Digitalization, or the use of digital technology and information to transform business operations1, has the potential to level the playing field for individuals and businesses of all sizes and backgrounds. It provides more equal access to education, remote work, and healthcare, and allows small businesses to compete with larger businesses by reaching customers and talented workers across the globe.
However, inclusiveness is not guaranteed without significant improvements in digital education and training. The job market is shifting toward one that increasingly requires digital skills.
Digitalization is happening in nearly every industry. According to Brookings, the number of occupations that meet the criteria for high digital content has tripled to 23% of employment. More than 32 million workers have jobs that require high digital skills, 66 million have jobs that require moderate digital skills, and 41 million have jobs that require low digital skills.
While the wave of digitalization raises concerns about job replacement and automation, it also offers several advantages for society that have the potential to lessen inequality.
The Problem of Inequality
Inequality is a widespread issue that affects many demographic groups. Income and wealth inequalities are broadly classified as inequality of opportunity and inequality of outcome.
- Inequality of opportunity is the unequal distribution of and access to chances to succeed, no matter who you are or where you come from. Examples include access to education, healthcare, job opportunities, mentoring, and other resources that are necessary for career success.
- Inequality of outcome refers to the unequal distribution of outcomes, such as income, wealth, and other measures of success.2 While income inequality between countries is improving, income inequality within countries is getting worse.3
Inequality is a widespread problem with many examples, but far fewer solutions. Examples include:3,4,5
- Gender and racial pay gaps
- Racial and disability-based discrimination in the labor market
- Racial gaps in access to education
- Racial gaps in access to healthcare
- Disproportionate representation in the criminal justice system
- Occupational sex segregation
- Lack of legal rights
How Is Digitalization Leveling the Playing Field for Disadvantaged Groups?
Digitalization has the potential to reduce inequalities by providing greater access to information, markets, education, and services for everyone, regardless of their physical location or socioeconomic status.
Educational technology has come a long way in the last 20 years, and for the most part, the changes have benefited employees and students. There was a time when voice-over PowerPoint was considered innovative. As the COVID-19 pandemic made remote learning the education standard, technologies improved at a rapid pace.
Teachers today have a wide range of technologies available to engage students.
- Augmented and virtual reality make learning more interactive. Personification and gaming allow learners to step into multiple roles and perspectives by creating real-world simulations. Students can explore history and science in a more engaging way.
- Artificial intelligence (AI) provides almost instant answers to questions. It makes individualized learning in the classroom possible. Students can explore topics tailored to their interests. For example, AI can be used to develop personalized assignments that allow students to learn at their own pace. AI technology can help academically disadvantaged students catch up with their peers. It can also provide real-time feedback and allow students to self-assess their progress.
- Wireless technology and access to the internet enable students and parents to choose whether classroom or online education better meets their needs. Students can collaborate with their peers across the globe, learning about cultures and languages from the comfort of their homes or schools.
- Technology to increase accessibility makes it easier for students with low vision to use the internet, enables students with mobility issues to more easily attend classes, and helps students with speech and language disabilities communicate with their peers.
Financial technology, or FinTech, can improve access and affordability, potentially reducing inequality.
- In areas of the world where gender inequality is high, technology provides flexibility for women to earn an income while managing a household.6
- Mobile banking improves access to banks and other financial institutions, especially for low-income or rural populations.
- When determining loan eligibility, insurance costs, and other decisions that are more subjective, AI and algorithms can be used to make decisions more effectively and objectively. However, they may also inherit the biases of their creators.7
- Digital technologies can reduce costs and complexity, making access easier.
- AI and other technologies can help increase financial literacy. They can provide financial management advice that is far more affordable than traditional in-person advisory services.
- Technology can improve pricing transparency and highlight the risks and advantages of financial services, making it simpler for customers to understand and compare costs, terms, and conditions, as well as compare goods and services.
Telehealth offers easier and more affordable access to healthcare by using telecommunications technology to transmit medical data and information. Telemedicine is a subcategory of telehealth and refers to a patient-doctor consultation that is used to diagnose and treat medical conditions using remote technologies.
Telehealth makes healthcare more accessible and affordable for individuals and families living with mobility issues or in low-income or rural communities to receive healthcare services and address their medical needs without the need to travel. Virtual appointments can reduce burdens on low-income patients as they reduce lost wages and childcare costs for families that do not receive work-related benefits.
According to the 2015 U.S. Transgender Survey, almost 30% of people who took the survey had to travel more than 25 miles to get care related to their transition, and 15% had to travel more than 50 miles. Virtual appointments make it easier to access specialists and culturally competent providers.
Using telemedicine, you meet with a doctor online. Telemedicine online clinics can provide:
- Virtual consultations with a doctor: Online telemedicine visits enable you to consult with a licensed doctor from the comfort of your own home. In many cases, telemedicine clinics provide both scheduled and on-demand appointments.
- Diagnostic services: With the help of cameras, virtual appointments, and laboratory tests, many medical conditions can be diagnosed online. Of course, some limitations exist to what services can be provided remotely. Most telemedicine clinics provide a list of conditions they treat on their websites.
- Online prescriptions: Most telemedicine providers will issue prescriptions in much the same way that a local doctor would. The prescription can be electronically transmitted to a pharmacy for processing and delivery to your home or a local pharmacy to be filled.
Everyone can benefit from the convenience, safety, and cost savings telehealth offers. However, people who live in rural areas and have limited access to primary and preventative care, people with limited access to transportation, or people who lack good insurance benefits typically find that telehealth provides them with better healthcare options at a lower cost.
According to recent Gallup polls, 45% of full-time U.S. employees work from home. About half divide their time between their home and office, and the other half work entirely from home.8
Internet access and other technologies help people work effectively from home, which expands the employment options available for people with disabilities or who live in locations where access to well-paying jobs is limited.
Remote work has many advantages, including:
- Saving time and money by not commuting
- Job flexibility which may improve work-life balance
- Cost savings for employers
- Higher efficiency with fewer interruptions throughout the workday
- Reduced absenteeism
- Better employee morale and work performance
Digitalization has given rise to new ways of connecting with others. Facebook and LinkedIn are good examples of networking channels that expand job opportunities, especially for people living in more remote areas. Occupational sex segregation and discrimination in the job market can be lessened if everyone has more equal access to communication platforms and salaries and benefits are more openly shared.
How Is Technology Challenging Equality?
While digitalization has its benefits, it also has the potential to increase the digital divide. Access to telehealth, online education, finances, and remote work requires access to the internet and technological literacy. People who live in rural areas, identify as racial or ethnic minorities, or have low incomes are more likely to have trouble accessing telehealth and other online technologies. Older adults and people with limited health literacy and English proficiency are also at a disadvantage.9
Technology is likely to open up new career options, but these will require a medium-to-high level of technical skills. As robotics and AI have improved, more types of jobs are now at risk of being done by machines. Writers, teachers, computer programmers, paralegals, customer service representatives, and instructional designers all see the possibility of being replaced by AI.
Automation is a threat to equality. It increases the possibility of job displacement, especially for low-skilled workers who are unable to qualify for careers requiring computer science and technical skills. Fast-food workers, translators, personal financial advisors, surgeons, truck drivers, warehouse workers, and laborers are examples of workers at risk for job displacement.10
Automation can also make certain skills and jobs less valuable, which results in a decrease in the demand for these skills and a decrease in wages for people who have them.
Digitalization provides better access to information, but it has also enabled the spread of misinformation. The damage that false or misleading information can cause was demonstrated by the COVID-19 pandemic. Technology can also be used to amplify the voices of people who wish to perpetuate disinformation, bias, and discriminatory beliefs.
Technology is a tool, and, like all tools, it can be used for benefit or harm. While technology can provide marginalized populations with better access to information, it can also increase the digital divide, widening the income and wealth gap between those with technological literacy and access to the internet and those without.
- Digitization, digitalization, digital and transformation: the differences. i-SCOOP. Published February 2, 2017. Accessed January 25, 2023. https://www.i-scoop.eu/digital-transformation/digitization-digitalization-digital-transformation-disruption/
- Lefranc, A., Pistolesi, N. and Trannoy, A. (2008), Inequality Of Opportunities Vs. Inequality Of Outcomes: Are Western Societies All Alike?. Review of Income and Wealth, 54: 513-546. https://doi.org/10.1111/j.1475-4991.2008.00289.x
- United Nations. Inequality – Bridging the Divide | United Nations. Accessed January 25, 2023. https://www.un.org/en/un75/inequality-bridging-divide
- 20 facts about U.s. inequality that everyone should know – Stanford center on poverty and inequality. Stanford.edu. Accessed January 25, 2023.
- Schaeffer K. 6 facts about economic inequality in the U.S. Pew Research Center. Published February 7, 2020. Accessed January 25, 2023. https://www.pewresearch.org/fact-tank/2020/02/07/6-facts-about-economic-inequality-in-the-u-s/
- Madgavkar A, Ellingrud K, Krishnan M. How can digital technology speed up gender equality? Mckinsey.com. Published August 14, 2018. Accessed January 25, 2023. https://www.mckinsey.com
- Fintech Futures. Can financial technology help reduce inequality? FinTech Futures. Published October 2, 2020. Accessed January 25, 2023. https://www.fintechfutures.com/2020/10/can-financial-technology-help-reduce-inequality/
- Saad L, Wigert B. Remote Work Persisting and Trending Permanent. Gallup. Published October 13, 2021. Accessed January 25, 2023. https://news.gallup.com/poll/355907/remote-work-persisting-trending-permanent.aspx
- Nouri S, Khoong E, Lyles C, Karliner L. (2020). Addressing Equity in Telemedicine for Chronic Disease Management During the Covid-19 Pandemic. NEJM catalyst. Accessed January 25, 2012. https://catalyst.nejm.org/doi/full/10.1056/CAT.20.0123
- Handel, Michael J. Growth trends for selected occupations considered at risk from automation. Bls.gov. Published July 13, 2022. Accessed January 25, 2023. https://www.bls.gov/opub/mlr/2022/article/growth-trends-for-selected-occupations-considered-at-risk-from-automation.htm