IMD World Digital Competitiveness

Figure 2: Technology and Gender Inequality Source: World Bank Development Indicators. Data for 2022

digital technologies on closing the gender gap. Such a relationship is, however, difficult to isolate without considering the hidden factors behind the gender gap, such as economic development. Figure 2 below shows, using two sets of World Bank data, that the relationship between access to the internet and gender inequality is weak, at least in developing economies.

On the other hand, it cannot be denied that digital trans formation comes at the expense of natural resources and the environment. A recent paper 8 by Sharma (2022) finds that digital technologies account for 4% of greenhouse gases, and that their energy consumption increases by 9% per year. One challenge for the future is therefore how to continue the trend towards more technology while preserving social and environmental goals.

Digital nations and artificial intelligence: some guidance I It is not our intention to describe numerous applications of AI technology in this report. However, our analysis shows that countries that want to excel in the use of AI need to focus on the following five priorities:

than face-to-face lenders, which points to lesser racial discrimination by AI. However, loan approval requires access to data that is not under the possession of banks (social network activity, location data, purchasing and credit-card history) and which therefore requires regu latory clearance and customer approval. How this data is accessed raises questions about how data can travel across borders and whether data-exporting countries can monetize it. The United Nations Conference on Trade and Development’s (UNCTAD’s) 2021 Digital Economy Report shows that 90% of the market capitalization of digital platforms is either the United States’ or China’s, 10 and calls for a more equitable system of data flows across countries.

1. Data access

There is a dilemma of facilitating access to data on the one hand, and respecting privacy concerns on the other. Think, for example, of the banking industry, where the loan application process can be made not only faster, but also more fair and less prone to errors. In a seminal paper, Bartlett et al. (2022) showed 9 that fintech algo rithms charge minority borrowers 40% less on average

8 Sharma, Pawankumar and Dash, Bibhu, The Digital Carbon Footprint: Threat to An Environmentally Sustainable Future (June 30, 2022). International Journal of Computer Science & Information Technology (IJCSIT) Vol 14, No 3, June 2022, Available at SSRN: https://ssrn. com/abstract=4335349 9 Robert Bartlett, Adair Morse, Richard Stanton, Nancy Wallace (2022), “Consumer-lending discrimination in the FinTech Era,” Journal of Financial Economics, Volume 143, Issue 1, 30-56. 10 UNCTAD Digital Economy Report 2021, accessible at https://unctad.org/system/files/official-document/der2021_en.pdf

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