The Haves and Have-nots Of the Digital Age

IMF Blog, March 1, 2021

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Title: The Haves and Have-nots Of the Digital Age
Author: Gita Bhatt
Date: March 1, 2021
Theme: Accelerated by the pandemic, the digital future is coming faster than ever and has broad economic, social, and policy implications explored in this issue of Finance & Development magazine.

For millions, technology has been a lifeline, changing the way we work, learn, shop, and entertain ourselves.
Pandemic-driven digital shifts highlighted:
- Governments using mobile solutions to provide cash assistance.
- Financial technology supporting the survival and, in some cases, growth of small- and medium-sized businesses.
- The first national digital currency, in The Bahamas, as a glimpse of the future of money.

Digitalization can drive unequal outcomes in:
- Education
- Opportunities
- Access to health care and financial services
Automation has destroyed jobs, some permanently.
The digital divide—between the digitally connected and the unconnected, across and within countries and between rural and urban areas—has amplified social and economic inequalities.
Specific risks and concerns raised:
- Cyber threats to the financial system (Tim Maurer, Carnegie Institute for International Peace).
- Need to balance commercial interests with protection of privacy and data integrity (IMF economists Yan Carrière-Swallow and Vikram Haksar).
- Issues of digital taxation, data bias and ethics, and the need for global tech cooperation.

Government role:
- Daron Acemoğlu (MIT) emphasizes that government can and should play a regulatory role, with incentives for innovation toward “human-friendly” technologies that produce good jobs.
Financial inclusion:
- Hyun Song Shin and coauthors from the Bank for International Settlements (BIS) elaborate on smart policies that can bring more people—particularly the poorest—into the financial system.
Education and inclusion:
- Sierra Leone’s Minister of Education, David Sengeh, describes steps to make his country’s education system both more digital and more inclusive.
Infrastructure and capacity:
- Cristina Duarte, special advisor on Africa to the UN Secretary General, stresses scaling up investment in digital infrastructure, such as access to electricity, mobile and internet coverage, and digital ID.
Overarching principle:
- Innovation needs to have public value and be shaped to bring everyone into the digital age.

IMF chief economist Gita Gopinath highlights the stark divergence in prospects across countries, regions, and sectors and the needed policy actions.
Sam Bowles and Wendy Carlin argue that the pandemic, along with climate change, will alter thinking about economics and the social contract.
Ruchir Agarwal, Ina Ganguli, and Patrick Gaule find that policies identifying and nurturing young talent from poorer countries could advance the global knowledge frontier.
Profile: Prakash Loungani profiles Assaf Razin, an early scholar of the promise and perils of globalization.

Source: The Haves and Have-nots Of the Digital Age, Gita Bhatt, March 1, 2021