Digitalisation: Evidence from the life in transition survey

Based on Chapter 3 of the Life in Transition Survey IV Report: Household resilience in a turbulent world by Victoria Marino (EBRD)

Digital skills are becoming increasingly important, not only for shopping online, enrolling in courses, accessing good jobs but also interacting with the government. While many public services have become increasingly available online, the Life in Transition Survey (LiTS) highlights that in many economies in the Europe and Central Asia (ECA) region, use of such online public services remains limited, with between around 26 to 32 per cent of respondents in the region reporting that they used various online public services (Figure 1). Estonia, Greece, Türkiye, Czechia, and Latvia had the highest access to digital public services in the ECA region, with more than half of the population obtaining information from online public services.

Lack of access to affordable internet (at home or via 3G/4G), to devices such as smartphones or computers and limited digital skills can hold back use of online public services even where these are available. According to the results of the latest round of LiTS, around 74 per cent of survey respondents in ECA have access to internet at home (Figure 2). Differences in access to internet at home are, in part, explained by differences in its cost relative to household income: access to internet at home is less common in economies where respondents report paying a larger percentage of their household income for that service. Economies in Central Asia have some of the lowest levels of access and some of the highest reported costs relative to household income. In Tajikistan, for instance, the median household spends over 3 per cent of its income on internet access at home and just over a third of all households report that they have access to internet at home. In contrast, the median households in Lithuania, Czechia and Poland spend less than 1 per cent of their income on internet at home.

Across the ECA region, access to the internet at home remains significantly higher in urban areas than in rural areas. Those gaps tend to be larger in poorer economies, with particularly large gaps in Central Asia. While some of the differences between urban and rural areas can be explained by low population densities in rural locations – households in more densely populated areas are, on average, more likely to have internet access at home – in some economies, there is a clear need for further investment in digital infrastructure. Elsewhere, policymakers should ensure that there is competition in the sector and, if need be, provide subsidies to ensure affordable access in rural areas.

Access to 3G/4G mobile data services is high across most economies in the ECA region, even in economies where only a lower proportion of households have access to the internet at home. On average in Central Asia, for instance, around 72 per cent of respondents report having access to 3G/4G mobile internet, while only 45 per cent have access to the internet at home (Figure 2).

Similar patterns are visible when examining access to devices: access to computers, laptops and tablets also varies more with GDP per capita and within economies with household income than access to smartphones. Looking at households that are in the lowest income decile in their respective economies, 68 per cent have smartphones, while only 27 per cent own computers (compared with figures of 94 and 79 per cent respectively for households in the highest income decile). This suggests that businesses and governments could broaden their reach by optimising online services for mobile phones rather than computers.

Gaps in digital skills also limit the use of available digital technologies. While around 74 per cent of respondents in the ECA region use the internet for phone or video calls, only around 55, 54 and 30 per cent report being able to send emails with attachments, copy files and install software, respectively. Depending on the economy, between around 8 and 75 per cent of LiTS respondents report shopping online, and between around 7 and 47 per cent engage in online learning.

In the EU economies included in the latest wave of the Life in Transition Survey, the distribution of digital skills primarily reflects a generational divide. Among younger cohorts, almost everyone makes payments online, and uptake of e-government services is strong – similar to the levels reported in Germany. In other ECA economies, however, only around 50 per cent of respondents below the age of 30 report being able to send emails with attachments, copy files and install software. Thus, generational change may not, on its own, be sufficient to deliver near-universal digital literacy in the foreseeable future in those economies. There is therefore a case for providing targeted digital skills courses (such as digital literacy programmes offered through public libraries in rural areas), offering support for reskilling and establishing programmes targeting women in rural areas, older workers or the unemployed.

Read more on digitalization, inequality of opportunity, job quality and support for green transition in the recently published Life in Transition Survey IV Report.