Internet access can lift people out of poverty and increase employment opportunities
Public-private collaboration key to connecting the unconnected
May 7, 2021
By Calum Handforth and Seth Tan
Digital infrastructure is the key utility of the 21st century. It is the foundation of smart cities, the digital economy and an important catalyst for many emerging technologies. It is also a crucial tool in shaping a green recovery from Covid-19 and driving the development of countries around the world. There has been considerable progress in building this critical infrastructure. In 2018, for the first time, more than half of the global population had internet access.
However, 3.7bn people are still not connected to the internet and many, particularly in vulnerable and marginalised communities, lack even basic connectivity. Public-private partnerships are essential to connect the unconnected and ensure digital products are affordable and accessible to everyone.
Much of the rollout of digital infrastructure is being led by the private sector. This includes the efforts of mobile network operators, full-fibre providers and satellite companies. The global infrastructure hub – the Group of 20’s dedicated infrastructure entity – has mapped $7.8tn of telecommunications investment. Although conducive regulatory environments are important in increasing penetration, reducing other barriers is also crucial. Here, local and national governments are key partners.
In particular, dig once policies can minimise the disruption caused by network construction works. A dig once policy ensures coordination between connectivity providers, utility companies and local authorities. It requires installing digital infrastructure alongside traditional infrastructure. The United Nations Development Programme’s global centre has been working with the World Economic Forum to create a model dig once policy for cities to implement as part of a broader smart city toolkit.
Leveraging public sector assets – including government buildings, transmission towers and water towers – to site infrastructure can also expand networks. This approach is being explored around the world, from the UK to India. In the Philippines, the UNDP is partnering with the department of information and communications technology on a nation-wide wifi rollout with connectivity infrastructure sited in schools, local government offices and other public buildings.
The costs of connectivity are significant. To date, much of this investment has been from the private sector. However, this is not sustainable or sufficient. The digital infrastructure investment gap, in Asia alone, could reach $512bn by 2040.
This provides an opportunity for increased and improved public-private partnerships and new ways of working. To help achieve better outcomes from public-private partnerships, the public sector could provide clearer development roadmaps and drive ongoing dialogue with the private sector to ensure the selection of the most suitable solutions and approaches. This includes leveraging data to identify ‘not spots’ and other priorities.
As digital infrastructure develops, there is a risk that those in the last mile are left behind. Providing connectivity to this population is less a technical challenge and more an economic one. In remote locations, building and maintaining network infrastructure can be double the cost of urban deployment. Ensuring inclusion in products and services is also crucial – including achieving the UN broadband commission’s ‘one for two’ goal (where one gigabyte of mobile data is priced at 2% or less of average monthly income). Many countries are far from achieving this target.
Government subsidies or other policies may also be needed. This includes supporting community networks, where the public and private sectors build the skills and expertise of communities to manage connectivity networks locally. New business models are also needed. Approaches that may help include adopting incentive-based models to provide benefits to operators for co-developing networks in under-served areas and bundled solutions featuring a mix of internet, energy and financial services. Conducive regulatory environments will continue to be important.
Covid-19 has highlighted the fundamental role digital infrastructure plays in our daily lives. In a context of continued remote learning and working, high-quality and reliable digital connectivity is an essential component of any economy or society. However, the pandemic also highlighted the stark inequality of access to digital infrastructure. For those without, learning outcomes, employment opportunities and even lives are put at risk.
Improved connectivity is crucial to economic and societal development. It is also a driver for every one of the sustainable development goals. Recent evidence has highlighted that upgrading mobile towers from 3G to 4G can increase household consumption and reduce poverty, while a landmark study highlighted the enormous positive multiplier effects on poverty reduction and employment opportunities following the arrival of submarine cables on the African continent.
The past year has also highlighted the importance of getting the basics right. 5G has enormous potential, but in 2025 most of the world will still be using a 4G connection. Many people are still using 3G or even 2G.
Further efforts are needed to connect the unconnected. Rural fibre and wireless deployments remain costly and complex, while satellite connectivity is still underdeveloped. Public-private partnerships, and broader collaboration between the sectors, are crucial in ensuring digital inclusion, both now and in the future.
This article was originally published on Official Monetary and Financial Institutions Forum.