Transcript Why the Digital Divide?

Angel Garbarino
Infrastructure: The
cause of the Digital
Divide?
http://www.cybergeography.org/atlas/router_distribution_large.png
Introduction
• “Universal
Service” Theodore
Vail in 1907
• Expanded to
mean the “Digital
Divide”
• Majority research
on rate of the
Divide.
http://memory.loc.gov/ammem/berlhtml/theodore
vailpic-c.jpg
Objective of this paper
• Defend position IT adoption
Contingent on infrastructure
• Different economic infrastructures
more conducive to IT.
• Biased efficiency growth rates
• Continues the growth of the Digital
Divide
Outline
Section I: Necessity of Infrastructure
and IT development.
Section II: Use of IT in economy
improve efficiency.
Section III: Thus, the digital divide,
and why it continues.
1. Infrastructure Concentration
• High fixed Cost
• Concentration towards those who
can afford costs.
• Cost barrier
• Problem for Developing countries
and rural areas
• $400 USD for cost of a typical
telephone landline.
1.1 Infrastructure Concentration on IT
Penetration
• Infrastructure bias, started
after WWII
• IT development highly
sensitive to Infrastructure
• Internet especially true
• Ex: Internet hosts gap
between Africa and
U.S. in 1997 multiple of
267
• In 2000 it was 540.
1.2 Role of Investment, Innovation and R&D
on IT Penetration
• Once established, incentive
to invest increases.
• Infrastructure not linked to
Investment, Innovation and
R&D.
• Infrastructure increases
security
• Incentive to operate outside
formal sector, less intellectual
property right securities.
• Pirating
• EX: U.S. & China
1.3 Role of Human Capital on IT
Penetration
• Human Capital development separate from
Infrastructure.
• On the Job-learning, and knowledge
spillovers
• Research shows need basic education
foundations to gain IT relevant skills. Need
infrastructure to practice.
• On the job learning limited.
• EX: Latin America vs. South Korea and
Taiwan.
• Biased towards those who work in IT-related
jobs.
1.4 Costs Affects IT Penetration
• Cost decreasing, and if economic
disadvantage, will be willing to pay some
amount.
• Ex: Villages in Peru, spent 1.5% share of GDP for
telephone services, vs. a country as whole which
spent 1.2% (Wellenius, 2000).
• Willing to pay does not indicate access
available
• Supply will meet Demand
• IT more complex, due to high fixed costs
• Other priorities (i.e. food)
2. Improving Economic Efficiency
• Efficiency depends on IT employment.
• Increases access to information, streamline processes.
2.1 Access Affects Efficiency
• Access slowly rising for all
countries
• Gap similar to VCRs and
televisions in U.S.
• Rate of adoption for IT faster
than TV or VCRs.
• Gap not closing
• Industries differ in IT adoption
use
• Infrastructure dictating
industry concentration
• Ex: Service Sector worked to
advance IT developments
http://wwn.nebcorp.com/images/televisions.jpg
2.2 Costs Affects Access
• Prices decreasing should decrease
industry bias.
• Price decrease effect on consumer,
regardless of industry concentration.
• Industry still must receive significant
enough returns to invest.
• Frivolous for consumer to purchase if no
infrastructure.
2.3 Geography Affects Access
• Geographical, historical
and political influences
responsible for industry
concentration
• Responsibility doesn’t
change persisting
concentration.
• Use these factors to
increase IT adoption
• Not malleable or stable to
work with.
http://www.northgeorgiasportsman.com/colonialism.jpg
3. Thus The Digital Divide
• Much easier to adopt when infrastructure
encourages adoption
• Biased infrastructure development
• Urban
• Wealthier
• IT increases efficiency, and makes easier
further IT adoption
• Furthering Digital Divide.
Bibliography
• Antonelli, Cristiano (September, 2002) The Digital Divide:
Understanding the
• Economics of New Information and Communication
Technology in the Global Economy, Information Economics
and Policy. 15 (2003) pg. 17-199.
• Bruton, H.J. (1998) A Reconsideration of Import Substitution.
Journal of Economic
Literature, 36, June, 903-936.
• Compaine, Benjamin (2001) Re-Examining the Digital Divide.
Research Affiliate, Internet and Telecoms Convergence
Consortium, MIT. Retrieved May 24, 2006, from
<http://ebusiness.mit.edu/research/papers/130%20Comp
aine,%20Digital%20Divi
de.pdf
• Dasgupat, Susmaita., Lall, Somik., Wheeler, David. (2001) Policy
Reform, Economic
• Leatherman, John C. (2000) Internet-Based Commerce:
Implication for Rural
Communities. Kansas State
University, U.S. Economic Development Administration.
Reviews of Economic Development Literature and Practice:
No. 5.
• Growth and the Digital Divide: An Econometric Analysis. Development
Research Group, World Bank. Retrieved May 17, 2006, from
<http://rru.worldbank.org/Documents/PapersLinks/1452.pdf>
• E-Commerce and Development Report (2004) E-Business and SME’s
United Nations, prepared by the UNCTAD secretariat, New York
and Geneva.
• Fiser, Noemi (2005) On the Brink of the Digital Divide. European
Integration Studies,
• Miskolc, Volume 4. Number 1. (2005) pp. 115-123. Retrieved May 21,
2006, from
<http://www.ceeol.com/aspx/getdocument.aspx?logid=5&id=122
cb7e9-0faa-4e88-919f-e3248bfc7d6d>
• Hoffman, Donna L., Novak, Thomas P., Schlosser, Ann E., (2000) The
Evolution of the Digital Divide: How Gaps in Internet Access May
Impact Electronic Commerce. Journal of Computer-Mediated
Communication. Owen Graduate School of Management
Vanderbilt University. No. 5 (3).
• International Telecommunications Union (2006) ICT Statistics. Retrieved
May 20, 2006, from < http://www.itu.int/ITU-D/ict/statistics/>
• Leamer, Edward E., and Michael Storper (2001) The Economic
Geography of the Internet Age. Journal of International Business
Studies, Vol. 32.
•
•
•
•
•
•
•
•
Norris, Pippa. (April, 2000). The Worldwide Digital Divide: Information poverty, the
Internet and Development. John F. Kennedy School of Government, Political
Studies Association of the UK, London School of Economics and Political
Science, Roundtable Event. Retrieved May 22, 2006, from <
http://ksghome.harvard.edu/~pnorris/acrobat/psa2000dig.pdf>
OECD Factbook 2006: Economic, Environmental and Social Statistics - ISBN 92-64
03561-3 - © OECD 2006
Staihr, B. (2000) Rural America’s State in the Digital Economy The Main Street
Economist: Commentary on the Rural Economy. Center for the Study of Rural
American. Kansas City, MO: Federal Reserve Bank of Kansas City. Retrieved
May 21, 2006, from
<http://www.kc.frb.org/RuralCenter/mainstreet/MainstMain.htm>
Thatcher, M., and Oliver, J. (2001) The Impact of Information Technology Investments
on a Firm’s Production Efficiency, Product Quality and Productivity. JMIS, (18: 2) Fall
2001, 17-46.
United Nations Development Program (September, 2006) The Infrastructure for
Poverty Reduction Event. Retrieved May 20, 2006, from,
<http://content.undp.org/go/newsroom/september-2005/infrastructurepoverty-20050916.en;jsessionid=aj-JlVp2kYFf
Wellenius, Björn (March, 2000) Extending Telecommunications beyondthe Market
Toward universal service in competitive environments. Public Policy for the
Private Sector, No. 26. Retrieved May 21, 2006, from <
http://rru.worldbank.org/Documents/PublicPolicyJournal/206welle.pdf>
Note No. 206 March 2000