From Digital Divide
to Online Democr@cy
What It Is and Why It Matters


What It Is

"Digital Divide" refers to the gap between those who benefit from digital technology and those who do not. It took digital-divide researchers a whole decade to figure out that the real issue is not so much about access to digital technology but about the benefits derived from it. Examining the situation more closely, it turns out that upper-to-middle classes have high-quality access to digital technology because the profit motive pushes technologists to work hard at creating "solutions" designed specifically for them. In this equation, however, the poor are ignored because the assumption is that designing solutions for them will not be profitable.[1] The result is that even where the poor are provided access to digital technology, it is low-quality. Furthermore, the digital technology they do have access to is often of a design that ends up being harmful rather than beneficial. This, in turn, widens the digital divide.

Consider, for the example, cyber cafés. Years ago, many pointed to their spread as an example demonstrating that the digital divide was shrinking. But when a local youth in a Cambodia village ignores his school work and instead spends his evenings playing violent videogames at a local cyber café, he is not really benefiting from digital technology. Thus giving to the poor digital technology that has been designed for the rich may actually add to the causes of poverty and accelerate the exodus of the rural poor into cities already bursting at the seams.

The new view is that closing the digital divide will be most effectively achieved through a two-pronged approach, one direct and the other indirect: The direct approach will be for governments and businesses to work together to change the incentives that shape digital markets. The indirect approach will be for them to team up on e-government digital technology initiatives that extend rural health care and quality education to the poor. Through these two approaches, the poor will be able to reap many of the same benefits from digital technology now derived by the wealthy.

Why Closing the Digital Divide Matters

1) Closing the Digital Divide is a precondition for reducing poverty.

Many antipoverty experts believe that closing the Digital Divide is not a top priority, arguing instead that the poor need clean water and jobs before they need computers. However, what they do not realize is that access to digital technology greatly enhances the effectiveness and affordability of efforts to improve the water supply, improve rural health and education, generate jobs and address any of the other interrelated problems of poverty. Closing the digital divide may not necessarily be the silver bullet for reducing poverty, but there is a much lower likelihood of large scale and sustainable poverty reduction without doing so.

2) Closing the Digital Divide is a precondition for resolving terrorism.

Even those who are unconvinced by the antipoverty argument may be convinced by the anti-terrorism argument, which argues that the digital divide contributes to terrorism in three ways:

  • The broadest correlation between digital divide and terrorism has been made by University of California sociologist Manuel Castells (, who argues that religious extremism is a rational, self-protection response made by those who are either left out of the digital revolution or who are being forced to accept modernist influences on terms that they perceive as undermining their core values.

  • The areas where terrorism is being incubated -- rural Pakistan, Central Asia, and Indonesia -- are areas mired in poverty and not served by digital networks. Terrorists are sheltered by villagers in these areas partly because the villages themselves have little stake in the stability of the international economy.

  • It is difficult to implement most antipoverty efforts in such rural areas, whether focused on educational or military solutions, without the aid of broadband telecommunications networks.

    3) Closing the Digital Divide is a precondition for achieving sustainable world markets.

    After the dot-com bust in the late 1990s, many came to believe that digital "information industries" had lost their central role in the world economy. They were wrong. This bust merely showed that technology purchases were slowing in saturated economies. Today, Europe and North America no longer are as dominant in technology as they once were. The emerging market countries of Asia are now major drivers of the digital economy and, in that vast region, the spread of wireless networks is stimulating all other dimensions of economic growth. In fact, the biggest technological growth is occurring outside big cities in these countries. As broadband networks spread into the countryside, costs throughout the supply chain will drop. By adjusting their policies to close the digital divide, the major IT and telecom companies are achieving innovations that could spur growth in the advanced countries as well.

    [1] For a good assessment of this issue, see the archive of World Development Reports of United Nations Development Programme, Also see International Telecommunications Union's reports on the subject,

    The Governmental Response

    At first politicians were clueless. What did they know about turning entire countries into “information societies?” Soon, reformers saw “closing the Digital Divide” as a way to undermine the power of entrenched elites in government bureaus who had restrained the spread of new markets into the countryside. Now ministries in some countries have formed reformist coalitions. They are ready to join wireless entrepreneurs to bring the internet into the countryside.

    When “digital divide” was first uttered in 1993, the phrase was used by citizen pressure groups who wanted to force the new Internet companies to pay the additional costs of extending their products and services to the poor. The framers of the 1996 US Telecommunications Act, after noting the existence of the Digital Divide, disappointed social activists by insisting it wasn’t government’s role to redress it. The various federal government programs that had been set up to close the Digital Divide in the Clinton era were discontinued under Bush. After 2000 governments in advanced countries no longer pressured high-tech companies to respond to Digital Divide.

    But as concern over the Digital Divide declined in the US, it surged in emerging markets. Many developing countries searched for a formula to close the Digital Divide which would free them from undue control my foreign interests. By 2002 you could find 1.4 million “digital divide” references to speeches and project descriptions via Google search. The concern culminated in Geneva’s World Summit on Information Society (revisited in Tunis two years later) where 13,000 delegates were convened to discuss the matter. But despite all the speeches and official “targets” to close the Divide, no formula emerged to harness market forces that shape the direction of new technology as it spread into the developing world.

    Phase one: Promoting A Digital Divide Superfund

    Because everyone assumed market forces couldn’t be altered, governments thought the answer must be to create “superfunds” that would subsidize the delivery of digital technology to the poor. Many of the first intergovernmental task forces to close the Digital Divide sought to become “honest brokers” between public and private sectors. They proposed the creation of huge trust funds they thought would be funded by billionaire IT moguls and G-7 governments. The Japanese Ministry of Foreign Affairs (MOFA) made a pledge of $15 billion in development assistance to developing countries to promote closing the digital divide. But the Japanese found it difficult to fulfill the pledge after neither the US nor other high tech nations chipped in. Adding to the disappointment, some developing countries found that they were unable to gain revenue from spectrum license fees, which many had touted as a way of funding digital super-funds.

    Phase Two: E-Readiness

    Wanting to embolden reformers, influential researchers in universities, such as superstar economist Jeff Sachs, joined forces with reformers to promote a concept called “e-readiness,” sometimes called “network readiness.” The term refers to quantitative rankings of countries regarding the extent to which they were able to muster the complex policy changes that would be needed to become an “information society.” By 2001 it was clear that some countries were doing a terrific job becoming e-ready, while others were not - a reality that was actually deepening the digital divide between countries. A study by National University of Singapore professor Wong Poh Kam showed that this pattern of deepening inequities between nations was particularly evident in Asia.

    Phase Three: Taking on the Phone Companies

    Many government reformers blamed the “PTTs” for the failure to close the Divide. The term refers to the incumbent “Post, Telegraph and Telephone” companies which set standards and serve as the 800-pound gorillas of telephony. After fifty years of telephony most fixed-line infrastructures were expensive, slow, bulky, and narrowly confined to cities. By 2000, most developing countries had only between 2-5% phone penetration rates, despite prodding by the World Trade Organization’s Telecom Services Act. There was clear evidence that restructuring telecommunications was a pre-requisite to e-readiness. An ITU study found that countries that liberalized or privatized their telecom sector had doubled telephone penetration between 1996 and 2000, compared with only incremental growth by the unreformed countries.

    Phase Four: Embrace Wireless as a “Disruptive Technology”

    Reformers in many countries found that it wasn’t easy to dislodge the entrenched power of the incumbent telecommunications companies, most of which were under the control of powerful government bureaucrats, even after the World Trade Organization passed its “Telecommunications Services Act.” The Act forces WTO members to liberalize their telecommunications regulations and offer spectrum to new companies. Just as in the business sector, some reformers evoked the name of Austrian-born economist Joseph Schumpeter, to argue that the only way to accelerate each country’s transition into information society’s is to promote “disruptive technologies” by backing entrepreneurs whose business models promise to undermine the control of the old guard.

    Seven Digital Divide Fallacies

    Those involved in the ten-year effort to close the Digital Divide were all well-intentioned. But we were like blind men describing the elephant as a tusk or a hoof rather and missing the point about the whole elephant. Similarly, closing the Divide turned out to be not a matter of gaining access to computers or cell phones but finding room for both. It is not a matter of promoting personal use of gadgets vs. shared use of gadgets but both. It is not a job for business or government but both. Not about choosing open source software over Windows but both. Similarly, it is not about GSM wireless vs. CDMA but both. Not about bottom-up vs. top-down efforts but both.

    In other words, closing the Digital Divide involves building “ecosystems” in which a diverse mix of stakeholders forge alliances that close the Divide. Here are the “blind man” fallacies, each of which are partial truths:

    FALLACY NUMBER ONE: Closing the Digital Divide is about giving poor people access to computers.

    FALLACY NUMBER TWO: Getting the private sector to profitably serve the poor at the "bottom of the pyramid" is the key to closing the Digital Divide.

    FALLACY NUMBER THREE: Creating "shared use" of ICT products in the countryside, such as information kiosks that deliver government services, is the key to closing the Digital Divide.

    FALLACY NUMBER FOUR: Closing the Digital Divide requires setting up a "superfund" that supports ICT projects for the poor.

    FALLACY NUMBER FIVE: The key to closing the Digital Divide is investment in literacy and education.

    FALLACY NUMBER SIX: Social entrepreneurs with IT skills must become the prime movers for closing the Divide since they are able to introduce "disruptive technologies" to serve the poor.

    FALLACY NUMBER SEVEN: If governments will only open up their telecom sectors to foreign competition, and make themselves "e-ready", market forces all by themselves will cause the Divide to close.

    --> Read the explanation of each fallacy on

    Nine Digital Divide Truths

    Ten years of efforts to ponder the Digital Divide have not been for nothing. Here are the nine lessons about Closing the Divide which have been learned by those on the front ranks of this movement. All these lessons have been incorporated into the model being developed by


    The Divide is widening, not narrowing, and at an ever-increasing rate.

    TRUTH NUMBER TWO: Closing the Digital Divide may be the only way to make globalization work for the poor.

    TRUTH NUMBER THREE: The consequence of not closing the Divide is terrorism.

    TRUTH NUMBER FOUR: Closing the Digital Divide is fundamentally about empowerment, that is, it is about using new technologies to empower the poor just as they now empower the rich.

    TRUTH NUMBER FIVE: Closing the Digital Divide is the only way to sustain the growth of world markets.

    TRUTH NUMBER SIX: World leaders from every sector -- business, government, academia, NGOs -- can benefit from closing the Divide. Yet no one sector has the incentives to lead the effort to close the Divide.

    TRUTH NUMBER SEVEN: Closing the Digital Divide requires building an "enterprise ecosystem" that offers "end to end solutions" for the poor.

    TRUTH NUMBER EIGHT: The midlevel countries in relatively advanced emerging markets, not the poorest countries, are the best settings for experimental efforts to close the Digital Divide.

    TRUTH NUMBER NINE: Closing the digital divide involves using new technologies to formalize the "informal economy," thereby bringing the poor into established markets.

    --> Read the explanation of each truth on


    --> The analysis above originally appeared on