Accelerating Digital Inclusion in the New Normal
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In collaboration with Boston Consulting Group Accelerating Digital Inclusion in the New Normal PLAYBOOK JULY 2020 Cover: Getty Images/Dobrila Vignjevic Inside: Getty Images/Subman; Reuters/Amit Dave; Reuters/Danish Siddiqui; Unsplash/Dan Burton; Reuters/Alessandro Bianchi; Reuters/Jason Redmond Contents 3 Executive summary 4 1 Role of connectivity in the time of COVID-19 5 2 Critical gaps in the digital divide 7 3 A growing digital divide in the ‘new normal’ 8 4 The future of digital inclusion 8 4.1 Growth 13 4.2 Financing 18 4.3 Technology 21 Conclusion 22 Acknowledgements 23 Endnotes © 2020 World Economic Forum. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, including photocopying and recording, or by any information storage and retrieval system. Accelerating Digital Inclusion in the New Normal 2 Executive summary The COVID-19 crisis has thrown into sharp focus particular, small and medium-sized enterprises the importance of digital connectivity in daily life. As (SMEs) lag behind large corporations, rendering many countries underwent lockdown periods, digital them more vulnerable to closures and job losses in infrastructure was critical to mitigate the impact of an environment where digital is increasingly key. stay-at-home restrictions. Connectivity players have contributed by taking short-term actions to ensure The post-COVID-19 “new normal” will likely see an continued access during the crisis. More importantly, increase in speeds, devices and budgets required their long-term investment in infrastructure over by households and businesses, exacerbating the past 20 years has driven a step change in the existing divides. As such, connectivity must level of fixed and mobile coverage and technology. become the top priority and stakeholders must aim This has enabled the continuation of key activities for United Nations targets: by 2025, broadband digitally, such as remote working, healthcare and internet1 user penetration should reach 75% education, and underpinned the growth of sectors worldwide, and by 2025, broadband should such as e-commerce while supporting adjacent cost no more than 2% of earnings. It will also be industry players at a critical time. important to implement the UN Secretary-General’s Roadmap for Digital Cooperation. To achieve At the same time, the crisis has also exposed even this, stakeholders should aim to drive adoption of more clearly the gaps that still exist in digital access. high-speed internet beyond coverage targets and When essential services such as health, education take a “tech agnostic” approach, where traditional or simply being able to continue one’s professional business cases are insufficient – this incorporates activity depend on connectivity, the inequalities terrestrial and non-terrestrial infrastructure became exacerbated. There remains a divide in options for providing access to high-quality fixed access to high-speed fixed and mobile connectivity. broadband, wireless and satellite networks. Even among fixed broadband subscribers, many do not get sufficient speeds for effective remote At this watershed moment, telcos and industry work, telemedicine or study, including in developed verticals, multinational corporations, governmental countries. Beyond coverage, there is a bigger divide and non-governmental organizations must mobilize in adoption where those with coverage may not to develop strategies to accelerate digital inclusion. use the internet due to lack of affordability, digital This playbook builds on past efforts by the World skills or relevant content in the local language. Economic Forum and other groups (e.g. GSMA, Furthermore, these issues extend to businesses Broadband Commission) and highlights further key that faced similar challenges during the crisis. In recommendations across three pillars: Growth Financing Technology How can the public and private sectors How can the public and private sectors best What combination of existing and emerging stimulate growth in the industry to accelerate finance the infrastructure and digitization technologies can efficiently and sustainably digital development in unserved and required to enable high-speed internet in deliver affordable connectivity? underserved regions? unserved and underserved regions? – Continue optimizing for the right mix of – Accelerate current efforts, particularly on – Accelerate relevant partnerships and technologies across fixed, wireless and new increasing adoption through improved regulatory actions identified non-terrestrial technologies across contexts affordability and digital skills – Involve more non-telco actors in infra-sharing – Accelerate the digitization of existing – Set up horizontal national digital strategies discussions operations through smart planning, and disburse unused funds via efficient automation, new architectures and ways of mechanisms – Creatively and assertively seek access to outside working, to improve the cost base and viability funding available for digitization and connectivity; of investments in underserved areas – Collaborate across sectors and governments explore ways to earmark recent recovery funding to facilitate the digitization of SMEs through end-to-end “digital SME in a box” solutions, – Collaborate with government to address as a key revenue growth driver bureaucratic hurdles of to speed up roll-out Accelerating Digital Inclusion in the New Normal 3 1 Role of connectivity in the time of COVID-19 The COVID-19 pandemic has highlighted a newfound sense of urgency to the digital inclusion agenda. While the crisis has enabled hundreds of millions to work, learn and connect digitally, it is easy to see how it has also exacerbated the situation for far too many people in vulnerable situations around the world. Now, more than ever, connectivity should be at the core of all national and international priorities – from healthcare, education, government services and beyond. This new normal presents an unprecedented opportunity for cross-sector collaboration to bridge the digital divide and enable unforeseen growth opportunities for the economy and society. Mauricio Ramos, Chief Executive Officer, Millicom, USA; Chair, Digital Communications Industry Community, World Economic Forum The ongoing COVID-19 crisis has generated a mobile coverage has risen from 12% to 97% of the fundamental change in the context connectivity world’s population, with more than 85% enjoying and tech players operate in, as societies are 4G technology.3 increasingly recognizing the critical importance of digital infrastructure and services. By end of This solid digital infrastructure has enabled the April 2020, 70% of countries globally were faced continuation of key activities, allowing an estimated with some level of stay-at-home requirements, a 10% of the global labour force to work remotely, majority of which were strict lockdowns. During supporting close to 300 million jobs. This translates this period, internet use grew by as much as to an annual impact of $8 trillion, or twice the size 70%, the use of remote desktop by 40% and of the Germany’s economy. A similar number of the use of virtual collaboration tools by more school-aged kids and university/higher education than 600%.2 Connectivity and tech players have students – ~100 million and ~200 million, played a key role in supporting this crisis with respectively, have also been able to maintain short-term response actions, as detailed in the access to education remotely. While this represents Digital Development Joint Action Plan and Call for 15-30% of the global student population, it is Action published in April 2020 by the World Bank, weighted towards developed economies.4 International Telecommunication Union (ITU), GSMA and World Economic Forum. Connectivity also had a significant impact on managing health-related issues during the crisis; However, beyond the instrumental role held by technology was used for pandemic planning, the industry in the short term, the most important surveillance, testing, contact tracing, quarantine enabler allowing the world to operate during and remote healthcare. Telemedicine consultations these lockdowns has been the substantial grew more in one month than in 10 years,5 which infrastructure roll-out and investments made by the played a key role in keeping lines down at hospitals industry since the internet boom. Operators and and maintaining patients in good health. While infrastructure providers have invested trillions of some sectors have been badly hit (e.g. travel and dollars over the past 20 years to create the digital hospitality), others have been able to grow during infrastructure coverage and capacity required to the lockdowns, directly enabled by connectivity, sustain lifestyles during COVID-19. From almost such as e-commerce, food delivery and online nothing two decades ago, today close to 45% groceries, with positive spillover effects to adjacent of global households have a fixed broadband industry players, all of which would have been subscription, of which close to half enjoy fibre impossible 20 years ago. connections and speeds. In the same timeframe, Accelerating Digital Inclusion in the New Normal 4 2 Critical gaps in the digital divide Despite support from the industry, the current to the recent crisis, as a result of increased crisis has also highlighted gaps in access and network traffic, hitting lows of 5Mbps in upstate exacerbated the existing digital divide, both in New York for example, preventing some developing