Inclusion or exclusion?
Carlos Alberto
Primo Braga, Information for Development Programme (infoDev), a multi-donor grant
facility managed by the World Bank, Washington, D.C.
This article commits the author only.
In a Cuban day care centre, children take their first steps in a virtual
world.
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The Law of Plentitude: in the old economy, value came from scarcity. In the new one, it’s just the opposite. The more plentiful things become, the more valuable they become. Adapted from “New Rules for the New Economy”, by Kevin Kelly, Wired Magazine, United States, September 1997 |
China is doing all it can to enter communication networks.
As we move from the industrial to the information age, access to the global
information infrastructure for economies, companies and individuals becomes paramount.The debate about the welfare implications of the information revolution for developing countries has given rise to diametrically opposed views. Some believe that information and communications technologies (ICT) can be mechanisms enabling developing countries to “leapfrog” stages of development. Others see the emerging global information infrastructure as contributing to even wider economic divergence between developing and industrialized countries. The reality is more complex.
A number of trends are broadly recognized as the hallmarks of the information age. First, ICT progress is expected to continue to promote the proliferation of communication networks as the costs of delivering these networks decline and the quality of their services improves.
Second, in a networked environment, the incentives for specialization and outsourcing increase. This puts a premium on flexibility and responsiveness as business cycles shorten and interactions between producers and consumers expand.
Third, electronic commerce is expected to continue to expand rapidly and further contribute to the internationalization of service activities.
Fourth, information flows are at the very core of the globalization process as countries and corporations project power by promoting their own culture and values on a global basis.
These trends suggest that the countries that are better positioned to thrive in the new economy are those that can rely on: widespread access to communication networks for their companies and citizens; the existence of educated labour-force and consumers; and the availability of institutions that promote knowledge creation and dissemination.
Against this background, developing countries seem to be at a significant disadvantage vis-à-vis industrialized countries. According to the World Bank, by 1995 low-income economies averaged less than 2.6 telephone lines per 100 inhabitants and less than two computers per 1,000 inhabitants, in contrast to a teledensity of 54.6 per 100 and a computer penetration of 199 per 1,000 in high-income economies. Internet penetration is even more skewed with the ten top countries (all of them industrialized economies) accounting for more than 85 per cent of the existing worldwide Internet hosts by the end of 1997.
Income inequality and computer literacy gaps
The quality and coverage of schooling at all levels are also characterized by significant gaps between industrialized and developing countries. These gaps reinforce income inequality, not only internationally, but also within each nation as the ratio of female to male illiteracy tends to be higher the lower the level of economic development and the benefits of public education are typically skewed toward the richer classes. The gaps are even more dramatic when translated to the field of computer literacy.
Finally, developing countries are ill equipped to implement pro-competitive regulatory regimes. In the same vein, the culture of protection and enforcement of intellectual property rights is often an alien concept. The same applies to reliance on networks to promote transparency and access to government services.
All these indicators seem to point towards a social transformation that will increase rather than diminish economic divergence at the international level. Developing economies would be condemned to fall further behind in the international economic race because of their lack of connectivity and ability to transform the information explosion into a knowledge revolution. Once one analyses the drivers of the information revolution, however, a different picture begins to emerge.
Technological developments are rapidly eroding economic and technical barriers to entry into communication networks. Developing countries can, for example, leapfrog stages of development by investing into fully digitized networks rather than continuing to expand their outdated analog-based infrastructure. There are advantages in being a follower–e.g., not having to cope with the technological obsolescence of well developed wireline networks–and they are illustrated by the fact that low-income economies presented a higher share of digital telephone lines (94.7 per cent) than high-income economies (85.5 per cent) by 1996. ICT are also creating new development opportunities to address some of the handicaps of developing countries noted above.
First, by developing a modern information infrastructure countries can reduce isolation and exclusion. Many countries are experiencing fast expansion of cellular telephony as an alternative to inefficient conventional network services. Wireless technology can also provide affordable connectivity to rural areas in a fraction of the time that was required in the past to expand conventional telephone networks. In Bangladesh, for example, “wireless women” were given loans of $350 each by Grameen Bank to cover the initial costs of the telephone, connection and training. They have now become service providers in the rural areas. Moreover, community information centres with access to value-added services can be customized to the needs of the poor. In South Africa, for example, such centres are being used to provide access to the Internet and to help answer questions concerning health, employment, and human rights issues.
Second, countries can accelerate educational development by using their information infrastructures for distance education. The costs and effectiveness of such programmes are improving dramatically. ICT is also being used for lifelong learning, opening opportunities for new players in education systems. In developing economies, the dynamism of these new entrants can challenge conventional educational systems and play a catalytic role in their transformation.
Leapfrogging stages of development
Third, a modern information infrastructure can also be a powerful force for better governance. It can, for example, enhance tax administration, auditing and control. Morocco has significantly improved its tax revenue by computerizing the country’s tax administration. Moreover, countries can now automate their institutions administering intellectual property rights, strengthening their efficiency and enforcement capability at a fraction of the costs that prevailed in the past.
In short, the logic of the networked economy is one of inclusion rather than one of exclusion. As technological progress continues to push the costs of computing and bandwidth down, opportunities for development-oriented applications of ICT will multiply. Moreover, for those already connected the value of the network increases exponentially as new participants join the community.
Technological determinism and government policies
These considerations point toward a more optimistic scenario for developing countries’ participation in the emerging knowledge economy. Although, no doubt, income and wealth inequality may increase in the initial stages of the process, catch-up can also happen at a much faster pace than in the past. ICT spending, for example, grew more quickly in most developing regions than in high-income economies in the 1992-97 period. And countries like South Africa and Brazil already boast a higher share of networked personal computers than most industrialized economies.
These scenarios can be criticized for sharing a common feature: technological determinism. The different outcomes predicted, however, illustrate that they are also influenced by other variables, in particular, government policies.
If, for example, developing countries maintain regulatory barriers to the expansion of networks–e.g., by favouring monopolistic providers for telecom services–the likelihood of the first scenario increases. In this case, global dualism will be magnified not only across the conventional North-South divide, but also in terms of country-level economic inequality as a small elite of connected people in the South benefit from the global information infrastructure.
On the other hand, if regulatory roadblocks are properly addressed and efforts to promote universal access to value-added networks and computer literacy are implemented, then the possibilities for catching up will proliferate. Participation in multilateral efforts–e.g., negotiations conducted under the World Trade Organisation and the World Intellectual Property Organization–can also be used to leverage the process of institutional modernization. Under these circumstances, the benefits of the revolution will be widely disseminated both at national and international levels.
The most likely outcome, however, is a combination of both scenarios in which a subset of developing countries is able to converge with high-income economies more quickly than ever before while others lag further behind. International efforts to promote pilot projects in this field can increase the number of countries in the first category.
• www.worldbank. org/infodev.
• World Telecommunication Development Report, International Telecommunication Union (ITU), Geneva, 1998
• World Development Report: Knowledge for Development, World Bank, 1998; New York, Oxford University Press.
• Digital Planet: The Global Information Economy, World Information Technology and Services Alliance (WITSA), Arlington, Virginia, USA, 1998
• “Alleviating Poverty Through Technology”,
M. Yunus, 1998, Science, 282 (16 October/No. 5388), pp. 409-410.
