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

20.500.12592/5y7jnt5

Digitalization and Inclusive Growth: A Review of the Evidence

15 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.
development technology inequality economic growth jobs digital macroeconomics and economic growth::economic growth social protections and labor::employment and unemployment macroeconomics and economic growth::economic development industry, innovation and infrastructure sdg 9 sdg 8 decent work and economic growth science and technology development::technology innovation

Authors

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

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Citation
“ Nayyar, Gaurav ; Pleninger, Regina ; Vorisek, Dana ; Yu, Shu . 2024 . Digitalization and Inclusive Growth: A Review of the Evidence . Policy Research Working Paper; 10941 . © Washington, DC: World Bank . http://hdl.handle.net/10986/42243 License: CC BY 3.0 IGO . ”
Collection(s)
Policy Research Working Papers
DOI
http://dx.doi.org/10.1596/1813-9450-10941
Identifier externaldocumentum
34398684
Identifier internaldocumentum
34398684
Pages
43
Published in
United States of America
RelationisPartofseries
Policy Research Working Paper; 10941
Report
WPS10941
Rights
CC BY 3.0 IGO
Rights Holder
World Bank
Rights URI
https://creativecommons.org/licenses/by/3.0/igo/
UNIT
ProsperityChiefEcoAnalyticalTeam (EFIAT)
URI
https://hdl.handle.net/10986/42243
date disclosure
2024-10-15
region geographical
World

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