Internet in development: World Wide Web?
[The author is a development economist working in Washington, DC. This article is adapted from his book: Overselling the Web? Development and the Internet published by Lynne Rienner in September 2006. Chapter summaries and two free chapters are available at http://charleskenny.blogs.com. The views expressed are solely the author's own.]
Before the dot-com bubble burst, it was common place amongst pundits to consider the Internet as a powerful force for global change. Comparisons were made with the Industrial Revolution, the American Revolution and even with the taming of fire by prehistoric man. The punditry has fallen off along with the NASDAQ, but the influence of such ideas on the development community remains, with frequent calls for universal access to the Internet, wide scale subsidy of Internet-related industries and web-based economic growth. Is there anything to such hopes?
There has been a massive and impressive rollout of telecommunication’s infrastructure worldwide. From being mostly a preserve of the urban elite in developing countries only ten years ago, telephones are now ubiquitous even in rural areas of the poorest countries. More than half of the World’s households now own a fixed telephone, there are in the region of two billion mobile subscribers; and the mobile phone signal footprint now covers as much as 77 percent of the World’s population.
had a considerable impact on quality of life - survey evidence suggests that
farms and enterprises with access to phones get more for their products whilst
consumers with telephone access pay less, for example. And the mobile phone is
being used to transfer cash in areas with few banks and fewer ATMs - 2.3
million people in the
Internet use is expanding rapidly. The number of Internet users in developing
countries increased from about one per thousand people in 1993 to 75 per
thousand in 2003. In
At the same time, many people in developing countries have decided to stay offline, and advanced use of the Internet is extremely limited. A recent survey carried out in regions of India, Mozambique and Tanzania found that, in spite of the availability of public facilities in local towns, less that two percent of respondents had ever used the Internet (In contrast, seventy percent were regularly using the telephone). For buying and selling over the Web, secure servers are used to host e-commerce applications. Of 110,000 such servers worldwide, only 224 are in low income countries.
ask people in the developing world why they aren’t logging on, or why their
company hasn’t built an e-commerce portal, the answer tends towards ‘why
bother?’ For example, the two
most popular answers to a survey of enterprises in
When seen in this light, the oft-touted ‘digital divide’ looks a lot like the traditional development divide. The Internet will have less impact on poor countries than on rich ones because the enabling environment for advanced applications isn’t there.
What does this suggest for predictions of global growth driven by the new Information and Communications Technologies? The evidence is that the telephone and the Internet are useful tools in developing countries, and they will have an impact. But the extent of that impact will be constrained by all of the usual factors that hold back growth - weak institutions, limited human capital and poor quality infrastructure. The Internet won’t allow countries to ‘leapfrog’ over such barriers.
optimistic estimates of the impact of the Internet on global growth reflect
this, discussing impacts of a few percentage points of GDP. Compare that to
the 10,000 percent difference between income per capita in
this suggests a role for Information and Communication Technologies in public
investment plans and aid budgets, but also a need for caution. When done
right, extending access to telephones or using networked computers in
government can both garner significant development returns. But large-scale
rollout of public Internet access points or subsidies for ICT industries may
well divert resources from activities that will have a far greater impact on
poverty reduction - educating young girls or vaccinating children against
measles, as it might be. The Internet is a useful new tool in the fight
against poverty, but every handyman knows you need a lot more than one tool
to get a big job done.