Digital transformation presents policy makers everywhere with challenges that transcend borders. While the transformation was underway before COVID-19, the pandemic significantly accelerated it around the world. Seizing the opportunities of the accelerating digital transformation, while better managing the associated and growing risks, challenges and disruptions requires a strong evidence base, leadership by public administrations, and extensive international co-operation and global engagement. Countries are increasingly looking to international institutions as sources of advice and forums to debate and design policy frameworks for the digital age. These must draw on the best practices of countries furthest ahead in their digital transformation journeys, while considering the divergent realities in countries less prepared to benefit from digital technology.

The annual Development Co-operation Report brings new evidence, analysis and ideas on sustainable development to members of the OECD Development Assistance Committee (DAC) and the international community more broadly. The objectives are to promote best practices and innovation in development co‑operation, and to inform and shape policy and behaviour to realise the Sustainable Development Goals and better lives for all. Each year, the report analyses a policy issue that is timely, relevant or challenging for development co-operation and finance. It also includes annual data covering at-a-glance over 90 providers of development co-operation, including members of the OECD DAC, other countries and philanthropic foundations.

Digitalisation is a lifeline for those lucky enough to have the Internet during the COVID-19 pandemic. It improved access to social protection payments, health care, jobs and education. At the same time, the COVID-19 crisis highlighted our dependence on the digital world. It exposed the vulnerability of countries falling behind in digital infrastructure, affordability, use, skills and innovation. As many as 2.9 billion people around the world – especially women and girls – are missing out on the benefits of digital transformation.  

This reader’s guide presents a glossary of key terms related to digital transformation. This glossary is not exhaustive but is intended to provide definitions for the terms that appear commonly throughout this report.

Fast-paced digital transformation is a strategic opportunity to accelerate progress towards development goals. Between 2019 and 2021, 800 million people came online for the first time – a historical jump driven by the need to work, learn and communicate during the COVID-19 pandemic lockdowns. Universal Internet coverage is a standalone target in the Sustainable Development Goals (SDGs), but the transformative power of digital technology is that it offers a gateway to job opportunities, improved government services and enhanced citizen engagement, and widens the global digital economy to include more people.

Digital transformation is taking place around the world at different speeds, in countries with vastly different levels of resources, regulation and public engagement. This overview, enriched by evidence and insights from across the report, highlights that digital realities in developing countries require bespoke responses. Gathering evidence from countries at different stages of digital transformation, this chapter presents success factors for building inclusive digital ecosystems. It calls for global co-operation to tackle universal risks and lays out a development co-operation framework to power an inclusive digital future.

General point: unless otherwise stated, and with the exception of data on official development assistance (ODA) allocation by sector, and ODA supporting gender equality and environment objectives (whose figures refer to commitments), all figures in the profiles refer to gross bilateral disbursements. The term DAC country average refers to weighted averages of Development Assistance Committee (DAC) countries for the specific allocation. Allocations by the European Union institutions are excluded from this calculation. All of the data presented in the profiles is publicly available at: www.oecd.org/dac/financing-sustainable-development and effectivecooperation.org.