How the Digital World Can Help to Reduce Global Inequality
The digital revolution has occurred alongside a widening gap between the haves and have-nots, but it could also provide the tools to reduce inequality
The power of the digital world is clear; it’s everywhere. It’s embraced by the rich and the poor, men and women, the well-educated and the barely literate. It’s used for high finance and business transactions as well as for social gossiping. It transcends national boundaries, ignores the north-south divide, and brushes aside cultural and ideological barriers. It is clearly a great equaliser in our increasingly unequal world.
The paradox is that the digital revolution has occurred alongside with widening gaps between the haves and have-nots.
There are certainly examples of notable success of the digital changing the daily lives of the poor for the better. M-Pesa in Africa is often cited as a case of mobile connectivity breaking new grounds in facilitating money transfer for the poor, especially in rural areas. But these are exceptions that prove the rule.
What is missing is a transformation in the macro social and economic context that could fully leverage the power of the digital world – inclusive growth. In order to effectively close the gap between the haves and have-nots a wide range of networks that govern how people live and produce have to become inclusive.
These are networks that people use to access basic needs such as transportation, water, electricity. Then there are networks that provide education, health care, and financial services. For would-be entrepreneurs and small business owners, they need to access networks that can connect them with suppliers and customers, and to access investment capital. The digital world touches on many of these networks, but these networks need to become truly inclusive in order to realise the full potential of the digital world. Inclusive growth is a pre-condition for leveraging the power of the digital; the digital on its own cannot bring about inclusion.
M-Pesa in Africa is often cited as a case of mobile connectivity breaking new grounds in facilitating money transfer for the poor, especially in rural areas. Photograph: Noor Khamis/Reuters
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