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IllustrationStruggling with the Digital Divide: Internet Infrastructure, Content, and Culture
Is a progressive Internet environment enough to close the gap between North and South?

By Madanmohan Rao madanr@planetasia.com

From improving software and education to boosting handicrafts and human rights, the Net has a lot to offer to a wide array of humanity in emerging economies. But without a progressive Internet environment, cyberspace will continue to exacerbate the digital divide between North and South, urban and rural, and English-speaking and non-English-speaking parts of the world.

Given the broad-based nature of the Internet as a communications, publishing, and transactions platform, policies aimed at bridging that gap must simultaneously address access, content, and commerce issues.

The Framework

The eight Cs of success in the Internet economy can be aptly summed up as connectivity, content, community, commerce, capacity, culture, cooperation, and capital. Gaps tend to emerge along this entire spectrum of parameters, and they can be narrowed to a certain extent by some of the steps recommended below.


The digital gap is most evident at the phase of connectivity: the lack of affordable access to PCs, Internet devices, modems, telephone lines, and Internet connections. Steps to reduce this gap include devising cheaper access devices (such as publicly accessible kiosks), lowering tariffs on the import of computers and modems, creating Internet community access centers (with leased lines and shared devices), and bringing down access prices by creating a favorable climate of competition among Internet service providers (ISPs).

The regulatory climate in many of the emerging economies has only recently welcomed private-sector ISPs, and a key challenge lies in creating a level playing field between government-owned and private-sector ISPs in terms of operating licenses, tariffs, cross-subsidies, and creation of international gateways. A government ISP player with a monopoly in one area-such as VSAT links, last-mile connectivity, or international telecoms-should not use this monopoly power to wipe out an entire industry in another sector.

Work has begun on initiatives to increase Internet diffusion via kiosks (in Bangladesh), community centers (in Peru), cybercafés (in Ecuador), and wireless delivery and non-PC devices (in India), but much innovation and investment are still called for.

The costs of dial-up and leased lines are dropping, but they could become even more affordable. Organizational adoption of intranets and extranets (and hence of VPN services by ISPs) is only slowly emerging. Universal-access issues and peering agreements will continue to dominate the ISP scenario in many of the emerging economies in coming years.

Special concerns arise in cross-country wiring for regions with mountainous terrain, with large arid tracts, or with a high density of island space.

No peering agreements for forming national Internet exchanges-let alone regional ones-exist in most of the emerging economies; most inter-ISP traffic is routed via the U.S., Europe, or East Asia.

Much potential lies in the hands of the public-sector units, such as the power grid and railway authorities that have existing secure cable connections across the region. National ISP organizations also need to form to create greater collective bargaining power and to pool assets.


Digital gaps between nations arise not just in number and density of ISPs, hosts connected to the Net, proportion of individual users online, Internet diffusion ratios, and number of organizations with leased-line connections. The imbalance also extends to content in terms of number of Web sites in developing countries, amount of local language content, and use of online content by key sectors.

According to the International Telecommunications Union, there were more Internet hosts in Finland than in all of Latin America and the Caribbean in 1999, there were more hosts in New York than in all of Africa, and more than 80 percent of Web pages were in English.

There are at least seven measures of market maturity for online content in a country (Rao et al., "Internet Content in South Asia: Opportunities and Realities").
  1. total number of Web sites about (and published in) the country
  2. local relevance and usefulness of this content
  3. local language standardization and usage on the Web
  4. amount of subnational content (about states, provinces, and cities)
  5. presence of metacontent such as directories and search engines
  6. amount of ad revenues that target online audiences via these sites
  7. presence of third-party services from online traffic auditors, ad revenue auditors, and market research groups

Emerging economies need to increase activity within each of these seven dimensions in order to help reduce the content gap. News media, public health services, government-citizen resources, NGOs, SMEs, and emergency relief organizations need to make more content and services available online. World-class hosting infrastructure must be created in emerging economies so that locally generated content will be hosted predominantly in the region and not outside it, thereby saving lucrative foreign exchange revenues and safeguarding information sovereignty.


Online and offline forums need to be actively promoted in order to bring in larger and more diverse sections of communities to discuss issues of common interest, particularly the issue of how to creatively tackle the digital divide.

While much attention is focused on Web publishing, e-mail forums for content distribution and discussion still can play a useful role-especially in areas where bandwidth is low and the quality of phone connections is poor. E-mail-based discussion lists are an underutilized channel in online communications for many of the emerging economies.


Advanced Internet economies have moved beyond basic Internet infrastructure to dynamic e-commerce infrastructure in the form of payment gateways, secure channels, digital certification authorities, overnight courier services, third-party audit services, and online tracking capabilities.

To move beyond being mere destinations for e-commerce sales from U.S. and European sites, emerging economies need to close the e-commerce gap by effectively building a domestic Internet economy and promoting online transactional capabilities for the consumer, business, and government sectors-B2C, B2B, C2C, G2C, and G2B. This includes the updating of existing business and intellectual property rights laws to accommodate electronic contracts, online funds transfer, and stronger consumer fraud protection laws. Malaysia's cyberbill and India's proposed information technology bill fall into this category.


To close the digital skills gap, emerging economies need to improve the capacity of their workforces to play roles in the Internet age. This includes improving Internet access and educational offerings in schools and colleges, creating digital libraries for universities, and promoting professional training institutes.

The Internet should also be strongly promoted in sectors that already have the capacity to harness it. Key priority areas for such Internet growth include the software and Web solutions/services sectors, through which an emerging economy can harness the Net not just as a tool but also as a market in its own right.

Challenges also arise in closing the technical/legal gap in crucial capacity areas such as cyberlaw. Legal developments concerning content classification, regulation, and enforcement in countries around the world must be tracked. Regional representatives from industry, academia, and government should try to be present in forums of the UN, WTO, OECD, G-7, ASEAN, and APEC that deal with cyberspace content issues such as intellectual property rights, copyright protection, online privacy, online crimes, and digital watermarks.


Culture represents probably the biggest challenge in closing the digital gap. It involves overcoming cultural inhibitions and insecurities about developing competence for surviving the breakneck speed of the Internet age.

Closing the culture gap includes getting governments in emerging economies to stop treating their telecom monopolies like cash cows and instead, getting government telecom players to invest in areas like R&D on Internet telephony, so that the technology is seen as a market opportunity on a global scale and not a threat on a local scale. It also includes getting career-track diplomats, bureaucrats, academics, and public-sector employees to take up Internet training and harness the opportunities as well as the plentiful challenges that accompany Internet diffusion.

For goals such as making government procedures transparent, a lot of political will and muscle will be needed. For instance, certain unscrupulous middlemen tend to get involved in land records and power connections. Openness and transparency will threaten them, but the government must display the political will to clean up these processes via open content publishing.

Most important, closing the cultural gap entails the creation of a risk-taking culture, in which accepting some initial failures by entrepreneurs should not be treated as sign of weakness or a loss of face. High mobility between jobs should also be accepted as a reflection of the fast pace of skill acquisition.


No single sector can take on the Internet economy by itself; much cooperation at the national level is needed to overcome the gaps between government, academia, the private sector, civil society, and international organizations. This should happen at the state or provincial, national, and regional levels; it can also extend to groupings based on culture-such as Latin America-or language, such as among the five countries in which Tamil is an official language.

A better characterization would perhaps be the term <I>coopetition:</I> traditional competitors teaming up to grow the entire Internet pie instead of fighting over small slices. Activities such as forming Internet advertising bureaus, national Internet industry associations, and chapters of the Internet Society fall into this category.


The highly volatile Internet economy is making it all too evident that an Internet initiative can best survive if it is economically self-sustaining. Therefore, government should focus on creating open investment climates for the incubation, launch, acceleration, and initial-public-offering phases of an Internet start-up. The government need not spend excessive funds on incubation projects of its own; it should create conditions and safeguards conducive to the movement of domestic and international capital into the New Economy.

Domestic venture-capital funds and skills must be promoted, or else the capital gap in many emerging economies may lead to an excessive and unhealthy dependence on high-technology exchanges like Nasdaq in the U.S. As for the capital for software investments, use of freeware and shareware packages and tools should be encouraged when possible instead of reliance on costly proprietary software solutions such as in the use of the Linux operating system and Apache Web server for digital publishing.


International Telecommunications Union (1999). "Challenges to the Network: Internet for Development."

Rao, Madanmohan; Mehta, Arun; Crishna, Vickram. "Internet Content in South Asia: Opportunities and Realities." Presented at the South Asia Internet Workshop, Dhaka, Bangladesh, April 1999.

Rao, Madanmohan; Mehta, Arun; and Crishna, Vickram. "Struggling with the Digital Divide: Internet Infrastructure, Policies and Regulations in South Asia." Presented at the South Asia Internet Workshop, Dhaka, Bangladesh, April 1999.

World Bank. World Development Report. Oxford, England: Oxford University Press, 1998.

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