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#wdr2016 www.worldbank.org/wdr2016
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Digital revolution has brought many private benefits
SOURCE: WDR 2016 team; h0p://www.internetlivestats.com/one-second/ (As compiled on May 29, 2015)
A typical day in the life of the internet
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But are countries reaping sizable digital dividends?
Growth
DIGITAL DIVIDENDS
Jobs Services
Business People Government
AGENTS
Are the benefits reaching everyone, everywhere?
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Number of small & medium enterprises on Taobao (Alibaba):
5 MILLION & COUNTING
DIGITAL MARKETPLACE
Digital technologies are transforming BUSINESS, PEOPLE’s LIVES & GOVERNMENT
DIGITAL PAYMENTS
DIGITAL IDENTITY
Number of mobile money accounts worldwide:
300 MILLION & COUNTING
(end of 2014)
SOURCE: h0p://www.sundaytimes.lk/160626/uploads/ENicGraphic.jpg
SOURCE: http://www.kariyawasam.com/ezcash-mobile-money-introduces-to-sri-lanka-by-dialog/.
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SOURCE: WDR 2016
The main mechanisms to promote development
Expand the information base, lower information costs and create information goods
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Then why the deep pessimism surrounding the global economy?
SOURCE: Total Economy Database, Conference Board; and WDR 2016 team; Christoph Lakner and Branko Milanovic 2013; Bishop and Hoeffler 2014.
Business People Governments
-10
Not because of digital technologies, but in spite of them
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SOURCE: WDR 2016 team based on Research ICT Africa and ITU data
1. A significant digital divide remains
6 BILLION without BROADBAND
4 BILLION without INTERNET
2 BILLION without MOBILE PHONES
0.4 BILLION without A DIGITAL SIGNAL
Divides persist between and within countries—in access and capability
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SOURCE: World Economic Forum, http://www.lankabusinessonline.com/sri-lankas-ict-export-sector-revenue-to-hit-us-1-bn-in-2015-minister/
Sri Lanka’s digital economy has shown steady growth in recent
yearsNetworkedReadinessIndexRanking
Year
63(outof139) 2016
65(outof143) 2015
GlobalCompe99venessIndexRanking
Year
68(outof140) 2015-2016
73(outof144) 2014-2015
SriLankaICTExports Year
1BillionUSD 2015
719MillionUSD 2013
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
1995 2000 2005 2010 2015 2020
PercentageofpopulaConusingtheInternetinSriLanka
29.99%
Yet, many households remain without access to ICTs
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DIGITAL TECHNOLOGIES
INNOVATION EFFICIENCY INCLUSION
CONCENTRATION INEQUALITY CONTROL
2. Digital technologies hold benefits as well as risks
What are those complements?
with complements
withoutcomplements
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www.worldbank.org/wdr2016
Connectivity + Complements à Digital Dividends
Digital development strategies need to be broader than ICT strategies
• Regulations that allow firms to connect and compete• Skills that leverage technology• Institutions that are accountable and capable
Digital technologies add two important dimensions • They amplify the impact of good (and bad) policies à Failure to reform
means falling further behind• While not a short-cut to development, they can be an accelerator, by raising
the quality of complements
The payoff• Increasing digital dividends:
Faster growth, more jobs and beder services
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SOURCE: WDR 2016 team based on Research ICT Africa and ITU data
Sri Lanka: Digital adoption is relatively high in government and lower among business and people
0.0
0.2
0.4
0.6
0.8
1.0
100 1,000 10,000 100,0000.0
0.2
0.4
0.6
0.8
1.0
100 1,000 10,000 100,000
Business People Government
0.0
0.2
0.4
0.6
0.8
1.0
100 1,000 10,000 100,000
Yaxis:DigitalAdopConIndex(DAI)Xaxis:GDPpercapitain2015
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SOURCE:Eurostat, circa 2014,.WDR 2016 Team
Scale without COMPETITION à lower digital adoption and growing divergence
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SOURCE: WDR 2016 team. For more details see figure 5.3 in the full Report.
Technology
Complem
ents
Race between technology and complements
Complements: Index of quality of institutions, skills and regulations. !
Technology: Digital adoption index - businesses, people and governments.
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SECTORAL NATIONAL GLOBAL
The WDR 2016 proposes policies at three levels
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SUPPLY SIDE ISSUES
• Competition policy
• Public-private partnerships
• Effective telecom & internet regulation
SECTORALPOLICIES
Making internet access universal, affordable, open and safe
Mobile cellular subscriptions in Sri Lanka
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
UniqueMobilePhoneSubscripConsinSriLanka
Source:GSMAIntelligence
DEMAND SIDE ISSUES
• Protecting personal privacy
• Cybersecurity
• Censorship and content filtering
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Analog foundations for a digital economy
SOURCE: WDR 2016 team.
NATIONALPRIORITIES
Note: ICT = information and communication technology.
Figure O.22 Policy priorities for countries that are emerging, transitioning, or transforming
EMERGING TRANSITIONING TRANSFORMING
REGULATIONS
SKILLS
INSTITUTIONS
Remove barriers to adoption
Foundational skills and basic ICT
literacy
Mobile phone– based services and monitoring
Competition regulation andenforcement
Prepare for careers
instead of jobs
e-government delivery and
citizen engagement
Platform competition
Facilitate lifelong learning
Participatory policy making
and digital collaboration
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• A governance model for an open and safe internet
• Removing barriers to a global digital market
• Leveraging information for sustainable development
• Get wired
• Build platforms
• Go global
International consensus on cross-border issues
GLOBALCOOPERATION
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SOURCE: WDR 2016 team, based on ILO KILM (ILO, various years); I2D2 (World Bank, various years); National Bureau of Statistics of China (various years)
Automation without SKILLS
Annualaveragechangeinemploymentshare,circa1995–circa2012
à polarized labor markets and greater inequality
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What is driving polarization and decreasing labor shares of labor?
Technologycomplementssome
Workers(skill-biased)
ButtechnologycansubsCtuteothers(labor-
saving)
Dependingonhoweasyitistoautomatetasks(rou9nevsnon-rou9ne)
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A Policy Framework for jobs and skills in the digital ageStageintheDigitaltransforma9on
Incipient Transi9oning Transforming
FoundaConalcogniCveandsocio-emoConalskills
Digitalliteracy
High-ordercogniCveandsocio-emoConalskills
AdvancedICTandSTEMeducaCon
Life-longlearning
• Lowskillsbase• Lowtechnologicalbase• DisrupConswilltakealong
Cme
• Mediumskillsbase• Mediumtechnologicalbase• DisrupConsinshortand
mediumterm
• Goodskillsbase• Hightechnologicalbase• DisrupConsalreadyapparent• Rapidly-aging
AdapCnglabormarket,taxaConandsocialprotecConinsCtuCons
21Agriculture and ICTs
• DigitalTechnologieshavebeenshowntoenhanceon-farmproduc9vity,facilita9ngmarkettransparencyandenablingefficientlogis9csandimprovingqualitycontrol.
Howevergovernmentsneedstomakethefollowingadap9onstoreapsustainableandinclusivebenefitsofthedigitalrevolu9oninagriculture:• Hightechtoolsandtechnologiescanbenefitbigfarms.ASen9onmustbepaidto
closethedigitaldivideinruralareas,byempoweringthepoorestsegmentwithdigitaltechnologies,suchasbasicmobilephones.
• Ratherthanassumingthataninforma9onandcommunica9ontechnology(ICT)approachwillalwaysbecost-effec9veandyieldabeSeroutcome,amorenuancedunderstandingoftheunderlyingins9tu9onalenvironmentandconstraintsiswarranted.
• Technology-enabledinterven9onsarenopanaceainthemselves,andneedtobebackedbycomplementaryinvestmentsinphysicalinfrastructure,includingelectricityandliteracy.
• Finally,informa9ontechnology(IT)policyandthebroaderregulatoryenvironmentinacountryshouldbediscussedjointly.Forinstance,interdisciplinarycommiSeescomprisedofregulatoryexperts,scien9sts,agriculturespecialists,economistsandtechnologyexpertsfromacademia,civilsocietyandprivatesectorcanbeformedtotacklethemostpressingAgriculturaldevelopmentchallengesfacedbySriLanka.
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www.worldbank.org/wdr2016
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Back-up Slides
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Digital technology can accelerate growth …
TRADE PRODUCTIVITY COMPETITION
SOURCE: Chapter 1, WDR 2016 (http://www.worldbank.org/en/publication/wdr2016)
The internet enables more firms to reach new markets, 2001-12
Vietnamese firms using e-commerce have higher total factor productivity growth, 2007-12
Average monthly trips per traditional taxi in San Francisco after Uber started operation
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….but not when complements are missing
Barriers to Trade/Regulations associated with lower ICT use
ACCESS v/s. SKILLS & REORGANIZATION
SOURCE: Chapter 1, WDR 2016 (http://www.worldbank.org/en/publication/wdr2016)
Frequencyofnon-tariffbarriersinmanufacturing
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Digital technology can expand opportunities…
PRODUCTIVITY & CONSUMER SURPLUS
JOB CREATION
SOURCE: Chapter 2, WDR 2016 (http://www.worldbank.org/en/publication/wdr2016)
Number of o-Desk contractors
Africa: Respondents that agree with each statement on benefits and use of mobile phones, 2011–12
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Employment becomes more intensive in ICTs as economies grow
SOURCE: p. 125 , WDR 2016 (http://www.worldbank.org/en/publication/wdr2016)
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Automation without SKILLSà risks of polarized labor markets and greater inequality
SOURCE: p. 107 , WDR 2016 (http://www.worldbank.org/en/publication/wdr2016)
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Employment in ICT sector and ICT occupations remains small
SOURCE: p. 107 , WDR 2016 (http://www.worldbank.org/en/publication/wdr2016)
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Lack of ICT skills is a constraint to employment
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Digital technology can improve service delivery…
CAPACITY TRANSPARENCY
SOURCE: Chapter 3, WDR 2016 (http://www.worldbank.org/en/publication/wdr2016)
Complaints were resolved quickly in the Nairobi water utility after the introduction of digital customer feedback
e-government systems increase the transparency of government budgets, 2014
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SOURCE: WDR team, based on Polity IV 2015; UN 2014; Open Net Initiative 2013.
Information without ACCOUNTABILITYà risks of greater state control and elite capture
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SOURCE: WDR team, based on Polity IV 2015; UN 2014; Open Net Initiative 2013.
…but information without ACCOUNTABILITYà risks of fiscal waste and elite capture
Success rate of large public sector ICT projects Profile of online and offline voters in a participatory budgeting vote in Rio Grande do Sul, Brazil, 2011–12
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SECTORALPOLICIES
A Framework for considering policy interventions
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SECTORALPOLICIES
How public-private partnership helped build the internet backbone in Korea
Mobile cellular subscriptions in the Horn of Africa
Broadbandper100inhabitants,2002Q4through2014Q2
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Globally, work is becoming more intensive in non-routine skills and less so in routine ones
EmploymentComposi9on(simplecrosscountryaveragebytypeofoccupa9on)(2000-2012)
0
10
20
30
40
50
60
Shareinto
talemploymen
t(%)
OECDcountries
Non-rouCnecogniCveorinter-personal
RouCnecogniCveormanual
Non-rouCnemanual
0
10
20
30
40
50
60
200020012002200320042005200620072008200920102011
Shareinto
talemploymen
t(%)
Developingcountries
Non-rouCnecogniCveorinter-personal
RouCnecogniCveormanual
Non-rouCnemanual
Source: WDR2016team,basedonILOKILMdata. Skills classification follows Autor (2014).
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The worker of the 21st century…
• Will increasingly be a non-wage worker;
• Will have more flexibility in the time of work but also the location of work;
• Will change jobs more often.
Changingnatureoftherela9onshipbetweenemployersandemployees
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Many of the jobs in the “new economy” are informal
• In most cases, workers are considered independent contractors rather than employees.
• These jobs lack benefits of formal jobs: pensions, unemployment insurance, health insurance.
• This industry is in its infancy, though…• Already changes in the United States (Uber and health
insurance; Airbnb and hotel taxes)
Emergingrisks:Informality
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Policy Implications• Technology changes the skills required to succeed in a modern
economy.
• Technology also accelerates the pace of change, making skills obsolete more quickly and opening up new opportunities.
• Technology further changes the world of work, introducing new forms of work and allowing for more flexible work arrangements but also eroding traditional employer-employee relationships.
