| Even within industrialized OECD countries, ‘The digital divide may be said to be growing, as the access gap between those with the highest and lowest levels of ICT [information and communication technology] access is increasing. Conversely, the digital divide may be said to be shrinking, as rates of growth are much faster for lagging groups’. This paradox is explored in great detail in the ‘Information Technology Outlook 2002: ICTs and the Information Economy’ report published by the Organisation for Economic Cooperation and Development (OECD). The report presents a cross section through the Information Technology (IT) industry across all 28 OECD countries, the key dynamics of the global IT industry, and the range of policies and interventions made and under consideration by policy-makers. Many of these ICT policies are not dissimilar to those being implemented in developing countries, or may help to inform those policies which are under consideration. The digital divide exists also among and within OECD countries. The report recognises that a ‘digital divide’ exist among and within OECD countries. It acknowledges that ‘differences in access to ICTs, such as computers and the Internet, create a ‘digital divide’ between those able to benefit from opportunities provided by ICTs and those who cannot. Access to and development of the information and communication resources that these technologies enable is increasingly viewed as crucial for economic and social development’. As a pressing concern for policy-makers, the report highlights in particular that: - Household digital divides exist by income, education, age, family type, sub-national region. There are considerable differences in the diffusion and use of ICTs and electronic commerce across, and within, OECD countries. Differences may create new kinds of social divides and accentuate existing divides relating to income, education, age, family type and sub-national regions. There are particularly striking differences by household income and education in household PC and Internet access, but these are greatly influenced by other access factors, particularly whether individuals also have access in the workplace.
- The shape of the digital divide is changing. The digital divide may be said to be growing, as the access gap between those with the highest and lowest levels of ICT access is increasing. Conversely, the digital divide may be said to be shrinking, as rates of growth are much faster for lagging groups. Common measures of distributional inequalities such as Gini coefficients also show the digital divide to be shrinking.
- Different kinds of firms have different rates of ICT use and e-government will affect the divide. Differences in diffusion may also be creating new kinds of business divides. Sector-specific factors and firm size have an important influence on the uptake and use of ICT, and the regional concentration of particular kinds of firms and industries accentuates these divides. Government use of ICT is also increasingly important in OECD countries. As e-government is more widely implemented, it may both provide incentives to increase ICT use by citizens and businesses and accentuate existing digital differences.
OECD governments are addressing ICT issues through a wide variety of policies The report highlights that ‘almost all OECD countries have well-developed and clearly enunciated broad strategies and action plans for IT and an overarching policy approach to the information society. These usually cover technology development, technology diffusion, improving the IT environment and the global diffusion and distribution of ICTs. Policies to encourage broadband infrastructure investment and use are receiving more and more attention. The potential cost-effectiveness of public-private partnerships in promoting the development and use of ICTs is increasingly recognised. In particular,’…governments are implementing policies to facilitate the supply of skills… OECD governments recognise the importance of a skilled workforce, and are increasingly taking policy measures to support the efforts of business…ICT skills have become a new type of ‘general’ skill, like literacy or numeracy. Governments are implementing an array of policies targeting different segments of the population in order to promote basic and advanced ICT skills. ‘ Governments are also implementing policies to overcome the digital divide. ‘Governments are also searching for ways to overcome the digital divide in order to spread more widely the potentially positive benefits of ICT use and digital opportunities. Fostering a healthy and pro-competitive ICT environment will enable ICT goods and services supply at competitive prices and quality. General and specific policies may be needed to target more specific goals and socio-economic groups that may be lagging. International initiatives will help countries to learn from the experience of others.’ Digital Divide Policy Examples by Groups of OECD Economies (Excerpt)
Source: ‘Information Technology Outlook 2002: ICTs and the Information Economy’, OECD 2002 Table A8.2 pp 258. Emphasis added. Highlights: The key findings of the report also include detailed analyses that ICTs play a strong an increasing role in the world economy, and that the rapid evolution of ICT technologies bring new challenges to policy-makers: - ‘ICTs play an increasingly important role in the economy. ICTs are increasingly ubiquitous and firms, industries and countries are reaping greater benefits from their ongoing investments in ICTs and the more widespread use of the Internet.
- ICTs account for a large share of investment and contribute significantly to output and productivity growth. The diffusion of ICTs throughout the economy has enhanced economic efficiency and substantially boosted productivity growth and the ICT-producing and ICT-using sectors have accounted for the bulk of overall productivity growth in a wide range of OECD countries.
- Trend growth of the ICT sector remains strong, despite current cyclical difficulties. Since late 2000, however, the world ICT equipment industry has faced a severe downturn, although there are signs of an upturn on the horizon, as OECD economies begin to recover and demand and investment slowly pick up. Despite the short-term turbulence, prospects for the industry remain strong, as new products and services such as broadband continue to drive demand from firms, households and governments.
- The overall market for ICT goods and services continues to grow. In the OECD area, ICT intensity (total ICT markets/GDP) increased, driven by strong growth in telecommunications services, to an average 8.3% in 2001 for goods and services combined. Software still represents less than 10% of the total ICT market, but is growing fastest, at almost 16% a year since 1992. Growth in non-member countries has been even more dynamic, and markets such as China and Brazil are now among the world’s ten largest.
- The ICT sector is highly globalised in an increasingly globalised world economy… The ICT sector is highly and increasingly globalised. Trade in ICT goods has grown at almost double the rate of trade in total goods, with exports of ICT equipment equivalent to well over 5% of GDP in a few OECD countries and trade in IT services growing faster than trade in equipment. Both are growing at much higher rates than GDP.
- The focus of international investment in ICTs is shifting from manufacturing towards services. Foreign investment in the ICT sector is strong, and the focus of new international investment in ICTs is shifting from manufacturing to services activities. Software is among the most rapidly growing sectors in OECD countries, with strong increases in value added, employment and R&D investment.
- Electronic commerce is growing, but is still in its infancy, especially among consumers. Growth in electronic commerce transactions has been less spectacular than predicted. Nevertheless, the volume of electronic transactions is growing and the Internet is increasingly used as a transaction channel, particularly for purchases. However, electronic transactions are growing, the Internet is increasingly used for purchase and EDI remains important. Internet transactions remain concentrated in a few sectors and the relation between Internet use and firm size is complex. Business-to-consumer Internet sales remain low with lack of consumer interest a common reason. Computer products, clothing and digitised products such as music, books and software often constitute the major sources of Internet sales to consumers.
- The demand for ICT skills continues to grow, creating concerns about possible labour shortages and gaps in worker skills. Governments, firms and educational institutions in OECD countries are taking measures to meet changing skill demands in the IT workforce. Immigration is only one tool to increase short-term supply and must be part of a broader policy framework.
- New computing potential and communication channels are being developed and are proliferating. As computing power increases, unit price and size decrease and communication capabilities expand. These trends are likely to have widespread impacts, increasing ICT ubiquity and possible associated benefits, such as productivity growth. More devices will be fitted with computing and communication capabilities that will provide new functionalities for users.
- …Shifting the focus from a centralized to a decentralized model of information exchange. With increasingly ubiquitous computing power and communications capacity, the dominant model of information exchange is shifting from a centralised and hierarchical model to one that is decentralised, horizontal and more equally distributed and democratic.
- New technologies present new policy challenges. The challenge for government is to foster innovation and technological development while attending to equity considerations (e.g. digital divide issues related to new technologies) and potential problem areas (e.g. system security, privacy and trust issues).’
Resources: The full copy of this report can be obtained from OECD Publications department:
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