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To Shape or to be Shaped - Digitization as a Driver of Global Change

12.04.2016 Digitization is perceived by many as a development towards more connectivity, participation and representation in a world that trends ultimately towards convergence and integration. But at a time when 60% of the world's people are still offline, the digital divide within as well as between countries is an issue. A new Wold Bank report deals with it.

Implicitly pictured on the reports front cover is the perceived shady side of things. 'Worldwide nearly 21 percent of households in the bottom 40 percent of their countries' income distribution don't have access to a mobile phone, and 71 percent don't have access to the internet.' Dividing trends are likely augmented by digitization. Tools of the digital media world are produced by knowledge industries in a few technologically advanced economies and distributed globally. This looks reminiscent of early stages of industrialization, when 'for the first time in history, the backward countries industrialized without proprietary innovations' (Amsden 2001). Otherwise the prospects for gains in efficiency, precision and reliability of data are promising. Big data industries and sciences are much motivated to bring the complexities of the global world into ambitious scenario planning with a clear intent to transform expectations and the way we look at the operational capacities of our institutions.

It can be said that this year's World Development Report (WDR 2016) does not paint a rosy picture of our digital present. Whereas the report's vision is clearly 'digital technologies to benefit everyone everywhere' (quite reminiscent of a digital giants slogan) the authors lament the aggregate impact of these technologies that has fallen short and is unevenly distributed. 'Analog compliments' therefore are identified in the report that should bring the digital fancy down to earth. These compliments are: a favourable business environment, strong human capital and good governance, as are the foundations of economic development. A potential of the digital turn with regard to social economic development is thus postulated: new business models, more productivity and a boost in education. But the pitfalls are close and it turns out that in society as well as the business world the middle stratum faces a challenge. Digitization seems to distribute its premium uneven to the rich and the poor so far. Whether the middle class on the one hand and medium sized industries on the other will reshape themselves as drivers of innovation in business and society, this is one of the pending questions and the report is published too early to have an answer here. Digitization leads to automation not only of industrial processes and of workflows in service industries (white-collar). With the speedy development of artificially intelligent agents the replacement of content providers (editors, writers, translators, scientists) emerges already at the horizon.

This ongoing structural change triggers a question and a challenge for different policy fields: will all these productivity gains be redistributed? Will structural changes in the labour market be synchronized with a concept to educate the people affected in directions of future demand? In a recent discussion in Bonn, following a presentation of the WDR findings by lead author Deepak Mishra ("technology is never neutral in its impact"), the almost complete absence of a sustainability perspective in the report was noted with some surprise. Monitoring the effects of digitization on global commons would be a necessary and for sure an uncomfortable task. Tilman Altenburg from the hosting German Development Institute in his comment thus rephrased a once presidential saying in this way: 'Don't ask what ICT did contribute but what challenges could we solve with ICT in which way.'

World Bank. 2016. World Development Report 2016: Digital Dividends. Washington, DC: World Bank. doi:10.1596/978-1-4648-0671-1.

Amsden, Alice H. 2001. The Rise of the 'Rest'. Challenges in the West from Late-Industrializing Economies. Oxford, NY: Oxford UP.

Event mentioned
Presentation and public discussion on the World Development Report 2016 by The World Bank’s Co-Director on the World Development Report 2016, Deepak Mishra. 6 April 2016, German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE) in Bonn.

Martin Wolf
Head of Public Relations
Tel: +49 (0)203 379 5238