Sunday, May 27, 2012

African Development and ICT: Narrowing the Global Digital Divide

In 1925, a Soviet economist by the name of Nikolai Kondratiev argued the existence of economic supercycles: periods of high production and increased economic growth sparked by a particular innovative technology. Although both Soviet economists and contemporary orthodox economists rejected Kondratiev’s theories, it seems clear that we now live in an age wherein economic growth is contingent upon one particular technological artifact: the Internet. In the past decade, the Internet has revolutionized the international political economy by creating a complex “network of individuals, firms and countries that are linked electronically and in interdependent relationships” [1]. These networks allow for the exchange of knowledge and information at a global level, resulting in new ways of conducting business, increased commerce between states, and the development of entire new industries based on knowledge creation and transmission [2-4].

In this emerging economy, the ability to transmit and receive knowledge and information becomes paramount in terms of comparative and competitive advantage. Thus, many of the world’s wealthiest nations, and indeed many developing nations, have invested substantial capital in the mechanisms of knowledge and information exchange. These mechanisms, known collectively as Information and Communications Technologies (ICT), include such technologies as Internet backbone, as well as telecommunications and network infrastructure like cell towers and satellite links [3]. Essentially, ICTs are “the pipes and mechanisms through which knowledge and information are packaged and transmitted” [5]. Due to a variety of factors, some states have been more successful in developing a sophisticated ICT infrastructure than others; this ‘international technical dualism’ is widely known as the Global Digital Divide [6]. The economic effects of this technical disparity are obvious when one considers that the Global Digital Divide is roughly coterminous with North-South Divide. This seems to imply that the more sophisticated a state’s ICT infrastructure is, the more advanced its economy is likely to be, and vice versa. In fact, there is a growing body of research in the social sciences that highlights these effects; many scholars have pointed out a strong, positive correlation between technological and economic development [7-10].

While the Global Digital Divide affects a number of developing nations, it is most evident on the African continent; Africa has the lowest penetration of ICT per capita in the world [11]. Given the momentum behind the emerging digital economy, and the growing importance of global integration, it is no surprise that African states consistently rank the lowest on the United Nations Human Development Index, a matrix that measures nations’ relative development in terms of life expectancy, educational attainment and Gross Domestic Product [12]. Africa’s relatively primitive ICT infrastructure has hindered economic development on the continent, putting African states at a significant disadvantage in developing modern industries and drawing foreign direct investment. In order for African states to narrow the socioeconomic gap between themselves and more developed nations, their primary consideration must be to overcome the technical deficit that constrains economic development. African states must make critical decisions on how to best allocate scarce resources in order to promote economic development [10]. Given the immense costs associated with developing a modern ICT infrastructure, it is understandable that many African policymakers have chosen to focus their development efforts elsewhere—on education, healthcare, anti-corruption measures and security. These policy decisions are based on a body of research in political science and other disciplines that attribute Africa’s economic issues to structural problems. Scholars such as Sandbrook and Barker [13], Diamond [14] and Englebert [15] argue that African states will be unable to assert themselves in the global economy until they first reach a level of political stability that encourages active democratic participation in government and discourages the political violence and ethnic strife that have been prevalent on the continent for the past five decades.

Policy decisions designed to overcome these challenges are certainly valid; however, they fail to take into account the strong relationship between ICTs and economic development. Jipp was among the first scholars to notice this trend; in 1963, he demonstrated that there exists a positive correlation between teledensity (telephone lines per capita) and the wealth of nations (as measured by GDP). Although traditional Jipp Curves plot the number of telephone landlines against GDP, recent scholarship expanded this metric to include mobile phones and Internet connectivity, and subsequently found the same positive correlation between these ICTs and economic development [3, 11]. Alleman et al [10] note, “Recent statistical tests… show that the growth of telecommunications investment or penetration is a statistically significant predictor of economic growth.” Further, Madon’s analysis [16] concludes, “wider connectivity within developing countries would improve the overall information infrastructure in these countries and thereby promote positive changes in socio- economic development.” Overall, recent empirical studies and cross-national analyses suggest, quite convincingly, that the sophistication of a state’s ICT infrastructure is a primary indicator of economic performance. Africa is the poorest inhabited continent in the world. The continent’s current economic status is clearly representative of its technological deficit. The question that emerges, then, is whether or not Africa has any hope of overcoming this deficit and reversing the trends of economic stagnation and increasing poverty [1]. Before we can begin to answer this question, it is important to have a sense of the status of Africa’s ICT infrastructure. Africa’s ICT infrastructure is best conceptualized in terms of Internet penetration. This measure is multifaceted; it includes qualitative data such as the status of Internet infrastructure, and quantitative data such as the total number of Internet users measured in teledensity. Based on these metrics, Africa is the most digitally isolated region in the world [11, 17, 18].

In terms of Internet infrastructure, the entire continent is dependent on two competitive highbandwidth connections (the SAT-3/WASC and SEACOM cables) to the Internet backbone, while there are more than 160 fiber optic cables connecting North America, Europe and East Asia [18]. To put these figures into perspective, consider them in terms of bandwidth: African bandwidth per capita is 1% of the world average, and .2% of that of that of the United States [17]. Juma and Moyer point out a very clear example of this inequity: currently, the entire nation of Senegal has a total available fiber bandwidth of 1.2 gigabits per second, which it shares with neighboring nations— this is basically one tenth of available bandwidth of Harvard University [17]. In terms of teledensity, as of 2000, there were an estimated three to six million Internet users on the African continent—this works out to roughly 40 to 80 Internet users per 10,000 people [19, 20]. More recent estimates put African Internetteledensity at 111 users per 10,000 people, compared to 2,444 per 10,000 in America and 3,333 per 10,000 in Europe [11]. These measures of Internet penetration illustrate a vast technical disparity between African states and more developed nations. If a sophisticated ICT infrastructure is indeed a necessary precursor to economic development, as the above research suggests, it seems logical for African states to update their ICT infrastructure and further develop their information technology industries. Unfortunately, this process is easier suggested than implemented. As Oshikoya and Hussain [1] point out; [S]tarting from an initial position of poverty, African countries would not be able to finance the investments in information infrastructure and computer hardware and software required to access the information technology age.

This would, in turn, mean that they would risk increased marginalization in the global economy with severe competitive disadvantage for their goods and services, and hence for their development prospects. Reproduced from [23] As these authors suggest, the primary obstacle to bridging the growing digital divide is access to capital. In order for Africa to overcome this digital handicap and compete in today’s information economy, vast capital investments in ICT infrastructure are needed; at the present, however, this capital is simply unavailable. Faced with the current economic downturn, many multinational corporations and development agencies are unwilling or unable to provide African states with the foreign direct investment or development capital needed to fund ICT projects. Additionally, the demands on available finances are great. Many African states have adopted fiscal policies that emphasize pressing social problems such as education, the AIDS pandemic, political violence and ethnic discord, and rampant governmental corruption.

Given the dearth of available capital and the current state of ICT infrastructure on the continent, Africa’s technological and economic future seems bleak. It is unlikely that Africa has much hope of overcoming these technological disadvantages, and emerging as a strong competitor in the global information economy. This, however, does not mitigate the necessity of technological advancement—African nations will continue to lag behind other states in terms of economic development until there is some change that allows them to compete more effectively in the international economy. It may benefit African governments to learn from other developing states such as India and China: two nations that prioritized ICT growth and information technology industries and subsequently positioned themselves as emerging economic powers [21]. Although India and China did not begin at the same level of relative poverty as most African states, these two nations, while developing their ICT infrastructures, were faced with similar fiscal choices: whether to focus governmental spending on social issues, or to prioritize information-led development. India and China both took a middle route, investing in the technical education their citizens as well as relatively cheaper ICTs such as mobile telephony [22]. These investments seemingly paid off, as both nations are among the most prosperous developing nations in the world [12]. If African states follow India and China’s lead by prioritizing some of these “in reach” technological development policies, it may go a long way towards leveling the digital and economic playing field.

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