectivity improvements, many small businesses continue to forgo digital tools and payments due to the high cost of devices (smartphones, computers) relative to revenue, and limited digital literacy, underscoring that cables and towers alone do not drive digital transformation. Reform of sector taxation, availability of consumer financing for devices, targeted subsidies, and digital skills support are equally critical to closing the “usage gap.” Equally, regulatory reform must precede or accompany infrastructure deployment: without open-access rules, infrastructure sharing, and sound spectrum management, private investment stalls and last-mile connectivity remain financially unviable.

Next Steps

Looking ahead, the WBG will scale proven approaches while continuing to tackle the hardest connectivity challenges, prioritizing Fragility, Conflict, and Violence (FCV) contexts, climate-vulnerable communities, and populations facing the greatest affordability barriers. The WBG remains committed to closing the device and data affordability gap through targeted subsidies, consumer financing, and tax reform, working across governments, regulators, and the private sector to develop the instruments and partnerships needed. Sustained engagement across the full connectivity chain, infrastructure, regulation, and affordability will remain essential to delivering lasting, market-shaping results.