the digital divide

Filed in archive Global Economy on February 6, 2004

The Economist features a new paper from Carsten Fink and Charles Kenny about the Digital Divide.

"The authors conclude that the divide's size and importance have been overstated, and that current trends suggest that it is actually shrinking, not growing---which means policies designed to "bridge the digital divide" may need rethinking."

The authors argue that the digital divide is much less a problem about connectivity but more about injecting the knowledge into an economy.

"But such per-head figures may not even be the right way to measure the divide. You would expect poor countries to have fewer telephones and computers per head, simply because they are poorer. And phones and computers are routinely shared between many users in developing countries. Mobile phones are often rented out by the call, and cybercaf�s provide internet access to people who could otherwise not afford it. One alternative measure, suggest the paper's authors, is per-income availability of ICTs. The number of phones and internet users per dollar of GDP provides a measure of the relative importance attached to ICTs. On this measure, the digital divide becomes a "digital leapfrog", as low- and middle-income countries jump ahead of rich ones."

"One worry is that ICTs might have less impact on productivity in poor countries than in rich countries because of lower adoption levels. It is possible, for example, that a certain threshold level of adoption is required before the productivity benefits of ICTs kick in. But even if this is true, the high growth rates suggest that there are perceived benefits to adopting ICTs in any case, even if productivity benefits have yet to materialize, so that the threshold will eventually be reached."

I fully agree with the authors. Many of the arguments that come from digital divide bureaucrats actually don't reflect much of the reality. Just go to a Southern island in Thailand (I consider Thailand not as a poor but as an emerging country) and you will hardly find a telephone but speedy broadband connections sitting under a palm tree in the jungle. The sharing of internet infrastructure is extremely common and accepted in these countries. The access costs near to nothing. Often young people are very savvy with internet tools, as it is the best (and often the only affordable) way to communicate with the outside of a neighborhood. I found the internet has become the primary source of education for people under 30 in these countries. Considering the poor education standards even the rather confusing internet can be a great leap forward.

What is more worrying indeed is the application of the knowledge into local economies. Many countries feature though protection laws for many sectors that make it difficult for entrepreneurs to execute what they have learned. However I feel information is not the (biggest) problem for emerging economies but rather the stone age economic policies...