Digital technology is already playing an important role in the West Bank and Gaza (WB&G), and development of the digital economy is among the national priorities. Internet access has increased significantly in recent years, with 80 percent of households having access to the internet at home in 2019 (compared with 52 percent of households in 2017), while 86 percent of households own a smartphone. The Palestinian information and communications technology (ICT) sector contributes about $493 million in annual value added to the economy and accounts for approximately 3.2 percent of GDP. Employment in the ICT industry almost doubled between 2008 and 2018, while ICT service exports increased from less than US$2 million in 2000 to more than US$85 million in 2017. Development of the digital economy is among the priorities of the National Development Plan (2021-2023), the recent ICT Sector Strategy 2021-2023, and many sectoral strategies.
This report aims to assess the state of digital economy development in WB&G, identify opportunities for further growth, and inform reforms and donor support programs in WB&G. The report is based on the World Bank’s Digital Economy Assessment methodology, which was initially piloted in African countries and is now applied in other regions. In line with this methodology, the report provides a comprehensive overview of digital economy development in WB&G across the five foundational pillars – digital infrastructure, digital platforms, digital financial services, digital businesses, and digital skills. The report is based on several fact-finding missions, structured interviews, surveys, focus group discussions and analysis of secondary data.