Copyright 2004 John Wiley & Sons, Inc Information Technology: Strategic Decision Making For Managers Henry C. Lucas Jr. John Wiley & Sons, Inc Dinesh Mirchandani University of Missouri – St. Louis

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Copyright 2004 John Wiley & Sons, Inc Chapter 20 Technology Haves and Have Nots: The Digital Divide in the U.S. and the World

Copyright 2004 John Wiley & Sons, Inc Importance of the Digital Divide to Managers On the customer side, a retailer would like to reach as many potential shoppers as possible –if a substantial number of people do not have Internet access, an online store can only achieve part of its potential Quality of the work force –in the 21 st century, a skilled worker must be knowledgeable about information technology

Copyright 2004 John Wiley & Sons, Inc The Divide in the U.S Significant divides in computer usage exist between –high and low-income households blue collar and unskilled workers have little access and few opportunities to develop technology skills –among different racial groups –for people with disabilities people with disabilities are online 50% less than population average –between northern and southern states –between rural and urban areas libraries and schools play a critical role in providing internet access for low income and minority families

Copyright 2004 John Wiley & Sons, Inc Race, Origin and Location Gap

Copyright 2004 John Wiley & Sons, Inc The Income Gap

Copyright 2004 John Wiley & Sons, Inc The Global Digital Divide The digital divide among nations is larger than the divide in the U.S –the gap between wealthy and poor countries is widening and the consequences of this gap can be quite severe Web inequality –80% of web sites are in English –26% of web users are Americans –An American can buy a computer with a month’s salary, but a Bangladeshi would need 8 year’s income

Copyright 2004 John Wiley & Sons, Inc The Global Digital Divide The Internet is a kind of technological infrastructure –developing countries are notoriously short of infrastructure –The Internet also requires a level of education and training to use educational opportunities in poorer countries are generally inferior to those in wealthy countries

Copyright 2004 John Wiley & Sons, Inc New Technologies and Economic Inequality among Nations: Historical Perspectives The gap in average income per person between rich and poor societies has become much wider Possible causes for the gap include –The traditional view technological innovations associated with the industrial revolution have led to inequality latecomers often grow faster than industrial pioneers, whose innovations they can implement without having to develop them on their own –The contemporary view waves of network technologies and network innovations have led to inequality economic inequality will continue to increase

Copyright 2004 John Wiley & Sons, Inc The Growth and Distribution of the Internet There is a significant gap between the countries with little presence on the Internet and countries that have a more substantial presence –Countries with fewer than the median number of hosts on the Internet are a long way behind those with a substantial Internet presence –adjusted gross domestic product, literacy rate, phones per 1000 people, wealth, education and infrastructure are associated with a greater presence on the Internet

Copyright 2004 John Wiley & Sons, Inc Bringing IT to Underdeveloped Countries Development of a simple, hand-held computer and software for use by rural, largely illiterate villagers in India Government sponsored inexpensive “people’s PC” in Thailand Discounts and partnership programs of major PC manufacturers (e.g., HP)

Copyright 2004 John Wiley & Sons, Inc Barriers to the Adoption of the Internet Cultural distrust The Internet requires a group of knowledgeable users to diffuse the technology to others Undemocratic governments Lack of funds for –investing in a telecommunications infrastructure –purchasing computers, and –providing education

Copyright 2004 John Wiley & Sons, Inc Proposals for the Assistance of Poorer Nations A sustained effort by the United Nations and wealthy countries The dedication of sufficient satellite transponders for two- way Internet access for poor countries An Internet Corps within the UN or individual countries modeled after the Peace Corps A concerted effort by aid agencies A surcharge on the Internet accounts of every user in wealthy nations to fund the activities above A tax on all electronic commerce dedicated to expanding Internet use in developing countries An International Developing Countries Venture Capital Fund

Copyright 2004 John Wiley & Sons, Inc Benefits of Such Assistance Substantial network externalities from the Internet and World Wide Web –both buyers and sellers benefit from increasing the number of users of the Net around the world –The more users connected to the Net, the more valuable the Internet is to content providers, who in turn, attract more users

Copyright 2004 John Wiley & Sons, Inc Important Considerations Giving people or groups of people a computer is unlikely to accomplish much unless support and social services are provided in addition to the hardware The design to bridge the digital divide should include –requirements analysis –learning what the users’ needs are for the technology –understanding resource constraints –implementation considerations

Copyright 2004 John Wiley & Sons, Inc Summary There are significant benefits for business around the world from having more people using the Internet Computer and Internet users provide a more skilled work force to businesses Equality of opportunity and the benefits of network externalities justify the investment in reducing of the digital divide in the U.S. Countering inequality, world instability, and antagonism towards wealthier nations justify the investment in reducing the digital divide among nations