Bhaskar Chakravorti started his career as a game theorist “solving mathematical puzzles on obscure topics of no use to anyone except other game theorists,” he said. Now dean of global business at The Fletcher School and founding executive director of the Institute for Business in the Global Context (IBGC), he spearheads research on the digital economy.
Created 50 years ago with the dawn of the Internet, the digital economy encompasses hardware and infrastructure, browsers and apps, and services and solutions extending to all aspects of life—from work and education to entertainment, dating and even funeral services, he noted. Through interdisciplinary research initiatives such as IBCG’s Digital Planet, which Chakravorti established soon after arriving at Fletcher in 2011, and its offshoot, Imagining a Digital Economy for All (IDEA 2030), he and his colleagues are exploring how access to digital technologies is shaping lives and livelihoods across the world and what happens to those who are left behind.
The evidence-based work draws on a network of proprietary and public data sources and partner organizations and investigators. Researchers track several hundred different global indicators and regularly issue a Digital Intelligence Index that tracks digital progress across 125 economies. This year they are quantifying the economic and environmental impact of that progress as well.
Among the topics that Chakravorti and his colleagues are examining:
Lockdown Lessons
The COVID-19 pandemic created a living laboratory to study digital transformation. When the world went into lockdown in March 2020, IDEA 2030, which had originally focused on how digital technology might align with sustainable global development targets, pivoted to examine the impact of digital technologies in the global emergency. “It was the biggest experiment of our lives,” said Chakravorti.
The breadth of research partners made it possible to drill into subjects as varied as the pandemic’s impact on children’s education across over 600 of India’s school districts, changing public opinion through the lockdown as reflected in social media across countries as varied as South Korea and the UK, and youth employment through digital means in sub-Saharan Africa. Research showed that the pandemic accelerated the digitalization of daily life worldwide, helping people work, learn, buy and sell, and socialize. By and large the Internet and associated infrastructure proved up to the challenge.
But digitalization was no silver bullet. A significant blind spot was the failure of many governments to act in ways that fostered citizens’ trust in their policies, the researchers found. Inequities in digital resources, typically linked to differences in wealth or education, remained or even increased. In the U.S., Digital Planet’s research was influential in allocating funds for broadband access as part of the Biden administration’s Inflation Reduction Act.
Post-pandemic, Chakravorti’s team is examining ongoing changes in the workplace, classroom, and home and the degree to which changes will “stick” in the future.
AI: Advancement or Apocalypse?
Public awareness of artificial intelligence exploded in late 2022, said Chakravorti, with the U.S. far and away the leader in key AI drivers such as innovation and capital investment, followed by China. And with AI development centered in only six companies, all of them based in the U.S., decision-making is highly centralized.
AI offers big rewards, but research shows it also poses big concerns, what Chakravorti calls the 12 horsemen of the AI Apocalypse. They’re as varied as AI-aided disinformation, possible bias and questionable ethics among the small group of developers, and negative impacts on water supply and air quality.
In fact, 48% of the most optimistic AI experts surveyed say that there’s a 5% chance that AI could bring consequences as disastrous as extinction of humankind. “Would you get on a plane if experts said there’s a 5% chance of it falling out of the sky?” asked Chakravorti. “I wouldn’t.”
To address this trust gap, AI developers, policymakers, and others in the digital community need to move quickly to address risks and create guardrails not unlike those that regulate drugs. “AI is happening as we speak, and decision makers in Washington have already missed the boat on timely AI regulation,” Chakravorti said.
The Costs of Cash
Money has lagged many other information-based products and services when it comes to digitization. People with lower incomes tend to do their business in cash, because they don’t have access to banks or other mainstream financial services. Digital Planet’s research was among the earliest to point out that reliance on cash has a significant cost for people with low incomes, who have to pay for check cashing or other expensive services to access or transfer money.
Cash also has a cost to society because cash payments often escape the tax system, resulting in significant lost revenue that could fund public services. Chakravorti said that a broadly accessible digital payment system could have an enormous positive impact on equity and inclusion.
Chakravorti’s research team is studying India’s transition from a payment system that was almost 90% cash-based pre-pandemic to the world’s biggest digital payment economy today. Of particular interest is India’s associated development of an underlying digital public infrastructure that could be a pathway to digitizing numerous public services as well as payments, from health care to education to giving every citizen a means to uniquely identify themselves. This “could be invaluable in future crises as well as providing a model for positive international development,” Chakravorti said.
