Sector News

Digital identification: A key to inclusive growth

May 1, 2019
Borderless Future

Digital identification, or “digital ID,” can be authenticated unambiguously through a digital channel, unlocking access to banking, government benefits, education, and many other critical services.

The risks and potential for misuse of digital ID are real and deserve careful attention. When well-designed, digital ID not only enables civic and social empowerment, but also makes possible real and inclusive economic gains—a less well understood aspect of the technology. In this research, we develop a framework to understand the potential economic impact of digital ID, informed by an analysis of nearly 100 ways in which digital ID can be used in Brazil, China, Ethiopia, India, Nigeria, the United Kingdom, and the United States.

In our seven focus countries, extending full digital ID coverage could unlock economic value equivalent to 3 to 13 percent of GDP in 2030, with just over half of the potential economic value potentially accruing to individuals. Realizing this value is by no means certain or automatic—it necessitates multiple high-value use cases and high levels of usage—and not all of these potential sources of economic value may translate into GDP. Yet, with careful system design and policies to promote uptake and mitigate risks, digital ID could be a powerful key to inclusive growth, offering quantifiable economic value to individuals, beyond significant noneconomic benefits.

> Read the full article on the McKinsey website

By Olivia White, Anu Madgavkar, James Manyika, Deepa Mahajan, Jacques Bughin, Mike McCarthy, and Owen Sperling

Source: McKinsey

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