People in different regions of a country living below the standard living style are generally considered impoverished. Most underdeveloped countries and developing countries have impoverished regions in the rural areas of their countries.
In such places, many of the population need help running their business. Thus, they can earn less and level up their living standards. Where the industrialized areas of the country develop, they remain in the same difficult situation.
However, introducing technology and using digital platforms can change their local economy. Imagine the local farmers selling their produce online and generating more revenue. Or, the creative crafters are selling their handmade jewellery online and growing the business to the sky limit. So, let’s understand how efficiently utilizing technology and digital platforms for economic development in impoverished regions is.
Current Challenges in Impoverished Regions
Impoverished regions face many challenges in establishing solvent businesses and bringing benefits to their economy. Some of the critical challenges are
Lack of access to traditional financial services
People often face difficulties getting a loan to start their business. They also feel unsafe and refrain from saving money for the bank and participating in investments. Therefore, they do not participate in economic growth activities.
Limited infrastructure for business development
Poor infrastructure, like harsh roads, inadequate electricity, and weak communication, make it hard for businesses to grow. These problems slow down work and make it challenging for local companies to compete.
Low levels of digital literacy and access to technology
In impoverished areas, the availability of digital literacy could be much higher. Therefore, entrepreneurs can’t educate themselves enough to take part in digital and online activities to grow their businesses exponentially.
Insufficient skill training
As digital literacy lags, they need the opportunity to get enough skill training for online operations. As a result, even if they start digitalizing their business, they can’t keep expanding.
Unstable political environment
Political chaos can confuse other countries when investing in businesses. It messes up how businesses run, making it challenging for the economy to improve in poor areas. This worsens poverty and makes things hard to improve in the long run.
Lack of market
In impoverished regions, the linkage between the market and business is challenging. The lack of transportation and communication connections is common. Companies need help to reach broader markets in such a situation. Besides, it hampers economic opportunities and growth potential for local enterprises.
Environmental degradation
Poor environmental management practices can have detrimental effects on natural resources. It reduces agricultural yields and water scarcity and increases climate-related disasters. Later on, it impacts economic sustainability.
The Role of Technology in Economic Development
Technology and digital platforms can create a significant impact on economic development. There are many aspects technology can stimulate. Some of them are –
Income Growth
Technology helps entrepreneurs create digital stores without opening a physical shop at the beginning. It also allows stores to store inventory in their own house and sell through online orders and deliveries. Thus, it promotes income growth. For example, in 2019, 832 impoverished countries became able to succeed in online retail, reaching the amount of $15.7 billion.
Ways To Display Product or Service Online
With the help of e-commerce, digital stores, social media, online ads, and other digital platforms, businesses can display their products and promote their services online. Thus, they reach more targeted people beyond the geographical margins and do business globally.
Employment Opportunities
Undoubtedly, the digitalization of business increases income and expands it. Once those businesses grow more significant, they need more workers. As a result, different levels of employment opportunities increase.One can get online jobs if they have the required skills besides physical jobs. Thereby, unemployment issues are eradicated, and poverty decreases in the region.
Learning Facilities
When several businesses adopt digital solutions, other companies in that area also join and embrace the new idea. Therefore, people feel the need to get digital literacy and primary education. By getting training from professionals in the field, other people can benefit from the learning.
Financial Stability
Technology and digital platforms contribute a lot to a country’s financial stability. Different mobile banking services, online financial databases, online calculation, and digital sending and receiving of financial statements make the work easy for financial institutions and the general public. It promotes clarity over financial transactions and statements. Thus, the public feels safe to save or invest money with the financial entities and add a lot to the local economy.
Conclusion
There is immense potential for technology and digital platforms to boost economic development in poorer areas. These tools can significantly improve lives and make the economy stronger. It’s time for governments, non-profit organisations (NGOs), and private businesses to step up. They need to make technology a priority for developing the economy. By working together, they can create initiatives that use technology to bring positive changes.
