The Blurring Digital Divide

Contrary to widespread commentary about a growing gap in IT capabilities between the developed and the developing world, many poorer nations are making great leaps in technology. The author, managing director for IBM Singapore, writes that IT skills are just as transferrable as any other intellectual asset, especially since recent years have seen the physical cost of digital technology decline steeply. As a result, developing countries have been able to access and master new technologies easily, frequently skipping over older and more expensive infrastructure and techniques that preceded IT in richer countries – for instance, buying cellular phones first, rather than installing landlines. More people proportionally are using broadband Internet, and students are being schooled in the latest technology in far greater numbers than in rich countries. All these factors point to the emerging economies of Asia, Latin America, and other parts of the world as possible future leaders in IT. – YaleGlobal

The Blurring Digital Divide

Developing countries are fast catching up with developed nations in the use of IT
Patricia Yim
Thursday, April 28, 2005

PUNDITS once warned of a 'global digital divide', in which dramatic persistent disparities in IT access all but assured a widening of the gap between the technological haves and have-nots. Such pessimism may have made good sound bites, but it was never sound analysis.

It ignores a few obvious facts. No nation or region has a monopoly on creativity and innovation. That's no less true with respect to technology than it is in any other sphere of human endeavour. While high IT costs once posed an insurmountable barrier to all but the richest industries in the wealthiest countries, costs quickly plummeted, opening new opportunities that didn't exist even months before.

Furthermore, in some respects, developing nations are not playing catch-up, but have leapfrogged the dominant technologies used in many developed countries. For example, countries with poor and incomplete wired telephone networks have avoided the considerable expense of completing their landline infrastructure with the wholesale embrace of cellular systems. In the process, they saved decades of development and many billions of dollars.

The International Telecommunication Union (ITU) now puts the number of mobile phone subscribers at around 1.5 billion - 25 per cent of the world's population. A recent report by the World Bank says half the world's population - 3.2 billion people - now has telephone access. That's up an astounding 28 per cent since 2003, more than three-quarters of whom use mobile phones, according to ITU.

By the middle of 2004, developing countries accounted for 56 per cent of all mobile subscribers and 79 per cent of growth in the market since 2000, ITU reports. Surging demand in China, India and Russia was responsible for much of that growth.

Look at personal computers. The combined rate of PC sales growth of the so-called BRIC countries of Brazil, Russia, India and China was 35 per cent in the first half of 2004 - five times faster than overall global revenue growth of 7 per cent.

More importantly, developing nations are ahead of the curve with respect to PC operating systems. Windows adds 15 per cent or more to the cost of an average PC in many of the world's fastest-growing markets. As a result, Gartner reports that this year more than 12 per cent of the PCs sold in Eastern Europe and Latin America and more than 10 per cent of those sold in Asia-Pacific will be sold with Linux, not Windows.

Low cost isn't Linux's primary attraction. Its open source transparency is jumpstarting local software development wherever it takes root. Worldwide Linux desktop shipments are expected to increase at a compound annual growth rate of 39 per cent through 2008. Virtually all PCs in North America and Western Europe are sold with Windows.

Internet access and broadband use are also growing at a faster rate in developing countries. The number of Internet users in Central and Eastern Europe grew 20 per cent last year, and users are migrating to broadband technologies.

The number of Internet users in China climbed to 94 million in 2004, according to the China Internet Network Information Center. Meanwhile the percentage of regular US Internet users has plateaued at 63 per cent of the adult population.

Broadband use in China soared nearly 150 per cent to 43 million, according to the Diffusion Group. By 2007, the market research firm estimates China will become the largest online gaming market in the world. Within a few years, many observers believe the Internet will be dominated by Asian users.

The swift adoption of broadband Internet use in developing countries is important because it enables the adoption of a host of other technologies from VoIP (Voice over Internet Protocol) Internet telephony to Web services and grid computing.

There are other reasons to assume less of a Western IT lead in the future. Chief among them is education. Many developing nations - most notably India and China - are training many more of its citizens for careers in math and computer science than the presumptively more advanced developed countries. Even in the US, many colleges and universities report that the overwhelming majority of students enrolled in math and computer science programs are foreign-born - and this is not a recent phenomenon.

In India alone, there are more than 250 universities and over 900 colleges providing computer education, according to NASSCOM, India's National Association of Software and Service Companies. India had only 6,800 knowledge workers in 1985-86. That number exploded to 522,000 software and services professionals by the end of 2001-02, according to NASSCOM.

Put it all together. Modern telecommunication is spreading like wildfire - even to areas with little prior contact with the outside world. Falling hardware costs, grid computing and pay-as-you-go pricing options are reducing, if not eliminating, barriers to IT entry. The open source movement is being embraced by developing nations even more enthusiastically than in the West. And with a growing and increasingly well-trained cadre of indigenous IT professionals, the notion of a permanent structural digital divide is fast succumbing to a far rosier reality.

The author is managing director of IBM Singapore

Copyright © 2005 Singapore Press Holdings Ltd.

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