Technology can plug the gaps in poverty, inequality
published : 9 Mar 2016 at 04:05
newspaper section: News
The world is witnessing the greatest information and communications revolution in human history. Digital technologies provide access to huge amounts of information at all times, allow us to stay in touch with friends and relatives much more easily, and offer new opportunities for business and leisure. The sky is the limit!
The information revolution has reached billions of people around the world, and more people get connected every day. However, many others are not yet sharing in the benefits of modern digital technologies. There are the digital "haves" and digital "have nots".
Today, 95% of the global population has access to a digital signal, but 5% do not; 73% have mobile phones, 27% do not; slightly less than half of all people (46%) have internet, but the majority do not; and only 19% of the world's population has broadband. There are also persistent digital divides across gender, geography, age and income within each country.
Why should we care about overcoming this digital divide, and what can we do?
Technology can increase access to capital. For example, mobile phone-enabled services like mobile money (M-Pesa in Kenya) help people access finance, fund business opportunities, and remit money to their families and friends cheaply and quickly. Today, there are more than 300 million mobile money accounts worldwide. However, if governments do not allow for mobile money services, people remain financially excluded.
The internet can promote innovation. For example, the internet allows the development of innovative e-commerce and business opportunities, like ENSOGO here in Thailand. Once initial investments are made, the additional cost of transactions is almost zero, with real-time interactions between buyers and sellers. This has led to an increase in commerce and more jobs.
What is the overall effect on incomes and inequality? People who do not have access to the internet cannot participate in digital transformation: "e-inequality" can increase income inequality. However, with good policies, especially strong education and skills policies, digital technology has the potential to increase the income of many.
On the one hand, a shift to more technology-intensive skills and jobs can reduce wage gaps among a growing number of increasingly better educated people. Women are well positioned to gain from a shift in employment toward non-routine occupations, and away from physical work -- as has been the case for Thailand.
On the other hand, people without the education and know-how to take on technology intensive jobs do not benefit equally.
As production is automated, new jobs are created in hi-tech sectors (employing more well qualified, elite educated people) while jobs in assembly line industries (employing lower-paid, lower-skilled workers) are reduced.
Education systems in Thailand and elsewhere must therefore build the foundations for students to develop problem solving skills, so that they can take advantage of technologically intensive jobs of the future.
The World Bank's "2016 World Development Report: Digital Dividends" provides ideas for how to harness the internet as a means for positive change and empowerment for all. The report identifies three important priorities:
Firstly, creating a business environment that allows firms to connect and compete easily. This entails investment in the high-speed internet back bone to help ensure high-quality, rapid internet access across the country. At the same time, smart regulation can facilitate, and even promote, platforms like mobile money to operate, and can encourage competition to keep the price of services low.
Secondly, providing workers with the skills that technology complements rather than replaces. For example, countries can introduce computer programming into the curricula even at primary school levels, as has been done in Estonia and United Kingdom, to help students develop logic-driven problem solving skills.
This would allow them to take advantage of massive open online courses. For example, platforms such as Coursera.org, Udacity.com, and edX.org host excellent online courses, facilitate online discussions, and assess participants' performances.
Thirdly, increasing the responsiveness of government institutions, so they have a strong incentive to leverage technology for better service provision.
This involves integrating e-government systems across government agencies for seamless data exchange -- allowing citizens to access multiple services through a single interface.
One example is the Digital Identity program in India, which covers more than 950 million citizens. Such a program can allow for public services to be more effectively delivered to citizens (including social protection programs, public utilities). Thailand is also working towards such an ID program, which could enable the country to provide focused support to the poor through a unified social protection program.
With policies and actions to help make the education system, the business environment, and government services "e-friendly", the internet and digital technologies can become tools for positive change to reduce poverty and widely shared prosperity in Thailand, and around the world.
Ulrich Zachau is the World Bank's Country Director for Southeast Asia.
World Bank Country Director for Southeast Asia
Ulrich Zachau is the World Bank Country Director for Southeast Asia (Cambodia, Lao PDR, Malaysia, Myanmar and Thailand).