High-speed Internet is key for working from home, for children’s education when they can’t attend school in person, for telemedicine, for benefiting from social support programs and for enabling access to financial services for everyone, especially for those living in remote areas.
Still, Internet usage remains a luxury: Half of the world’s population does not have access to the Internet, either through a mobile device or through fixed line broadband.
Advanced economies like the United States, France, Germany, the United Kingdom and Canada have the highest access rates. Big emerging economies show large disparities in the proportion of Internet users in their populations, which range from about two-thirds in Brazil and Mexico to about one-third in India.
The lack of universal and affordable access to the Internet may widen income inequality within and between countries.
- Within countries. Income inequality and inequality of opportunity may worsen — even in advanced economies — because disadvantaged groups and people who live in rural areas have more limited Internet access. The disparity between men and women in their labor force participation, wages and access to financial services may increase where there is a gender gap in access to the Internet. This could be the case in many emerging and developing countries where fewer women than men own a mobile phone.
- Between countries. The relatively low Internet access might depress productivity in emerging and developing countries. IMF staff research finds that a one percentage point increase in the share of Internet users in the population raises per capita growth by 0.1-0.4 percentage points in sub-Saharan Africa. The Covid-19 pandemic demonstrates that having reliable Internet allows some businesses to continue operations amidst lockdowns, which keeps economies running.
So, how can policymakers support affordable and universal access to the Internet?
Governments can foster a digital-friendly business and regulatory environment for the private sector. This can be instrumental to accelerate and finance investments in infrastructure.
Given the increasing role of the Internet for the economy and for accessing public services, policies to foster an inclusive recovery must aim to tackle the digital divide within and between countries.