We live in the age of information. The development and proliferation of electronically communicated information has accelerated economic and social change across all areas of human activity worldwide—and it continues to do so at a rapid pace. While the use of information and communication technologies (ICTs) remains concentrated largely in the developed world, ICT diffusion is beginning to reach developing countries, including poor rural areas, bringing with it high hopes of positive development outcomes.

Yet although technological innovations, such as cellular telephones and wireless broadband access, are playing an important role in building ICT levels globally, strong inequality still remains. The rapid growth of ICTs in developing countries is partly a result of very low initial access, and therefore in absolute terms developing countries are still well behind the developed world in access to ICTs. As Figure 1 shows, total telephone access in South Asia and Sub-Saharan Africa grew by an average of 22 and 17 percent per year, respectively, from 1990 to 2003, but their current levels of access are still just 6.2 and 5.8 percent. Inequality of access is even greater within developing countries, especially between urban and rural areas, where the digital divide continues to widen.

Why are ICTs assigned such importance in the development context? ICTs are unique in having an impact beyond the individual user’s welfare. ICT infrastructure offers economies of scale that stimulate network building and consequent spillover benefits. ICTs enable interactive communication unhindered by distance, volume, medium, or time. They promote greater inclusion of individuals within networks and, even more important, increase the diversity of participants by overcoming the barriers of physical distance and social standing. The immediacy and reach of ICTs also promote faster, more efficient, and ultimately better decision-making across all fields of endeavor.

Some commentators, however, hold much more skeptical views of the benefits of ICTs for development. They argue that access to ICTs largely depends on education, income, and wealth and that the so-called digital divide is only a part of a much broader development divide. Limited education, inappropriate language skills, or lack of resources could prevent disadvantaged segments of the population from accessing ICTs, ultimately exacerbating information gaps and increasing income inequality between and within countries. The income gap could be further widened if ICT use raises the demand for skilled labor and—by its introduction into manufacturing and service industries— reduces the demand for unskilled labor, at least in the short term. It is often argued that developing countries have other, more pressing investment priorities, such as food, safe water, education, and public health, and that devoting limited resources to ICTs must be justified on the basis of its opportunity costs relative to other development agendas.

Continue to read the brief (with Joachim von Braun)

(Photo credit: John O’Bryan/USAID via Creative Commons)