Has Digital Technology Created More Income Inequality?

digitaldividendsFor the last decade we have been reporting on the ICT trends that have revolutionized the world, from tweeting about human rights abuses to creating online businesses.  However, according to the World Bank, technology might be doing more harm than good.

Its new report, Digital Dividends, covers technology’s role in development and the global economy.  Advances in ICT have not proven to provide greater productivity, more opportunities for the poor and middle class or more accountable governments and firms as had anticipated.

While Internet users have tripled in a decade to an estimated 3.2 billion, nearly 60 percent of people globally — some 4 billion people — are still offline.  Nearly 2 billion people do not use a mobile phone, and almost half a billion people live outside areas with a mobile signal.  This may correlate partially with the fact that approximately 1.6 billion people in the world are living without access to electricity, as well as the high cost of Internet and mobile phone subscriptions and slow connections.

The report warns that people lacking access and training in technology will be left behind in the new digital economy.  The fear is that there are not enough workers trained to take on jobs that are becoming more technologically-based.  Also, technology is automating routine jobs, such as factory work, and some white-collar jobs, and forcing workers into lower paying jobs that haven’t been automated yet.

There is also the complaint that some governments and firms are using the Internet to control information, not share it.   At the same time the absence of global consensus in dealing with censorship and other “next-generation issues”, such as privacy, cybersecurity, and internet governance, makes it difficult to find a solution.

Despite the setbacks, ICT has provided opportunities for those who previously were out of reach of them, such as e-commerce and mHealth.  This is especially seen among women in developing countries.  

Ultimately, the report states that ICT will not solve basic development issues that need to be done offline, though it can accelerate them if used in the right way.

Download World Development Report 2016: Digital Dividends.

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