cover image: Digitalization and Inclusive Growth : A Review of the Evidence (English)

20.500.12592/2k3m5et

Digitalization and Inclusive Growth : A Review of the Evidence (English)

2 Oct 2024

This paper summarizes the evidence on the growth and distributional effects of digitalization through four channels: average productivity growth, employment and wages, access to markets, and government finances. First, digitalization has increased average productivity growth by better matching demand and supply, improving the efficiency of business processes, and boosting the accumulation of intangible capital. For developing economies, the productivity gains from “smart” automation and artificial intelligence that reduce labor costs may be lower than from the previous wave of information and communications technologies, which improved the matching of sellers to buyers by reducing search and coordination costs. Second, there is little evidence that use of information and communications technologies has reduced aggregate employment or resulted in job polarization in developing economies, unlike the experience of advanced economies. However, distributional challenges within countries might increase to the extent that “smart” robots and artificial intelligence need complementary skills. Third, digitalization has enhanced market access for rural households, small firms, and unbanked populations in developing economies through improving information flows. Fourth, digitalization has improved the efficiency of government spending on, and revenue mobilization for, public services and welfare programs through its effect on transparency, accountability, simplification of bureaucratic processes, and adoption of new delivery models.
economic growth jobs other information and communication technologies world

Authors

Nayyar,Gaurav, Pleninger,Regina, Vorisek,Dana Lauren, Shu Yu

DOI
https://dx.doi.org/10.1596/1813-9450-10941
Disclosure Date
2024/10/02
Disclosure Status
Disclosed
Doc Name
Digitalization and Inclusive Growth : A Review of the Evidence
Originating Unit
Off of Sr VP Dev Econ/Chief Econ (DECVP)
Pages
43
Product Line
Advisory Services & Analytics
Published in
United States of America
Rel Proj ID
1W-Jobs And Growth Research -- P507244
Series Name
Policy Research working paper; RRR; PROSPERITY;
Unit Owning
ProsperityChiefEcoAnalyticalTeam (EFIAT),People - Chief Economist Office (GGHCE)
Version Type
Final
Volume No
1

Table of Contents