How Much does the Digital Divide Affect Global Economics?

In two words: a lot. And it will only get worse until the Divide is bridged.  This article from Time Magazine explores the relationship between economic growth and cheap and reliable access to the internet. The bottom line is that when economies, be they rural or national, have limited and unreliable access to the internet, they are missing out on an entire economic sector at a high cost. In the past two decades we have witnessed the rise of the digital economy, whose commerce now accounts for up to 10% of some nation’s entire economies (like the U.K)- much to the chagrin of nations where access to that economic sector is limited by poor infrastructure, government instilled firewalls, or other forms of red tape.

Here I see a clear example of a paradox of the developing world: the digital economy could provide numerous benefits to developing nations (such as internet based jobs, world-wide communication, online education, and readily available information and advice on health/hygiene) and yet those same nations who could benefit so much are those with the least access to such an economy. This leaves developed nations with free speech and excellent infrastructure to dominate the digital commerce market, stymying growth and employment elsewhere.

We can take this concept and apply it to say, Brazil. Brazil in this sense represents both the developing and the developed world. In its metropolitan cities of Rio de Janeiro, São paulo, and Brasilia, the internet is widely used for commerce, media and net-based employment (like banking, translation services, etc.). However drive two hours into the rural interior and suddenly cell phone service becomes inexistent, let alone internet, leaving the towns and small cities of the interior at the dark bottom of the Divide while large cities are consistently seeing growing facets of their economies becoming reliant on the internet.  So what’s the solution? It depends. If you live in a nation with the infrastructure and capabilities to have a strong internet based economy but are experiencing digital oppression by government policies (like China) the solution becomes political- making sure that governments are aware of the reasons why limiting internet usage is bad for economic growth. For the rest of the developing world its about bridging the Divide and creating a fair playing field where access to the benefits of internet commerce is available to all.

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2 responses to “How Much does the Digital Divide Affect Global Economics?

  • Thomas J O'Brien

    The growth of mobile broadband presents a good opportunity to begin to get basic internet access to people without having to run lines to very rural areas. Mobile broadband is not as good as traditional broadband, but it is a good start. You are correct to say that the digital divide negatively impacts the economies of developing nations. Mobile broadband can contribute to jumpstarting more investment in these areas because it can be a tool to grow local economies.

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