Whether in agriculture, industry, education or water and energy supply – modern operations, innovative solutions and up-to-date infrastructure can unleash enormous economic potential. Potential that is important for employment and income, and thus for development and poverty reduction.
However, the world is still a long way from exploiting these opportunities to their full extent. Developing countries in particular urgently need to stimulate modernisation. For example, they could achieve significantly higher yields in agriculture, not only on large farms. Small farms for self-sufficiency also benefit from new ideas. They could use apps to determine the best time for harvesting or to identify and eliminate pests in good time.
Innovation ultimately facilitates higher production output with less cost in nearly every sector. And nearly every sector can use intelligent solutions that are more environmentally friendly, fairer and sustainable. These solutions are the future in the era of climate change, biodiversity loss, water scarcity and increasing social injustice.
Even if it is not the only factor, digitalisation plays a major role as a driver of innovation here – and its role has grown around the world due to coronavirus. It provides virtually inexhaustible opportunities for developing countries in particular. Not only because knowledge can be tapped quickly on the Internet, but also because it reduces costs and time, eliminates physical distances and allows technology stages to be skipped. It can also perform well when it comes to modernising the economy, society and everyday life.
However, in many countries the conditions for the widespread use of digital technologies still need to improve. Development cooperation itself can also become more efficient and effective through digital instruments. Promoting digitisation in a responsible manner is a prerequisite for further innovations and development impulses.
KfW Development Bank helps its partners tap into this potential for sustainable development through technology and innovation in various sectors. At the same time, it ensures that risks also associated with the use of modern technologies, such as data privacy, cybersecurity, environmental hazards and social impacts, are handled responsibly.
KfW frequently performs pioneering work in the area of sustainable infrastructure; one example of this is energy supply, whether using geothermal energy in Kenya or solar power and green hydrogen in Morocco. KfW also links infrastructure to innovation in the area of transport and is helping to in the Indian state Tamil Nadu, replacing it with battery-operated versions, for instance. In Jordan, KfW is supporting the introduction of efficient irrigation methods and, on Lake Managua in Nicaragua, it is ensuring better water quality with a modern wastewater treatment plant.
KfW pursues the goal of always implementing modern technology and the latest know-how for digitalisation as well. Its portfolio currently includes over 180 ongoing digital projects. In Peru, for example, KfW is supporting the introduction of a to ensure a sustainable and reliable water supply. In Malawi, it is investing in digital education infrastructure with the programme.
With TruBudget, KfW developed software based on blockchain technology that enables partner countries to use promotional funds much more efficiently and transparently. Overall, new commitments for KfW Development Bank projects aiming to support SDG 9 amounted to around EUR 665 million in 2021.
Progress is not always as profound as new developments like TruBudget. Sometimes it consists of smaller projects like the cashless payment system in Ghana or a in Laos to prevent illegal logging. But the technological innovations always have the goal of making projects more efficient and effective. Because without digitalisation and technology, and without modern economic structures, it will not be possible to achieve the SDGs. Innovations act as development catalysts, and not just in the coronavirus era.