By Dr. Gyan Pathak
Drivers of digital transformation have been shifting globally over time. Insights from 99 economies of the world now suggest that the world, especially those seeking to accelerate digital transformation must invest not only in connectivity but also in human capital, effective institutions, and inclusive strategies.
An Asian Development Bank (ADB) brief just released found that during the early breakaway phase (2010–2015), infrastructure and economic development played dominant roles. In the catch-up phase (2016–2021), institutional quality and digital skills became the most significant drivers. These findings carry important implications for development policy.
Digital technologies have spread rapidly, transforming economies and societies in unprecedented ways, the brief said. Yet this transformation has not occurred evenly, it warned. Between 2010 and 2015, a small group of economies surged ahead in digital adoption, forming a breakaway lead pack. From 2016 to 2021, a broader group began catching up, yet the important divides remain. Over the past 30 years, digital technologies—especially the internet—have rapidly reshaped societies around the world. Unlike earlier innovations such as electricity or the telephone, which took decades to reach a broad user base, digital technologies have spread at unprecedented speed.
Nevertheless, there are persistent gaps—commonly referred to as the “digital divide”. They are shaped by a variety of factors. Within economies, differences in income, education, and digital literacy help explain who gains access and who does not. Across regions, infrastructure and skills are typically stronger in cities than in rural or remote areas. At the national level, disparities in access and affordability reflect broader differences in economic development and policy support.
Despite the swift global uptake in mobile phone and internet usage, large gaps remain. According to the International Telecommunication Union, nearly 2.6 billion people—about one-third of the global population—still do not have internet access. This divide plays out not only in personal use but also in how businesses, governments, and civic institutions adopt and rely on digital infrastructure.
Digitalization itself can be understood both as a process (the rollout and use of digital tools) and an outcome (how deeply digital tech is embedded in society and the economy). As more economies integrate these technologies, the digital divide becomes more visible and urgent—not only among nations, but also within them.
Data from 2010 to 2021 paints a striking picture. In 2010, internet use averaged just over 33% globally, with most economies falling below that line. Only a few stood out as early leaders with usage above 75%. By 2021, the average had jumped to nearly 70%, and a majority of economies had moved well past the 75% threshold. As a result, low-performing economies today are in a stark minority—and their lag is especially worrisome.
A pivotal moment came in 2015: for the first time, the typical economy (measured by median internet use) exceeded the global average. This marked a shift from digitalization being the domain of a few pioneers to becoming the global norm. The big question now is whether this turning point also helped close the digital gap—or if some economies are still at risk of being left behind.
Over the past 3 decades, digital technologies have reshaped how economies operate, governments function, and individuals connect. The internet, mobile phones, and digital platforms have penetrated societies at a pace unmatched by earlier technological revolutions. Yet, despite the speed of this digital proliferation, adoption levels vary significantly across economies. By 2021, global internet usage had reached nearly 70%. However, this average conceals stark differences. Some economies surpassed 75% penetration as early as 2015, while others lagged far behind even in 2021.
The study finds that in both the phases of digital transformation – Breakaway Phase (2010-2015) and the Catch-up Phase (2016-2021) – though the drivers dramatically shifted, there were also some Time-Stable drivers. Urbanization continued to play a vital role, providing favorable environments for infrastructure deployment and technology uptake due to population density and service centralization. Regardless of the phase, capable and responsive governments provided the institutional bedrock for rolling out digital initiatives and ensuring their uptake among the population.
Nevertheless, Dynamic Shifts in Drivers over times, have offered pressing challenge shifted from building access to enabling meaningful use. The study concluded, “Whereas infrastructure and GDP mattered most early on, today it is human capital and institutional strength that shape success. Effective digital strategies must therefore be adaptive, forward-looking, and inclusive.”
“Policymakers must now look beyond access and focus on capability. Sequencing matters: infrastructure enables access, but skills enable use, and institutions sustain impact. Economies that align their digital transformation agendas with broader governance and equity goals will be best positioned to thrive in the digital age,” the study concluded. (IPA Service)
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