This article is part of:Annual Meeting of the New Champions

• Rural regions play a key role in the global economy, with 43% of the world's population living in such areas – some 3.42 billion people.
• However, rural regions have relatively underperformed in driving economic value, due to poor infrastructure and other challenges.
• Digital technologies can play an essential role in driving innovation and sustainable economic growth in agricultural and rural regions.

Rural regions are critical for the global economy. As of 2023, 3.42 billion people, or 43% of the global population, resided in rural regions. In emerging regions, the share is much higher. For instance, in South Asia, 63.64% live in rural areas.

Similarly, in sub-Saharan Africa, over 57% of the population resides in rural regions. Besides being populous, these regions contribute significantly to livelihoods. Agriculture in large countries like India contributes to more than 42% of livelihoods and 18% of the country’s gross domestic product, while in sub-Saharan Africa, over 60% of the population are smallholder farmers.

Given the extent of human capital, along with abundant natural resources such as fertile land, freshwater and forests, rural regions have relatively underperformed in driving economic value. This can be attributed to factors such as lack of basic infrastructure, both physical and digital, coupled with challenges in accessing services including healthcare, education and finance.

Currently, the ability to earn sustainable incomes in rural settings in emerging economies is gradually decreasing, causing rapid urban migration, which may itself be unsustainable.

By 2040, an additional 1.6 billion people will move into cities, with 80% of this growth occurring in countries least equipped to handle it. In such cases, migration can result in sprawling informal settlements, strained infrastructure and increased vulnerability to climate change-related hazards.

Digital technologies and their transformative potential for rural regions

Recent advancements in digital technologies can play a significant role in enabling rural regions to drive economic growth. These technologies can pivot these regions to become demand drivers (by increasing disposable incomes and triggering latent demand) and supply centres (by improving efficiency and productivity) from being receivers of support.

Three ways digital technologies can drive rural growth are:

Enhancing access to basic services (fuelling demand)

At a foundational level, digital technologies can improve access to critical services. For instance, telemedicine can connect healthcare providers to village-level clinics, digital classrooms can connect students with educators and fintech tools can help the unbanked securely save, borrow and insure – boosting the resilience of rural residents.

Enhancing current livelihoods

Technology can enhance traditional livelihoods anchored in agriculture, livestock rearing forestry and artisanal crafts through targeted services. Precision farming tools and real-time weather updates can help bolster farm profits, for example, while technology-enabled farm-to-fork models, farmers can service urban centres, further unlocking marketability of their produce.

Enabling diversified livelihoods

Rural areas can leverage a mix of physical and digital technologies to support diversification into new businesses such as rural tourism, agri-processing, hyperlocal logistics, or local entrepreneurship. For instance, youth can be trained in agricultural drones to complement existing activities. Similarly, investments in processing infrastructure and value addition can unlock additional economic growth opportunities.

Considerations when scaling digital technology for rural prosperity

For digital technologies to have a transformative impact, a comprehensive approach for tech integration is required. Some key considerations for decision-makers who plan to deploy digital tech for rural prosperity include:

1. Prioritizing the right technology mix based on a needs and value-created framework

A diagnostic approach is important for choosing the right technology mix for rural transformation. While choosing the right technologies, it is important to assess gaps on:

• Citizen’s access to basic services: Begin with a participatory rural appraisal to identify pressing unmet needs, especially in basic services such as healthcare, education and finance. For instance, if maternal health outcomes are poor while education outcomes are performing well, digital health may offer higher value than education.
• Inefficiencies in current rural livelihoods and competitive advantages: Identify current livelihood and economic opportunities, along with the inefficiencies that they currently face. This is important as the set of technologies chosen must be specific for the current livelihood profile. Some rural regions may also have distinct competitive advantages. Focusing on technologies that leverage these competitive advantages can improve the return on investment in technology. For instance, if a rural region is rich in natural capital, technology that enables diversified livelihoods in sectors such as rural tourism can be transformative, while in a region known for artisanal manufacturing, technologies that deliver market linkages may work better.
• Underlying infrastructure required for adoption and delivery of technologies: Determine the level of digital and physical infrastructure alongside institutional capacity to ensure chosen technologies are not only high impact but also feasible. Not having the underlying infrastructure can severely impact the scalability of technology driven interventions.

Once gaps are assessed, it is important to evaluate the value-to-cost ratio of different technology use-cases. Values can be both direct (e.g. increased income, time savings) and indirect (e.g. improved community resilience). An extremely simplified framework, using illustrative figures for representation only, is depicted below:

2. Developing PPP frameworks for tech Integration

Piloting technologies through public-private partnerships (PPPs) can ensure better design, execution and long-term sustainability. In PPPs, governments bring scale, trust and access to beneficiaries, while private players can bring innovation, investments, technical expertise and operational agility. Relying solely on government-led pilots can result in rigid procurement-driven approaches that lack agility and prevent rapid iteration.

The Saagu Baagu project in India identified chilli cultivation as a key livelihood profile. Four technologies were then prioritized and delivered through PPPs where the government enabled farmer onboarding, while the private sector delivered services. Within a few cycles, farmers saw a 21% increase in chilli yields per acre, a 9% reduction in pesticide use, a 5% decrease in fertilizer usage, and an 8% improvement in unit prices due to quality enhancements.

3. Evaluating complementary roles of technology for planning and evaluation

Beyond service delivery, decision-makers should evaluate how technology can help enable the planning and evaluation of pilots. For instance, digital tools such as mobile surveys, geospatial mapping and remote sensing can allow for rapid, granular data collection on health, livelihoods, infrastructure and demographics. Similarly, technology enables rapid, low-cost evaluations through tools like sensors, mobile reporting and satellite data. This enables shorter evaluation loops, making pilots more agile and adaptive, so that they can be modified early.

4. Building rural human capabilities as channels for service delivery

For long-run implementation, it is also necessary to invest in human capabilities for both the delivery of technologies and enabling technology-driven entrepreneurship. For instance, in agriculture and healthcare, instead of technologies being delivered directly to residents, they can be intermediated via extension workers or village-level entrepreneurs.

These actors can facilitate technology adoption, offer basic troubleshooting and serve as feedback channels. Investing in their digital literacy and incentivizing their role can transform them into critical nodes of rural tech ecosystems, ensuring sustainable and scalable deployment. An example of this is India’s Common Services Centres (CSCs) model. CSCs have seeded rural entrepreneurs who provide access to government, financial and utility services to residents of rural areas for a fee.

5. Transitioning to rural innovation hotspots

Over a longer time frame, it is also necessary to build innovation ecosystems in rural areas that shift these areas from being import-dependent on imported tech to innovation hotspots. Targeted investments can enable such localization. For instance, decision-makers could set up infrastructure such as rural technology incubators and data exchanges.

Additionally, schemes that incentivize reverse migration can enable building up of rural technology capabilities. In South Korea, to improve the adoption of agriculture among rural populations, the government launched smart farm innovation valleys and provided youth with support to set up smart farms, including access to rental farmland and grants for setting up smart farms.

DISCOVER

What is the World Economic Forum doing about the Fourth Industrial Revolution?

The World Economic Forum was the first to draw the world’s attention to the Fourth Industrial Revolution, the current period of unprecedented change driven by rapid technological advances. Policies, norms and regulations have not been able to keep up with the pace of innovation, creating a growing need to fill this gap.

The Forum established the Centre for the Fourth Industrial Revolution Network in 2017 to ensure that new and emerging technologies will help—not harm—humanity in the future. Headquartered in San Francisco, the network launched centres in China, India and Japan in 2018 and is rapidly establishing locally-run Affiliate Centres in many countries around the world.

 

 

The global network is working closely with partners from government, business, academia and civil society to co-design and pilot agile frameworks for governing new and emerging technologies, including artificial intelligence (AI), autonomous vehicles, blockchain, data policy, digital trade, drones, internet of things (IoT), precision medicine and environmental innovations.

Learn more about the groundbreaking work that the Centre for the Fourth Industrial Revolution Network is doing to prepare us for the future.

Want to help us shape the Fourth Industrial Revolution? Contact us to find out how you can become a member or partner.

To unlock rural prosperity, technology must therefore be deployed not as a one-size-fits-all solution, but through a context-driven, inclusive and phased approach.

By aligning technologies to local needs, strengthening delivery mechanisms and fostering decentralized innovation ecosystems, digital technologies can be well leveraged to deliver equity, resilience and sustainable growth for the world’s rural communities.