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Digital Dividends Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized 102725 world development report DIGITAL DIVIDENDS A World Bank Group Flagship Report world development report DIGITAL DIVIDENDS © 2016 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved 1 2 3 4 19 18 17 16 This work is a product of the staff of The World Bank with external contributions. The fi ndings, interpretations, and conclusions expressed in this work do not necessarily refl ect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifi cally reserved. Rights and Permissions This work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) http://creativecommons.org /licenses/by/3.0/igo. Under the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions: Attribution—Please cite the work as follows: World Bank. 2016. World Development Report 2016: Digital Dividends. Washington, DC: World Bank. doi:10.1596/978-1-4648-0671-1. License: Creative Commons Attribution CC BY 3.0 IGO Translations—If you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by The World Bank and should not be considered an offi cial World Bank translation. The World Bank shall not be liable for any content or error in this translation. Adaptations—If you create an adaptation of this work, please add the following disclaimer along with the attribution: This is an adaptation of an original work by The World Bank. Views and opinions expressed in the adaptation are the sole responsibility of the author or authors of the adaptation and are not endorsed by The World Bank. Third-party content—The World Bank does not necessarily own each component of the content contained within the work. The World Bank therefore does not warrant that the use of any third-party-owned individual component or part contained in the work will not infringe on the rights of those third parties. The risk of claims resulting from such infringement rests solely with you. If you wish to re-use a component of the work, it is your responsibility to determine whether permission is needed for that re-use and to obtain permission from the copyright owner. Examples of components can include, but are not limited to, tables, fi gures, or images. All queries on rights and licenses should be addressed to the Publishing and Knowledge Division, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: [email protected]. ISSN, ISBN, e-ISBN, and DOI: Softcover ISSN: 0163-5085 ISBN: 978-1-4648-0671-1 e-ISBN: 978-1-4648-0672-8 DOI: 10.1596/978-1-4648-0671-1 Hardcover ISSN: 0163-5085 ISBN: 978-1-4648-0728-2 DOI: 10.1596/978-1-4648-0728-2 Interior design: Reboot (www.reboot.org), New York, New York, and George Kokkinidis, Design Language, Brooklyn, New York Cover photo: This 2013 World Press Photo of the Year shows migrants crowding the night shore of Djibouti City in an attempt to capture inexpensive cellphone signals from neighboring Somalia. © John Stanmeyer/National Geographic Creative. Used with the permission of John Stanmeyer/National Geographic Creative. Further permission required for reuse. Library of Congress Cataloging-in-Publication data has been requested. Contents xiii Foreword xv Acknowledgments xix Abbreviations 1 Overview: Strengthening the analog foundation of the digital revolution 5 Digital transformations—digital divides 8 How the internet promotes development 11 The dividends: Growth, jobs, and service delivery 18 The risks: Concentration, inequality, and control 25 Making the internet universal, affordable, open, and safe 29 Analog complements for a digital economy 36 Global cooperation to solve global problems 38 Reaping digital dividends for everyone 38 Notes 39 References 42 Spotlight 1: How the internet promotes development 49 Part 1: Facts and analysis 50 Chapter 1: Accelerating growth 51 Connected businesses 55 More trade, higher productivity, and greater competition 70 Digital technologies can lead fi rms and countries to diverge 73 The nexus of technology and regulation 80 The future of markets 82 Notes 85 References 90 Sector focus 1: Agriculture 94 Spotlight 2: Digital fi nance 100 Chapter 2: Expanding opportunities 101 Connected people 104 Creating jobs, boosting labor productivity, and benefi ting consumers 118 Labor market polarization can lead to greater inequality 120 The race between skills and technology v vi CONTENTS 130 The future of jobs 135 Notes 138 References 146 Sector focus 2: Education 148 Spotlight 3: Social media 152 Chapter 3: Delivering services 153 Connected governments 155 Greater state capability and citizen participation 171 Digital technologies too often fail to empower citizens 177 The gap between technology and institutions 181 The future of public services 181 Notes 183 References 190 Sector focus 3: e-health 194 Spotlight 4: Digital identity 199 Part 2: Policies 200 Chapter 4: Sectoral policies 200 Making the internet universal, affordable, open, and safe 203 Shaping the digital economy 204 Supply-side policies: Availability, accessibility, and affordability 221 Demand-side policies: Open and safe internet use 228 Promoting the digital economy 232 Notes 235 References 240 Sector focus 4: Smart cities 244 Spotlight 5: The data revolution 248 Chapter 5: National priorities 248 Analog foundations for a digital economy 249 The interdependence between technology and complements 253 Regulations: Helping businesses connect and compete 258 Skills: Making the internet work for everyone 272 Institutions: Connecting for a capable and accountable government 279 Digital safeguards 281 Notes 282 References 288 Sector focus 5: Energy 292 Chapter 6: Global cooperation 292 Internet governance 297 Toward a global digital market 303 Leveraging information for sustainable development 317 Notes 318 References 322 Sector focus 6: Environmental management 326 Spotlight 6: Six digital technologies to watch CONTENTS vii Boxes O.1 5 Frequently asked questions: The Report 2.2 110 The economics of online outsourcing at a glance 2.3 112 Expanding opportunities through O.2 10 e-commerce with Chinese online music characteristics: Inclusion, effi ciency, 2.4 114 Bridging the disability divide through and innovation in Taobao villages digital technologies O.3 15 Bridging the disability divide through 2.5 115 Using digital technologies to match digital technologies workers with jobs: Souktel in West O.4 16 Digital dividends and the bottom billion Bank and Gaza O.5 20 What Facebook “Likes” reveal—the 2.6 116 The impact of digital technologies on convenience-privacy trade-off remittances O.6 26 Nailing Jell-O to the wall—restrictions 2.7 123 Skills wanted: Key concepts on the fl ow of information 2.8 129 Concerns about technological O.7 27 Is the internet a public good? unemployment are not new O.8 27 The four digital enablers 2.9 133 The challenge of keeping up with new technologies in Mexico O.9 29 Technology and complements: Lessons from academic research 2.10 134 Digital technologies and economic opportunities: A gender lens O.10 32 Opening the M-Pesa mobile money platform to competition 3.1 158 Digital technology and crisis management O.11 33 Mobilizing technology in teaching in Rio’s Educopedia 3.2 159 Empowering women through digitally enabled social programs O.12 35 Can continuous monitoring and small sanctions improve provider 3.3 160 Targeted public transit benefi ts in performance? Bogotá O.13 37 European Union: A fragmented market 3.4 161 Streamlining services through one-stop for digital trade service centers S1.1 45 Three ways in which the internet 3.5 165 The high failure rate of e-government promotes development projects 1.1 56 Tracing back growth to a single, 3.6 169 Digitally enabled teacher management new technology suffers from severe in private schools measurement problems 3.7 173 Improving the integrity of elections 1.2 57 Is this time different? Predicting through crowdsourcing and labor productivity growth at the collaboration technological frontier based on lessons 3.8 178 Digital technologies can strengthen from past industrial revolutions control 1.3 59 Is the internet reshaping economic 4.1 201 Policy challenges for digital geography? Not yet. development 1.4 61 Successful online platforms account for 4.2 204 Is the internet a public good? local context and institutions 4.3 207 Fragile states, resilient digital 1.5 63 The growth impact is largest when economies fi rms in traditional sectors use digital 4.4 209 How public-private partnership helped technologies to modernize their build the internet backbone in the business Republic of Korea 1.6 65 Do digital technologies embed 4.5 212 The last (1,000) mile(s) productivity externalities? 4.6
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