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The digital dividends and divides of 2016

Friday, 15 January, 2016

The internet. What’s it good for? Lots. It can help boost trade, improve economies, distribute knowledge and create jobs for the marginalized. Who says? The World Bank says. That’s why it called the document it released yesterday “World Development Report 2016: Digital Dividends.” The key word there is “dividends”. But we don’t live in a perfect world so the report notes that “better educated, well connected, and more capable have received most of the benefits — circumscribing the gains from the digital revolution.” Not everyone has collected those digital dividends, in other words.

Still, it’s quite a leap to portray the the report as an indictment of the internet, but that’s exactly what the Guardian did in a story hilariously titled “Silicon Valley tech firms exacerbating income inequality, World Bank warns.” This is so comical that one can imagine Evgeny Morozov writing it. Instead, Danny Yadron “in San Francisco” is responsible. Anyway, back to the World Bank report. It presents a picture of a divided world in which 60 percent of people are still offline, four billion don’t have internet access, some two billion do not use a mobile phone and and almost half a billion live outside areas with a mobile signal. And what happens when the internet impacts?

“Many advanced economies face increasingly polarized labor markets and rising inequality — in part because technology augments higher skills while replacing routine jobs, forcing many workers to compete for low-paying jobs. Public sector investments in digital technologies, in the absence of accountable institutions, amplify the voice of elites, which can result in policy capture and greater state control. And because the economics of the internet favor natural monopolies, the absence of a competitive business environment can result in more concentrated markets, benefiting incumbent firms.”

To counter this, the World Bank recommends that governments lower barriers to internet adoption with rules that encourage competition and innovation, and investing in “analog complements,” such as basic education. Quote: “Many poor lack the basic literacy and numeracy skills needed to use the internet. In Mali and Uganda, about three-quarters of third-grade children cannot read. In Afghanistan and Niger, 7 of 10 adults are illiterate.” Those divides need to be closed before those dividends become real.

Note: Those tech companies castigated by the Guardian are committed to bringing internet access to the four corners of the world. Google’s Project Loon is set to float over Indonesia and Facebook’s Internet.org will offer mobile web access to people in India and Egypt. And both are experimenting with providing internet access using solar-powered, high-altitude drones. Yes, we need to ensure that these companies don’t become synonymous with the internet, but neither should we resort to paranoia about their innovations. Those digital dividends depend on closing those divides.


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