Half of the world is now officially online, but several thorny new problems now threaten the digital economy

Tim Berners-Lee

About half of the world's population is now online, the World Economic Forum said in a new report.
But the transformation to a digital economy and society faces some big challenges, the forum said.
Among the biggest are that the pace of internet adoption is slowing markedly and trust in the digital economy is waning.

The internet has reached a major milestone — half of the world's population is now online.

The digital transformation of economies and society continues apace and promises a range of benefits, from better health to reduced inequality to greater access to information, the World Economic Forum said in a new report issued Sunday night. But as the digital era takes hold, policymakers, businesses and citizens are facing some profound anc difficult-to-solve problems, the forum noted in the report.

Internet adoption is slowing, which threatens to leave billions on the wrong side of the digital divide, possibly even permanently, the report warned. With cyberattacks up and trust in tech companies down, more than half of people around the globe think technology's downsides outweigh its benefits. And both the public and private sectors are struggling to keep up with the pace of digital change and set rules that benefit everyone.

"While recognizing that digital developments fuel many opportunities in political, commercial, and social spheres, a key point of this paper is the need to focus on inclusion and addressing digital divides," said Lynn St. Amour, who helped put together the report as the co-chairperson of the forum's Shaping the Future of Digital Economy and Society committee.

The committee brought together people from governments, corporations, and non-profit organizations around the world who worked together for 18 months to produce the report, entitled "Our Shared Digital Future
Building an Inclusive, Trustworthy and Sustainable Digital Society." Among the participants in the working group were World Wide Web creator Tim Berners-Lee, former Vice President Al Gore, and Booking.com CEO Gillian Tans.

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Internet adoption has slowed markedly

Perhaps the biggest problem facing policymakers amid the digital transformation is the slowdown in internet adoption, the report said. Being able to go online is essential to being able to take part in the digital economy and world.

While the number of internet users worldwide grew by 17% in 2007, it's only expected to increase by 5.5% this year, the forum reported, citing data from the International Telecommunications Union. And the 50% adoption rate worldwide masks wide differences in adoption rates around the globe. Only 44% of people in the Asia-Pacific region are online and just 22% in Africa, according to ITU data.

"Digital connectivity is foundational to meaningful social and economic participation of individuals and countries in the 21st century," the forum's working group said in the report. "Unequal access to the internet increasingly means unequal access to opportunities, jobs or ability to deal with unexpected events."

The forum recommended that governments and multilateral organizations invest in widening access to the internet and in removing barriers to adoption.

Trust is waning in the digital economy

Another thing holding back the digital transformation are cyberattacks. Some 74% of businesses will be hacked this year and hacking attacks cost the world economy some $400 billion each year, according to the report.

And the problem is worsening. In just the first half of this year, cyberattacks compromised 4.5 billion records, which was up from 2.7 billion in all of last year.

"Digital connectivity plays a pivotal role in unlocking innovation and prosperity around the world," the working group said in the report. But, it continued: "the increasing number of cyber-risks presents a major obstacle to our continued and collective path to progress."

The forum called on governments and businesses to prioritize cybersecurity and to work together to reduce risks.

Amid all the cyberattacks and other problems, confidence in the digital economy is ebbing, according to the report. Just 45% of people around the world think that the benefits of the digital economy outweigh the drawbacks, the forum group said, citing data from marketing firm Dentsu Aegis.

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