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#wdr2016 www.worldbank.org/wdr2016
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Digital revolution has brought many private benefits
SOURCE: WDR 2016 team; h0p://www.internetlivestats.com/one-second/ (As compiled on May 29, 2015)
A typical day in the life of the internet
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But are countries reaping sizable digital dividends?
Growth
DIGITAL DIVIDENDS
Jobs Services
Business People Government
AGENTS
Are the benefits reaching everyone, everywhere?
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Number of small & medium enterprises on Taobao (Alibaba):
5 MILLION & COUNTING
SOURCE: h0p://www.alizila.com/chinas-online-cowboy-rounds-buyers
DIGITAL MARKETPLACE
Digital technologies are transforming BUSINESS
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DIGITAL PAYMENTS
Number of mobile money accounts worldwide:
300 MILLION & COUNTING
(end of 2014)
SOURCE: John Owens, Alliance for Financial Inclusion, June 2013.
Digital technologies are transforming PEOPLE’S LIVES
Where mobile money accounts outnumber !bank accounts
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DIGITAL IDENTITY
Indians with digital identity:
950 MILLION & COUNTING
SOURCE: h0p://www.newindianexpress.com/cities/chennai/Trafficking- Victims-see-New-life-in-Aadhaar/2015/03/30/article2737396.ece
Digital technologies are transforming GOVERNMENT
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SOURCE: WDR 2016
The main mechanisms to promote development
Expand the information base, lower information costs and create information goods
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Then why the deep pessimism surrounding the global economy?
SOURCE: Total Economy Database, Conference Board; and WDR 2016 team; Christoph Lakner and Branko Milanovic 2013; Bishop and Hoeffler 2014.
Business People Governments
-10
Not because of digital technologies, but in spite of them
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SOURCE: WDR 2016 team based on Research ICT Africa and ITU data
1. A significant digital divide remains
6 BILLION without BROADBAND
4 BILLION without INTERNET
2 BILLION without MOBILE PHONES
0.4 BILLION without A DIGITAL SIGNAL
Divides persist between and within countries—in access and capability
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SOURCE: WDR2016team,basedonResearchICTAfricasurveys(variousyears)for10Africancountries.
… between and within countries—in access and capability
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SUPPLY SIDE ISSUES
• Competition policy
• Public-private partnerships
• Effective telecom & internet regulation
SECTORALPOLICIES
Making internet access universal, affordable, open and safe
Mobile cellular subscriptions in the Horn of Africa
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SECTORALPOLICIES
A Framework for considering policy interventions
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DIGITAL TECHNOLOGIES
INNOVATION EFFICIENCY INCLUSION
CONCENTRATION INEQUALITY CONTROL
2. Digital technologies often lack analog complements
What are those complements?
with complements
withoutcomplements
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Digital technology can accelerate growth …
TRADE PRODUCTIVITY COMPETITION
SOURCE: Chapter 1, WDR 2016 (http://www.worldbank.org/en/publication/wdr2016)
The internet increases trade between countries, 2001-12
Vietnamese firms using e-commerce have higher total factor productivity growth, 2007-12
Average monthly trips per traditional taxi in San Francisco after Uber started operation
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SOURCE:Eurostat, circa 2014,.WDR 2016 Team
…but scale without COMPETITION à risks of lower digital adoption and growing divergence
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Digital technology can expand opportunities…
PRODUCTIVITY & CONSUMER SURPLUS
JOB CREATION
SOURCE: Chapter 2, WDR 2016 (http://www.worldbank.org/en/publication/wdr2016)
Number of oDesk contractors Africa: Respondents that agree with each statement on benefits and use of mobile phones, 2011–12
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SOURCE: WDR 2016 team, based on ILO KILM (ILO, various years); I2D2 (World Bank, various years); National Bureau of Statistics of China (various years)
…but automation without SKILLS
Annualaveragechangeinemploymentshare,circa1995–circa2012
à risks of polarized labor markets and greater inequality
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Digital technology can improve service delivery…
CAPACITY TRANSPARENCY
SOURCE: Chapter 3, WDR 2016 (http://www.worldbank.org/en/publication/wdr2016)
Complaints were resolved quickly in the Nairobi water utility after the introduction of digital customer feedback
e-government systems increase the transparency of government budgets, 2014
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SOURCE: WDR team, based on Polity IV 2015; UN 2014; Open Net Initiative 2013.
…but information without ACCOUNTABILITYà risks of greater state control and elite capture
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SOURCE: WDR 2016 team. For more details see figure 5.3 in the full Report.
Technology
Complem
ents
Race between technology and complements
Complements: Index of quality of institutions, skills and regulations. !
Technology: Digital Adoption Index - businesses, people and governments.
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Analog foundations for a digital economy
SOURCE: WDR 2016 team.
NATIONALPRIORITIES
Note: ICT = information and communication technology.
Figure O.22 Policy priorities for countries that are emerging, transitioning, or transforming
EMERGING TRANSITIONING TRANSFORMING
REGULATIONS
SKILLS
INSTITUTIONS
Remove barriers to adoption
Foundational skills and basic ICT
literacy
Mobile phone– based services and monitoring
Competition regulation andenforcement
Prepare for careers
instead of jobs
e-government delivery and
citizen engagement
Platform competition
Facilitate lifelong learning
Participatory policy making
and digital collaboration
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www.worldbank.org/wdr2016
Digital development strategies need to be broader than ICT strategies
Connectivity + Complements à Digital Dividends• Regulations that allow firms to connect and compete• Skills that leverage technology• Institutions that are accountable and capable
Match policies to the level of digital development• Emerging: Lay the foundations by promoting digital adoption• Transitioning: Enable everyone to take advantage of new technologies• Transforming: Deal with the wicked problems faced in the new economy
The payoff• Increasing digital dividends:
Faster growth, more jobs and beher services
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www.worldbank.org/wdr2016
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Back-up Slides
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Digital technologies have spread rapidly
SOURCE: World Bank. Data at h0p://bit.do/WDR2016-MapO_1.
The world, based on internet population (2014)
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How the internet affects developmentDECREASING MARKET AND NON-MARKET TRANSACTION COSTS
SOURCE: WDR 2016 Team
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Many digital transactions involve all three mechanisms and a two-sided market
SOURCE: WDR 2016 team.
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But technology will not be enough
“Be an expensive complement (stats knowhow) to something that’s getting cheaper (data).”
—Hal Varian
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SOURCE: WDR 2016 team based on Research ICT Africa and ITU data
2. Digital technologies tend to be:
0%
5%
10%
15%
20%
25%
30%
35%
Q1 Q2 Q3 Q4 Q5Productivity quartiles
% fi
rms
with
web
site
0.0
0.2
0.4
0.6
0.8
1.0
0 20 40 60
% of High ICT Intensity Occupations
Digitalado
pNon
inde
x
-0.4
-0.3
-0.2
-0.1
0
0.1
0.2
0.3
0.4
-0.5 -0.3 -0.1 0.1 0.3 0.5Budget transparency (index)
Coree-governm
entsystems
Limiting the aggregate gains from the digital revolution
Productivity-biased Skills-biased Voice-biased
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Technology and automation
SOURCE: World Bank. Data at h0p://bit.do/WDR2016-MapO_1.
Implications for countries trying to industrialize through labor intensive manufacturing sector
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SOURCE: WDR 2016 Team, Pew Research
Informing citizens High
GOVERNMENTCAPABILITY
Automating tasks Medium
Citizens feedback Medium
Provider management Low
Free and fair elections High
CITIZENEMPOWERMENT
Informed voting Medium
Collective action Low
CHANNELS IMPACT OUTCOMESS
ER
VIC
E D
ELIV
ER
Y
INCLUSION EFFICIENCY INNOVATION
Information without ACCOUNTABILITYà risks of greater state control and elite capture
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SOURCE: WDR team, based on Polity IV 2015; UN 2014; Open Net Initiative 2013.
…but information without ACCOUNTABILITYà risks of fiscal waste and elite capture
Success rate of large public sector ICT projects Profile of online and offline voters in a participatory budgeting vote in Rio Grande do Sul, Brazil, 2011–12
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• A governance model for an open and safe internet
• Removing barriers to a global digital market
• Leveraging information for sustainable development
• Get wired
• Build platforms
• Go global
International consensus on cross-border issues
GLOBALCOOPERATION
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Dealing with the downside risks of the digital economy
SOURCE: WDR 2016 team.
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Making internet access universal, affordable, open and safe
DEMAND SIDE ISSUES
• Protecting personal privacy
• Cybersecurity
• Censorship and content filtering
2014 “Now Google and its like are surveillance machines that know not only that you’re a dog but whether you have fleas and which brand of meaty chunks you prefer.” (Economist)
1993
SECTORALPOLICIES
“On the Internet, nobody knows you’re a dog.”