THERE IS BUSINESS IN CLOSING THE DIGITAL DIVIDE
Geoffrey Kirkman is director of the Information Technologies
Group at the Center for International Development at Harvard University
and a visiting fellow at the MIT Media Lab. Jeffrey Sachs is director
of the Harvard Center for International Development.
By Geoffrey Kirkman and Jeffrey Sachs
CAMBRIDGE, Mass. -- Globally, the quantity of goods and services that
are already sold -- or whose sale is mediated -- through electronic means
is staggering. Virtual consulting teams work 24 hours a day in many firms,
passing off project work to the team in the next convenient time zone
as the workday ends. Just-in-time Internet-based order systems alert textile
suppliers in the Indian Ocean when their shipments are needed to arrive
in the ports of northern Europe. Growing numbers of government tenders
are migrating to online platforms worldwide. It is estimated that by 2005
than 10 percent of global economic activity will take place online, a
figure that could reach $3 trillion each year.
Readers may scoff, especially with the bloom off Internet market values.
But there is a big difference between believing in the new economy and
believing in the unrealistic stock prices that were attached to firms
in the new economy. Many of the core gains in productivity due to information
technology will be captured by consumers, or by hospital patients, or
students, and not by the providers of the IT services. Thus, the stock
price declines, and even the slowdown in IT sales in the United States
are no cause for doubting the potential for information and communication
technologies to reshape economies and benefit those who need growth the
most -- the poor countries of the world.
The Internet has been shown to be a powerful tool for dealing with grave
social issues as well. E-mail has played an essential role in rallying
health-care interventions in response to Ebola outbreaks in Uganda and
in organizing humanitarian responses to refugee crises in the Balkans
and in Africa. It has an even larger role to play in the future, in helping
to get the primary health centers and district hospitals of the poor countries
online so that they can better share in the remarkable boom in global
knowledge about treating disease, controlling epidemics and mobilizing
novel technologies to solve urgent health problems.
Yet in spite of the revolution that has been sparked by the new technologies,
there are still tremendous obstacles to the success of these sweeping
changes in the developing world. Without a national strategy harnessed
to political will and business-sector leadership, regulatory impediments
will remain in place, educational systems will continue to turn out woefully
untrained workers, and access to and use of IT will remain
only in the hands of the developed world and some pockets of success in
What needs to be done?
FREE UP THE PHONE LINES
If there is one element that we can point to with certainty as a key strategic
priority for developing nations, it is the liberalization of telecommunications.
Where telecoms regimes remain dominated by monopolies, either state or
private, the result is almost everywhere a dismally underperforming IT
sector, one with few participants, high prices, low quality of service
and backward technology. The key is open competition,
easy entry of new participants in the IT sector and thereby ample room
for start-ups, foreign companies and domestic firms from outside the traditional
The liberalization of telecoms should include not only long-distance and
local telephony, but also Internet service provision, cellular telephony
and the opening of the local loop. These steps have consistently had incredibly
powerful effects upon an economy. When competition is introduced, prices
of IT services fall sharply, the quality of the infrastructure rises,
and customer service becomes a priority of IT providers. Suddenly, telecommunications
become more accessible to a wide
spectrum of individuals, firms and institutions that had previously been
shut out. This access to information and communication leads to an empowerment
of the business community and social networks that enhance economic competitiveness.
In many places, this question of liberalization comes down to the basic
question of political will. Political leaders have to look at telecoms
monopolies as more than just a major source of revenue, perhaps for the
ruling party, derived from a limited market. Liberalized telecoms regimes
can and should become the major drivers for growth for national economies,
fueling innovation and business activity in all areas of the economy.
Shortsightedness and the fear of letting go of the "cash cow"
continue to stand in the way of vital reform. Beyond the liberalization
of telecoms, there are other clear priorities that should be dealt with
to promote investment in technology related enterprises. Low tariff barriers
for IT products and services, serious consideration of online privacy
and security, legal certainty for digital transactions and more fundamental
issues -- such as access to credit, predictability of the legal system
and openness to foreign direct investment -- are among the essential policy
issues to consider when creating an environment in which IT can thrive.
Within the private sector, business leaders should also reexamine their
priorities. One important step, which would not only unlock the potential
for IT to catalyze economic growth in the developing world, but would
also certainly lead to innumerable profit-making opportunities, is for
leaders in the developed world to stop discounting the long term market
potential of the 5 billion people living in the developing world whose
economies have a combined annual income of more than $6 trillion. There
is a deep hunger in developing economies for information -- information
for business, commerce, health, education, entertainment. It is trite
to say that information is key in making markets function, but it is also
true that information is in short supply and available only at exorbitant
prices in most developing-country contexts.
It does not require too much imagination to link this information
scarcity with an untapped market potential. But creativity will be needed
to promote viable business models. In poorer countries, IT facilities
will need to be multi-functional, so that community access to Internet
outlets is used to maximum advantage -- to empower local businesses, local
local health clinics and the like. Software and hardware must be adjusted
to local conditions, in terms of language, suitability and functionality
in stressful conditions and easy maintenance.
What is certain is that once the first major IT companies successfully
tap the markets of the global poor, the rest of the competition will be
left playing catch-up and asking, "Why didn't we do that?"
EDUCATION, EDUCATION, EDUCATION
Without a cadre of workers who have the necessary IT skills, it is impossible
to build a thriving industry around the new technologies. It is also impossible
to attract the investment and create the employment opportunities that
can flow from the global information and communication technology sectors.
In much of the developing world, few workers graduate
each year with the relevant skills needed to be competitive in the new
It is no secret that educational systems in most of the developing world
are desperately short on funds and are often not a priority in national
planning. Curricula are out of date and not attuned to the IT revolution.
This does not have to continue to be the norm. As is illustrated by showpieces
of educational excellence -- such as the Indian Institutes of Technology
and Mexico's Tec de Monterrey -- a dedicated vision and strategic long-term
investment can build world-class institutions of higher learning that
produce some of the world's finest IT workers. National universities should
partner with universities in the developed world to foster technology
transfer and improvements in curricula and staff expertise. Close working
relationships with the local business community and multinational firms
allow the skills in institutions of higher education to become more relevant
to the marketplace.
Partnership between the public and private sectors has been a successful
avenue for projects in the developing world outside the university. At
the primary and secondary school level, there are shining examples such
as the World Links for Development (WorLD) program. This World Bank-sponsored
project, with the support of private firms and other agencies hooks up
secondary schools to the Internet, trains teachers to incorporate computers
into their daily curriculum and develops learning programs for their students
to collaborate over the Internet with students in other countries.
To date, WorLD has trained more than 5,000 teachers in 20 developing countries
and, using IT, has created pockets of excellence in secondary education
throughout the developing world. Leaders in the developing world should
also consider the possibilities of imparting IT skills to their citizens
outside the formal educational system. The Cisco Networking Academies
-- now active with almost 6,000 academics in 96 countries -- currently
have more than 154,000 students enrolled in network administration training
courses worldwide. The network
of Computer Clubhouses, begun in Boston, Mass., recently received a grant
from Intel to create a global network of 100 after-school learning centers
that is expected to attract more than 50,000 under-served youth to technology-based
programs. These examples of private companies getting
involved in the learning process show the possibilities of working around
the difficulties of the formal education system. They also demonstrate
the importance of leadership from the business community in promoting
knowledge and skills that are desperately needed.
If we are truly living through an IT revolution, then we need nothing
less than a revolution in global learning systems. Only then will every
country be able to participate fully in the global new economy. The leaders
of the developing world should view this period as a time of great opportunity.
Powerful tools, in the form of information and communication technologies,
are available to enhance economic development and to lessen the socioeconomic
and geographical divides that have characterized international relations
for decades. But to take advantage of this tremendous opportunity, leaders
must show leadership. Difficult decisions need to be made by both the
public and private sectors in order to harness the new technologies. The
rewards for making those decisions are clear and important. The early
movers will surely reap the greatest benefits.
(c) 2001, World Link. Distributed by the Los Angeles Times Syndicate International
For immediate release (Distributed 6/13/01)