Digital Dividends: Strengthening the Analog Foundation of the Digital Revolution

Overview: How the internet promotes development

The Module Overview sets the stage for the five weeks that follow. It introduces economic and social impact of digital revolution and analyzes a broad range of issues on productivity, inequality, and liberty in the digital age. It draws on the work done in the 2016 World Development Report: Digital Dividends. Module One introduces the concept collectively referred to as the Digital dividends: faster growth, more jobs and better services. It analyzes the impact from the perspective of three agents: business, people and government. The Module argues that there are factors beyond technology that shape their development impact. The report calls them the Analog foundations of the digital revolution. The module concludes that, in absence of those analog complements, the benefits will often fall short.

Accelerating growth: More trade, higher productivity and greater competition

The Module 2 is based on chapter 1 of the WDR 2016 and introduces participants to a framework for the internet and economic growth. It discusses how trade, productivity and competition are enhanced by digital technology. It points out that digital technology creates opportunities to accelerate growth as it reduces transaction costs. This allows firms to enter new markets, enhance their efficiency and exploit economies of scale, leading to innovation. The module raises an issue of competition and argues that firms that face more competition use digital technology more intensively and effectively, because it enables them to reduce their costs to outperform their competitors. The module concludes that: 1) The opportunities are often missed because firms in sectors where technology's impact is greatest are frequently protected from innovative competitors, and 2) Regulation to foster competition in the digital economy must prevent anticompetitive behavior and ensure that potential entrepreneurs have fair market access.This module focuses specifically on two sectors: Agriculture, and Digital Finance.

Expanding opportunities: Creating jobs and boosting labor productivity

Module 3 is based on chapter 2 of the WDR 2016 and focuses on new opportunities that digital technologies generate for employment and earnings. It also examines the risks involved. It discusses how digital technologies can create jobs and increase earnings, as well as increase worker productivity; while at the same time benefiting consumers. The module also argues that a major risk associated with introduction of digital technologies is related to the speed of labor market changes and the destruction of jobs. The module demonstrates how by improving internet access, basic literacy, and providing education opportunities via skill and training systems, countries can realize significant benefits that will be broadly shared. The most crucial element is skill development. Two sets of skills are increasingly important in today's labor markets: Information and Communication Technology (ICT) skills and higher-order cognitive and socioemotional skills. The module suggests that without complementary policies, many benefits can go unrealized and inequality can increase. The module focuses on Education and Jobs, and discusses how digital technologies help empower women, both economically and socially.

Delivering services: Connecting for a capable and accountable government

Module 4 is based on chapter 3 of the WDR 2016 and focuses on how digital technologies can strengthen government capability and empower citizens. The module outlines how this is done through three mechanisms: 1) overcoming information barriers and promoting participation by citizens in services and in elections; 2) enabling governments to replace some factors used for producing services through the automation of routine activities; and, 3) enabling citizens to connect with one another; fostering citizen voice and collective action. The module analyzes the impact of these mechanisms on capability and empowerment, which depend upon the strength of government institutions. The module concludes that the misalignment between digital technologies and weak or unaccountable institutions creates twin risks: increasing elite control paired with the wasting of scarce public resources on ineffective e-government projects. The module focuses on e-Health and Identification for Development (ID4D).

Policy implications: Making the internet universal, affordable and safe

Module 5 is based on chapter 4 of the report. It examines policy challenges for digital development, and defines next generation policies for increasing connectivity and expanding digital dividends to all communities. It defines supply-side (availability, accessibility and affordability) and demand-side (open and safe internet use) policies. Government policies and regulation of the internet help shape the digital economy. The module focuses on key policy ingredients that include market competition, private participation, and independent regulation. Independent regulation requires establishing ICT regulatory agencies that are independent of leading operators and of government departments. The module concludes that, particularly through their policies for the ICT sector, governments and regulatory agencies create an enabling environment for the private sector to build networks, develop services, and provide content and applications for users. The module focuses on Data Revolution, Smart Cities and Cyber Security.

National priorities: Making the Internet work for everyone

Module 6 is based on chapter 5 of the WDR 2016 and examines the need of governments to focus on digital technology in their national plans. It presents evidence that developing or transitioning countries can seize the opportunities the internet offers by implementing a smart and comprehensive digital development strategy. The module cautions that ICT projects often fail when they focus solely on technology - without also addressing shortcomings in the complements that cannot be automated. The module suggests that successful digital strategies need to focus on two pillars: one digital and the other analog. If digital investments are not accompanied by improvements in the analog complements, countries face significant risks. The module focuses on Energy and Six Digital technologies to watch.

At the end of the Module 6, a summary of conclusions for the course is presented.