Responsible technology: How can companies and investors drive digital inclusion and economic growth?

But the benefits of digital inclusion are not only about sustainable development and positive societal impact. Studies have shown that an increase in mobile network, internet and fixed broadband penetration can lead to GDP growth – with an even more significant impact in low- and middle-income countries.^{4  5}

The International Monetary Fund also demonstrates that digital financial inclusion is correlated to GDP growth – an increase in digital financial inclusion in payments from the 25th percentile to the 75th percentile is associated with an increase in average economic growth of up to 2.2ppt. ⁶

Studies in developing countries have also demonstrated significant positive effects of digital inclusion in labour markets, democracy, education, financial inclusion, poverty reduction, public service delivery and health. ⁷ And there is a clear correlation between healthy, educated, prosperous communities and economic growth.

How investors can help

We believe that providing capital to companies and governments that aim to address digital inclusion is a way to potentially combine seeking financial outcomes with a positive societal impact. This could span sectors as diverse as financial services companies that are facilitating access to banking for underserved customers; telecommunications companies that connect homes in rural areas; and companies within the digital payments space that enable businesses to grow and entrepreneurs to flourish.

Responsible investors can also direct their capital towards companies and governments with good practices around digital inclusion. The World Benchmarking Alliance’s Digital Inclusion Benchmark (DIB) sets out good practice on material issues:

• Access and affordability: Setting up initiatives and having quantifiable objectives for universal and affordable access to digital technologies. This could mean targeting people and areas for which it is the most needed, or establishing discounted prices for low-income households
• Quality of access: Striving to deliver equal quality of access to digital technologies
• Digital skills: Establishing programmes to advance at least basic digital skills development
• Gender digital gap: Putting in place initiatives and programmes dedicated to resolving gender disparities, both in terms of improved access to digital technology and removing barriers that can keep women away from digital opportunities and careers.⁸

We conducted an analysis of companies’ scores in the 2021 DIB to understand how ICT firms deliver on these practices. We focused on the ‘access’ and ‘skills’ indicators of the DIB, as these take access, affordability, quality of access, gender and digital skills issues into consideration.⁹

The data suggests that most ICT companies are still lagging in their digital inclusion initiatives, despite some improvements compared to data from previous years. There are clear issues where investors can challenge companies and ask them to better disclose and deliver around digital inclusion – for example only 53% of assessed companies had initiatives to enhance access to digital technology and digital initiatives dedicated to women and girls.

We believe that investors have a significant role to play in driving digital inclusion, with potential opportunities to direct more capital towards companies – or governments via the bond market – that are making strides in areas from infrastructure to education to digital banking services and more. Ultimately, a more connected, digital world should equate to more sustainable economic growth – potentially creating the scope for greater returns for investors as well as the prosperity sought by the United Nations SDGs.