Technological Forecasting & Social Change 76 (2009) 1124–1129

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Technological Forecasting & Social Change

Research note

From the relative to the absolute digital divide in developing countries

Jeffrey JamesTilburg University, Warandelaan 2, 5000 LE Tilburg, The Netherlands

a r t i c l e i n f o

E-mail address: M.J.James@uvt.nl.

0040-1625/$ – see front matter © 2009 Elsevier Inc.doi:10.1016/j.techfore.2009.01.004

a b s t r a c t

Article history:Received 15 October 2008Received in revised form 22 January 2009Accepted 24 January 2009

This paper argues that the literature on the digital divide is based heavily on relative rather thanabsolute magnitudes, although the latter has more welfare significance. It is clear that theformer concept has been falling sharply in recent years yet such calculations have not beenmade for the absolute divide. One contribution of this paper is to redress this gap in theliterature for both mobile phones and the Internet using a sample of more than sixty countries.The results tend to be broadly consistent with findings from the literature on the adoption anddiffusion of IT in developing countries generally and Africa in particular.

© 2009 Elsevier Inc. All rights reserved.

Keywords:Mobile phonesThe InternetAfricaInformation technology

1. Introduction

When people speak of the digital divide they are almost always referring to the relative divide between rich and poor countries[1]. There is very little in the literature on the absolute divide [2].What this article suggests is that there are good reasons to refocusthe literature in favour of this neglected concept of the digital divide [3]. One reason is that the relative concept is not a goodindicator of welfare (partly because it is too easily overcome). A second reason is that this indicator of the divide has been fallingquite sharply in recent years and in the case of mobile phones is coming close to disappearing altogether. As such the issue ofclosing the relative divide becomes irrelevant. Finally, it needs to be recognized that closing this divide is only an intermediate stepin the larger process of closing the absolute divide between rich and poor countries. If the latter have indeed managed to close thelatter divide, then one can properly speak of amajor achievement in the adoption and diffusion of information technology, one thathas as yet gone unnoticed in the literature with its heavy bias in favour of the relative divide.

These reasons prompt me to pose the following research question: Though the relative divide in mobile phones and theInternet has been falling quite sharply in recent years, can one also discern a tendency for themore fundamental absolute divide todecline? In order to answer this question I employ a simple formula based on IT stocks and growth rates in developed anddeveloping countries. The result comprises the first attempt (I am aware of) to measure the behaviour of the absolute divide overtime.

2. The relative versus absolute divide

The relative divide is defined at any point of time simply as the ratio of information technology stock in developed countriesdivided by the stock in developing countries. This gap will fall, rise, or stay unchanged depending on whether the latter countriesgrow, respectively, faster, slower or at the same pace as the former countries (In the case of mobile phones, for example, it is thenumber of subscribers per 100 persons in rich countries divided by the corresponding number for the poor countries.). Theabsolute gap on the other hand is defined as the stock of information technology in developed countries minus the stock indeveloping countries. As shown in Table 1 it is perfectly possible for the absolute divide to increase while the relative magnitude isfalling.

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Table 1Absolute divide grows as relative divide falls.

1996 2006

(Population=100) (Population=100) Growth fraction

Internet users per 100 inhabitantsDeveloped countries 40 45 1.25Developing countries 10 12 2Relative divide 4 3.75Absolute divide 30 33

1125J. James / Technological Forecasting & Social Change 76 (2009) 1124–1129

In particular, the higher assumed growth in Internet users in the developing countries causes the relative divide to fall to 3.75even though the absolute gap has gone up by 3 persons in 2006. Let us now examine the question of how these divides haveactually behaved over the period between 2000 and 2006 (before 2000 the penetration rate of IT in developing countries was veryslight).

3. The closing relative divide in mobile phones and the Internet

Table 2 shows the fall in the relative divide for mobile phones and the Internet over the period from 1994 to 2007.By the end of the period the relative divide in mobile phones had fallen to just 2.16 and in the Internet to 3.65. The higher

penetration rate for the former technology in 2007 probably reflects several factors. One of them is that mobile phone technologyis considerably less demanding than the Internet with respect to affordability, user capabilities and infrastructure requirements.Another reason is that the former technology is far better placed than the latter to benefit fromwhat is referred to as technologicalleapfrogging. Underlying this concept is the notion that developing countries, as latecomers, can benefit from the comparative lackof investment in earlier versions of a technology and can hence leapfrog directly and advantageously to the latest version. In thecase of digital switching technology for example, these countries did not suffer from the disadvantage of having large, establishedmechanical networks and could thus leapfrog this technology and go directly to digital switching. In the case of mobile phones theanalogy is with fixed-lines which some developing countries have been able to bypass altogether.

One needs to take note however that the rapid convergence in this sense took place from a very large difference in initialconditions, [3]. Whereas, for example, developed countries began the period from 1994 with 2.18 Internet users per 100inhabitants, the corresponding number for developing countries was only 0.03. Indeed, when one takes this difference intoaccount, some decline in the relative digital divide was almost inevitable. For, from that minute absolute initial level, developingcountries would only have needed an increase in the number of users to 0.7 per 100 inhabitants in order to achieve the samepercentage growth that occurred in the developed countries over the ten year period to 2004 (that is, an average of 237 per centper annum). The point I am trying to emphasize is that it is relatively easy for ‘latecomer’ countries to bridge the relative digitaldivide in mobile phones and the Internet. It is hardly a meaningful goal worth striving for [3].

4. The need for a refocus towards the absolute digital divide

I have just described how easy it is for the developing world (and especially its poorest parts) to close the relative divide from alow initial base. This itself makes the goal somewhat unchallenging from a development point of view, as it does in the case ofclosing the relative income divide. A more fundamental approach would be to compare absolute numbers of users of newtechnologies in rich and poor countries. From a welfare point of view this tells us the differential extent to which inhabitants ofthese regions actually benefit frommobile phones and the Internet. And this is ultimately what a digital divide should capture andhow progress towards overcoming it should bemeasured; that is, as a real achievement rather than as an exercise in the arithmeticof starting from a low base number.

The powerful bias currently exerted in the literature in favour of the relative divide would be less of a problem if that bias alsotold us something about the behaviour of the absolute divide. Yet, as already shown in Table 1, it is perfectly possible for that latter

Table 2The decline in the relative digital divide.

1994 2004 2007

a) Mobile phonesDeveloped countries 5.2 76.8 97.0Developing countries 0.19 18.8 45.0Size of the relative divide 27 times 4 times 2.16 times

b) The InternetDeveloped countries 2.18 53.8 62.0Developing countries 0.03 6.7 17.0

73 times more 8 times 3.65 times

Source: ITU, free statistics, graphs.

Table 3The basic formula: five outcomes (2000–2006).

1) Absolute digital divide increasesIT stock developed countries 2006ð ÞIT stock developing country 2006ð ÞN

growth developing countrygrowth developed countries

2) Absolute digital divide fallsIT stock developed countries 2006ð ÞIT stock developing country 2006ð Þ <

growth developing countrygrowth developed countries

3) Absolute digital divide remains constantIT stock developed countries 2006ð ÞIT stock developing country 2006ð Þ = growth developing country

growth developed countries

4) Absolute digital divide has disappearedIT stock developed countries 2006ð ÞIT stock developing country 2006ð Þ =15) Absolute digital divide never fallsGrowth developing countryGrowth developed countries<1

Note: the period of growth is from 2000 to 2006.Note: the period of growth is from 2000 to 2006.

1126 J. James / Technological Forecasting & Social Change 76 (2009) 1124–1129

divide to increase while the former is narrowing. Thus a separate inquiry needs to be undertaken on the movement of the absolutedivide over time and it is to this topic that I now turn. Such an inquiry would usefully supplement the data currently provided bythe Millennium Development Goals, namely, the penetration rates of mobile phones and the Internet over time. It would alsosupplement the same data provided annually by the ITU and the World Bank.

5. The behaviour of the absolute divide over time

To determine the various possible outcomes of the absolute divide over the years I compare two ratios. One is the ratio of thestock of information technology in the developed countries divided by the stock in developing countries and the other is thereverse ratio of growth rates in IT between the two regions over the selected period. Thus, for a given stock difference, the digitaldivide will increase, decrease or stay the same depending on the differential growth rates in rich and poor countries (see Table 3).Table 3 also shows two other possibilities. The first is where the stocks of IT are equal in developed and developing countries(where the ratio is thus unitary) and the second occurs when the absolute digital will never fall, because growth in the lattercountries falls short of growth in the former.

My task in the sections that follow is to fill in these five categories for a sample of low and low-middle income countries withregard to bothmobile phones and the Internet [4]. In each case I beginwith a calculation made at the aggregate level, between richand poor countries, before shifting to the less aggregative form of analysis.

5.1. Mobile phones

The relevant data at the former level are mobile phone subscribers in both groups of countries in 2006 and the conversegrowth rate in subscribers between 2000 and 2006. In particular,

90 subscribers per 100ð ÞDCs;200634 subscribers per 100ð ÞLDCs;2006 � Growth rate of 96:7k LDCs;2000−06

Growth rate of 13:3k DCs;2000−06

4b7.27.

Or, 2.6Thus, the difference in growth rates between rich and poor countries (DCs and LDCs respectively) is more than enough to

outweigh the imbalance in mobile phone subscribers in 2006, and the absolute digital divide falls over the period in question(case 2 in Table 3). How, though, are individual low and low-middle income countries spread across the five categories shownin Table 3?

Table 4 shows first that only one country, Jamaica, had reached the same penetration rate as developed countries by the end of2006 (that is, where the ratio of the stocks was equal to one). Indeed, this country has a higher mobile subscription rate than somedeveloped countries such as Japan and it performs far better in this respect than its income level would predict. According to theInternational Telecommunications Union (ITU),

Jamaica has achieved this success thanks to a market liberalization process that began in 1999. It renegotiated the 25-yearold monopoly held by Cable and Wireless, allowing the country to introduce competition on a phased basis….Liberalization began in April 2000, when Jamaica became one of the first Caribbean countries to liberalize its mobilemarket by granting licenses to two newmobile operators, Digicel and Oceanic digital, for around US $ 92 million in total….Digital launched its mobile network in April 2001 and became an overnight success story. In its first 100 days of operation,Digicel gained 100,000 subscribers, a target it had originally envisaged reaching after one year. After its first year ofoperation, Digicel had 400,000 subscribers; roughly what the incumbent had taken a decade to achieve. Jamaica's successis significant, as it disproved a long-established theory that small island economies were too small to sustain competition.One positive factor for mobile competition in small island economies is that they are often tourist destinations. Giventhe rise of mobile telephony and roaming, these markets are attractive to investors, as they can reap significant roamingrevenues from tourists [4, p. 31].

Table 4Closing the absolute divide in mobile phones.⁎

Countries wherecatch-up hasalready occurred (1)

Countries where the absolute divide is beingreduced (47)

Countries where the absolutedivide is increasing (11)

Countries where thereis no change in thedigital divide (2)

Countries whichwill never closethe digital divide (0)

Jamaica Afghanistan, Albania, Algeria, Angola, Bangladesh,Burkina Faso, Cameroon, Chad, China,Cote-d-Ivoire, Dominican Republic, Ecuador,El Salvador, Ghana, Guatemala, Guyana, India,Namibia, Gambia, Honduras, Indonesia, Jordan,Kenya, Lao, Lesotho, Mali, Mauritania, Nicaragua,Pakistan, Paraguay, Peru, Philippines, Senegal,Sri Lanka, Sudan, Surinam, Syria, Tanzania,Thailand, Togo, Uganda, Vietnam, Yemen,Zambia, Benin, Egypt, Iran

Burundi, Cambodia, Central African,Republic, Malawi, Mongolia,Zimbabwe, Haiti, Madagascar,Rwanda, Sierra Leone, Iraq

Bolivia, Fiji

Notes: ⁎Based on author's calculations.

1127J. James / Technological Forecasting & Social Change 76 (2009) 1124–1129

Table 4 also shows that for the majority of developing countries the absolute digital divide is closing. The growth rate ofmobile subscribers in these countries, that is to say, is sufficient to cover the higher penetration rates observed in the richcountries. This represents a substantial welfare achievement that has so far gone unrecorded in the existing literature, with itsbias in favour of the relative divide. In a minority of the countries shown in Table 4, however, the absolute divide has beenincreasing over time.

Table 5 suggests that these are not countries which have been randomly chosen but rather that they exhibit several distinctivefeatures. The first is that they are drawn from amongst the very poorest countries in the world and the second is that they sufferfrom especially low penetration rates (relative again to the low-income country average). The income level for example is just overhalf that of low-income countries, while the penetration rate is less than half the average for the same control group.

These countries may be caught in some form of poverty trap where low income constrains mobile phone adoption and the lackof this technology in turn keeps poverty at a high level. There is already for example an important literature that stresses the linkbetween poverty and investment via imperfect capital markets. In particular,

Table 5Charact

Country

BurundCambodCentralMalawiMongolZimbabHaitiMadagaRwandaSierra LIraq

Source:

When the returns are higher than the cost of capital, an individualwould have the same incentive to invest regardless of his orher initial income level: theoretically, poor people could always borrow the capital they need to make the investment…

However, in real life – and especially in developing countries – capital and financial markets are plagued with imper-

fections. In many economies large segments of the population may not have access to credit at all. In some cases, access tocredit is denied because the poor do not have the necessary capital. In other cases, financial operators may find it difficultto enforce contracts, and an individual's access to credit will likely be constrained by his or her initial wealth [5, p. 106].

If there is indeed a poverty trap based on the multiple causality between poverty and mobile phone adoption, then policy willbest be addressed to both of these variables simultaneously [5].

eristics of countries where the absolute divide in mobiles is increasing.

Penetration rate (per 100) Income level ($)

i 1.9 100ia 8 490African Republic 2.4 350

3.2 230ia 21.8 1000we 6.3 340

5.4 430scar 5.5 280

3.3 250eone 2.2 240

2.1 n/aAverage=5.65 Average=$ 371Low-income countries=14.3 Low-income counties=$ 649SSA=13.5 SSA=$ 829Low-middle income=381 Low-middle income=$ 2038

World Bank at-a-glance tables.

Table 6Closing the absolute divide in the Internet.⁎⁎

Countries wherecatch-up hasalready occurred (0)

Countries where the digital divide isfalling (23)

Countries where the digital divide isrising (37)

Countries where thereis no change in thedigital divide (4)

Countries where thegrowth rate is less thanor equal to in developedcountries (2)

Albania⁎, Algeria⁎, Benin, Colombia⁎,Costa Rica⁎, Dominican Republic⁎,Ecuador⁎, El Salvador⁎, Egypt⁎,Guatemala⁎, Haiti, India, Jamaica⁎,Jordan⁎, Kenya, Mongolia, Peru⁎,Senegal, Sudan, Syria⁎, Vietnam,Zambia, Zimbabwe

Angola⁎, Bangladesh, Bhutan⁎, Bolivia⁎,Burundi, Cameroon⁎, Central African Rep.,China⁎, Cote-d-Ivoire, Cuba⁎, Djibouti,The Gambia, Ghana, Honduras⁎, Lao,Madagascar, Mali, Mauritania, Mozambique,Namibia⁎, Nepal, Nigeria, Nicaragua⁎,Paraguay⁎, Philippines⁎, Sierra Leone, Somalia,Sri Lanka⁎, Suriname⁎, Tanzania, Rwanda,Thailand⁎, Togo, Uganda, Yemen, Eritrea

Burkina Faso, Fiji,Guyana, Indonesia

Malawi, Tanzania

Notes: ⁎Denotes low-middle income country.⁎⁎Based on author's calculations.

1128 J. James / Technological Forecasting & Social Change 76 (2009) 1124–1129

5.2. Internet

The following data show Internet users in both developed and developing countries in 2006 and growth in users between 2000and 2006.

Table 7Penetra

Countri

a) PeneAverageLow-incSSA=3Low-mi

b) Per cAverageLow-incSSA=$Low-mi

Note: 1)

case.

59 users per 100ð Þin DCs;200612 users per 100ð Þin LDCs;2006

� Growth rate of 83:3k LDCs;2000−06Growth rate of 15k DCS;2000−06

2b5.55.

Or, 4.9In spite of the fact that the absolute divide in the Internet is falling for developing countries as a whole, however, Table 6 shows

that it is increasing amongst the majority of these countries. This stands in sharp contrast to the case of mobile phones and reflectsfundamental differences in the ease and desirability of adoption of the two technologies. For one thing the Internet is much moredependent on a country's infrastructure (such as phones and electricity) than the mobile phone which can be operated relativelyindependently of other complementary resources. Then there is the question of differing skill requirements for the two forms ofinformation technology. Whereas mobiles can be operated even by the illiterate, use of the Internet requires a whole range ofcomplex linguistic and technical skills [6]. If these are not present, additional computer hardware alone will not increase output(unused or underutilized computers are a common sight in many developing countries) [6]. Note finally that the desirability of thetwo technologies will tend to vary in the eyes of low-income consumers. In particular, whereas such consumers would place aheavy emphasis not only on the ability of mobile phones to improve their overall well-being but also to access vital communicationhubs, this is much less true of the Internet. It is more difficult to relate the Internet to low-income communication needs and formany people this technology remains a rather esoteric ‘luxury’.

Another major issue concerns the composition of the groups where the absolute divide is falling and rising. One of the moststriking observations about the latter category is the strong presence of low-income African countries (more than half the total)and it reflects the especially acute difficulties of Internet installation and adoption in that region. The scarcity of internationalbandwidth, the lack of Internet Exchange Points (IXPs) and intermittent electricity all drive up prices (indeed, the poorestcontinent in the world also faces the highest price of connecting to the Internet). According to theWorld Bank (2008) the monthlyprice basket for the Internet in Africa in 2006 was $ 15.95 as against $ 12 for the low-income countries as awhole. The comparative

tion rate and income difference per group (the Internet).

es where the digital divide is falling Countries where the digital divide is growing

tration rate (2006)=12.93 (per 100 users) Average=2.87 (per 100 users)ome countries=4.21) Low income countries=4.21)

.8 SSA=3.8ddle income=11.4 Low-middle income=11.4

apita income (2006)=$ 1906.52 Average=$ 966.57ome countries=$ 6491) Low-income countries= $ 6491)

829 SSA=$ 829ddle income=$ 2038 Low-middle income=$ 2038

These three numbers are the same in both columns and they are designed to help the reader obtain a comparative perspective with the averages in each

1129J. James / Technological Forecasting & Social Change 76 (2009) 1124–1129

shortage of Internet skills in Africa is the result partly of low learning achievements in the region. Pritchett [7], for example, hasobserved that ‘the developing countries lag far behind the OECD in learning achievement. Latin American countries are 4.8standard deviations below the OECD median; countries in SSA [Sub-Saharan Africa] 6.7; countries in the Middle East and NorthAfrica (4.7) and countries in East Asia 3.1’. More generally, Africa tends to performworst on the numerous indicators that are nowused to measure the preparedness of countries to benefit from information technology [1].

If the strong presence of low-income Africa in the group with a rising absolute digital divide tends to exert a downwardinfluence over the average income levels and Internet penetration rates of countries in this group, so too does the lower proportionof low-middle incomemembers of the sample. Table 7 confirms that the average penetration rate and income level in the group inquestion are considerably lower than the other group. In fact, the penetration rate in the former group is seen in Table 7 to be evenlower than for low-income countries as a whole. There is a distinct similarity here with the result for mobile phones describedabove, and both reflect ultimately the role of income in adoption patterns of information technology throughout the developingworld. Indeed, there is now considerable cross-country evidence showing that income is a major determinant of penetration ratesin mobile phones and the Internet [8]. But there are other important explanatory variables as well, such as education andgovernment policy, which account for different penetration rates at the same income level and help to explain why some low-income African countries are experiencing a fall in the absolute digital divide and others are not [9].

6. Conclusions

I began this article by arguing that the achievements of developing countries in the adoption of mobile phones and the Internetshould be judged by whether they reduce the absolute rather than the relative digital divide. Closing the latter, I suggest, is not ameaningful welfare yardstick partly because it is met too easily by countries starting from a low base level of IT. The empirical partof the paper therefore is concerned to examine the historical behaviour of the absolute divide in a sample, of low and low-middleincome countries for mobile phones and the Internet. By this more exacting and fundamental standard I find that at theaggregative level of developing countries as awhole, the divide is being reduced for both technologies (but less so for the Internet).This, one should emphasize, is a striking achievement that has so far gone unnoticed in the literaturewith its heavy bias in favour ofthe relative divide. When one looks at individual countries however the extent of the achievement differs somewhat betweenmobile phones and the Internet. In the mobile phone case that is to say there are only a few countries where the absolute divide isincreasing, whereas for the Internet this description applies to a wide majority of countries. I ascribe the difference to the moredemanding infrastructure and education requirements for the operation of the Internet as opposed to the use of the mobile phone.Common to both technologies however was the finding that the group of countries experiencing a rise in the divide tended to bemade up more heavily of low income countries with low penetration rates (rates which are low even by the standard of low-income countries as a whole). In the case of both technologies moreover, low-income African countries showed a strong presencein the category where the absolute digital divide is increasing.

6.1. Notes

(1) According to the influential ITU [1] ‘It is true and encouraging that overall, the digital divide has been reduced and continuesto shrink’ (p. 4). The context of this quotation makes it clear that the digital divide is of the relative kind.

(2) Morawetz [2] contains a brief discussion of the respectivemerits of the relative and absolute divides in income between richand poor countries.

(3) According to Morawetz [2] ‘It is not clear that ‘narrowing the relative gap’ makes much sense as a development objective’.(4) I chose as many countries in the low and low-middle groups for which data were available. I did however exclude countries

from Eastern Europe. In total the sample contains more than 60 countries (see Tables 4 and 6). Data were obtained from theWorld Bank's site on information and communication technologies.

(5) For, to do otherwise would not exploit the dual causality between these variables.(6) In technical terms the isoquant becomes flat over part of its range.

References

[1] ITU, World Telecommunication/ICT Development Report, Geneva, 2006.[2] D. Morawetz, Twenty-five Years of Economic Development: 1950 to 1975, World Bank, Washington D.C., 1977.[3] J. James, Evaluating latecomer growth in information technology: a historical perspective, Technol. Forecast. Soc. Change 75 (8) (2008) 1339–1347.[4] ITU, World Information Society Report, Geneva, 2007.[5] G. Perry (Ed.), Poverty Reduction and Growth: Virtuous and Vicious Cycles, The World Bank, Washington D.C., 2006.[6] J. van Dijk, The Deepening Divide, Sage, 2005.[7] L. Pritchett, ‘Towards a new consensus for addressing the global challenge of the lack of education”, in: B. Lomborg (Ed.), Global Crises, Global Solutions,

Cambridge University Press, Cambridge, 2004.[8] S.Dewan,D.Ganley, K.Kraemer, Across thedigital divide: a cross-countryanalysis of thedeterminantsof ITpenetration, J. Assoc. Inform. Syst. 6 (12) (2005)298–337.[9] S. Dasgupta, S. Lall, D. Wheeler, Policy reform, economic growth and the digital divide: an econometric analysis, Working Paper, Development Research Group,

The World Bank, 2001.

Jeffrey James is Professor of Development Economics at Tilburg University, The Netherlands. He has also served as Director of Graduate Studies in Economics andManagement at Tilburg. Before that Jeffrey James was a Research Fellow in Economics at Oxford University and an Assistant Professor at Boston University in theUSA.