World Development Report 2016 - Digital Dividend by World Bank Notes for Civil Services Exam (CSE).

1. World Development Report 2016 - Digital Dividends
Amit Kumar Anand
www.amitkanand.com
September 20, 2016
1 Overview
• We are in the midst of greatest informa-
tion and communications revolution in
human history.
• Digital technologies have boosted
growth, expanded opportunities, and
improved service delivery.
• 40% of world population has access to in-
ternet.
• Among poorest 20% households 7 out of
10 has mobile phones.
• Poorest households are more likely to
have access to mobile phones then to toi-
lets or clean water.
• Access to digital technologies bring more
choice and convenience.
• Cost of sending remittances dropped
down upto 90% after the introduction
of M-Pesa, digital payment system, in
Kenya.
• Aadhaar, by overcoming complex infor-
mation problems, helps willing govern-
ments to promote the inclusion of dis- ad-
vantaged groups.
• PwD can lead more productive life.
• easier communication and information,
greater convenience, free digital prod-
ucts, and new forms of leisure.
• created a profound sense of social con-
nectedness and global community.
• Inclusion, efficiency, innovation-
these are the main mechanisms for digital
technologies to promote development.
• Digital technologies promote innovation
when transaction costs fall to essentially
zero. They boost efficiency as existing
activities and services become cheaper,
quicker, or more convenient. And they
increase inclusion as people get access to
services that previously were out of reach
• While digital technologies has been
spreading, digital dividends have not.
1. 60% of world population is still of-
fline and can’t participate in digital
economy in any meaningful way.
2. Perceived benefits of digital tech-
nologies are offset by emerging risks.
(a) Increasingly polarized markets
and rising inequality - technol-
ogy augments higher skills while
replacing routine jobs, forcing
many workers to compete for
low paying jobs.
(b) In absence of accountable in-
stitutions, amplify the voice of
elites, which can result in policy
capture and greater state con-
trol.
(c) Economics of internet favor nat-
ural monopolies. Lack of com-
petition results in more con-
centrated markets benefiting in-
cumbent firms.
• Digital technologies can make routine,
transaction-intensive tasks dramatically
cheaper, faster, and more convenient.
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2. • When technology is applied to automate
tasks without matching improvements in
the complements, it can fail to bring
broad-based gains.
• Technology can make workers more pro-
ductive, but not when they lack the
know-how to use it. Digital technologies
can help monitor teacher attendance and
improve learning outcomes, but not when
the education system lacks accountabil-
ity.
• Access to the internet is critical, but not
sufficient. The digital economy also re-
quires a strong analog foundation- vi-
brant business climate, skilled human re-
source and accountable institutions that
use the internet to empower citizens.
• Countries that are able to swiftly adjust
to this evolving digital economy will reap
the greatest digital dividends, while the
rest are likely to fall behind.
• A favorable business climate, strong hu-
man capital, and good governance is re-
quired.
• Digital technologies add two important
dimensions.
1. Raise the opportunity cost of not
undertaking the necessary reforms.
They amplify the impact of good
(and bad) policies.
2. Digital technologies are no shortcut
to development, they can be an en-
abler and perhaps an accelerator by
raising the quality of the comple-
ments.
• To deliver universal digital access, we
must invest in infrastructure and pursue
reforms that bring greater competition
to telecommunications markets, promote
public-private partnerships, and yield ef-
fective regulation.
• Countries that complement technology
investments with broader economic re-
forms reap digital dividends in the form
of faster growth, more jobs, and better
services.
2 Digital Dividends
• Connected people
• Connected governments
• Connected businesses
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3. 3 How Internet promotes de-
velopment
• promotes inclusion
• promotes efficiency
• promotes innovation
4 Dividends: Growth, jobs
and service delivery
• The internet can lead to more trade, bet-
ter capital use, and greater competition.
• Expands trade. e.g. e-trading, e-
tutoring.
• Improves capital utilization.
• Advancing competition. e.g Ola, Uber v
traditional car rental.
• Creates jobs. New opportunities for en-
trepreneurship and self-employment are
also growing rapidly in the digital econ-
omy.
• Increases labor productivity.
• Increasing the consumer surplus. In-
creased variety of goods and service avail-
able.
• Makes government more capable and re-
sponsive.
• Expanding participation.
• Advancing voice. Arab spring, anti war
demonstration, participatory law mak-
ing.
5 Risks: Concentration, in-
equality and control
• When the internet delivers scale
economies for firms but the busi-
ness environment inhibits competition,
the outcome could be excessive con-
centration of market power and rise of
monopolies, inhibiting future innovation.
• When the internet automates many tasks
but workers do not possess the skills
that technology augments, the outcome
will be greater inequality, rather than
greater efficiency.
• When the internet helps overcome in-
formation barriers that impede service
delivery but governments remain unac-
countable, the outcome will be greater
control, rather than greater empower-
ment and inclusion.
6 Cost of internet filtering
and censorship
1. Diverts public fund.
2. Can slow the speed of internet access,
which hurt the business users.
3. Can restrict access to economically and
scientifically useful information. e.g.
Google Scholar.
4. Blocking foreign websites can be viewed
as non-tarriff trade barrier.
5. widespread censorship means that peo-
ple avoid discussing and exchanging ideas
openly, a prerequisite for an innovative
and productive society.
7 Analog complement to dig-
ital economy
1. Regulations that promote competetion
and entry.
2. Lower the barriers to digital adoption.
3. Tailor “new economy” regulations to en-
sure competetion.
8 Skills for digital economy
1. Start early with foundational skills.
2. Rethink curricula and teaching methods:
Prepare stuents for a career and not only
a job.
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4. 3. Develop advanced technological skills
and encourage lifelong learning.
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