Firms’ Digitalization during the COVID-19 Pandemic
The COVID-19 pandemic accelerated the digital transformation of businesses. Using a unique global panel dataset, this paper documents the patterns of digital adoption during the pandemic across firms in 57 (mostly developing) countries. The data show the tale of two stories. On one hand, the pandemic drove firms to increase the use of digital platforms and invest in digital solutions. On the other hand, there is evidence that the digital divide increased. There remain substantial gaps between small and large firms as well as across sectors, particularly for new investments in digital solutions. Firms that did not use any digital platform or channel before the pandemic, also lagged in their response to the pandemic, increasing the gap with those that were more digitally ready. Moreover, although the share of online sales across firms for all size groups increased, there is a growing concentration of online sales among top firms. The paper discusses some of the factors associated with this increase in the digital divide and find that changes in digitalization remain even after mobility restrictions have eased. The analysis suggests that the pandemic has accelerated digitalization, but some firms disproportionately benefited from the digital transformation, potentially increasing the digital divide.
| Main Authors: | , , , , , , |
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| Format: | Working Paper biblioteca |
| Language: | English English |
| Published: |
World Bank, Washington, DC
2023-02-15T20:02:45Z
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| Subjects: | CORONAVIRUS, COVID-19, FIRM-LEVEL INNOVATION, DIGITALIZATION, DIGITAL DIVIDE, INNOVATION AND TECHNOLOGY POLICY, DIGITAL ADOPTION IN DEVELOPING COUNTRIES, MOBIITY RESTRICTIONS AND DIGITALIZATION, |
| Online Access: | http://documents.worldbank.org/curated/en/099906201252336913/IDU003954df4097d60473d0b65906fce19f25ce6 https://worldbank7-prod.atmire.com/handle/10986/39442 |
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| Summary: | The COVID-19 pandemic accelerated the
digital transformation of businesses. Using a unique global
panel dataset, this paper documents the patterns of digital
adoption during the pandemic across firms in 57 (mostly
developing) countries. The data show the tale of two
stories. On one hand, the pandemic drove firms to increase
the use of digital platforms and invest in digital
solutions. On the other hand, there is evidence that the
digital divide increased. There remain substantial gaps
between small and large firms as well as across sectors,
particularly for new investments in digital solutions. Firms
that did not use any digital platform or channel before the
pandemic, also lagged in their response to the pandemic,
increasing the gap with those that were more digitally
ready. Moreover, although the share of online sales across
firms for all size groups increased, there is a growing
concentration of online sales among top firms. The paper
discusses some of the factors associated with this increase
in the digital divide and find that changes in
digitalization remain even after mobility restrictions have
eased. The analysis suggests that the pandemic has
accelerated digitalization, but some firms
disproportionately benefited from the digital
transformation, potentially increasing the digital divide. |
|---|