November 2007

ICTs and the challenges ahead

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The Organisation for Economic Cooperation and Development's (OECD) Understanding the Digital Divide (2001) describes that 'digital divide' refers to the gap between individuals, households, businesses and geographic areas at different socio-economic levels with regard both to their opportunities to access Information and Communication Technologies (ICTs), and to their use of the Internet for a wide variety of activities. The 'digital divide' thus reflects various differences among and within countries. The 'digital divide' among households appears to depend primarily on two variables, income and education. Other variables, such as household size and type, age, gender, racial and linguistic backgrounds and location also plays crucial role in determining the size and character of 'digital divide'. According to Mehra et al (2007), 'digital divide' encompasses both physical access to technology, hardware and more broadly, the resources and skills needed to effectively participate as digital citizen.

The 'digital divide'
The major determinants of digital divide are:
Household or individual income: It is an important determinant of the presence of personal computers (PCs) and the extent of Internet access in homes. Income distribution is particularly important in determining the diffusion of new technology, with higher income groups acquiring ICTs early and leading uptake. However, rates of increase in access are larger for lowest income groups in almost all OECD countries. But this may not hold true for underdeveloped countries where demand for basic amenities can be stronger than that of ICTs.

Level of education: In general, the higher the level of education, the more likely individuals have access to and use of ICTs in both the home and the workplace. Educational attainment and income are strongly correlated and explain much of the difference in uptake. A study in the OECD countries reveals that at the same income level, those with higher educational attainment will have higher rates of access.

Size and type of households: Given other things, size and type of households do matter in PC penetration and Internet access. In the OECD countries, families with children have the highest access of all households, and couples with children under 18 are more likely to have a PC and Internet access. Rates for these types of households are approximately double the rate for single person households (OECD, 2001).

The existing 'global order', the 'nature' of the things, and the institutions do not appear conducive enough for technology to serve the needs of the very poor, the destitute or the most vulnerable

Age of the population: PC penetration and Internet access are generally lower for older people than for younger people in the OECD countries. Usage has tended to grow faster in younger age group (OECD, 2001).

Gender: Gender can determine access to Internet and ICTs. International Labour Organisation's (ILO)'s World Employment Report 2001 show that women are the minority users of Internet in both developing and developed countries. Only 38 percent of Internet users in Latin America are women, 25 percent in European Union, 19 percent in Russia, 18 percent in Japan and 14 percent in the Middle East. However, gender gap in ICT usage is quite low in Nordic countries and in the US of America. Women's representation in core ICT occupations is quite low due to their under-representation in core ICT science and engineering curricula in education systems. An International Labour Organisation (ILO) study on the Indian software industry reveals that men are mostly in export software firms, while women are present in domestic low-end and IT-enabled services.

Rural urban divide/location: In the OECD countries, members of households in urban areas are more likely to have occupations where computers and the Internet are part of their work environment. Costs tend to be higher and quality of access lower in rural areas. Incomes tend to be lower in rural areas and ICT costs are relatively higher for low-income groups. Internet access levels are higher in capital cities and highly industrialised and advanced regions than in rural and peripheral regions. Leading areas have higher concentration of more technologically advanced businesses and academic and research institutions, which are likely to have high levels of uptake and use of new technologies. Network infrastructure tends to be more expensive and lower capacity and quality in remote areas (OECD, 2001). One ILO study on the Indian software industry shows that there is absence of rural-brains in the IT industry. Urban masses have the advantage of knowing English.

Ethnicity: Within a particular country, digital accessibility may be easier for certain groups to obtain because of the past policies of the state or the mindset of the people. For example, the digital divide between certain groups of Americans increased between 1994 and 1997, resulting in a widening gap between those at upper and lower income levels and between both the Blacks and Hispanics as compared with the Whites. A study by the ILO reveals that in the Indian software industry, professionals belonging to the forward castes form the highest proportion of workers in the software industry.

Infrastructure and cost of accessibility: Infrastructure is the foundation for the development of ICTs. Most Information and Communication Technologies depended on electrical power and telephone lines. The production and consumption of energy varies broadly across countries in direct relationship with their economic supremacy. Developing countries tend to have lower levels of energy production, less efficient systems that produce great losses during transmission and distribution, and lower consumption levels. Similarly, wealthier countries have more phone lines per 100 inhabitants than countries and regions with weaker economies. Costs too strongly affect access. Despite reduction in costs in the past decades, indicators still show significant cost differences among countries and within countries in a single region.

Legal frameworks and institutions: They basically mean laws and regulations that facilitate or constrain the use of technologies for the proposed objectives. Telecommunications was viewed as a natural monopoly. It was seen as most efficient to have one and only producer. Because costs in this industry fall as the scale of production/ operation increases, the largest firm in the industry achieved lowest costs and could under price its rivals. Governments thus entered the arena and prevented the entry of competitors, arguing that they would wastefully duplicate existing facilities or provide services only to low-cost users (typically those in urban areas, where the density of customers was high). But inefficiency and underinvestment by State telephone monopolies led to bad service delivery, and did little or nothing for the poor or the rural areas. Since the 1980s, countries over the world have witnessed a sea change in the way information infrastructure was being supplied, priced, financed, used and regulated. As already said, natural monopolies occur when firms that produce at lower costs, and are said to achieve economies of scale. But when firms using the new technologies have low costs even at small scale of operations, there may be many competitors. Traditional cross subsidies from international to local calling have generally failed to provide universal access, because they have neither been transparent nor well targeted. But all these are changing now. Privatisation of telecom sector has become a key issue. However, when a state monopoly is privatised without proper regulations, then a private monopoly can emerge which results in the transfer of economic rents from public sector to private sector without any gain in efficiency, lower prices or broader service. So the State has a bigger role to play while privatising the telecom sector.

Problem of leapfrogging
It is argued that the debate over future 'digital divide' would be moving away from inequality in basic 'quantity' and 'access' to ICTs to differences in the 'quality' of the user experience and 'capacity'. However, there is also the need to observe and contemplate whether the present global knowledge economy allows countries from lower and middle-income groups to leapfrog in terms of growth and development simply on the basis of technological advancements. Such a technocentric approach to development have always welcomed criticisms from social scientists and academicians since diffusion of technology in a non-discriminatory and participatory manner depends on varieties of factors including institutions and regulations. The existing 'global order', the 'nature' of the things, and the institutions do not appear conducive enough for technology to serve the needs of the very poor, the destitute or the most vulnerable. Some have even contested that the present nature of 'digital divide' appear similar to what was seen during the days of industrial revolution in the West. Although the industrial revolution started in the West but it was dependent on colonial relations and exploitation. If 'dependency theory' is logical enough to be believed, then one can argue that the countries from lower and middle-income groups may face problems and obstacles in leapfrogging.

Current state of affairs
The earliest International Telecommunication Union (ITU) statistics on telecommunications (published in 1871, recording data on telegraph operations since 1849) show the divide between the Member States of the Union, mainly within Western Europe at that time. The International Telecommunication Union's World Information Society Report 2007 provide some idea about digital divide  in various kinds of economies i.e. Organisation for Economic Co-operation and Development plus (OECD+), least developed countries (LDCs ) and developing (and also World Bank categories of high, upper-middle, lower-middle and low-income states), and trends over the decade from 1995-2000 (2000-2005 for broadband). The gap in fixed lines between OECD+ and developing economies (measured by the ratio between average penetration rates) has reduced from 9.8 in 1995 to 3.3 in 2005. The absolute difference has also reduced (in terms of total percentage points between the averages), falling from 40.4 percent in 1995 to 33.5 in 2005. The gap between developing and least developed countries (LDCs) has actually widened for fixed lines, from 13.8 to 20.2. In mobile telecommunications, the ratio between OECD+ and developing economies has been practically eradicated, falling from 33.1 to 3.1. Least developed countries (LDCs) have done well in mobile, growing their subscriber base by a phenomenal 93 percent per year over 1995-2005. Mobile phones are the most evenly distributed and fixed broadband connections the least. Two economies



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