Crossing the Digital Divide - One Bridge at a Time

It ignores a few obvious facts. No nation or region has a monopoly on creativity and innovation. That's no less true with respect to technology than it is in any other sphere of human endeavor. While high IT costs once posed an insurmountable barrier to all but the richest industries in the wealthiest countries, costs quickly plummeted, opening new opportunities that didn't exist even months before.

Furthermore, in some respects, developing nations are not playing catch-up, but have leapfrogged the dominant technologies used in many developed countries. For example, countries with poor infrastructure and incomplete wired telephone networks have avoided the considerable expense of completing their landline infrastructures with the wholesale embrace of cellular systems. In the process, they saved decades of development and many billions of dollars.

The International Telecommunication Union now puts the number of mobile phone subscribers at around 1.5 billion -- 25% of the world's population. A recent report by the World Bank says half the world's population — 3.2 billion people — now has telephone access. That's up an astounding 28% since 2003, more than three-quarters of whom use mobile phones, according to ITU. By the middle of 2004, developing countries accounted for 56% of all mobile subscribers and 79% of growth in the market since 2000, ITU reports. Surging demand in China, India and Russia was responsible for much of that growth.

Look at personal computers. The combined rate of PC sales growth of the so-called BRIC countries of Brazil, Russia, India and China was 35% in the first half of 2004 — five times faster than overall global revenue growth of seven percent. More importantly, developing nations are ahead of the curve with respect to PC operating systems.

Gartner reports that this year more than 12% of the PCs sold in Eastern Europe and Latin America and more than 10% of those sold in Asia-Pacific will be sold with Linux, not Windows. Low cost isn't Linux's primary attraction. Its open source transparency is jumpstarting local software development wherever it takes root. Worldwide Linux desktop shipments are expected to increase at a compound annual growth rate of 39% through 2008.

Meanwhile, virtually all PCs in North America and Western Europe are sold with Windows. Internet access and broadband use is also growing at a faster rate in developing countries. The number of Internet users in Central and Eastern Europe grew 20% last year, and users are migrating to broadband technologies. The number of Internet users in China climbed to 94 million in 2004, according to the China Internet Network Information Center.

Meanwhile the percentage of regular U.S. Internet users has plateaued at 63% of the adult population. In March 2005, Internet World Stats reported that there were 39,200,000 Internet users in India (Ranks fifth in the world -- Internet World Stats, March 2005). Broadband use in China soared nearly 150% to 43 million, according to the Diffusion Group. By 2007, the market research firm estimates China will become on the largest online gaming market in the world.

Within a few years, many observers believe the Internet will be dominated by Asian users. Nassom reported that the real growth of the Internet in India is expected to take place through cable TV: the number of cable TV subscribers is set to increase from 37 million (as on August 2000) to 70 million in 2008.

The swift adoption of broadband Internet use in developing countries is important because it enables the adoption of a host of other technologies from VoIP (Voice over Internet Protocol) Internet telephony to Web services and grid computing.

There are other reasons to assume less of a Western IT lead in the future. Chief among them is education. Many developing nations — most notably India and China — are training many more of its citizens for careers in math and computer science than the presumptively more advanced developed countries. Even in the U.S., many colleges and universities report that the overwhelming majority of students enrolled in math and computer science programs are foreign-born.

This is not a recent phenomenon. The world is facing a skilled labor shortage of epic proportions. Over 1.5 million new IT jobs are anticipated by 2006. And while American schools are turning out fewer engineers (29% decline over last decade), Asian universities have more IT students but still cannot satisfy the accelerating demand for skills in rapidly evolving technology markets.

In India alone, there are more than 250 universities and over 900 colleges providing computer education. India had only 6,800 knowledge workers in 1985- 86. That number exploded to 522,000 software and services professionals by the end of 2001-02, according to Nasscom. In fact Nasscom predicts that by 2007, India will have, $56 billion in software revenue (34% CAGR) and over 1.3 million developers (23.5% CAGR).

Put it all together. Modern telecommunication is spreading like wildfire — even to areas with little prior contact with the outside world. Falling hardware costs, grid computing and pay-as-you-go pricing options are reducing, if not eliminating, barriers to IT entry. The open source movement is being embraced by developing nations even more enthusiastically than in the West. India is also adopting ways that will help provide widespread Internet access, access that can usher in economic growth, better education and healthcare and improved entertainment services as it has done elsewhere in the world.

And the solution must be wireless, to avoid the overwhelming cost and resources that would be required to deploy countrywide fixed-line broadband Internet infrastructure. Improved communications could bring remote villages into the world economy, information access could speed worker productivity, and faster communication between producers and suppliers could fuel demand for Indian products. Standards based technologies also becomes critical in this case to ensure speedy implementation.

Many have pinned their hopes on the wireless delivery of broadband based standards, WIMX for example, that is capable of delivering broadband Internet and extending services like Internet telephony throughout India without major disruption to transportation and other services. Unlike wired solutions, it requires no blocking traffic to dig miles of trenches for telecommunication cables. The Simputer is another great example of the reaching out to the masses.

The pace of globalization and the growth of new technologies are fueling both economic prosperity and human advancement. We have made substantial progress, but we do have a long way to go. Infrastructure issues need to be addressed, new technologies to address social and public policy issues such as Data Privacy, Cyber Security, Piracy, Pornography, Consumer protection, Protectionism need to be identified and implemented, and the spirit of innovation needs to be fuelled by providing a conducive environment.

We need to ensure that access to the digital economy will not be a privilege for a few, but will be an opportunity extended to every single person in our society and we need to work together to achieve that. India is tremendously well positioned to take advantage of the global implications of the IT market.

A Goldman Sachs report, “India: Realising BRIC's Potential” - April 14, 2004), predicts that India could become one of the world's three largest economies in less than 30 years (their 2003 BRIC report predicted this to happen in 50 years). And with the growing and increasingly well-trained cadre of indigenous IT professionals fuelled by the increasing industry — academic partnerships in the country, the notion of a permanent structural digital divide is fast succumbing to a far rosier reality.

The author Shanker Annaswamy is Managing Director, IBM Global Services.

(The views expressed in this article are those of the author's and do not necessarily reflect the views of Cyber India Online Ltd.)