In an article in The Wall Street Journal sometime towards the end of September this year, the writer argued how technological leadership has become an “existential issue” for China, the world’s second largest economy. With the Asian giant facing problems of heavy debt, a rapidly aging population and hostility from the United States, its biggest trading partner, the dynamic information-technology sector is one of the few reasons for it to cheer. China’s optimism about its technological leadership is quite understandable, especially since the country claims to have the world’s largest online population, and digitalization is one of the few factors that can ensure robust economic growth in the near future. But why digitization? Why is technology adoption and data access so important for growth? And what about countries that are still under-connected, or worse, disconnected? Are we witnessing an all new dimension of the global divide — the digital divide?
The world around us is undergoing a digital transformation at breakneck speed. Today, economic activities are stimulated by billions of online connections among people, businesses, devices, data and processes. The term “digital economy”, which was first coined in a book titled The Digital Economy: Promise and Peril in the Age of Networked Intelligence by Don Tapscott in 1995, has data at its core, and flourishes on hyper-connectivity — the ever-rising interconnectedness of people, organizations and machines because of mobile technology, Internet and Inter of Things (IoT).
In the last couple of decades, connectivity has grown by leaps and bounds. Global Internet consumption and data generation and sharing has multiplied at an exceptionally fast pace since the early 1990s. According to the United Nations Conference on Trade and Development (UNCTAD’s) Digital Economy Report 2019, 100 gigabytes of Internet Protocol traffic per day was witnessed in 1992. It grew to 100 GB per second in 2002 and 46,600GB per second in 2017. By 2025, this traffic is expected to be 150,700 GB per second.
Similarly, the reliance of businesses on data — for both trade and operations — has grown heavily in this period. A recent IMF blog suggests that today, a majority of the world’s largest firms, both in the tech space and otherwise, have data at the core of their business models. Perhaps that explains why the value of data intensive companies like Alibaba, Alphabet and Facebook has shot up. “Data has become a key input in modern economic production alongside land, capital, labor and oil. It feeds Artificial Intelligence algorithms whose predictions power applications from driverless cars to drug testing to credit provision to ad targeting,” reads the blog.
There has also been huge growth in the number of devices connected to the Internet such as sensors and meters. In 2018, there were nearly 8.6 billion devices connected to the Internet, as against nearly 5.7 billion people (going by the number of mobile broadband subscriptions). The number of IoT connections are predicted to grow at 17% each year and will exceed 22 billion by 2024. According to IoT Analytics 2018, the global IoT market is expected to grow tenfold by 2025 — from $151 billion (in 2018) to $1,567 billion. With changes like these becoming the new constant, the future holds tremendous opportunities and challenges.
“Examining the implications of the emerging digital economy for developing countries in terms of value creation and capture”, the UNCTAD report advocates for better governance of digital technology development through open, agile and multi-stakeholder models. While the huge wealth generated by digital advances is for the world to see, it is also important to note that this wealth is largely confined to a small number of countries, companies and individuals. For instance, the US and China together account for nearly 90% of the market capitalization value of the world’s 70 largest digital platforms and over 75% of the cloud computing market.
Under the current policies and regulations, going by the report, the situation is unlikely to change, further increasing the global inequality. That’s why it is very important to bridge the digital divide, as till date nearly half of the world has limited or no access to the Internet. This growing divide, which is not only based on geography (between countries) but is also based on gender (men and women) and ethnicity (rural and urban), poses a threat particularly to the less developed and underdeveloped countries, leaving them far behind in the “digital race”. The only way these gaps can be bridged is through better connectivity, embracing of emerging technologies and more partnerships and collaborations.
“In order to increase the pace of implementation of the Sustainable Development Goals, it is recognized that better use of data, and harnessing science, technology and innovation with a greater focus on digital transformation, is required,” says Greg Scott, Inter-Regional Advisor, Global Geospatial Information Management Section, United Nations Statistics Division. However, despite an abundance of data and associated technologies now readily available globally, for many developing countries, having access to reliable and consistent mapping data and analytics still remains completely out of reach, he adds. In the new era of digital transformation, there remains a vast digital divide between developed and developing countries, where the ‘haves’ and ‘have-nots’ of complete and detailed national mapping is real — and where many nations are being denied opportunity to contribute to the global digital economy, and are being left behind.
While the conventional causes for this situation are lack of political will , lack of understanding of mapping and spatial data infrastructures and unwillingness to share knowledge, it could be argued that many developing countries are yet to attain effective and sustained access to digital technology, the Internet and the corresponding computer literacy which are needed to contribute to the information society. “In these countries, providing and exploiting the new data needs, information systems, analytics and associated enabling technologies and tools to support the implementation of the SDGs is going to take strategic policy leadership and transformational change — a digital transformation that is able to bridge the digital divide which continues to inhibit development progress for developing countries,” adds Scott.
Inter-Regional Advisor, GGIM Section, UNSD
In the mid-2000s, the first users of mobiles in emerging markets were educated urban young men with a sound economic background. Over a decade later, even though mobile phone adoption has exploded, the uptake and use continued to be constrained by socio-economic and demographic factors such as income, education, gender etc. “Data, or access to technology is predominantly a male dominated possession in most developing and underdeveloped countries. It’s crucial that women are equipped with technology tools and are made part of the decision-making process,” says Jagdeesh Rao Puppala, Chief Executive, Foundation For Ecological Security.
In the less developed countries, there is a clear divide at the rural and urban levels — about 89% of urban households have a mobile phone, as against 63% in rural ones.
In Africa and India, while urban areas have reached the saturation point in terms of SIM subscribers, the mobile uptake in rural areas has plateaued. And the ones who have adopted late are failing to keep pace with rapid technology advancements. In Kenya, for example, despite the country’s advanced DFS ecosystem, the rural poor are about 40% less likely to be active mobile money users when compared to other populations (2018 Pathways for Prosperity Commission paper on The Mobile Phone Revolution and Digital Inequality).
Then there is the gender gap, which the World Bank’s Global Findex database presents in terms of possessing a mobile money account. Since 2011, the global gender gap in mobile money account ownership has remained unchanged at 9 percentage points. Similarly, GSMA’s 2018 Mobile Gender Gap Report suggests that in low and middle-income countries, the gender gap in mobile Internet access is 2.6 times that in phone ownership
Nearly 2.5 billion people around the world are dependent on community land, which is generally held in a collective manner under customary tenure arrangements. Experts estimate 50-65% of the world’s land is community land, though very little is known about the extent to which these lands are recognized. That’s because a major portion of these lands does not find a mention on maps. According to a 2015 study of 64 countries comprising 82% of global land area, only 10% of the world’s land (belonging to communities) was legally recognized (on maps). That is why, LandMark, an online project, is working on mapping all of the world’s indigenous lands to help secure legal rights of communities and alert them about threats such as illegal logging and mining.
Every year, more than one million people across the globe lose their lives to epidemics and calamities like earthquakes, floods, storms, hurricanes and landslides. Though paucity of resources continues to plague disease/disaster-prone areas in less developed and underdeveloped countries, another major problem that hinders relief work in times of crisis is the absence of these areas from maps. Be it 2017 measles outbreak in Conakry, Guinea, or 2016 hurricane in Haiti, no maps means delayed response and uneven allocation of resources. Missing Maps Project, which was set up by a group of humanitarian organizations in 2014, is working on bringing disaster-hit areas and communities on the map.
Let alone Africa and Middle East, places in Europe and America were wrongly mapped, or not mapped at all, until recently. With nearly 80% of data now having a location component, experts argue that maps are important not only for basic development but are also crucial for sound decision-making and analysis. “Around the world, we are facing a range of social, economic and environmental challenges. Data has a fundamental role to play in addressing these challenges. To maximize value from data, we need to increase access in ways that build trust, conform to legal and ethical frameworks and deliver value for the public good,” says Sir Nigel Shadbolt, Co-Founder and Chairman, Open Data Institute.
Half of the world may have “come online”, but there isn’t much to celebrate, as the status quo still puts billions of people on the wrong side of digitalization. And that is why, technology giants such as Microsoft are going an extra mile to ensure proper Internet access for people in the less developed world. In a blog in September this year, the company said that while the efforts to accelerate Internet access globally, with a focus on developing nations, are not new, it’s clear that the world needs a new approach to this work.
The blog, citing the UN State of Broadband Report, which suggested that broadband adoption has slowed in the world and that the progress is especially elusive in low-income countries and rural areas across the globe, said that even the majority of connected population relies on low speed, basic cellular services and only 14.1% of the global population has an in-home Internet subscription. Through its new international track of the Airband Initiative, Microsoft aims to extend Internet access to 40 million unserved and underserved people around the globe by July 2022.
In many countries, mobile has become the primary, and sometimes the only means of Internet access, according to GSMA’s Connected Society Report last year. However, the mobile Internet connectivity is not equitable, since just over 40% of the population in low and middle-income countries is connected, as compared to almost 75% of the population in high-income countries. There is also a persistent rural-urban gap in mobile Internet access — rural population in the above-mentioned countries are 40% less likely to use mobile Internet than urban populations. When it comes to gender, women are 23% less likely than men to use mobile Internet. The report suggests that the rural-urban divide and the gender gap are greatest in South Asia and Sub-Saharan Africa.
“We need to be able to leverage the transformative nature of digital technology as a true enabler for all, but it will require Internet access, literacy, availability and most importantly, bandwidth,” says Scott. This is a reality that countries and decision-makers will need to address. However, there are now communications technologies that are emerging from the industry that will assist countries to leap-frog the more traditional approaches. 5G is one such example. But the initial enabling infrastructure for these technologies can still be very costly.
“Ironically, for Africa, another influencing determinant not often considered is access to reliable electricity, without which there simply is no access to computers, ICTs and the Internet, and enjoyment of the subsequent opportunities and benefits,” explains Scott.
Co-Founder and Chairman, Open Data Institute
Asia Pacific and North America regions are expected to account for about 70% of the total data traffic between 2017 and 2022, whereas Latin America, the Middle East and Africa together will account for just around 10%, suggests the Digital Economy report. Nearly 99% of total global data transmissions run through fibre optic submarine cables and content providers such as Microsoft, Google, Facebook and Amazon own or lease more than half of all undersea bandwidth. Further, most data centers are located in developed countries — out of 4,422 colocation data centers, 1,880 are in developed countries, with the US being home to about 40% of these centers.
Perhaps that is also why the e-commerce numbers have remained unchanged in the past years. The UNCTAD report states that the global value of e-commerce is estimated to have reached $29 trillion in 2017. However, the list of the top 10 countries by total e-commerce sales has not changed since 2016, with the United States being the market leader. China, on the other hand, has the largest number of online shoppers (440 million), whereas the United Kingdom has the highest proportion of online shoppers to the population (82% of those aged 15 years and older).
Chief Executive, Foundation For Ecological Security
If regulations in developing countries can clearly set the rules for digital platforms, argues the UNCTAD report, there might be less need for “ex post enforcement of competition law by authorities”. For instance, the Government of India introduced new e-commerce rules in 2018 to promote competition and prevent restrictive practices by online platforms such as Amazon and Flipkart. Another option for such countries can be joining forces at the regional level within their regional trade and economic frameworks. Such arrangements would boost regional trade and ensure larger markets for local companies. These would also ensure that dominant platforms remain open to local and regional companies under fair terms and conditions, further enhancing the scope for collaboration.
Companies operating in developing or underdeveloped countries can also benefit from the use of global digital platforms, which provide the opportunity to connect with different parts, or even with other countries. This could enhance efficiency and increase access to domestic and international markets. For instance, in many developing countries, Facebook is often used as a means to market domestic services to potential customers. This not only results in new types of trade, but also moves traditional trade online. Further, it is important for developing nations to have their own digital innovation platforms, as the large global platforms may not have plans that align with local market needs. “Global sustainable development is just not possible without data. However, there are a few factors hat deserve consideration. It is important to set timelines for development while using data. Also, it is crucial to understand trends presented by data so that the problem on the ground can be properly identified and dealt with,” adds Puppala.
Enormous disparities of opportunity, dignity, wealth and power still prevail as a result of the digital divide. “Billions of people are still excluded from the new world of data and information by circumstance, geographic location, language, poverty, education, income, social groups, gender, age, lack of technology infrastructure, remoteness, or prejudice and discrimination,” says Scott. While the availability of technology, information and knowledge in the developed world provides almost unlimited choices, in the developing world, many are still forced to make one choice — between food and knowledge.
With respect to geographic location, these societal elements can be mapped further geographically when aspects such as rural versus urban and industrialized versus developing countries have an effect. Additionally, the broader overarching national social, political, and economic implications of the digital divide for countries, including lack of opportunity to solve societal problems, needs to be more fully considered. That is when we can think about global development or development for all, let alone sustainable development.