Who benefits from the digital divide?
First Monday

Who benefits from the 
digital divide?

Who benefits from the digital divide? by Brendan Luyt

New information and communication technologies are seen as a potent source of advancement for many countries in Africa, Asia and Latin America and have increasingly featured as topics of discussion in international fora. Who benefits from the rapid rise of this issue on the international agenda? This article argues that the promotion of the digital divide as a policy issue benefits four major groups: information capital, developing country governments, the development "industry," and global civil society.


Information capital: The quest for cheap labour and new markets
The South: The state, ruling elites, and the middle class in the quest for hegemony
The development community: The quest for a renewed sense of legitimacy and meaning
Civil society: The quest for social change and the tools to achieve it





The astronomical growth of the Internet in the mid–1990s and the applications it makes possible have captured the imagination of increasing numbers of people around the world. At the highest levels of government and inter–governmental organizations, this newest form of information technology is viewed as a ticket to everlasting peace, progress, and prosperity. Despite the faltering of the "tech" bubble in 2000, hopes remain that the application of information technology will solve many of the problems now confronting the planet [1].

However, Internet technology is not evenly distributed around the world and as a result, there is a new issue on the tables of international fora, the problem of the digital divide:

"The challenge of bridging the international information and knowledge divide cannot, however, be underestimated. We recognise the priority being given to this by many developing countries. Indeed, those developing countries which fail to keep up with the accelerating pace of IT innovation may not have the opportunity to participate fully in the information society and economy. This is particularly so where the existing gaps in terms of basic economic and social infrastructures, such as electricity, telecommunications and education, deter the diffusion of IT." [2]

There remains the stark disparity between two types of world citizens: one empowered by access to information and communication technologies (ICT) to improve their own livelihood; the other stunted and disenfranchised by the lack of access to ICT that provide critical development opportunities." [3]

But if the lack of access to new ICTs is increasingly seen as a marker separating developed from developing nations, what accounts for its meteoritic rise to prominence? As Michel Menou (2001) notes, other serious conditions continue to plague much of the so–called developing world which could equally be the focus of international attention. Menou suggests, for example, the equal importance of the "fair working conditions divide" or the "healthy life divide" between nations and peoples. What makes the digital divide so worthy of attention?

Scholars of policy analysis have long argued that policy–making is not an orderly and logical process in which problems are identified, solutions proposed, and decisions implemented in a neutral fashion. Policy–making is constrained by inherent limitations on the time and resources of its participants (Simon and March, 1958) and by the fact that it is a political process that requires decisions to be made that effect the material interests of various groups within society (Hawkesworth, 1988).

The fact that the gap between ICT access in the developed and developing countries is now on the agenda at international conferences and summits around the world does not necessarily reflect the intrinsic importance of that gap to world affairs. What it does reflect is a particular convergence of interests and their ability to collectively set the political agenda in such a way that the digital divide is now seen as a serious and important social problem. As Jeremey Richardson notes:

"For any one issue or policy problem, we can usually identify a wide range of actors who have a very direct interest — in the sense that they stand to gain or lose significantly by the decision. These actors can be politicians whose electoral fortunes may be affected, bureaucrats whose career opportunities and budgets may be affected, private institutions, such as churches and universities, conventional membership interest groups — and, of course, citizens. Each policy problem, as it reaches the agenda, brings with it a whole constellation of interests who then engage in political activity in order to ensure the processing of that issue is to their advantage. Indeed, the very agenda–setting process is often at the centre of the power struggle in society with pressure groups playing a central role in the struggles to attract the attention of decision–makers and the public at large." [3]

The definition of social problems and their categorization in a hierarchy of priorities comprises a vital task for groups involved in the policy process: non–profit, profit, and governmental. But while the demonstration of a definitive causal link between interests and policy outcomes is a difficult task [4] it is certainly possible to ask of any given social problem or policy issue: who benefits? The rest of this article addresses precisely this question. In it I argue that the promotion of the digital divide as a policy issue benefits four major groups: information capital, developing country governments, the development "industry," and global civil society.



Information capital: The quest for cheap labour and new markets

While the developed economies of Western Europe, Japan and North America account for the majority of economic activity on the planet today, the South [5] continues to play an important role in the global economic system. In the past this role was primarily as exporters of raw materials, from the spices of the East Indies that motivated the Spanish and Portuguese hundreds of years ago, to the diamonds and gold that formed the impetus for the development of southern Africa in the nineteenth century. Over the course of the second half of the twentieth century, parts of the South have also become centres for manufacturing. The so–called "miracle" economies of East Asia, for example, have been built on the production and export of manufactured commodities to the North using cheap pools of labour freed from previous agricultural employment by mechanization or the increasing concentration of land ownership.

Today, the South is poised to take on a new set of roles in the global economy. Just as mercantile capitalism coveted the raw materials of Africa, Asia and Latin America; and industrial capitalism increasingly used it as a manufacturing platform; informational capitalism [6] has plans of its own for the South as a market and a site for offshore informational processing.

The roots of this development go back to the early 1980s when large American firms in the airline and insurance industries first began to move clerical work associated with their operations to offshore destinations in the Caribbean. American Airlines, for example, closed its Oklahoma data processing centre in 1984 and relocated the work done there to the Barbados [7]. Caribbean Data Services, the subsidiary American Airlines established to handle the move, has since gone on to become a profitable firm in its own right, contracting data processing work from other companies to its facilities in Barbados [8].

Numerous U.S. corporations followed the path taken by American Airlines, and the Caribbean nations of Jamaica, Barbados, St. Lucia, St. Vincent, St. Christopher–Nevis, and the Dominican Republic have gained a reputation as global data processing centres alongside their previous allure as winter vacation destinations for rich North Americans. Increasingly, data processing work has been taken up in such countries as the Philippines, India, South Africa, and Mexico (Skinner, 1997; Hamilton, 1990).

In the case of India and the Philippines, data processing work is complemented by a focus on contact centres. The Philippines, for example, a relative newcomer to the field, now boasts 45 centres employing 30,000 employees, and the industry gives every indication of further growth in the future (Natividad, 2004). In these offices, English–speaking Filipinos communicate via telephone, e–mail, or fax, with Americans, Canadians and Australians in order to sell products, handle queries, or conduct commercial transactions. In the Indian centres, the United Kingdom is more frequently the target of operations.

However, data entry and contact services are only part of the picture of the information processing tasks now being assigned to the South. Bardhan and Kroll, in a recent report on the outsourcing trend in the United States, note that the developing world is increasingly the production site of choice for higher–end, white–collar operations, including "geographic information services, stock market research, medical transcription, legal online database research, and data analysis for consulting firms" [9]. These authors conclude that 11 percent of the entire current workforce in the United States is potentially at danger due to the increasing desire of firms to outsource operations overseas [10].

Katharine Mieszkowski put together similar figures on this trend from the reports of top business consulting firms. From a Forrester Research report we learn that by 2015, the United States alone will lose 472,632 jobs in the information technology sector, mostly to the developing world. Mieszkowski also quotes from a report by A.T. Kearney predicting that over the next five years American banks and brokerages will move eight percent of their positions overseas. A Gartner study on the topic suggests that even areas previously thought immune to outsourcing are now under threat: 11 percent of its survey participants have already outsourced system and architecture planning, while 14 percent currently outsource research and development initiatives (Mieszkowski, 2003).

Clearly information processing is part of the new role for the South in the global economy, but the developing world is also seen as a market for the products of information capitalism. The Business Software Alliance (BSA), an organization initially established by several of the biggest names in the industry (Microsoft, Adobe, Network Associates, and Macromedia, among others) with the express purpose of fighting software copyright infringement, has been especially active in the developing world, providing estimates on the percentage of pirated software in use in the South that range from a low of 51 percent in Chile to a high of 95 percent in Vietnam. Corresponding potential losses to the software industry are of a similar magnitude. In the Asia/Pacific region, for example, the BSA estimates 2002 losses as US$5.5 billion, an increase of US$755 million over 2001 (BSA, 2003). Table 1 provides estimates for the rest of the world [11]. Together they provide evidence of the importance the industry attaches to the developing world as a market for its products.


Table 1: BSA estimates of losses (in US$) due to piracy by region, 2002.

Mid East/Africa $285 million
Latin America $824 million
Eastern Europe $1,025 million
North America (Canada and United States) $2,267 million
Western Europe $3,190 million
Asia/Pacific $5,481 million
Asia/Pacific (minus Japan) $4,008 million


Table 2 gives another indication that the markets of the South are of significance to the entire information technology industry. The table provides data on information technology spending for a selected group of countries of the South and, for comparison, Canada. The combined market of these eight nations is greater than the Canadian market. While individually the markets of the South might be small, taken as a whole they do represent a significant opportunity for information technology firms.


Table 2: Spending on information technology in selected countries, 2001 (World Bank, in US$).

India 15,451,419,499
Philippines 2,882,770,091
Chile 5,890,198,979
Egypt 2,386,261,574
Mexico 18,584,111,677
Poland 9,669,082,006
Romania 847,912,886
South Africa 11,005,010,756
Total 66,716,767,467
Canada 59,358,317,642


If the South increasingly assumes the role of information processor for the North and acts as a lucrative market for the new products of informational capitalism, this is not due to chance. Similar large shifts in the global economy have taken place before.

Until the 1950s, the South was primarily a source of raw materials for manufacturers located in the North; afterwards the factories started moving. Between 1953 and 1975, the developing world’s share of manufacturing output almost doubled, from 4.8 percent to nine percent, while the share held by the capitalist developed world declined from 72 percent to 65 percent [12]. At the same time, the proportion of manufactured exports from the South increased dramatically. In 1963 only 17 percent of the developing world exports to the developed world consisted of manufactured goods, but by 1977, the figure had increased to 50 percent [13]. Scholars of this phenomena dubbed the changes they observed as the new international division of labour (NIDL) and noted that ultimately it was driven by the emergence of the multinational corporation and its continuing quest for new markets and cheaper labour [14].

However, shifting industrial production to new territories was not an easy task. As Folker Fröbel, et al. demonstrated in their study of the changing structure of the West German textile industry, the NIDL was a result of three developments: the creation of a cheap labour force in the South, the de–skilling of the manufacturing process through minute sub–division of tasks, and the construction of adequate transportation and communications infrastructure [15].

In the developing world, this infrastructure was financed through the programs and policies of development institutions such as the World Bank and sympathetic national governments. As Cheryl Payer noted in her classic study of Bank lending:

"Infrastructure projects — transportation, communications, and electric power — are the traditional areas of Bank lending. They dominated the lending pattern in the 1950s and even after the expansion of lending for agriculture and so–called social infrastructure projects in the past two decades, they remain among the largest sectors in volume of money spent." [16]

The link between foreign investment opportunities for multinational corporations and the need for Bank and government lending for infrastructure was not lost on Bank leadership at the time:

"Costly equipment from abroad, it was clear, would be required for electric power plants, transportation and communication systems, and other basic facilities that were no longer attractive to private capital, although they could be regarded as prerequisites for the attraction of private capital to industry, agriculture, and the services. Public utilities had attracted private capital to less developed countries in pre–World War II days, but it would have been unrealistic to expect them to continue to do so on any appreciable scale after the war. The investment was too large, the return to the investor too small, and the prospect of government intervention too great" [17]

Thus the post–war period saw the rapid creation of the infrastructure needed for industrial manufacturing in the developing world. It was an era of mega–dams, ambitious road projects and port expansion — all necessary to support the shift in industrial capitalism.

To give just one example of this trend, the Philippines, a key investment location for transnational capital, devoted 64 percent of its 1982 public sector spending financed by foreign debt to infrastructure projects while public sector spending on capital projects went from a low of 1.2 percent of GNP in 1970 to a high of 7.3 percent in 1978. Even during the recession of the early 1980s, capital spending in the Philippines remained high, dropping to 3.7 percent only in 1985. Most of this spending was devoted to infrastructure, first in transportation and irrigation, later in energy [18].

As was the case with the NIDL, enrolling the South in the plans of information capitalism also requires the establishment of an adequate level of infrastructure. Some of this infrastructure is already in place. The basic ability to communicate with overseas manufacturing facilities was a precondition for the earlier shift to production in the South. Gerald Sussman for example, describes World Bank involvement in making Philippine telecommunications infrastructure fit for transnational capital in the 1970s (Sussman, 1991). Realizing the potential of the South as a producer of information commodities requires that this infrastructure be continually kept up to date (ie., broadband Internet for VOIP and video conferencing). It also requires an appropriate set of government policies (policy infrastructure), including, for example, a deregulated telecommunications sector in order to guarantee low communication costs for firms, protection of intellectual property, and some notion of data security enshrined in law.

Information capitalism also requires attention to the labour market. Unlike the industrial capitalism of the NIDL era, it depends on more highly skilled forms of labour with a wide range of capabilities (keyboarding at the very least, specialized computer languages at the high–end of the scale). This creates a need for training that the previous shift in manufacturing did not.

In both the infrastructural and labour requirements we see the attractiveness to information capital of the digital divide as a policy issue. Projects to narrow the gap in access to advanced information technologies clearly serve to develop the infrastructure needed for information processing tasks as well as making available "human resources" with various levels of familiarity with these technologies.

The fact that projects may consciously target countries or regions that up to now have not had much contact with information capitalism is of added benefit. The economic and social problems that capitalism encounters are frequently resolved, if temporarily, through geographical expansion of its area of operations in what David Harvey refers to as a "spatial fix" (Harvey, 1999).

In this regard, it is interesting that after only a few years of operation average attrition levels among data entry operators in India have already reached 30 to 35 percent. Datamonitor claims that disillusionment with working conditions is responsible for the problem. Indian staff are required to keep odd hours, adopt American accents, and have few options for career advancement. Similarly Indian computer programmers are becoming difficult to retain due to the increased competition between firms that the market has produced (Datamonitor, 2003).

With the exception of the need to adopt a foreign culture while at work, these issues are precisely the same ones that have plagued data entry operators in North America — in fact, it was to get away from these problems that the work was outsourced in the first place. The quickness with which they have re–surfaced in the South suggests that information capital will be in a constant search for new populations willing to engage in such labour. The expansion of communication infrastructure into the hinterlands of the developing world and a growing familiarity with information technology by those living in these regions can only help with this task.



The South: The state, ruling elites, and the middle class in the quest for hegemony

Information capital and its need for new markets and cheap, yet digitally skilled labour is not the only beneficiary of the increasing importance of the digital divide as an international issue. As in the past, elites in the South are actively involved in seeking lucrative roles as intermediaries in a global economic structure dominated by the developed world [19].

In the Philippines most of the contact centres involved in the outsourcing business are joint ventures between American firms and Filipino businessmen (see Appendix 1). India has been an especially fertile ground for indigenous fortune–making in the IT business, with numerous examples of successful firms able to carve out a niche for themselves despite the decline in the IT industry’s fortunes. Infosys Technologies, Wipro and Tata Consultancy Services make money primarily through exports to the developed world and are all large and successful Indian firms by any standard. The executives of these firms, and other companies aspiring to their status, such as Pradap Kar, Jaitirth Rao, Narayana Murthy, Vivek Paul, and Azim Premji, are commonly featured in the media as new Indian heroes. But opportunities in the world of IT abound for elites in other parts of the globe as well.

In Ghana, a local software firm, Soft, successfully competes in the operating–system market due to the realization of its founder, Hermann Chinnery–Hesse, that Africa needs something cheaper and more resilient than Windows. He has attracted international investors to his business (Hale, 2003b). Other Ghanaians are also busy trying to extract wealth from information technology. Francis Quartey runs a large and successful Internet service provider, Intercom Data Network in Accra (Thompson, 2002) while another of his countrymen has established the country’s first call centre engaging in U.S. telemarketing efforts (Hale, 2003a).

It is not only elite groups that benefit from efforts to span the digital divide. There is also a need for states in the South to assume a certain level of political legitimacy, especially among the middle class. However, to understand the connection between the digital divide as a policy issue and the quest for state legitimacy we need to explore the notion of economic development.

Economic development constitutes the most important ideological element structuring relations between citizens and the state in the South, and for that matter, between the North and South. It has been enormously influential for much of the twentieth century, but during the post–war era of American global hegemony it took on an enlarged role in global affairs as it became clear that the system of colonial empires that had extended the reach of capitalism so far in the past was in serious jeopardy (Adas, 1989; Rist, 2002).

American hegemony over the South was based not on a relationship between colonizer and colonized (the United States had only a few colonies of its own, notably the Philippines and Cuba), but between developed and undeveloped countries. The old baggage of race and superior civilization that had previously structured colonial relations was jettisoned. Instead the peoples of the South were seen as the same as those in the North, with the only difference being their development status, a status that could be remedied by economically catching up to the North.

In making economic growth the centrepiece of development, the United States was advancing a well–established argument that what mattered most was not the distribution of resources or means of production, but the overall size of the economic "pie." According to this view, expanding the size of the "pie" meant more for everybody while avoiding the discord and friction between classes that re–distribution would entail. Thus development would bring harmony not only on the world stage, where it would replace the inherently conflictual relations of colonialism, but also domestically, where it would mute class conflict [20].

By advancing this conception of development the United States government was also advancing its own interests. For many years previous to the war it had worked for a more liberal international order that would guarantee open markets for its increasingly productive manufacturing industry (Hearden, 2002).

But development was also eagerly accepted by the new nations of Africa, Asia and Latin America. The immensely influential 1955 Asia–Africa Conference held in Bandung, Indonesia endorsed development wholeheartedly in the first clause of its final communique by "recogniz[ing] the urgency of promoting economic development in the Asian–African region" [21]. For the ruling groups in these countries development not only equalized their relations with the rest of the world, but also provided an apparent avenue to improve their people’s condition without undue hardship for themselves (i.e., redistribution of resources or sharing of power). It was a formula that apparently worked to everyone’s advantage, so that by the early 1960s development had become entrenched as the main element in North–South relations and the internal politics of most states in the South as well. It is therefore apt to speak of the development idea as the philosophy of the modern world system — a means to ensure that ever–expanding areas of the globe would engage in capitalist production despite the ending of colonial control.

It is relatively easy to understand the appeal that this version of development had to the newly emerging countries of Africa and Asia in the 1950s and 1960s, yet it becomes increasingly difficult to fathom the extent to which it is still venerated today. The numerous cases of development gone seriously awry have been documented in countless books and articles over the last three decades at least [22].

John Passe–Smith has examined world growth rates from 1960 and 1998 and his findings are instructive in this regard. His analysis shows that the overall gap between high income countries and medium and low income countries in terms of GNP per capita have steadily increased throughout the period (see Table 3).


Table 3: Absolute gap in GNP per capita in 1995 U.S. dollars.

  1960 1980 1998 Average Annual Increase in the Gap
Middle income country average 9,623 15,333 22,317 325
Poor income country average 12,081 17,739 25,016 332


In fact, only five countries were able to resist this trend: Japan, Singapore, Hong Kong, Ireland, and French Polynesia (Passe–Smith, 2003). GNP per capita for middle and low income countries expressed in terms of percentage of the GNP per capita level for high level countries also gives evidence of this trend (see Table 4).


Table 4: Low and middle income country GNP per capita levels as percentage of high Income country GNP per capita.

  1960 1980 1998
Middle income country average 22.9 15.4 12.1
Poor income country average 3.1 2.1 1.5


Figure 1 presents a simplified picture, but its central premise is correct — development as currently conceived does not work, at least in ways leading to a reduction global inequality, which was, as we have seen, a major argument for the massive efforts made on its behalf. Why, then, is it still possible to speak of development as a going concern in the twenty–first century?

Figure 1: Long–term trend in world income distribution between countries (ratio between the world’s richest and poorest country for selected years). (Source: UNDP Human Development Report 1999, p. 38)

For Doug Porter, the "early statements about development expressed a basic idea that persists to this day: Development practice is understood as the systematic application of a universal rationality at a societal level to achieve desired states of affairs through the control of human as well as natural processes." According to Porter, development came to be seen as a ‘problem’ which could be broken down into a series of constraints, like savings, growth rates, or literacy, according to known causal relations between them. Once identified, these elements could be reassembled and manipulated in a controllable and predictable manner [23].

It is this problem–solving approach that has saved the development concept by making possible an endless series of augmentations to the basic premise of economic growth. New problems and constraints brought to the attention of developers were progressively incorporated into development thinking, adding more steps to the path leading to development’s secular version of salvation, but not eliminating the journey by any means.

We can therefore view the history of development as a cycle: problems leading to supposed solutions leading to new problems. When the increasing immiseration of much of the African, Asian, and Latin American population became too obvious to ignore in the 1970s, development rose to the challenge by announcing its new focus on the poorest of the poor, who were declared lacking in basic needs. When forced to concede the existence of gender disparities that previous attempts at development created in many cases, the response was to establish a new field of study and practice: women in development. The environment, concerns over popular political participation, and, more recently, issues of government corruption have all been incorporated into the development idea, making the concept progressively more devoid of meaning and therefore even more amendable to future bouts of assimilation. Jan Nederveen Pieterse notes that "As a concept development papers over the different interests involved in economic, social and political change. ‘Development’ suggests the possibility of a package formula in which all these interests come to some form of crystallization and convergence" [24]. At the same time, the underlying misery and deprivation that rhetoric suggests is the focus of development efforts remains, providing justification for renewed developmental efforts. Who doesn’t want to end world hunger or the countless other miseries afflicting the majority of humankind in the South? And if a new addition to the development arsenal might do the trick, the moral imperative appears clear.

The discourse surrounding new forms of information technology, and the digital divide their absence creates, helps secure state legitimacy by once again revitalizing the notion of development as achievable within the parameters of the current global economic system. Information technology appeals to the people of the South, or at least the middle classes of the South, as an avenue of upward mobility, a means by which they or their descendants can achieve economic prosperity and social advancement. And for some individuals this will be the case. Information technology has and will continue to create not only fortunes in the South, but at a more modest scale, the fulfillment of the dreams of many in the middle class.

Working for a software firm in India, the Philippines or any number of other nations in the developing world provides an exceptionally good living for those lucky enough to be able to afford the necessary educational credentials. Daniel Pink tells us about the privileged middle class employees of Hexaware, an Indian software firm:

"Programming jobs have delivered a nice upper–middle class lifestyle to the people in this room. They own apartments. They drive new cars. They surf the Internet and watch American television and sip cappuccinos" (Pink, 2004).

Table 5 provides the average cost of IT workers and the per capita GDP for selected countries of the South. The table clearly shows that these positions pay above–average wages. Even less–skilled jobs such as call centre work are relatively well–paid. In Morocco, the average call centre operator makes US$762 per month, compared to the country’s per capita annual gross national income (GNI) figure of US$1,170 (Tieman, 2004). In the Philippines, starting agents receive between US$218 and US$273 per month (Teves, 2003). Operators are cheaper in Ghana, taking home between US$100 and US$200 each month, but in a country where a licensed nurse receives around US$50 per month, this is considered exceptional [25].


Table 5: Average cost (US$) of IT workers and GDP per capita in selected countries.

  Cost of IT workers GDP per capita
India $8,000 $470
China $9,600 $960
Philippines $7,000 $1,030
Russia $7,000 $2,130
Mexico $7,000 $5,920
South Africa $18,000 $2,500


But while the creation of well–paid and respected IT jobs in the South helps to rehabilitate the notion of development in the eyes of a restive segment of its population, the middle class, it is in a form beneficial to the overall structure of the global economy as it is currently structured. Computer hardware is bought principally from Northern companies. Software may be produced in the South, but is mostly exported to the North. Contact centres service clientele in the North. And business process outsourcing is done to help Northern corporations improve their returns. Even the popular notion of marketing crafts through the Internet involves tying the South further to the economies of the North. Rather than advocating a radical break with the current global economic system, perhaps to a more regional–centered or even domestic structure of trade, the discourse surrounding information technology in the South serves to perpetuate the status quo and the State that guarantees its maintenance in the South.



The development community: The quest for a renewed sense of legitimacy and meaning

Northern capital and Southern States all have something to gain from the promotion of the digital divide as a policy issue. To this dyad needs to be added a third group: the development community itself. Despite its manifest failure to significantly address the pressing problems of human welfare, the institutions necessary to propagate the development message around the world have proliferated [26]. By the late 1980s, Graham Hancock could describe this community as:

"a fantastically complex, diversified and devolved industry ... . Financed largely by the official aid of rich countries, mandated to promote ‘development’ in the poor ones, it is an industry that employs hundreds of thousands of people around the world to fulfil a broad range of economic and humanitarian objectives. The Wall Street Journal once described it as ‘the largest bureaucracy in history devoted to international good deeds.’ I prefer to think of it as Development Incorporated." [27]

A partial list of participants in the development industry would have to begin, in terms of size and influence at least, with the World Bank. Complementing the World Bank’s mission around the world are four regional development banks: one each for Africa, Latin America, Asia, and the Caribbean. Also extremely important in the aid community are the major bilateral government agencies such as USAID, the German Federal Ministry of Economic Cooperation and Development, and the Japanese International Cooperation Agency (JICA). The European Union has the European Development Fund while the United Nations system also has a full panopoly of aid organizations: the United Nations Development Programme (UNDP), Food and Agriculture Organization (FAO), World Food Programme (WFP), International Fund for Agricultural Development (IFAD), United Nations International Childrens Emergency Fund (UNICEF), and the United Nations Educational, Social, and Cultural Organization (UNESCO). Think tanks, consultancy firms, academic programs, and a host of private sector development contractors also comprise important elements of the aid community. These include technical support and training organizations, bursary management institutions such as the British Council, research institutes such as the U.K.’s Institute of Development Studies, the Institute for Developing Economies in Japan and the International Development Research Centre in Canada, and non–profit organizations of all kinds. Straddling the aid community and the broader business world are major private consultants such as Pricewaterhouse Coopers, Accenture, Deloitte & Touche, Ernst & Young and KPMG. Even this incomplete list should serve to adequately illustrate the point that development has "stakeholders" in considerable numbers.

The development community has relied on a deeply embedded assumption that society can be effectively changed through programmes of planned intervention. Development is all about planning for change. Until the 1980s this assumption was unchallenged, but as the wave of enthusiasm for neo–liberal solutions to economic problems spread from its centres in Thatcher’s United Kingdom and Reagan’s United States to the rest of the world, the development community was not left untouched. Colin Leys, noting this phenomenon, wrote that:

"although the ‘development community’ was loath to acknowledge it, the new global economic regime thoroughly undermined the foundations of development theory as it had hitherto been conceived." [28]

The new economic "reality" was that the market was to be the final arbiter of human destiny with the result that the notion of purposive change through policy was denigrated as impractical, unworkable, and prone to corruption or other forms of malfeasance.

Development was to be no exception to market rule. The theoretical works of, among others, Peter Bauer, Deepak Lal, Ian Little and Bela Balassa, argued forcibly that the problem of the developing world was development policy itself which distorted markets and intrenched economic inefficiencies (Toye, 1993). If such a position was adopted wholeheartedly around the world, development, as a project for governments and other institutions devoted to planned change, would be seen as an impediment to prosperity and advancement. The entire development community would be in serious jeopardy as a result.

But if the market ruled supreme in theory during the 1980s and 1990s, reality was different. The development community was too entrenched for it to meekly give up its position without either a fight or an attempt at adaptation. In the later approach, certain ideas about information have proved invaluable in its quest for renewed relevancy. The role of these ideas is most clearly revealed in the recent work on the changing fortunes of the World Bank by Ben Fine, an economist at the University of London’s School of Oriental and African Studies.

While conceding the faltering legitimacy of the World Bank’s development mission in the mid–1990s, Fine is at pains to point out that at the turn of the century, the Bank was back on its feet. He traces this remarkable recovery to the efforts of the Bank’s former chief economist Joseph Stiglitz to introduce into Bank thinking the concepts of information–theoretic economics [29].

Information–theoretic economics provided the missing relevancy for the Bank in a neo–liberal age. Its basic premise is that although markets are the most efficient means of organizing the material operations of a society, they are difficult mechanisms to perfect. In many cases they fail to clear properly or suffer other inefficiencies, chiefly due to the lack of appropriate information on the part of market participants. In such cases planned intervention by non–market agents such as governments become essential means to attain the ultimate goal: an efficient market [30].

Accepting this argument, according to Fine, restored the World Bank and, by extension, other development agencies, to a prominent position by giving development a renewed role in the economies of the South. The brilliance of this move consisted in the fact that it legitimatized development activity without contradicting fundamental neo–liberal tenets and without introducing uncomfortable notions such as power and class that would constitute a truly radical critique of the current global economy. As Fine points out, "the idea of development itself ... is simply reduced to the alternative arrangements for dealing with informationally–based market imperfections" [31].

It is no surprise that alongside Stiglitz’s attempts to construct a new theoretical rationale for development based on information economics came an emphasis on information and communication technologies. If the provision of information was now at the core of development then the tools by which this information could be disseminated and manipulated became of vital importance. From the mid–1990s onwards, an increasing number of reports, case studies, and discussion papers on information technology for development began to circulate [32]. The new development problem, the international digital divide, if not exactly born at this time, certainly came of age. Today the World Bank claims itself to be a "Knowledge Bank" and has created a formidable array of departments and programmes formally dedicated to bridging the gap in information technology and knowledge between the North and South. Appendix 2 provides an overview of some of these efforts.

Other development organizations have not been slow in adopting information technology as part of their operations and programmes. The Canadian International Development Agency’s (CIDA) "Strategy on Knowledge for Development through Information and Communication Technologies" is a case in point. The document tells us that

"information and knowledge are among the resources fundamental to the development process. Access to information and knowledge, other than strengthening civil society, contributes to poverty reduction by allowing individuals and communities to expand their choices" (CIDA, n.d.).

CIDA now has a number of programmes designed to help African countries access the Internet and reform telecommunications policies. It also helps to support Canadian NGO initiatives in the field and the projects of the Ottawa–based International Development Research Centre (IDRC) (Einsiedel and Innes, 2000).

Similar to the position taken by CIDA, the Asian Development Bank (ADB) has declared that:

"Information and communication technology (ICT) has become a powerful tool in the fight against world poverty, providing developing countries with an unprecedented opportunity to meet vital development goals, such as poverty reduction, basic health care, and education, far more effectively than before. The countries that succeed in bridging the digital divide by harnessing the potential of ICT can look forward to enhancing economic growth, and improving human welfare and good governance practices" (ADB, 2001).

Statistics on loan approvals by sector show that an average of 32.84 percent of the total disbursement for the years 2001–2003 was for the purpose of transportation and communications, the highest level for any of the ADB’s sectoral categories [33].



Civil society: The quest for social change and the tools to achieve it

A fourth group stands to heavily gain from efforts to put the digital divide on the policy map — those organizations that fall into the broad category of civil society, a term usually taken to refer to that part of society separate from both the private sphere of the family and the State. Parts of the development community belong to civil society, for example, NGOs such as Oxfam and the Catholic Agency for Overseas Development (CAFOD). But in this section I expand the focus to groups actively pursuing goals other than development. Among these are human rights advocates (Amnesty, Human Rights Watch), environmental movements (Greenpeace), and alternative media (OneWorld). Development of one form or other may be considered by these organizations as essential, but the essence of their mission lies elsewhere.

In the South, the past few decades have seen the rapid expansion of such groups and their growing importance as national and domestic actors [34]. Estimates of their numbers vary significantly, but the upward trend is not in question. To give some idea of this growth, Princen and Finger recorded 79 NGOs in the Indonesian Environmental Forum (WALHI) in 1980 but over 500 in 1992; while the African NGO Environmental Network (ANEN) jumped from 21 members in 1982 to 530 in 1990 [35].

Jeff Haynes estimates the total membership of these groups as roughly 100 million worldwide (Haynes, 1997). He argues that their burgeoning presence is a reaction to widespread feelings of alienation towards established organizations, including traditional democratic institutions; and, generalized economic and environmental decline, approaching complete collapse in some areas of the world.

For these groups, new information and communications technologies, previously the fax machine, and now the Internet, are seen as a useful tool for organizing and communicating their message to others [36]. A few examples are provided in the following paragraphs.

Early beneficiaries of the new technology were the Mexican Zapatistas. Triggered by the integration of Mexico into the North American free trade zone in 1994, but the product of years of repression and impoverishment, the Zapatista movement has mobilized the indigenous people of Chiapas, Mexico to fight for social transformation. It has also exercised a decisive influence on civil society the world over. As Harry Cleaver notes: "... it is not exaggerated to speak of a ‘Zapatista’ effect reverberating through social movements around the world." [37]

While the Zapatistas did not make use of this technology at first, their foreign supporters quickly used the medium to spread news about the activities of the Mexican army in Chiapas around the world. After this initial success, the Zapatistas began to tailor their strategy to take advantage of the global networking that the Internet makes possible. Within Mexico, the movement started to use the Internet as a means to gather support, while outside the country the Zapatistas used e–mail to help organize a series of meetings in which social movements from around the world came together to discuss strategy [38].

Other organizations in other parts of the developing world also increasingly use these new technologies. In 1993, Douglas Steele, a student at Thailand’s Chulalongkorn University, established BurmaNet and began posting Thai newspaper articles online, one of the few non–government controlled sources of news about Burma at the time. BurmaNet acted as a magnet, drawing together exiled Burmese from around the world, or at least those with access to an Internet account [39].

In 1995, the Free Burma Coalition was established in the United States with the aim of achieving a real, functioning democracy for Burma. From the beginning, the coalition relied on the Internet. E–mail lists were used to coordinate demonstrations and a Web presence was quickly established in order to reach potential recruits and supporters. BurmaNet continued to be the major source of news about Burma for the coalition [40].

While the Free Burma Coalition has not yet achieved the goal it initially set for itself, it has had some important victories. Twelve multinational companies, including Pepsi, have agreed to pull out of the country while 21 municipalities and one state in the U.S. have passed ordinances restricting dealings with companies involved with the country. And in 1996, the U.S. Congress imposed conditional economic sanctions on the regime [41].

Human rights organizations are now also heavy users of new ICTs. Amnesty international, for example, now regularly uses e–mail to collect information from its regional contacts and is now in a position to tap into electronic news feeds to help its researchers keep up with local news. Information dissemination to members and the wider public has also been affected by the advent of the Internet as Amnesty now makes available an online database of its reports and other materials documenting the state of human rights in the world to the general public. Mobilization of its members in order to deal with particular cases of human rights abuse is now also done electronically, although the organization stresses the continued need for pressure to be applied to governments through the form of letters or faxes, rather than e–mail (Lebert, 2003).

One noteworthy example of the use of electronic media in the fight for human rights revolves around the East Timor Ireland Solidarity Campaign (ETISC). Together with their Internet service provider (ISP), Connect Ireland, ETISC registered East Timor as a top–level country domain in the name of Xanana Gusmao, the leader of the Timorese independence movement. Although a symbolic effort, its wider significance became apparent soon afterwards. In January of 1999, a large and well–organized attack was launched on the domain "in the most sophisticated hacking [attempt] ever recorded in Ireland" [42]. Connect Ireland, in statements to the press, considered the attack to be the work of paid individuals, rather than the hacking activity of amateurs, strongly suggesting that the domain was attacked by the Indonesian government or its operatives [43].

Despite numbers of success stories regarding the use of ICTs by civil society groups in the South (of which the above are only a few examples), their full potential has not been reached. In the case of the Free Burma Coalition, efforts to provide alternative sources of information to people within Burma have proved much more difficult than dissemination of news to overseas audiences. This blockage was due not only to the intelligence activities of the regime, but the lack of an adequate infrastructure to support the new media [44].

Similar infrastructural issues are seen hampering the use of the Internet for human rights work in Latin America. Alejandro Pacheco, a consultant to Amnesty International, notes that advanced Internet features such as chat groups or video conferencing are rarely used due to technological and economic constraints. Perhaps more important is that privacy protection such as Pretty Good Privacy (PGP) is also infrequently used and that few NGOs in Latin America are capable of publishing their own materials on the Internet due to a lack of skills and hardware facilities [45]. There is no reason to believe that the situation is any better in Africa or most of Asia.

Yet while the full potential of the new ICTs has not been realized by many groups in the South, there is an awareness of this potential. Ellen Kole, in an examination of the use of ICTs by NGO delegates at the 1995 UN World Conference on Women, tells us that

"the women from the South, however, all valued electronic network information as of ‘great importance’ or even ‘very great importance’. The networks gave them access to new information on the process as well as on policy issues ... Southern women who were previously unable to communicate in an uncomplicated way with similar organizations in the region report that e–mail enabled them to participate in coalitions." [46]

The value placed on new ICTs thus produces a dynamic whereby the potential of the new technologies, as exemplified by success stories such as the Zapatistas and Free Burma Coalition, are seen as creating a pressing need for civil society in the South to also acquire these tools in a more substantial fashion than at present.

Joanne Lebert of Amnesty International, for example, tells us that "those engaged in online activism tend to represent the elite of the world" with the result that Amnesty "is committed to improving its information technology support to sections ... Resources garnered by the [International Secretariat] IS and wealthier sections are pooled and redistributed primarily according to identified needs, but also according to the strategic importance of a particular section" [47]. In supporting efforts to bridge the ICT gap between organizations operating in both the North and South, groups such as Amnesty International effectively become adherents to the policy problem of the digital divide.




In 2005, Tunis will play host to the follow–up of the first World Summit on the Information Society. The digital divide is likely to be a key issue at this conference, as it was at the previous conference held in Geneva in 2003. Whether or not the issue deserves such a level of attention is a contentious issue.

Regardless of the position one takes on that question, it is important for those observing the process to ask searching questions about the wider context in which the issue is embedded, including the beneficiaries that the heightened attention produces. As Mark Considine, an advocate of critical policy analysis, comments:

"Achieving effective policy outcomes [requires] an understanding of the social and political context of policy making which shapes and often determines which options, goals and strategies will be available for consideration ... This does not mean that those seeking to understand how policy is made should dismiss all participants as equally prejudiced or tainted, but rather that searching questions should always be asked. Finding the right questions involves mapping the roles and interests of all who have a stake in any given policy." [48]

In this article I have described four groups that have an interest in the promotion of the digital divide issue. Information capital achieves a new market for its products as well as an educated workforce capable of producing those products in the first place. The state in the South benefits through the legitimation conferred through programs designed to combat the divide. Not only do these offer new accumulation opportunities for its elite, they also hold the possibility of defusing discontent over poor economic prospects for the middle class, a volatile section of the population. The development industry, suffering from a neo–liberal attack that views development as irrelevant in the modern world, also benefits from the digital divide. Another gap has been opened up that requires the expertise these agencies believe they can provide. And finally, the organs of civil society are also winners, as they attempt to capture information and communication technologies for their own increasingly successful projects.

Frequently, policy discussion surrounding the digital divide focuses attention on target populations defined as lacking access to, or perhaps the skills needed to use, new ICTs. Projects and programmes are designed to ostensibly benefit these groups. However, this article raises awareness that the range of beneficiaries of policies to tackle the digital divide is likely to be much wider.

Given their strength, it is likely that these groups are capable of capturing most of the advantages new ICTs can offer marginalized peoples in the South. It suggests that those wishing to use new ICTs for the benefit of those truly at the bottom of the global social and economic hierarchy need to re–construct the nature of the digital divide as a policy issue, to frame it as more than access, skills, or even content, but rather as part of a challenge to the global order itself so that solutions to the problem consciously tilt the balance of benefits away from those already privileged (information capital, the state, and the development industry) towards those currently excluded from not only new information and communication technology, but the basic requirements of a dignified human existence. End of 


About the author

Brendan Luyt is a Ph.D. candidate in Library and Information Science at the Faculty of Information and Media Studies, University of Western Ontario, Canada.
E–mail: bjluyt@uwo.ca.



1. Press, 2004; Hammond, 2001. For a critique of this thinking, see Shade (2003).

2. Digital Opportunity Taskforce, 2000.

3. World Economic Forum, 2002, p. 3.

4. Richardson, 1993, pp. 6–7.

5. As Kingdon notes about policy–making in general:

"We still encounter considerable doses of messiness, accident, fortuitous coupling, and dumb luck. Subjects sometimes rise on agendas without our understanding completely why. We are sometimes surprised by the couplings that take place. The fortuitous appearance of absence of key participants affect outcomes. There remains some degree of unpredictabilty" (Kingdon, 1984, p. 216).

6. The South is one of several terms used to describe those countries of Latin America, Africa and portions of Asia where much of the population lack access to the level of resources that would ensure a reasonable standard of living. Other terms to describe this group of nations, which collectively hold the majority of the world’s population, are the developing countries and the Third World.

7.Informational capitalism, as the name suggests, sees information elevated to a new position within the economy, as a commodity (intellectual property) and as a means to extend the profitability of the manufacturing process itself (Perelman, 1998, pp. 30–31; Morris–Suzuki, 1997, p. 60). It is a response not only to the invention of new and powerful forms of computing and networking technology, but to the increasing problems of making a profit in the developed world (Robins and Webster, 1999, p. 114).

8. Skinner, 1998, p. 67.

9. Ellis, 1997, p. 115.

10. Bardhan and Kroll, 2003, p. 1.

11. Ibid., p. 6.

12. These figures are potential losses only. It is highly unlikely that perfect compliance with copyright rules would generate sales growth of this magnitude. While the BSA is loath to admit it, it is the price of their members’ products and the inability of most organizations and individuals in the South to afford to pay these prices that produces such high rates of copyright violation. Gopal and Sanders have correlated per capita GNP with the BSA’s piracy figures. They conclude that "higher software piracy rates are heavily skewed towards countries with low per capita GNP" (Gopal and Sanders, 2000, p. 85). An examination of software prices adjusted to reflect purchasing power parity lends credence to their claim. In Vietnam the effective U.S. dollar price of WinXP is a startling $48,011 while in Ghana the effective price climbs even further, to $73,442 (Ghosh, 2003). Perhaps what is really surprising is that rates of piracy in the South are not higher! However, for our purposes, what the BSA’s figures suggest is the importance that the Association, and by extension the industry it represents, attaches to developing country markets.

13. Dicken, 1988, p. 22.

14. Ibid., p. 39.

15. Dicken, 1988, p. 54; Hymer, 1972, p. 124.

16. Fröbel, et al., 1980, p. 13.

17. Payer, 1982, p. 87.

18. Mason and Asher, in Payer, 1982, pp. 87–88.

19. Dohner and Intal, 1989, pp. 404–405.

20. A classic work on this subject of dependent development is found in Evans (1979).

21. Rist, 2002, p. 76.

22. Ibid., p. 83.

23. See, for example, Seabrook (1993), Hancock (1989), Marnham (1980), among many others.

24. Porter, 1995, pp. 70–71.

25. Nederveen Pieterse, 2001, p. 40.

26. Zachary, 2004; Thompson, 2002.

27. Escobar, 1995, pp. 44–47.

28. Hancock, 1989, pp. 41–42.

29. Leys, 1996, p. 19.

30. Fine, 2001, p. 2.

31. Ibid., p. 5.

32. Fine, 2001, p. 7.

33. See, for example, Hanna (1991), Talero and Gaudette (1996), GICT Department (2000), Kenny, et al. (2001), Dahlman and Aubert (2001), and GICT Department (2002).

34. Asian Development Bank (ADB), 2003, p. 163.

35. Mathews, 1997, p. 53.

36. Princen and Finger, 1994, p. 2.

37. Mathews, 1997, p. 54; de Vaney, 2000, p. 5.

38. Cleaver, 1998, p. 622.

39. Ibid., pp. 627–631.

40. Danitz and Strobel, 1999, p. 258.

41. Zarni, 2000, pp. 80–81.

42. Ibid., p. 79.

43. Scharfe, 2000, p. 134.

44. Ibid.

45. Danitz and Strobel, 1999, p. 259.

46. Pacheco, 2000, pp. 108–109.

47. Kole, 1998, p. 351.

48. Lebert, 2003, pp. 224–225.

49. Considine, 1994, p. 8.



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Appendix 1: Contact centres in the Philippines as of 2002.
(Compiled from issues of Busnessworld, Computerworld Philippines, and individual company Web sites.)

Name Owner Nationality Date* Partner Nationality
Advanced Contact Solutions Same Philippines 1997 None n/a
Ambergis Solutions Same United States 2002 ICCP Venture Partner Philippines
C3 Benpres Holdings Philippines 2000 SourceOne United States
ContactWorld ePLDT Philippines 2000 Salimat Australia
CQuadrant NxtQuest Philippines 2000 None n/a
Cyber City Teleservices Same United States ? None n/a
EasyCall EasyCall Communications Philippines 1998 Centralized Marketing United States
Equitable Computer Services Equicom Systems Management Philippines ? Telus Canada
eTeleCare SPI Philippines 1999 Integrated Telecom United States
Expercs Direct Communications Expercs Philippines ? None n/a
Immequire Same United States 2001 None n/a
INFONXX Same United States 2001 None n/a
Island Information and Technology Same Philippines 2002 US Asia Solutions United States
Parlance Systems ePLDT Philippines 2002 Echostar United States
PeopleSupport Same United States 2000 None n/a
Pilipinas Teleserv Same Philippines 2000 None n/a
Reese Brothers Same United States 2001 None n/a
Skyes Asia Skyes United States 1997 None n/a
SVI Connect Same Philippines 2000 Telemarketing Concepts** United States
TeleMessage Telemesser United States 2001 EL Communications Philippines
Vocativ ePLDT Philippines 2001 Teletech Holdings United States

*The date refers either to the official date of opening or announcement of intention to establish a call centre.
**Telemarketing Concepts was acquired by SVI Connect in 2000.



Appendix 2: Selected World Bank ICT initiatives.

Development Gateway "a development issues Web portal, for users to gain access to information, resources, and tools — and to contribute their knowledge and experience"
Global Knowledge Partnership
http://www.world bank.org/ks/Global_regional.html
"an evolving informal partnership of public, private, and not–for–profit organizations in both developing and industrial countries. Its members are committed to sharing information, experiences, and resources to promote broad access to — and effective use of — knowledge and information as tools of sustainable development"
World Links for Development "provides Internet connectivity and training for teachers, teacher trainers and students in developing countries in the use of technology in secondary education"
African Virtual University
http://www.avu.org/s ection/about/default.htm
"first–of–its–kind interactive–instructional telecommunications network established to serve the countries of Africa. The objective of the AVU is to build capacity and support economic development by leveraging the power of modern telecommunications technology to provide world–class quality education and training programs to students and professionals in Africa"
Global Development Learning Network "links decisionmakers around the globe, through telecommunications systems, as participants in global learning activities"
InfoDev "a global grant program to promote innovative projects on the use of information and communication technologies for economic and social development"
Global Information and Communication Technologies "accelerates the participation of client countries in the global information economy and promotes innovative projects on the use of information and communication technologies"
Indigenous Knowledge "provides users with quick access to syntheses of country–specific cases of indigenous/traditional practices, in–country sources of knowledge, and Bank–supported projects related to IK issues"
B–SPAN "an Internet–based broadcasting station that presents World Bank seminars, workshops, and conferences on a variety of sustainable development and poverty reduction issues"
Rapid Response "provides access to knowledge resources on investment climate and privatization policy issues — through a quality–assured database of papers, case studies and Web sites, a discussion board on hot policy topics, and a free helpdesk for straightforward requests"
FDI Xchange "an e–mail based service offering periodic updates on new direct investment opportunities, market analysis and business environment information in developing countries and economies in transition"
The Investment Promotion Network (IPAnet) "provides access to over 13,000 investment information resources, drawn from over 650 organizations — all catalogued and searchable by country, sector and topic"
PrivatizationLink "a privatization information and marketing service featuring detailed profiles of state–owned enterprises currently being divested in emerging economies"


Editorial history

Paper received 2 July 2004; accepted 28 July 2004.

Contents Index

Copyright ©2004, First Monday

Copyright ©2004, Brendan Luyt

Who benefits from the digital divide? by Brendan Luyt
First Monday, volume 9, number 8 (August 2004),
URL: http://firstmonday.org/issues/issue9_8/luyt/index.html

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