Digital technologies offer opportunities for economic growth

12 april 2016

“Not only science fiction writers of the 1970s, but even our contemporaries just 10-20 years ago could not imagine how information technologies would change our life. Today making a video call to another city from a smart phone or searching for a job in the internet have become a routine task even for those who live in small towns,” said Konstantin Noskov, Head of the Analytical Center for the Government of Russia, opening the presentation of the World Development Report 2016: Digital Dividends.

“Information technologies permeate our life, and have tremendous potential when strengthening development,” said Andras Horvai, Country Director and Resident Representative of the World Bank in Russia. “Today, much of the world is reaping digital dividends: companies benefit through economic growth; people, through new jobs; and governments, through delivering better services. And yet, ensuring that the benefits reach everyone will need deliberate effort: the full benefits will only be reaped by further inclusion.”

The Report says that the world is in the midst of the greatest information and communications revolution in human history. More than 40 percent of the world’s population has access to the internet, with new users coming online every day. Among the poorest 20 percent of households, nearly 7 out of 10 have a mobile phone. The poorest households are more likely to have access to mobile phones than to toilets or clean water. However, countries use opportunities offered by information technologies in different ways.  

In Russia, new technologies are aimed at economic diversification. Yandex, Kaspersky, online taxi booking services – these are just few examples of development of domestic information technologies cited by Andras Horvai. Besides, Russia has one of the highest levels of mobile phone penetration. “It is important that the work is pursued at the government level: information technologies are adopted in public service delivery, the open data system is evolving, and e-government is created,” said Horvai, underlining that such evident success as time reduction of property rights registration to 10 days using information technologies moved Russia up to the 8th place in the relevant section of the Doing Business rating.

“The WDR examines how digital technologies influence the life of people, especially the poor,” explained Deepak Mishra, World Bank Lead Economist and co-director of the report. “Because they can contribute to development, and create opportunities for inclusion, efficiency, and innovation. However, the digital divide in the world is still substantial, and those who are better educated or have stronger skills benefit more from the development of information technologies,” said the expert. “For digital technologies to benefit everyone everywhere, greater digital adoption will not be enough. Work is also needed on the “analog complements”: countries should strengthen regulations, adapt workers’ skills to the demands of the new economy, and ensure that institutions are accountable.

“The WDR examines how digital technologies influence the life of people, especially the poor. Because they contribute to development, creating more opportunities for integration, efficiency, and innovation.”

Deepak Mishra

World Bank Lead Economist and Co-Director of the World Developmant Report

The report concludes that the full benefits of the information and communications transformation will not be realized unless countries continue to improve their business climate and invest in people’s education and health. In countries where these fundamentals are weak, digital technologies have not boosted productivity or reduced inequality.  Countries that complement technology investments with broader economic reforms reap digital dividends in the form of faster growth, more jobs, and better services.

As mentioned on the World Bank’s website, in the 37-year history of preparing World Development Reports this issue is the first one that is fully dedicated to the role of information and communications technologies in socioeconomic development.  

For the World Development Report 2016: Digital Dividends check out the World Bank web site.