Navigating the Uneven Terrain: The Global Digital Landscape Amidst COVID and AI Acceleration

• The COVID-19 pandemic accelerated global digital transformation but widened the digital gap between high-income and low-income countries, with only one in four people in low-income countries able to access the internet.
• The World Bank’s “Digital Progress and Trends Report 2023” emphasizes the critical role of digital infrastructure and highlights the transformative potential of digital technologies for economic growth, employment, and resilience, stressing the need for inclusive digital adoption globally.

The COVID-19 pandemic brought about unprecedented acceleration of digital transformation across the globe – with spikes in data traffic, app usage, IT sector growth, digital business resilience, and much more. All countries saw a significant uptick in digital adoption, though the gains in low-income countries were not enough to keep the gap with high income countries from growing or to close the digital divide within their borders. In low-income countries, only one in four people are able to access the internet.

The World Bank Group’s new “Digital Progress and Trends Report 2023” provides a sweeping analysis of countries’ production and use of digital technologies—from digital jobs, digital services exports, and app development, to internet use, affordability, quality, and more.

Gaps in internet speed, data traffic, and digital use are hampering digital gains for individuals and firms in low- and middle-income countries. The use of digital technologies during the pandemic led to a surge in data traffic, driven by video streaming. Average mobile broadband traffic per capita in richer countries surpassed that in low-income countries by over 20 times, and fixed broadband traffic by more than 1700 times. In 2023, median fixed and mobile broadband speeds were five to ten times faster in high-income countries than in low-income countries.

Still, prices remained much higher for the poor, with the median fixed broadband prices in low-income countries accounting for one-third of monthly income in 2022. Even the cheapest smartphone accounts for more than 14 percent of annual income for persons living on less than US$2 a day. Today, connectivity is most expensive in Africa, while uptake of digital financial services is lowest in the Middle East and North Africa region.

“Digitalization is the transformational opportunity of our time—but only for those who are connected,” said Axel van Trotsenburg, Senior Managing Director at the World Bank. “Without access to the internet and the skills to use digital technologies effectively, you are essentially locked out of the modern world. The critical services that support development—like hospitals, schools, energy infrastructure, and agriculture—all run on connectivity and data. The infrastructure and platforms that underpin these connections must be available, affordable, and safe for developing countries to flourish.”

The report finds that where digitalization takes off, it drives economic growth, employment, and resilience. The information technology (IT) services sector grew nearly twice as fast as the global economy from 2000 to 2022.  Over the same period, employment in digital services grew 7 percent annually, six times higher than total employment growth. During the COVID-19 pandemic, businesses that had invested in digital solutions only lost half the level of sales relative to non-digitally enabled firms.

“Closely measuring digital progress at the country, regional, and global level will help policy makers and the private sector direct their efforts towards the most critical areas for narrowing the digital divide,” said Guangzhe Chen, Vice President for Infrastructure at the World Bank. “To achieve the transformative potential of digital technologies, the global community needs to redouble efforts to help developing countries catch up and accelerate digital adoption and ensure that everyone is included.”

The report also highlights two clear emerging trends that are reshaping our digital future.  First, the importance of digital public infrastructure—digital platforms for identity, payments and data sharing—as a crucial foundation for accessing public and private services.  And second, the breakthroughs of artificial intelligence that will accelerate growth as well as disruption.

The World Bank Group’s “Digital Progress and Trends Report” will be updated annually to track the incredible pace of today’s digital transformation.  It will provide policymakers and practitioners with a global benchmark against which to measure the speed of change, identify trends to build upon and bottlenecks to overcome, and reap the benefits of digital transformation in a new development era.

Source: The World Bank