World Bank embraces digital transformation

The World Bank has hosted its first “global digital summit” to help accelerate digital access, alongside affordability and usability, in low-income countries. Despite rapid growth in the rate of digital adoption around the world, 2.6 billion people do not have access to the internet, the majority of whom live in poorer countries. Furthermore, where people are connected, they face slower broadband speeds and higher costs for data than higher-income countries do, according to the bank’s new digital trends report. In fact, average mobile broadband traffic per capita in wealthier countries surpassed that of low-income countries by over 20 times, and fixed broadband traffic by more than 1,700 times. In addition, new digital developments, such as artificial intelligence, are emerging faster than ever, meaning lower-income countries are being left further behind and missing out on the benefits that come with digital transformation, such as economic growth, employment, and resilience to shocks, according to the bank. “Digitalization is the transformational opportunity of our time, but only for those who are connected,” Axel van Trotsenburg, the bank’s senior managing director, said in a press release. “Without access to the internet and the skills to use digital technologies effectively, you are essentially locked out of the modern world. The critical services that support development — like hospitals, schools, energy infrastructure, and agriculture — all run on connectivity and data. The infrastructure and platforms that underpin these connections must be available, affordable, and safe for developing countries to flourish,” he added. In response, the bank’s president, Ajay Banga, has vowed to prioritize digital efforts at the multilateral lender, creating a new operational unit, known as a vice presidency, dedicated to accelerating countries’ digital transformation. The new vice president has yet to be named. To underscore this commitment, the bank hosted its inaugural global digital summit in Washington, D.C., this week, featuring tech heavyweights Satya Nadella, head of Microsoft, and Hans Vestberg, head of Verizon. While experts and senior bank leaders acknowledge that missing digital infrastructure is one of the major challenges — across Africa, more than 600 million people don’t have electricity — this is only part of the problem. “It’s also about affordability and usability,” Banga said during the opening session on Tuesday. When Banga was asked if the bank should be prioritizing digital over the electricity needs of those 600 million people, the former chief of Mastercard said you can, and should, do both. “There is no tradeoff,” he said. “The reality is we have to get those 600 million people connected to electricity. … Meanwhile, there’s the other billion and a half of people who have access to electricity but don’t have digital. We have work to do with them too. And then there’s the others who do have access to the internet, but it’s not being fully used and exploited for the capabilities that it is possible to do. So there’s different shades of work to be done with different target audiences.” This message was echoed by Hans Vestberg, head of Verizon, who said during the plenary: “Broadband and connectivity is only useful if you use it for something good,” such as to give people digital bank accounts, identities, and education. In the aftermath of the COVID-19 pandemic in 2021, Vestberg helped launch the EDISON Alliance — a global coalition of private sector companies, governments, and civil society — to connect 1 billion people to affordable and accessible digital solutions across health, education, and financial services by 2025. To improve digital infrastructure — i.e., digital platforms for identity, payments, and data sharing — the bank has committed to connecting an additional 100 million people to power by 2030 using renewable energy, and plans to add another 100 million to the target, Banga said during the summit. But the bank’s senior managing director also stressed the importance of looking beyond digital infrastructure, saying that an “ecosystem” approach is needed. This involves providing electricity but also regulatory frameworks, education systems, and continuous training for the workforce to usher in digital transformation, van Trotsenburg said on Day 2 of the summit. This will require a lot of resources and cooperation among governments, the private sector, and the multilateral systems, he added. Alan Gelb, senior fellow at the Center for Global Development, said he welcomed the bank’s increased focus on digital issues. The institution has been working actively in the area since 2014, he said, including digital health projects and promoting digital identification systems. According to Gelb, this new digital push elevates the bank’s existing work to a “more systemic and higher level.” “I think what Banga is trying to do is build on the kind of experience the bank has already, bring it together, and reap the externalities you get in this area,” he told Devex. “Digital systems and platforms are potentially multipurpose, and cannot be approached simply on a sector or issue basis — there are externalities between applications,” he added. Van Trotsenburg’s discussion of digital within the broader digital public infrastructure heading was also positive, Gelb said. “The discussion is moving to redefine digital as not being just about digital programs or services but looking at it from a perspective of digital public infrastructure; systems like roads or power that serve multiple uses,” he explained. This requires interoperable systems so that the same digital system can be used for any transaction or service, for example, to improve efficiency and reduce citizen’s transactions’ costs, Gelb told Devex. However, Gelb said he would like to hear more from the anti-poverty lender on how it will measure the success of its digital interventions. “I would like to see systematic monitoring of these programs as they go forward, looking at whether digital interventions make services and transactions easier, cheaper, and more efficient for people and companies,” he said. “Furthermore, even as we recognize the huge opportunities, we need to focus on reducing exclusion and bridging the digital divide,” Gelb added.