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| Source: eBiquity Research Group, 2007 |
The Digital Divide presents a rather puzzling phenomenon. When examined in micro terms, it is nondiscriminatory; it afflicts people regardless of age, gender, ethnicity, or socioeconomic status. However, as the lens is broadened, a very clear duality – the ever-present North-South division – appears. Most argue that the aforementioned traits are contributors to the Digital Divide, but when the issue is distilled to its bare core, it presents itself as just another way in which the ever-present problem of the “haves” and “have nots” manifests itself. It is a problem that runs deeper than race or wealth. Therefore, to understand it we must understand the roots of inequality. After all, many of the afflicted peoples did not just miss the Digital Revolution; they also missed the Industrial and Agricultural Revolutions.
Getting to the Root of the Digital Divide
In a paper being considered for publication in Econometrica,[1] a Ph.D. candidate at the Massachusetts Institute of Technology (henceforth, “MIT”) found that institutions of yore can and appear to have an impact on how well-off people are today. Using regression discontinuity, i.e., designs that evaluate causal effects of interventions, the author found that mita, a practice whereby local Incas were forced by Conquistadors to leave their homes to work in gold and silver mines may explain why people that inhabit this area today are poorer than their neighbors despite being equal by other measures, e.g., natural resource endowment.
The lesson from Diamond and the MIT graduate student is clear: The Digital Divide, like other manifestations of the problem of “haves” and “have nots” is the product of a long chain of choices, activities, interventions, and policies. These things facilitated the formation of the requisite institutions in some places and not others upon which digital technology is based. Nevertheless, as globalization is now in full-swing we can all benefit from narrowing the Digital Divide. This problem is of importance in the context of this Masters program: Innovation will only continue to occur in the “informationally-blessed” parts of the world. For a concept that is predicated on the idea that more people equates to more ideas, it is important for us help those who are lagging to catch up so that they too may contribute their ideas. But until they have access to basic infrastructure they will only develop that which we already have and the vicious cycle will continue.
This paper will emphasize that the reasons for redress are more economic and less equality-based. Additionally, we will examine the impacts of policies designed to narrow the gap.
What is the Digital Divide?
Typically, the term Digital Divide (henceforth, “the Divide”) describes the disparity of access to digital and information technology. This definition, perhaps only tacitly, suggests that the problem is one of wealth and ethnicity. But this is not entirely true. For those who have access to these technologies, a disparity exists in how much benefit they are able to leverage from it. For instance, mobile phones and the internet are supposed to make our lives easier and to be gateways to an endless stream of information. But for many people, computers remain typewriters with a jack for their headphones and a screen on which to watch movies and television.
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| Source: U.S. Bureau of Labor Statistics, 2008 |
In the simplest of terms, digital and information technology (henceforth, “DIT”) are inaccessible to many due to cost. True the cost of a personal computer has fallen significantly over the last few decades (see graph) but with a considerable number of people living on less than one dollar per day, the cost remains prohibitive.[1]
As the global economy is increasingly dependent on DIT it is of increasing importance that more people have the opportunity to integrate said technologies into their lives. This is one of the fundamental precepts of a market economy; the greater the number of participants, the greater the social welfare. This division weighs heavily on the afflicted. And anytime people can benefit from having burdens of this ilk lifted, the door is opened for a discussion of shadow cost.
Shadow cost is the value associated with easing a particular constraint. For the world’s destitute, this is immeasurable. The transition to the digital economy was easy because of the gain in utility attainable. Moreover, the sheer amount of time savings associated make life much easier for people. The cost of communication has decreased significantly. And cheaper, easier modes of communication allow people to take on new economic opportunities that otherwise would have been unavailable. And the more expensive information/communication is, the more scarce it is. This is precisely why the relative lack of information is a key element of poverty.
For roughly one decade, India has become the poster child of the “emerging” economies. And the rapid proliferation of cellular phones, i.e., the cheapening of information, among its people is a big reason why. For fishermen in the country, for instance, they can begin negotiating with local mongers long before they return to port. Whereas in the past, said mongers could take advantage of informational asymmetries, today the fishermen can shop, so to speak, for the best price with a few clicks of a button. [2] And in addition to economic benefits, reducing the cost of information can also be beneficial for public health.
The use of mobile technology among doctors in the developed world will only provide marginal benefits to patients. We are talking about seconds and minutes saved. But In poorer economies, the benefits will be substantial as they will not only save time, but will help doctors deliver basic health services to the populace. Cell phone use has risen over 500% in Africa since 2004.[3] Today, approximately 350 million Africans have subscriptions with perhaps millions more using rechargeable credit services.[4] On March 21st, Rwanda’s President, Paul Kagame, delivered on his promise to provide community health workers with 2,500 mobile phones.[5] Subsequently, the speed with which doctors communicate with patients, other doctors, and medical service providers, e.g., EMTs can decrease considerably. As a practical example, the sooner a doctor knows that that an ambulance is on the way, the sooner they can move on to other patients. This means that each patient is less burdensome to the next and to the doctor.
For the Rwandan doctors, less time spent caring for a particular patient means that they can see more patients during the day, i.e., alleviation of the shadow cost. Due to the time saving associated with mobile telephony, doctors can increase their coverage areas. More patients tended to means greater overall health. And healthy people are more productive. As you can see the benefits of mHealth to Third World countries are immense.
Nicholas Negroponte, founder of the Media Lab at the Massachusetts Institute of Technology, designed a cheap laptop to be distributed to children in the developing world. The computer was sold at a cost of $100 (roughly one-third what I paid for my low-end netbook) through the One Laptop per Child program.[6] Sounds just dandy doesn’t it? The problem with this project, according to usability guru, Jakob Nielsen[7] was that Negroponte did not adequately study the needs of the target group; there was no user testing.
But having access does not necessarily equate to efficacious use. If everyone could afford a computer, would they leverage the maximum benefit possible?
Part II: The Usability Divide
In the summer of 1999, the United States witnessed the household ownership rate of personal computers climb above 50%.[8] This figure says nothing about purpose, whether it is exclusively or primarily for game playing, “chatting” with friends, or more serious activities. Nor does it speak about time and quality of use. Because of this we don’t tend to think of the “rich” as being afflicted by the Divide.
A 2002 study by the Nielsen Norman Group, a company that helps corporations to extend products via the web by improving website usability, found that the internet was twice as hard for seniors to use as compared to their younger counterparts.[9] For a group that did not grow up using a computer in schools or households, dedicating more time to deciphering the web is quite cumbersome and not a realistic option. A 2005 report published by the Kaiser Family foundation corroborates this. The report relied upon a random, digitized survey with 1,450 respondents aged fifty and older. According to the survey, less than one-third of Americans ages sixty-five and older have ever used the internet.[10]
People use DIT for myriad purposes: Communication, work, entertainment, shopping, and etcetera. The possibilities are virtually endless. Yet very few of us actually optimize the way in which we use these technologies. From where I’m sitting in the library, I can see the computer screens of over a dozen fellow students and nearly all of them are on Facebook. If they are not on Facebook, they are on YouTube. Which begs the question: Even if everyone had access to easy-to-use technologies, would we make the most out of this access?
Part III: The Empowerment Divide
In researching how people use search engines for the Nielsen Norman group has found that many users don't know how to use search to truly master the Web. People don't understand advanced search features; they rarely employ query reformulation; and many uncritically select the first search results. Also, many users don't understand how search engines prioritize their listings, and some users don't even know that the euphemistic label "sponsored links" refers to paid advertisements.[11]
Because they lack the initiative and skill to take matters into their own hands, some users remain at the mercy of other people's decisions. For example, people sometimes accept the default home page chosen by their computer vendor or ISP rather than select one that's better suited to their needs. Again, this means that the user's attention can be sold off like a sheep to slaughter, as indicated by deals where search engines pay computer vendors millions of dollars to be the default setting on shipping PCs.[12]
Similarly, some users limit themselves to "free" Web applications that display ads. What such users don't realize is that better, i.e., more appropriate, powerful, and liberating applications are available at a cost that's far less than the value of the time they waste trying not to look at the ads.[13]
The story here is very much the same as in the preceding section: The acquisition of information is empowering and has economic benefits. Indeed, narrowing the knowledge gap is very much at the heart of this issue. Unfortunately, there are quite a few practical, logistical matters that make this quite a difficult task.
Increased Bandwidth and other Infrastructure Requirements
In computer networking and computer science, bandwidth is a measure of consumed data communication resources expressed in bits. It goes then that the more users, the greater the bandwidth requirements. On the internet-superhighway, information travels as light through fiber-optic cables. Each fiber carries with it a stream of information “coded” as a color. The more information that needs to be transmitted, the more colors are required. And the more users, means more cables. Therefore, in order to properly combat the Divide, the necessary infrastructure must be in place.
With the large-scale outsourcing that has occurred, groups such as India’s Tata Group has launched a multi-terabit cable connecting eastern India to Singapore where it can connect to other cables that traverse the Pacific Ocean to the United States. Other cables are being planned along the same route as well as towards the Middle East and Europe.[14]
In practical terms, a typical multi-terabit, transoceanic submarine cable system – such as the Unity Cable Google is building along with 5 other members of the consortium, the likes of which have become the industry norm – costs several hundred million dollars to construct.[15] Projects of this ilk aren’t usually preëmptive; they usually represent a supply shift in response to increasing demand. For instance, trans-Pacific internet traffic rose 41 percent between mid-2006 and mid-2007.[16] The industry has learned to be responsive to avoid supply gluts that led to the bursting of the “Broadband Bubble” in 2000. It is unclear whether current bandwidth installations would be able to handle a hypothetical situation, such as a rate of computer ownership in Africa of 50 percent.  |
| Source: International Telecommunications Union, 2008 |
Increased connectivity has implications in other sectors as well; notably, telecommunications where the construction of new towers in sparsely-populated areas and perhaps pico grids in more densely-populated urban zones could appear. Already, the ceiling is being approached on cell phone use in the developed world and the rate of penetration is rising quickly in developing countries (see graph). Furthermore, as the internet and cellular phones are increasingly used for data-intensive media applications, bandwidth, tower construction, and cell shrinking will become of greater importance to keep information flowing and cheap.
Liberalization of the Telecommunication Industry
In general, liberalization is the act of relaxing certain government restrictions, usually state-held monopolies. By design, liberalization increases the number of competitors in the market, which drives prices and profits down and consumer surplus up. Lower costs, increased teledensity, innovation, greater availability of services, and foreign investments are among the benefits associated with open and competitive telecommunications markets.
The World Trade Organization (henceforth, “WTO”) has held member states to a higher standard when it comes to telecomm liberalization. It seems to be working – fixed line penetration is markëdly higher (almost four times) among, for example, low-income countries in Southeast Asia that have implemented WTO liberalization standards versus those that have not.[1] More specifically, the rate of penetration in India rose by a factor of eight between 1996 and 2004 after liberalizing its telecommunications sector.[2] Over that same period, India’s gross domestic product, in terms of purchasing power parity, rose from $1.41 to $3.56 trillion.[3]
Consumers joining a network obtain benefit from making and receiving calls, emails, text messages, and etcetera.
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| Effect on equilibrium condition associated with a positive spillover. Available under GNU Free Documentation |
They therefore have a private valuation of being part of the communications network. This value derives from being able to communicate with other people. It therefore increases with the number of people connected to the network: the bigger the network, the more valuable it is to both existing and potential members. This effect is known as a “network externality.” Thus is manifested the paradox that exists in telecommunications: Liberalization (read here as, deregulation) of telecom markets is necessary to reduce the price of information but some form of regulation, in the form of price floors or production subsidies are needed so that the full-economic benefit derived from access is captured in the price.
In the context of combating the Digital Divide, it is important that more people gain access to information pathways. Similarly, it is important that purveyors of access to information networks are able charge the appropriate, socially-optimal price. Yet they must also keep in mind that the more people in the service area, the cheaper it becomes due to economies of scale. Indeed the relationship is mutually beneficial.
Concluding Remarks
In the context of this Masters program, closing the information and knowledge gaps are an integral part of maintaining the innovative process. We have seen some present initiatives that are designed to close these gaps. Philanthropic efforts such as One Laptop per Child as well as WTO-backed liberalization initiatives have been positive contributors to the cause.
To emphasize the need for a pragmatic rather than an idealistic approach, we discussed some of the infrastructure requirements and strayed from the typical analysis of the various, often homogeneous program. These are rather basic in the developing world, e.g., electricity and cellular towers, and likely to change in rapidly developing, urban areas.
Regrettably, there wasn’t much room for a discussion on the issue of Standardization. It was not due to lack of importance but rather it was an unfortunate omission that was necessary in order to incorporate the various economic themes. After all this is a school of economics. We will say this, on the matter, as information technologies become more pervasive in the developing world, it is important that cultural identities are not forced by the wayside. This is by no means an easy task, as many languages, particularly in sub-Saharan Africa only exist in oral forms.
[1] “Making the Most Out of the Doha Opportunity: Benefits from Services Liberalization.” Coalition of Service Industries, 2006. Available electronically at:
[2] Ibid
[3] “The World Factbook.” The United States Central Intelligence Agency, 1996 & 2010. Available electronically at:
[4] For instance see: “Network Externalities in Telecommunications: Theory and Application.” Frontier Economics, 29 June 2005. Available electronically at:
[1] I could not find a reliable source to support this. Nevertheless, conceptually is rather well-known.
[2] Sullivan, Kevin. “For India’s Traditional Fishermen, Cell Phones Deliver a Sea of Change.” The Washington Post 15 October 2006. Available electronically at:
[3] Smith, David. “Africa calling: mobile phone usage sees record rise after huge investment.” The Guardian 22 October 2009. Available electronically at: < http://www.guardian.co.uk/technology/2009/oct/22/africa-mobile-phones-usage-rise>
[4] Ibid
[5] Nambi, Irene V. “Community Health Workers Get Cell Phones.” The New Times 22 March 2010. Available electronically at:
[6] Ledell, Joshua. “The $100 Laptop and the Usability Divide.” Compete on Usability. Joshualedell.typepad.com, 20 March 2007. Web. 28 April 2010
[7] Jakob Nielsen holds a Ph.D. in Computer-human Interaction from the Technical University of Denmark in Copenhagen.
[8] Bowie, Nolan A. “The Digital Divide: Making Knowledge Available in a Global Context.” Learning to Bridge the Digital Divide. Paris: The Organisation for Economic Co-operation and Development, 2000. 37-40
[9] Nielsen, J. and Pernice K. “Web Usability for Senior Citizens: 46 Design Guidelines Based on Usability Studies with People Age 65 and Older.” San Carlos, California: The Nielsen Norman Group, 2002. Available electronically at: <http://www.nngroup.com/reports/seniors/>
[10]“ e-Health and the Elderly: How Seniors Use the Internet for Health – Survey.” The Kaiser Family Foundation January 2005. Available electronically at: <http://www.kff.org/entmedia/upload/e-Health-and-the-Elderly-How-Seniors-Use-the-Internet-for-Health-Information-Key-Findings-From-a-National-Survey-of-Older-Americans-Survey-Report.pdf>
[11] Marable, Leslie. “False Oracles: Consumer Reaction to Learning the Truth About How Search Engines Work: Results of an Ethnographic Study.” Context-Based Research Group 30 June 2006. Available electronically at:< http://www.consumerwebwatch.org/pdfs/false-oracles.pdf>
[14] Lynch, Grahame. “The New Bandwidth Bubble? Foreign Barons Corner the Market, Much to the U.S. Government’s Dismay.” America’s Network. FindArticles.com, 15 November 2004. Web. 29 April 2010
[15] Gardiner, Bryan. “Google’s Submarine Cable Plans Get Official.” Wired 25 February 2008
[1] Dell, Melissa. “The Persistent Effects of Peru’s Mining Mita.” Department of Economics, Massachusetts Institute of Technology (2010). Available electronically at:
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