Technology in the Developing World: Challenges and Progress

Technology is reshaping economies across the globe, but for developing countries, the journey looks very different. While wealthier nations build on decades of digital infrastructure, many lower-income nations are leapfrogging entire stages of development – going straight from no landlines to smartphones, from unbanked populations to mobile money. This shift is not always smooth, and it comes with a unique set of challenges. But the progress made so far shows that when the right conditions align, technology can be a powerful force for economic and social transformation in the developing world.

The current state of technology in developing countries 🔗

Developing countries are not passive bystanders in the global technology revolution. Over the past two decades, they have adopted and adapted technologies in mobile communications, information technology, biotechnology, and digital finance at a remarkable pace. According to the World Bank’s Global Findex 2025 report, nearly 80% of adults worldwide now have a financial account, up from 50% in 2011 , and much of that growth has come from low- and middle-income countries. The WIPO Global Innovation Index 2025 notes that while technology adoption expanded across all indicators in 2024, every metric fell short of its long-term growth trend – a signal that adoption momentum is slowing even as the underlying technologies improve .

Mobile phones have been the single most transformative technology for developing nations. Globally, 86% of adults now own a mobile phone, with 68% owning smartphones, according to the Global Findex Digital Connectivity Tracker 2025 . In regions like East Asia and the Pacific, smartphone ownership stands at 86% of adults. But the picture varies greatly: in parts of Sub-Saharan Africa and South Asia, access to digital tools remains limited by affordability, connectivity, and energy supply.

Mobile communications as the great equaliser 🔗

Mobile banking is not the first technology that has helped countries skip stages of development. Cell phones had a similar effect in sub-Saharan Africa in the 2000s, allowing countries to bypass the landline telephone phase and rapidly bring modern communication to citizens . Today, this leapfrogging extends to financial services, healthcare delivery, and agricultural information systems. The foundation built by mobile networks is now enabling far more sophisticated digital services.

Biotechnology and agricultural innovation 🔗

Beyond mobile technology, biotechnology is playing a growing role in developing economies. Countries like India and Brazil have adopted genetically modified crops, improved seed varieties, and data-driven agricultural practices to boost food security. Information technology is also enabling precision farming, allowing small-scale farmers to make better decisions about planting, irrigation, and market pricing. These technologies, while not yet universally accessible, have shown clear gains in productivity and rural incomes where they have been deployed.

Case studies of successful technology integration 🔗

Two case studies stand out as examples of how technology, when adapted to local conditions, can drive inclusive growth: India’s E-Choupal initiative and Africa’s mobile banking revolution.

India’s E-Choupal: empowering farmers through the internet 🔗

ITC Limited launched E-Choupal in the year 2000, placing internet-connected computers in rural villages to serve as both a social gathering place and an e-commerce hub . The word “choupal” means gathering place in Hindi, and the initiative transformed these traditional meeting points into digital gateways. Farmers use this infrastructure to access real-time information on weather conditions, crop best practices, international market prices, and other data critical to their livelihood .

The programme now operates around 6,100 kiosks across 35,000 villages in 10 Indian states, reaching approximately 4 million farmers . Before E-Choupal, farmers had to travel to government-regulated marketplaces called mandis, where intermediaries often controlled pricing and information. Since the introduction of E-Choupal, farmers have seen rising income levels due to improved yields, better output quality, and lower transaction costs .

The incremental income gain from a more efficient marketing process is roughly US$6 per ton – about a 2.5% improvement over the traditional mandi system . While that may seem modest, for small and marginal farmers operating on thin margins, it makes a meaningful difference. ITC has since expanded E-Choupal’s scope beyond agriculture to include healthcare, education, and financial services , demonstrating how a single digital platform can become a springboard for broader rural development.

The success of E-Choupal offers a critical lesson: technology works best when it is embedded in local social structures and designed to solve specific, tangible problems. The initiative did not simply drop computers into villages – it trained local farmers, called sanchalaks, to manage the kiosks, creating community ownership and trust in the system.

M-Pesa and mobile banking in Africa 🔗

Africa’s mobile banking story is arguably the most celebrated example of technology leapfrogging in the developing world. Mobile banking in Africa began as a simple facility for transferring airtime between accounts, but quickly evolved into an alternative money transfer system in countries that lacked well-developed banking networks .

Kenya’s M-Pesa, operated by Safaricom, now serves 19 million users who send the equivalent of roughly US$150 million per day . The impact on financial inclusion has been dramatic. By 2021, 84% of Kenyans had access to financial services, compared to just 26% in 2006 . Kenya’s financial account ownership rate is more than double that of other sub-Saharan African countries .

The World Bank reports that in 2024, 40% of adults in developing economies saved in a financial account – a 16-percentage-point increase since 2021 and the fastest rise in over a decade . Mobile-phone technology was a key driver, with 10% of adults in developing economies now using a mobile-money account to save, a 5-percentage-point jump from 2021 . In Sub-Saharan Africa specifically, formal savings grew by 12 percentage points to reach 35% of adults.

The broader effects extend beyond savings. Research from Harvard Kennedy School found that M-Pesa users were able to handle major income shocks – such as crop failure or job loss – without reducing household spending, primarily by receiving support from family and friends via mobile transfers . Non-users, by contrast, had to cut spending by an average of 7% in similar situations. Mobile banking has also helped narrow the gender gap in account ownership – women’s account ownership in low- and middle-income countries nearly doubled, from 37% in 2011 to 73% in 2024 .

Overcoming challenges for broader adoption 🔗

Despite these successes, significant barriers still limit how widely technology can be adopted across the developing world. Understanding these challenges is essential for designing effective strategies to overcome them.

Infrastructure gaps 🔗

Without robust digital infrastructure, developing economies risk being excluded from technological advancements reshaping global trade . Reliable electricity, internet connectivity, and data centres are foundational requirements for any digital ecosystem. Many rural areas in Sub-Saharan Africa, South Asia, and parts of Latin America still lack consistent power supply, making even basic internet access unreliable.

The absence of local data centres in many developing countries means increased reliance on foreign entities, raising concerns about data sovereignty, cybersecurity, and cost inefficiencies . A practical approach to this problem is shared digital infrastructure (SDI) – a cooperative model where groups of countries pool resources to develop regional data hubs and cloud storage that serve multiple nations . Regional bodies like ASEAN, the African Union, and CARICOM are already exploring such partnerships.

Economic disparities and the digital divide 🔗

The gap between those who can access technology and those who cannot remains wide. The WIPO Global Innovation Index 2025 notes that while health and infrastructure progress continues, persistent gaps in lower-income economies remain a headwind . High costs of devices, data plans, and digital services put many tools out of reach for the poorest populations. The world’s 44 least developed countries, home to an estimated 1.4 billion people, account for less than 1% of global merchandise trade – a gap that digital exclusion only widens.

Digital literacy is another barrier. Having access to a device does not automatically translate to productive use. Research published in the journal Sustainability found that basic information systems remain the primary form of technology adopted by small businesses in developing countries, with advanced technologies like cloud computing and AI being far less common . Training programmes, multilingual interfaces, and locally relevant content are all needed to make technology genuinely useful.

Regulatory and policy environments 🔗

The regulatory climate plays a crucial role in technology adoption. Kenya’s flexible regulatory environment was instrumental in M-Pesa’s success, creating space for innovation while maintaining consumer protection . In contrast, other African countries have faced challenges from rigid regulations, poor cybersecurity infrastructure, and limited digital literacy – all of which slow the expansion of mobile financial services .

According to the World Bank, implementing paperless customs and single-window trade systems has been shown to cut clearance times by up to 50% , reducing the bureaucracy that stifles commerce. Governments that invest in digital public infrastructure – from electronic identity systems to interoperable payment networks – create conditions where private-sector innovation can flourish.

Strategies for sustainable technological growth 🔗

Addressing these barriers requires a multi-pronged approach that goes beyond simply distributing hardware or building cell towers.

Invest in foundational digital public infrastructure 🔗

Countries like India have demonstrated the impact of building digital public goods. Systems like Aadhaar (digital identity), UPI (unified payments interface), and public data platforms form a stack that enables everything from welfare delivery to small-business lending. Investment in systems that enable instant money transfers, such as UPI in India or PIX in Brazil, can help expand financial usage significantly .

Build local capacity and ownership 🔗

The E-Choupal model illustrates a principle that applies broadly: technology must be locally owned and operated to be sustainable. The World Bank’s research on firm-level technology adoption emphasises that access to technology alone is not enough – firms and communities must actually adopt and use it , which requires training, trust, and relevance to local needs. Community-driven models that train local operators and adapt platforms to local languages and conditions are far more effective than top-down technology transfers.

Leverage public-private partnerships 🔗

Neither governments nor corporations can bridge the digital divide alone. The most successful technology programmes in the developing world – M-Pesa, E-Choupal, and mobile health platforms – have involved partnerships between businesses, governments, NGOs, and international organisations. IMF research suggests that policymakers should calibrate their approach to technology based on a country’s stage of development, initially prioritising foreign technology adoption and gradually shifting to supporting domestic innovation as capabilities grow .

Address cybersecurity and consumer protection 🔗

As more people come online and conduct financial transactions digitally, the risks grow too. Of the 4 billion adults in low- and middle-income economies who own a mobile phone, only about half use a password to protect their device . Stronger consumer-protection frameworks, digital literacy campaigns focused on online safety, and investment in cybersecurity infrastructure are all essential to building trust in digital systems.

The road ahead 🔗

The trajectory is clear: developing countries are not waiting for the developed world to hand them technology. They are innovating, adapting, and in some cases leading – as Africa has done with mobile money. But the gap between early adopters and those left behind is real, and closing it will require sustained investment, smart regulation, and a commitment to building systems that serve the poorest and most marginalised populations.

UNCTAD’s Technology and Innovation Report 2025 highlights that among developing nations, only a few – notably China, and to a lesser extent India and Brazil – are significant players in frontier technology development . For the majority, the challenge is not just adoption but building the domestic capacity to sustain, maintain, and eventually innovate on the technologies they import.

Technology in the developing world is not a luxury – it is a prerequisite for participation in the modern global economy. The stories of E-Choupal and M-Pesa prove that meaningful change is possible, even in resource-constrained environments. The question now is whether the momentum can be broadened and sustained.

What do you think? Can developing countries continue to leapfrog traditional infrastructure models through mobile and digital technologies, or will persistent gaps in energy, connectivity, and education slow progress? What role should international organisations play in supporting locally driven tech adoption?

References

1. https://www.weforum.org/stories/2023/11/africa-digital-mobile-banking-financial-inclusion/
2. https://www.weforum.org/stories/2025/04/shared-digital-infrastructure-emerging-economies/
3. https://www.un.org/technologybank/news/boosting-trade-worlds-least-developed-countries-power-technology