Why is inequality growing in a world that’s more connected than ever?

Why is inequality growing in a world that's more connected than ever? Despite unprecedented global connectivity, the chasm between the wealthy and the poor continues to widen, revealing that digital advancements alone cannot bridge deep-rooted economic disparities.

The Global Paradox: Connectivity Without Equity

In 2024, the wealth of billionaires grew three times faster than in the previous year, according to Oxfam International's report released at the commencement of the World Economic Forum in Davos, Switzerland. Additionally, Oxfam predicts the emergence of at least five trillionaires in the next decade, highlighting a troubling trend of increasing economic inequality. The report underscores the minimal progress in poverty reduction since 1990 and calls for substantial measures such as increased taxation on the wealthy and breaking up monopolies.

Meanwhile, the number of people living on less than $6.85 per day has "barely changed" since 1990. This stark contrast underscores a global economy where wealth accumulation at the top outpaces efforts to alleviate poverty.

Kenya: A Microcosm of Global Inequality

Kenya exemplifies this global trend. The country's Gini coefficient, a measure of income inequality, stood at 0.39 in 2024, indicating a persistent disparity in income distribution.

In rural areas, the poorest quintile accounted for 8.5% of total consumption expenditure in 2022, while the richest quintile accounted for almost half of total consumption. Similarly, in urban areas, the richest quintile had a disproportionate share of consumption. Kenya National Bureau of Statistics

Furthermore, the share of the population in Kenya earning less than $2.15 per day is forecast to amount to 38.39% in 2025.

The Digital Divide: Connectivity's Double-Edged Sword

While digital technology has the potential to bridge economic gaps, it often exacerbates existing inequalities. An estimated 2.6 billion people remain offline, lacking access to the digital economy's benefits.

In Kenya, disparities in digital access are evident. Urban areas enjoy better internet connectivity and digital infrastructure, while rural regions lag behind, limiting opportunities for education, employment, and entrepreneurship.

Global Examples: Inequality Amid Connectivity

South Africa: Despite being one of the most connected countries in Africa, South Africa remains one of the most unequal societies globally. The top 10% of earners capture 65% of national income, highlighting the limitations of connectivity in addressing systemic inequality.

United States: In the U.S., geographic inequality has widened over the past four decades. The gap in incomes between richer places and poorer places has grown, even as many measures of overall income and wage inequality have narrowed somewhat.

The Role of Policy and Governance

Addressing growing inequality requires deliberate policy interventions. Recommendations include:

Progressive Taxation: Implementing tax policies that ensure the wealthy contribute a fair share to public revenues.
Investment in Education and Healthcare: Allocating resources to improve access to quality education and healthcare services, particularly in underserved areas.
Digital Inclusion Initiatives: Expanding internet access and digital literacy programs to bridge the digital divide.
Labor Market Reforms: Ensuring fair wages and labor protections to reduce income disparities.

Conclusion: Bridging the Gap in a Connected World

While global connectivity has transformed economies and societies, it has not inherently resolved economic inequalities. In Kenya and beyond, addressing the root causes of inequality requires comprehensive strategies that combine technological advancements with inclusive policies and equitable governance.