## Shifting to a hyperconnected world

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**Canonical URL:** [Shifting to a hyperconnected world](https://www.imf.org/-/media/files/publications/fandd/article/2021/march/en/shifting-to-a-hyperconnected-world-tourpe-en.pdf)

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### Transformative technology and post-COVID shifts
- Lockdowns and technology have accelerated remote activities: buying, learning, working, and socializing, with a shift toward touchless technologies.
- Technology firms are rapidly adjusting to a post-COVID world where people will avoid interacting with the physical world whenever possible.
- Examples of hardware and applications highlighted at the 2021 Consumer Electronics Show: laptops optimized for videoconferencing (multiple cameras, special lights, software-optimized audio), N95 masks with built-in Bluetooth headsets and microphones, smart glasses with ultra-small displays, and touchless doorbells that can notify homeowners and possibly check temperature.
- Augmented reality and remote health care/education are expected to be essential bridges to the digital world for people with low literacy in developing economies.

### Satellite mega constellations
- Potential impact:
  - Could connect the 53 percent of the developing world with no internet connectivity.
  - SpaceX has launched more than 1,000 of 12,000 planned low-Earth-orbit Starlink satellites.
  - OneWeb plans to launch 650 satellites this year alone.
  - Amazon’s Project Kuiper is expected to send up thousands of high-speed satellites soon.
  - This generation of satellites can beam internet to remote areas with high quality and speed and could serve as the backbone for mobile networks.
- IMF research finding:
  - A 10 percent increase in internet penetration could raise real per capita GDP growth 1 to 4 percentage points in sub-Saharan Africa.
- Costs and trade-offs:
  - Terrestrial internet infrastructure for Africa is expected to cost about $100 billion over the next 10 years.
  - Low-Earth-orbit satellite companies promise to deliver connectivity for a fraction of that cost and in a much shorter timeframe (next two years).
  - Expected individual cost initially: about $100 a month, plus another $500 for the hardware—likely too steep for poorer countries and would require subsidies.
  - Satellite proliferation: number of satellites may grow from fewer than 3,000 today to possibly more than 20,000, impacting ground-based astronomy.
- Policy and implementation challenges:
  - Without basic digital and financial skills training, newly connected populations may partially benefit from connectivity.
  - Increased connectivity brings increased digital threats such as fraud and misuse of data.
  - International organizations, development banks, and governments can seize the opportunity—but regulation, digital skills programs, and mindset changes will be necessary.

### Digital identity
- Scope and need:
  - According to the World Bank Group, 1.1 billion people worldwide lack documentation or verifiable credentials to prove their identity.
  - Digital ID can enable increased government transparency, easier access to government assistance, and expanded access to basic financial services, especially for displaced or undocumented people.
- Technologies and progress:
  - Underlying technologies are mature: two-factor authentication, asymmetric encryption, artificial intelligence, machine learning, and biometric sensors built into mobile devices.
  - Digital ID open-source software, open API-based solutions, and international standards have emerged, reducing implementation costs.
  - Early tests of blockchain-based identities are gaining momentum in several countries, including Estonia, potentially shifting control of data from governments to citizens while preserving governments’ authority to issue and validate identity.
- Barriers and risks:
  - Historical adoption slowed by ineffective national coordination, limited digital literacy, cybersecurity issues, data privacy concerns, and mistrust of government-provided technologies.
  - The COVID-19 pandemic forced governments to overcome or sidestep many barriers to deliver financial assistance and support, making the benefits of national digital ID more compelling.
  - Risks of misuse remain real; successful digital ID systems must be secure, inclusive, and interoperable.

### Managing digital risks
- Accelerated digital adoption:
  - The pandemic has leapfrogged digital adoption worldwide—some say by five years—while digital risks have accelerated at the same rate.
- Cybersecurity threats and examples:
  - Increased use of personal computers to access corporate systems increases corporate exposure.
  - Contact tracing applications raised tensions between data privacy and public health goals.
  - Hackers have exploited pandemic fears with phishing schemes and malware.
  - Threats include ransomware attacks against hospitals and intellectual property theft against vaccine companies.
- Broader digital risks:
  - Geopolitical tensions and new cyber-offensive capabilities have blurred lines between nation-state actions and nonstate malicious hackers.
  - Misinformation amplification via technology and the rise of deepfakes may fuel political tension through hard-to-debunk disinformation.
  - AI concerns include faster-than-expected automation of certain jobs, amplification of gender and racial biases, and the “black box” problem where AI conclusions can be unexplained by developers.
- Policy question:
  - Can governments become more agile and rapidly adopt a more comprehensive approach to risk regulation and digital strategy to reap benefits while limiting risks?

### Key takeaways and policy focus
- Opportunity:
  - The shift to a hyperconnected world offers billions improved access to education, health, employment, and financial services.
- Imperatives for governments and stakeholders:
  - Invest in regulation, digital skills programs, and changes in mindset to make connectivity valuable and inclusive.
  - Ensure digital ID deployments are secure, inclusive, and interoperable.
  - Strengthen cybersecurity, privacy protections, and frameworks to counter misinformation and AI-related risks.
  - Coordinate international and domestic policy responses to manage satellite proliferation impacts and affordability barriers.

*HERVE TOURPE is chief of the Digital Advisory Unit at the IMF.*

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_Source: https://www.imf.org/-/media/files/publications/fandd/article/2021/march/en/shifting-to-a-hyperconnected-world-tourpe-en.pdf_