Despite rapidly falling costs of hardware, software and telecommunications services, a wide gap persists between rich and poor nations in terms of their capabilities of accessing, delivering, and exchanging information in digital forms (Carter and Grieco, 2000). According to a report published by the United Nations Conference on Trade and Development in 2006, a person in a high-income country was more than 22 times likely to use the Internet than someone in a low-income country (UNCTAD, 2006). The ratios were 29 times for mobile phones and 21 times for fixed phones. An estimate suggested that more than 95% of e-commerce transactions in 2003 were industrialized countries (Tedeschi, 2003). Another estimate suggested that 99.9% of business-to-consumer e-commerce in 2003 took place in the developed regions of North America, Europe, and Asia Pacific (Computer Economics, 2000). This is a form of commercial divide (UN Chronicle, 2003). Another estimate suggests that 80 percent of the global trade in high technology products originates from Europe, the U.S., and Japan (Bowonder, 2001) and 92 % of the patents granted in the world are owned by the members of Organisation for Economic Co-operation and Development (Archibugi and Iammarino, 2000). Whereas high-income countries have income 63 times that of low-income countries, the respective ratios are 97 for PCs, 133 for mobile phones, and over 2,100 for Internet hosts (Dholakia and Kshetri, 2003). While reliable data on e-commerce transactions are not available, the ratio is likely to be even higher for e-commerce transactions since e-commerce is virtually non-existent in many developing countries. The pattern indicates that the gap between developed and developing countries is wider for more recent technologies such as PC, mobile phone, and the Internet than for technologies which were introduced earlier. This article provides an assessment of three computer networks that redefine the conventional definition of market value by allowing developing nations and communities (Brooks, 2001) reap the benefits of modern ICTs: Global Trade Point Network (GTPNet) and Little Intelligent Communities (LINCOS).
The “global digital divide” is the outcome of the complex interactions between information and communication technologies (ICT) and various economic, political, and social factors in the environment. The global digital divide arguably is one of the strongest non-tariff barriers to the world trade with potentially adverse social, economic and other consequences influencing a developing country’s ability to take advantage of opportunities provided by modern ICTs (UN Chronicle, 2003). First, a large majority of potential users in developing countries are unable to afford a telephone line, a PC, and the telephone and Internet services provider (ISP) access charges. Whereas the cost of a PC is 5% of per capita GDP in high-income countries, it is as high as 289% in low-income countries (ITU, 2001). Furthermore, monthly Internet access charge as a proportion of per capita GDP in the world varies from 1.2% in the U.S. to 614% in Madagascar (UNDP, 2001).
Second, even if consumers are willing to pay for the connection of a telephone line, there is a big gap between demand and supply in developing countries. For instance, in 2001, 33 million people in the developing world were on the registered waiting lists for telephone connections, the average waiting periods being over 10 years in some countries.
Key Terms in this Chapter
Information and Communications Technologies (ICTs): Are technologies that facilitate the capturing, processing, storage, and transfer of information.
Internet: Is the “global information system that (1) is logically linked together by a globally unique address space based on the Internet Protocol (IP) or its subsequent extensions/follow-ons; (2) is able to support communications using the Transmission Control Protocol/Internet Protocol (TCP/IP) suite or its subsequent extensions/follow-ons, and/or other IP-compatible protocols; and (3) provides, uses or makes accessible, either publicly or privately, high level services layered on the communications and related infrastructure described herein” (The Federal Networking Council definition).
Low-Income Countries: Have per capita income less than $875 U.S. (in 2001).
Digital Divide: Refers to the fact that people in developing countries use modern ICTs less than those in developed countries.
Gross Domestic Product (GDP): Is the sum of the total value of consumption expenditure, total value of investment expenditure, and government purchases of goods and services.
PPP (Purchasing Power Parity): Is a rate of exchange that accounts for price differences across countries, allowing international comparisons of real output and incomes.
High-Income Countries: Have per capita income $9,266 U.S. or more (in 2001).