News Flash: Digital IDs Could Fuel Economic Growth
Research suggests wider use of digital identification could lift GDP by up to 13%
The extension of digital identification “to a large part of the population could unlock economic value” equivalent to between 3% to 13% of GDP by 2030, according to a study of seven countries by the McKinsey Global Institute. The study focused on Brazil, China, Ethiopia, India, Nigeria, the United Kingdom, and the United States.
A report by the Thomson Reuters Foundation said McKinsey researchers considered how digital IDs can give people greater access to financial services, prevent identity fraud and reduce the time needed to vote or register a business, thereby benefitting the economy. More than one billion people globally have no way of proving their identity, while a further 3.4 billion people can’t use their existing identification to securely prove their identity online, according to the report.
“Digital signing alone saves every working Estonian at least an estimated five business days every year, amounting to a total efficiency gain of 2% of GDP annually,” said Estonia’s Prime Minister Juri Ratasm at the World Economic Forum in Davos, Switzerland, where the study was launched. “As they say, time is money,” he added, according to the Reuters report.
But the McKinsey report warned that poorly designed digital ID systems could be abused by governments and private companies. “History provides ugly examples of misuse of traditional identification programs, including to track or persecute ethnic or religious groups,” the authors wrote.
For more information, please see the Reuters report.Back