"Unfortunately, the Internet has fallen short of its promises in some other aspects, as its benefits have not fully reached people in the bottom of the income distribution. For example, skilled workers are better able to leverage the Internet to increase their earnings, whereas unskilled workers face a higher risk of having their jobs automated. High-productivity firms are more likely to use the Internet to grow their business, while mom-and-pop stores face the risk of being displaced. Rich countries, which tend to have stronger institutions than poorer countries, are better equipped to use the Internet to fight corruption and hold public officials accountable. In other words, the past three decades have shown that the benefits of achieving universal Internet access or increasing the size of the information and communication technology sector will not fully materialize unless governments improve their business environment, invest in human capital, and enhance their institutions. This message cannot be emphasized enough, especially for countries in the ECA region with a long tradition of distortionary industrial policies aimed at cherrypicking winners and losers. Reaping Digital Dividends: Leveraging the Internet for Development in Europe and Central Asia provides a framework for governments in the region to maximize the impact of the Internet on poverty reduction and shared prosperity. It highlights the diverse yet surmountable set of challenges. Although many people in the East remain unconnected, the experience of their neighbors to the West shows that achieving nearly universal Internet access does not guarantee success. For example, several factors hamper technology adoption among firms, while rigid regulations constrain the expansion of the sharing economy. This report argues that reaping digital dividends requires policies focused not only on the telecommunications sector but also on the analog complements, such as skills and the business environment. It also highlights that governments should be prepared to address the disruptive effects of new technologies and facilitate the transition of displaced workers to new and more productive jobs." (Foreword)