Global Digitalization in 10 Charts

Digital technologies are transforming communications, business, health, education, finance, and more.

Yet there remains a multi-dimensional digital divide across countries, businesses, and individuals, which is compounding the development divide. Hospitals, schools, governments, and businesses cannot operate effectively and efficiently without digital tools. The digital divide is holding back growth and limiting opportunities for the billions who are still unconnected, and for those who are connected by not harnessing the full potential of these technologies.

The new World Bank Group “Digital Progress and Trends Report 2023” tracks global progress of digitalization and countries’ production and use of digital technologies, from digital jobs, digital services exports, and app development to internet use, affordability, quality, and more. The report highlights two clear trends that are shaping our digital future: The importance of digital public infrastructure and the transformative potential of artificial intelligence (AI).

Closely measuring progress, especially in low- and middle-income countries, will help narrow the digital divide by steering policy makers and the private sector toward areas in need of critical attention and effective solutions.

These 10 charts reveal how digitalization is advancing, or not, across the globe.

Internet Usage

Internet use is speeding up in middle-income countries, but low-income countries are falling further behind.

^{Notes: High Income Countries (HIC), Europe and Central Asia (ECA), Latin America and Caribbean (LAC), Middle East and North Africa (MENA), East Asia and Pacific (EAP), Africa West (AFW), South Asia (SAR), Africa East (AFE).}

In 2022, more than 90 percent of people in high-income countries were online, compared to 26 percent in low-income countries. Among low- and middle-income countries, Europe and Central Asia region has the highest internet penetration at 84 percent.

The online population in South Asia doubled from 2018 to 2020, largely driven by India, which has brought one-third of its population online since 2018 in part by promoting internet literacy and providing cheaper data plans. In East Africa, less than 30 percent of people use the internet.

Data Traffic

Photo: Shutterstock

In many developing countries, people and businesses are held back by a lack of digital devices, slow internet, high prices, and poor service.

^{Notes: High Income Countries (HIC), Upper-Middle Income Countries (UMIC), Lower-Middle Income Countries (LMIC), Low Income Countries (LIC).}

The COVID-19 pandemic led to a global surge in data traffic. The surge was driven by video streaming, which accounted for two-thirds of global internet traffic.

In 2022, average mobile broadband traffic per capita in richer countries was more than 20 times higher—and fixed broadband traffic 1,700 times higher—than that in low-income nations.

Gaps in device ownership, internet speed, prices and affordability, and as a result, data traffic, are hampering digital transformation in some low- and middle-income countries.

App Usage

Photo: Shutterstock

A global surge in the use of apps during pandemic lockdowns has continued, underscoring lasting change in people’s behavior.

Downloads of business, education, health, finance, and shopping apps jumped immediately when the COVID-19 lockdowns went into effect, indicating a surge in new users worldwide. Downloads of business apps – such as teleconferencing and file management – drew the most first-time users, with downloads jumping by 60 percent within three months of the pandemic outbreak.

The pandemic also accelerated digital payments and online shopping globally, creating a major shift in the finance and commerce sectors. These behavioral changes have persisted as total time spent on these apps remained 60-70 percent above pre-pandemic levels by the end of 2022.

Business Digitalization

Photo: Shutterstock

Businesses in East Asia are racing ahead, embracing digitalization to engage online with customers, suppliers, and employees. Small firms in lower-income countries lag behind.

^{Notes: East Asia and Pacific (EAP), Europe and Central Asia (ECA), Latin America and Caribbean (LAC), Middle East and North Africa (MNA), South Asia (SAR), Sub-Saharan Africa (SSA).}

While companies in high-income countries continue to integrate digital solutions to streamline processes and improve efficiency, many companies in low- and middle-income countries were without a computer or internet connection in 2022, particularly small and medium enterprises.

From April 2020 to December 2022, the percentage of micro firms (zero to four employees) investing in digital solutions doubled from 10 percent to 20 percent but for large firms (more than 100 employees) it tripled from 20 percent to 60 percent. East Asia has been the front runner among developing regions, with the share of firms investing in digital solutions quadrupling from 13 percent to 54 percent between 2020 and 2022. In other regions, less than 30 percent of firms did so by the end of 2022.

Digital Services Sector Growth

Photo: Christina Morillo

The digital sector is an engine for economic growth and job creation, but the benefits are concentrated in a few leading economies.

The information technology (IT) services sector, such as software development and tech consulting, grew twice as fast as the global economy, creating jobs at six times the rate of the global economy. But this phenomenal growth was highly concentrated, with the top six economies – the United States, China, India, Japan, Germany, and United Kingdom – accounting for 70 percent of global value added in IT services.

Digital Services Exports

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Many developing countries have witnessed booming exports of IT services, which have enabled them to diversify their economies and create well-paid jobs.

^{Notes: High Income Countries (HIC), South Asia (SAR), East Asia and Pacific (EAP), Europe and Central Asia (ECA), Latin America and Caribbean (LAC), Middle East and North Africa (MENA), Africa East (AFE), Africa West (AFW).}

The export of IT services, which includes everything from software development to cloud computing and data processing, has grown nearly 7X since 2005.

While the field is dominated by high-income countries, developing countries in the East Asia and Pacific region experienced the fastest growth, with export values expanding by 17 times from 2005 to 2022, largely driven by China. India is most specialized in IT services exports, which contribute to one-third of its total services exports.

Local Digital Firms

Photo © Dominic Chavez/World Bank

Since the pandemic, the app market has become more local, especially in large countries with unique languages, strong cultural identities, and talented entrepreneurs.

Domestic digital firms in low- and middle-income countries are gaining momentum. These countries received an influx of venture capital funding for their digital startups during 2020 to 2022. While the app market is also becoming more localized, homegrown success in these developing economies may not be transferrable to foreign markets.

Data Infrastructure

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Developing countries lack infrastructure needed to handle the explosive growth in data and expand digitalization.

^{Notes: Africa East (AFE), Africa West (AFW), East Asia and Pacific (EAP), Europe and Central Asia (ECA), High Income Countries (HIC), Latin America and Caribbean (LAC), Middle East and North Africa (MENA), South Asia (SAR).}

Internet exchange points (IXP) are physical structures that facilitate connection to global internet traffic, while data centers store and process data. They are crucial for enabling cloud computing, big data analytics, and AI.

But in 2022, high-income countries accounted for around 60 percent of public IXP globally and nearly three-quarters of connected data centers, compared to 2 percent in the Middle East and North Africa region and 7 percent in Sub-Saharan Africa. Some 51 countries and territories, representing 5 percent of the world’s population, do not have any IXP access.

Identification and Digital Finance

Photo: K Lynch, World Bank.

More than 5 billion people cannot access secure online services and transactions. Digital public infrastructure can enable essential society-wide functions and services like identification, payments, and data exchange.

^{Notes: Africa West (AFW), South Asia (SAR), Africa East (AFE), Middle East and North Africa (MENA), Latin America and Caribbean (LAC), Europe and Central Asia (ECA), East Asia and Pacific (EAP), High Income Countries (HIC).}

An estimated 850 million people globally still do not have any official ID and an additional 220 million do not have a digital record of their identity.

In 2021, nearly all adults in wealthy countries embraced digital payments, compared to only 37 percent in low-income countries. The Middle East and North Africa region had the lowest adoption at around 6 percent of the population.

Similarly, two-thirds of adult population in the East Asia and Pacific region and high-income countries shopped online, while only less than 10 percent of people did in Africa and South Asia.

AI Advances

Photo: Tara Winstead

AI development has arrived at a new stage, reaching a level of sophistication previously unimaginable.

The ability to generate content sometimes indistinguishable from that generated by humans has propelled AI capabilities to new heights. The parameters used in AI models – a measure of AI complexity – have grown exponentially from just 255 parameters in 1955 to 1.6 trillion in 2022. As the use of AI expands, it has the potential to usher in accelerated growth and efficiency and provides opportunities for developing countries in its applications across education, transport, sustainability, and many other sectors.

Measuring digital progress at the country, regional, and global levels will help countries better understand the digital progress and divide and develop more effective solutions that can help close this gap. Digital technologies such as AI are evolving at a breathtaking pace, and we must act quickly. To reap the full potential of the digital transformation currently underway, everyone must be included.