‘Harness vast societal value in digitalisation’
Investment in broadband could benefit job creation, health care, reduce income disparity and road deaths
DIGITALISATION could benefit consumers more than businesses – but only if it was harnessed properly.
According to findings of the World Economic Forum Digital Transformation Initiative (DTI), much of the value that digitalisation could potentially generate for society would remain trapped unless efforts were stepped up to align private-sector investment incentives with the long-term public good.
Analysis by the DTI estimated that more than half of the value that digitalisation potentially offered was in the form of societal benefits.
These included net job creation and reduced income inequality, improved health outcomes and fewer accidents, reduced carbon emissions and time and cost savings for consumers.
“The majority of the benefits of digital will accrue to society, but only if collective action is taken to assess the potential, using consistent criteria to evaluate the outcomes of specific policy actions,” said Bruce Weinelt, head of the DTI.
“A greater change in the mindset of business will also be necessary. The private sector will have to go beyond measuring performance by growth and profit, and begin to embed sustainable and trustbased business models at the heart of their strategies.”
The DTI project, undertaken in collaboration with Accenture, had completed value-atstake analyses in 10 industries to help the private sector identify opportunities for growth. It had complemented this with a new societal-value framework enabling the private and public sectors to understand and measure wider societal benefits in financial terms.
This provided a consistent evidence base that would help governments and businesses design regulatory and policy changes that removed investment barriers at national and regional levels. The WEF said the new societal value model had been tried in India, the UK and Denmark to engage dialogue with policy-makers.
In the Indian state of Telangana, the four digital initiative models demonstrated that value generated in the next decade could be equal to 40% of India’s GDP in 2015.
Of the benefits of digitalisation, 94% could accrue to society and the environment, as opposed to industry.
For example, digital payment solutions could improve access to financial services for small businesses, creating 4.5 million jobs and $410 billion (R5.5 trillion) in value to society.
This would require measures to spur more investment in broadband and wider adoption of digital applications.
Mature Organisation for Economic Co-operation and Development economies could see even greater social benefits from digitalisation than the global average. For example, the higher costs in sectors such as health care could result in greater savings and productivity improvements.
In the UK, improved safety mechanisms in vehicles could reduce road fatalities by 9% a year, while advanced driver assistance systems could save consumers $25bn in insurance and accident costs.