Digital Divide, Digital Opportunities, Meeting the Challenge, Genoa Plan and Action

2. “Images used in this report may be
subject to copyright issue”

3. The Digital Divide
“Closing the Digital Divide is not just about giving
to the poor the benefits of the rich. It is about
creating a more equitable and balanced world
economy.”
- Craig Warren Smith (Digital Divide Institute)

4. The Digital Divide

5. The Digital Divide
Rapid technology change typically
occurs in uneven passion.
Unprecedented “speed” of
progress in the use of new information
and communication technologies (ICTs)
– but patterns of diffusion are less clear
and change fast. Given the pervasive
“impact” of ICTs on society, there is a
grave concern about whether the rapid
and uneven spread of ICTs will further
widen the “digital divide” that has
already emerged between
industrialized and developing
countries.
Rapid Technology

6. The Digital Divide
The conditions enabling the
“spread” of ICTs vary – or are
simply unmet – in “many parts” of
the developing world, differing
speeds of diffusion will inevitably
mean a “widening” digital divide.

7. The Digital Divide
ICT use proves to be
associated with economic
gains, that widening digital
divide can only reinforce
and the deepen the existing
socio-economic divide
between the industrialized
and developing countries.

8. The Digital Divide
• The extent of the digital divide
between industrialized and
developing countries.
• The analysis of the economic
effects of ICT use as a result of:
- The commercial applications
of the internet
- The productivity gains of the
application of ICTs to business
processes.
• The policy fundamentals
underlying the successful entry
into the information economy of
certain developing countries.
• The initiatives at international
level to put ICTs at the service of
development.
Contents

9. The Digital Divide
Digital Divide – is used to describe situations in which there is a
marked gap in access to or use ICT devices measured by.
- The socioeconomic and other disparities (differences, inequalities)
between those people have opportunities and skills enabling them
to benefit from digital resources, especially the internet, and those
who do not have the opportunities or skills: programs that help to
bridge the digital divide between rich and poor countries.
(Dictionary App)
Example: the number of phone lines per inhabitant, number of
internet users, mobile telephones in the population.
Distinction:
Commonly made between a digital divide within a country and
one between countries.
An example of the former is the divide that usually exists between
young and old, male and female, the more and the less educated, the
more and the less wealthy, and urban and rural locations.
Measuring the Digital Divide
Employment Strategy Department, ILO. Excluding Mexico / Duncan Campbell

10. The Digital Divide
Digital Divide in general:
Digital Divide refers to that between industrialized and
developing countries – although comparisons of ICT use at
different spots on the world map are now almost as significant as
inter-country comparisons.
Example regarding internet usage, International digital divide; the
divide between countries:
Kuala Lumpur may soon be closer to convergence with Sydney or
Milan with Rural Malaysia
What is digital divide?

11. The Digital Divide
In the early 21st century, residents of First World countries
enjoy many Internet services which are not yet widely available
in Third World countries, including:
a.In tandem with the above point, mobile phones and small
electronic communication devices;
b.E-communities and social-networking;
c.Fast broadband Internet connections, enabling advanced
Internet applications;
d.Affordable and widespread Internet access, either through
personal computers at home or work, through public terminals
in public libraries and Internet cafes, and through wireless
access points;
e.E-commerce enabled by efficient electronic payment networks
like credit cards and reliable shipping services;
f. Virtual globes featuring street maps searchable down to
individual street addresses and detailed satellite and aerial
photography;
http://en.wikipedia.org/wiki/Global_digital_divide#Concrete_examples_of_the_global_digital_divide
accessed July 15, 2013
Concrete examples of the global digital divide:

12. The Digital Divide
g. Online research systems like LexisNexis and ProQuest which
enable users to peruse newspaper and magazine articles that may
be centuries old, without having to leave home;
h. Electronic readers such as Kindle, Sony Reader, Samsung Papyrus
and Iliad by iRex Technologies;
i. Price engines like Google Shopping which help consumers find the
best possible online prices, and similar services like ShopLocal
which find the best possible prices at local retailers;
j. Electronic services delivery of government services, such as the
ability to pay taxes, fees, and fines online.
k. Further civic engagement through e-government and other
sources such as finding information about candidates regarding
political situations.
http://en.wikipedia.org/wiki/Global_digital_divide#Concrete_examples_of_the_global_digital_divide accessed July 15, 2013
Concrete examples of the global digital divide:

13. Population
(2012 Est. )
1,073,380,925
3,922,066,987
820,918,446
223,608,203
348,280154
593,688,638
35,903,569
7,071,846,922
World Internet Usage and Population
Statistics – June 30, 2012
http://www.internetworldstats.com/stats.htm- accessed July.15.2013
Worlds
Regions
Africa
Asia
Europe
Middle
East
North
America
Latin
America /
Caribbean
Oceania /
Australia
WORLD
TOTAL
Internet
Users
12. 31.2000
4,514,400
114,304,000
105,096,093
3,284,800
108,096,800
18,068,919
7,620,380
360,985,492
Internet Users
Latest Data
167,335,676
1,076,681,059
518,512,109
90,000,455
273,785,413
254,915,745
24,287,919
2,405,518,376
Penetration
% Population
15.6 %
27.5%
63.2%
40.2%
78.6%
42.9%
67.6%
34.3%
Growth
2000-2012
3,606.7%
841.9%
393.4%
2,639.9%
153.3%
1,310.8%
218.7%
566.4%
Users %
of Table
7.0%
44.8%
21.5%
3.7%
11.4%
10.6%
1.0%
100%

14. The Digital Divide http://www.internetworldstats.com/stats.htm- accessed July.15.2013

15. The Digital Divide http://www.internetworldstats.com/stats.htm- accessed July.15.2013

16. http://thenextweb.com/asia/2012/10/10/internet-use-in-asia-up-14-in-2012-as-
online-population-passes-1-billion-report/ accessed - July 17, 2013
According to the study, South Korea leads among
Asian countries in terms of Internet penetration with 83
percent of its citizens online, while also having the
fastest average connection (15.7 Mbps). Japan came in
second with an estimate of 79 percent, while Myanmar
placed dead last with use 1 percent.
Internet use in Asia up 14% in 2012 as online
population passes 1 billion

17. http://thenextweb.com/asia/2012/10/10/internet-use-in-asia-up-14-in-2012-as-
online-population-passes-1-billion-report/ - July 17, 2013
Internet use in Asia up 14% in 2012 as online
population passes 1 billion

18. http://thenextweb.com/asia/2012/10/10/internet-use-in-asia-up-14-in-2012-as-
online-population-passes-1-billion-report/ accessed - July 17, 2013
Internet use in Asia up 14% in 2012 as
online population passes 1 billion
As for sheer raw numbers, China has the largest Internet
population in Asia with 538 million netizens, followed by
India with 121 million. We Are Social believes that 102
million new users have come online in Asia this year, a
gain of 14 per cent.

19. http://thenextweb.com/asia/2012/10/10/internet-use-in-asia-up-14-in-2012-as-
online-population-passes-1-billion-report/ accessed - July 17, 2013

20. http://thenextweb.com/asia/2012/10/10/internet-use-in-asia-up-14-in-2012-as-
online-population-passes-1-billion-report/ accessed - July 17, 2013
Internet use in Asia up 14% in 2012 as
online population passes 1 billion
The study also notes that the continent spends a collective
total of 1.7 million years online every month. Social media
penetration is believed to have reached 21 percent, slightly
lower than the global average.
Social estimates Asia’s Facebook userbase stands at 229
million across the 24 markets tracked. A recent study
from Socialbakers pegged the social networking site’s reach
at 242 million, although its figures include more countries.
Asia continues to go mobile, with an estimated total of 3.1 billion
subscribers. Smartphone users are believed to number roughly
844 million.

21. http://www.unescap.org/stat/data/syb2011/I-People/Income-poverty-and-inequality.asp accessed - July 17,2013
Population living in poverty (2005 PPP$1.25 a day), Asia and the Pacific,
earliest and latest
The incidence of poverty is
below 5% in a number of
developing countries,
including Armenia, Azerbaijan,
Kazakhstan, Kyrgyzstan,
Malaysia, Mongolia, the Russian
Federation,Thailand and
Turkey. Many countries in the
region have lower poverty
rates in recent years in
comparison with rates of the
early 1990s; declines have
been pronounced in
Cambodia,China,
Turkmenistan and Viet Nam.

22. http://www.unescap.org/stat/data/syb2011/I-People/Income-poverty-and-inequality.asp accessed - July 17,2013
Gini index, Asia and the Pacific, earliest and latest
The incidence and depth of
poverty have been declining fairly
consistently.The trend is less
clear, however, for income
inequality. One means of
assessing income equality is by
considering the proportion of
national production consumed by
the poorest quintile of the
population.The poorest quintile of
the population receive a small
share in a number of middle- and
high-income countries, such as
Singapore (5.0%),Turkey (5.4%),
Thailand (6.1%), the Islamic
Republic of Iran (6.4%), and
Malaysia (6.4%).Those in the
poorest quintile do relatively
better in India (8.1%), Pakistan
(9.1%) and Bangladesh (9.4%).

23. Similar results come from application of the Gini index,
an aggregate measure of inequality that takes into account
the complete distribution of income. Inequality in Bhutan,
Cambodia, China, Georgia, Nepal, Papua New Guinea,
Philippines, the Russian Federation, Singapore, Sri Lanka,
Turkey, Turkmenistan and Thailand is highest according to
the latest available data, with all the countries listed having a
Gini index above 40. No clear regional trend emerges for
inequality.
Since the early 1990s, inequality seems to have increased
in some countries, such as Bangladesh, Cambodia, Nepal and
Sri Lanka; while it has decreased in others, such as Indonesia,
Islamic Republic of Iran, Malaysia and Thailand.
The Gini coefficient is a measure of statistical dispersion
developed by the Italian statistician Corrado Gini and
published in his 1912 – Web Definition
http://www.unescap.org/stat/data/syb2011/I-People/Income-poverty-and-inequality.asp accessed - July 17,2013

24. The Digital Divide
Another feature of the divide is arguably more worrisome
than the uneven spread of ICT devices or other technology
“outputs”, namely the disparities in “technological inputs”
existing between industrialized and developing countries.
These disparities are indeed significant, and they correlate
quite closely with the spread of ICT devices. The disparities are
of concern as national differences in these inputs are precisely
those likely to remain fairly stable over time; the number of
mobile telephones could increase quickly, for example, by the
number of scientists substantially less so.

25. The Digital Divide
An individual must be able to connect in order
to achieve enhancement of social and cultural
capital as well as achieve mass economic gains in
productivity. Therefore, access is a necessary (but
not sufficient) condition for overcoming the digital
divide.
Access to ICT meets significant challenges that
stem from income restrictions. The borderline
between ICT as a necessity good and ICT as a
luxury good is roughly around the “magical
number” of US$10 per person per month, or
US$120 per year, which means that people consider
ICT expenditure of US$120 per year as a basic
necessity. Since more than 40% of the world
population lives on less than US$ 2 per day, and
around 20% live on less than US$ 1 per day (or less
than US$ 365 per year), these income segments
would have to spend one third of their income on
ICT (120/365 = 33%). The global average of ICT
spending is at a mere 3% of income. Potential
solutions include driving down the costs of ICT,
which includes low cost technologies and shared
access through Telecentres.

26. The Digital Divide
Technology transfer is one aspect of the divide which has
distinct policy implications.The ubiquity on information is
defining feature of the digital era yet, ironically, technological
development in the post- Cold War era has been increasingly
dominated by the private sector, rather than by public sector
expenditure “on research and development.”Thus, on the one
hand, access to information for application to economic and social
ends has never been easier. On the other, the core knowledge
permitting technological advance is in the hands – or rather the
heads – of major private enterprises.

27. The Digital Divide
The true significance of the digital divide
does not reside in the uneven distribution of
inputs and outputs – scientists or mobile
telephones, for example – but in the fact that
both may increasingly important for the
economic growth. The outputs give rise to
greater flows of information and, as argued,
these in turn may result in higher economic
growth. The output give rise to greater flows of
information and, as argued below, these in turn
may result in higher economic growth.
Consensus reigns on the fact that investment in
land or physical capital. If the digital divide is
represented by uneven access to ICT inputs and
outputs, then a widening digital divide could
lead directly to a widening economic divide
between industrialized and developing
countries. At this early stage in the
communications revolution, the evidence on this
point is far from conclusive.
Economic Effects of ICT use

28. The Digital Divide
The dot-com bubble (also referred to as
the dot-com boom, the Internet bubble and the
information technology bubble) was a historic
speculative bubble covering roughly 1997–
2000 (with a climax on March 10, 2000, with the
NASDAQ peaking at 5408.60 in intraday trading
before closing at 5048.62) during which stock
markets in industrialized nations saw their
equity value rise rapidly from growth in the
Internet sector and related fields. While the
latter part was a boom and bust cycle, the
Internet boom is sometimes meant to refer to
the steady commercial growth of the Internet
with the advent of the World Wide Web, as
exemplified by the first release of the Mosaic
web browser in 1993, and continuing through
the 1990s.
Dot – com Bubble
http://en.wikipedia.org/wiki/Dot-com_bubble - July 17, 2013

29. The Digital Divide
The volatility of technology inequity markets since
2000, reflected in the boom-to-bust cycle of the first
generation of “dotcoms”, is a dramatic reminder how
little is known about the effect of ICTs on economic and
employment growth. Beyond such short-term
vicissitudes, however, the real test of the new
technologies’ implications for economic and
employment growth will be their effect on the “old”
economy.
Technology “bubble burst”

30. The Digital Divide
More in-depth analysis shows that
90% of the dot-coms companies
survived through 2004. With this, it is
safe to assume that the assets lost from
the Stock Market do not directly link to
the closing of firms. More importantly,
however, it can be concluded that even
companies who were categorized as the
"small players" were adequate enough
to endure the destruction of the financial
market during 2000-2002. Additionally,
retail investors who felt burned by the
burst transitioned their investment
portfolios to more cautious positions.
Aftermath
http://en.wikipedia.org/wiki/Dot-com_bubble accessed - July 17, 2013

31. The Digital Divide
ICTs ought to lead to positive
economic outcomes by making markets
more transparent through greater access
information, and more efficient through
the resulting decline in transaction costs.
Studies reviewed in a paper by Smith,
Bailey and Brynjolfsson (2000), do find
that prices are lower in electronic
markets relative to those in conventional
markets. These studies concentrate on
business-to-consumer markets, but their
findings are supported by estimates of
potential savings for business-business
commercial transactions (the
overwhelming share of online
commercial transactions)
Ought to Lead

32. The Digital Divide
The labour market may also be affected
through improvements in job search
efficiency. Online job search may be speed
up the matching process and be a factor in
lower unemployment.

33. The Digital Divide
The durable productivity gains have been
greatest in the enterprise in which ICT use
has been greatest (Bresnahan, Brynjolfsson
and Hitt, 1999). At the aggregate level, the
growth in multi-factor productivity in the late
1990s (compared with a decade earlier) was
greatest in countries in which ICTs were
most widespread. And these were countries
where employment growth was greatest.
ICTs lie behind the automation of routing
jobs in manufacturing, but are also
associated with the growth of the service
sector, including “intangible” markets –
markets in which the product itself is digital
– such software development
Productivity Gain

34. The Digital Divide
The effects of the internet may well be related to favourable
employment creation outcomes, but is important to note that the
communications revolution involves more than just internet use. A
strong correlation between the spread of telecommunications and
economic growth has already been observed and more recent
studies have sought to determine the causal relationship between
the two.
Example: Thought it stands to reason that wealthier countries
can afford better telecommunications infrastructures,
Is it true that better telecommunications lead to greater
economic growth?
- The wealthy countries can afford better telecommunications
- Better telecommunications are also determinant of economic
opportunity

35. The Digital Divide
Economic advantages of ICTs particularly relevant to development
• The internet expands the scope and scale of market opportunities. By acquiring
knowledge of markets and prices, etc., small firms could expand their market
presence or improve their performance.
• Lower barriers to entry for new business start-ups in terms of lower physical
equipment costs and capital costs are important for would-be entrepreneurs. In
intangible products such as software, knowledge and innovation are more critical
than access to financial capital. Similarly, telecentres or simply mobile hone rental,
can create many jobs with minimal investment.
• ICTs encourage the outsourcing of activities that could be captured by developing
countries as they fit into global value chains. Developing countries could exploit
their own comparative advantages, one of which might be their location in a
complementary time zone. Closer, more integrated relations between developed
and developing countries could result.
• The development of information-based products allows developing countries to
leapfrog into higher-value-added, higher-income industries. Moreover, where
information-based products are intangible there is less need to rely on the
existence of good physical infrastructure for supply or distribution, for example.
• The language of 75% of the content of the internet is English, and this is both an
opportunity and an obstacle for developing countries seeking to develop their own
internet content, and to trade in, for example , indigenous music or other cultural or
information-based products. When the internet use rises in a given location, the
internet becomes local and local content then predominates over foreign content.
Economic Divide between Rich and Poor

36. The Digital Divide
Differences in national income do not fully explain the
differences in the spread and use of ICTs. Analysis of 15 national
cases in the ILO’s World Employment Report 2001 found that progress
in three policy spheres – education and skills, industry and trade
policy, and infrastructure – was particularly relevant in developing
countries that have made substantial inroads into information
economy.
It is important then to have a national strategy on ICTs. The
internet itself originated in the 1960s as part of the US Department of
Defense national strategy on military research. Governments that
have recognized the significance of ICTs for economic growth and
employment generation have not been inclined to take a piecemeal
approach. Rather, they have evolved a comprehensive, coherent
national strategy to harness the technologies to these beneficial
ends.
Influence of developing countries’ policy priorities
on successful entry into the information economy

37. The Digital Divide
No developing country has made
substantial progress in the information
economy or achieved entry into global value
chains in information and knowledge-based
services without an educated, skilled
workforce.
The relationship between educational
attainment and ICT use is widespread for
individual countries (ILO, 2001, Chapter 2
and 7).
It is clear that the knowledge economy
to which ICTs give access to rests
fundamentally on levels of educational
attainment and on skills.
Example: One estimate of the cost of
shortage of ICT skills currently prevailing in
the European Union calculates a forgone
GDP growth of UD$106 billion since 1998
(ILO, 2000, p. 10)
Education, Learning and Skills

38. The Digital Divide
Participation in ICT markets can be achieved on the
basis of full range of skills. Developing countries can create jobs in
ICT markets at the same time as they develop higher ICT skills.
Indian Software Industry (Mid – 1990s)
In this particular industry India has
enjoyed growth in excess of 50 percent
per year since the mid – 1990s, currently
employs 180,000 people and generates
over US$4 billion in annual revenue; at the
same time well over 250,000 Indians are
employed in data-entry and data-
processing

39. The Digital Divide
“Making productive use of ICTs does not necessarily
imply a very time-intensive, “linear” investment in
education: it is often enough just to know what is needed
and where to learn it”
Many of those who design software or conform it to
different uses do not even have formal qualifications or
diploma in the field.

40. The Digital Divide
Still, it remains important to encourage the acquisition of
higher-level skills, such as software use and development, and
knowledge of hardware.
• The most profitable and secure niches in international ICT
markets are heavily skill-dependent.
- India owes the success of its software industry in large part to
its long-term investment in higher education, and to the
55,000 graduates in science and engineering it produces
annually.
- Silicon Valley proximity to Stanford University and other
Institutions of relevant higher learning in California is no
coincidence so, too, the growth of the ICT industry in
Bangalore, India, and in Xian, China, is related to its proximity
to long – established science and engineering institutions.
Acquisition of higher – level skills

41. The Digital Divide
Is to be able to adapt ICTs to their most “profitable uses”
whether in domestic or global markets. As the economic
advantages of ICTs extend across the economy and are no longer
confined to the ICT sector, “software and system maintenance skills
become important for all enterprises.
Ireland’s rise to prominence
as both user and developer of
software relied on the industry on
the wise use of the European
Social Fund’s Investments in the
Irish education system, as well as
on the Industrial Development
Authority’s strong focus on
developing the software industry.
Tax Incentive were also granted
for training provision.
Acquisition of higher – level skills

42. The Digital Divide
Singaporesubsidizes 70 % incentives of the cost
of continuing education for its software developers, thus subsidizing the
national investment in future wealth.
http://www.oecd.org/countries/singapore/46581101.pdf
Singapore is one of Asia’s great success stories, transforming itself from a
developing country to a modern industrial economy in one generation.
During the last decade, Singapore’s education system has remained
consistently at or near the top of most major world education ranking
systems.
How Singapore has achieved and sustained so much, so quickly?
• The ability of the government to successfully match supply with demand of
education and skills – a major source of Singapore’s competitive advantage.
• A clear vision and belief in the centrality of education for students and the nation;
• Persistent political leadership and alignment between policy and practice;
• A focus on building teacher and leadership capacity to deliver reforms at the
school level;
• Ambitious standards and assessments; and
• A culture of continuous improvement and future orientation that benchmarks
educational practices against the best in the world.
Acquisition of higher – level skills

43. The Digital Divide
The Philippines was named the
world’s best country in business English
proficiency, even beating the United
States, according to a recent study by
GlobalEnglish Corporation.
GlobalEnglish has released early this
month the results of its annual Business
English Index (BEI), the only index that
measures business English proficiency in
the workplace.
For 2012, results showed that from 76
represented countries worldwide, only
the Philippines attained a score above
7.0, "a BEI level within range of a high
proficiency that indicates an ability to
take an active role in business
discussions and perform relatively
complex tasks."
The Republic of the Philippines

44. The Digital Divide
“This is particularly interesting because the
Philippines, a country with one-tenth of the
population of India, recently overtook India as a hub
for call centers. Over 400,000 Filipinos are now
employed in call centers, roughly 50,000 more than
in India,” the study said.
The Philippines, which scored 7.11 and the lone
country in the intermediate level, were joined by
Norway (6.54), Estonia (6.45), Serbia (6.38) and
Slovenia (6.19) in the top five.
GlobalEnglish noted that a country’s business
English capability is an indicator of its economic
growth and business success.
“It is not surprising that both the Philippines and
Norway—the only two countries in the top five in
both 2011 and 2012—are improving their
economies, based on the latest GDP data from the
World Bank,” it added
The Global English Corporation

45. The Digital Divide
ICT jobs that do not necessarily require high levels
of education rely on those that do: are internet café or
telecentre may create jobs and highly used, but when
the equipment breaks down it can only be repaired by
appropriately skilled workers.

46. The Digital Divide
Industry and Trade Policy: Facilitating Market Access
https://en.wikipedia.org/wiki/E-commerce - July 18,2013
Electronic commerce , commonly
known as e-commerce, is a type of industry where buying and selling of
product or service is conducted over electronic systems such as the
Internet and other computer networks. Electronic commerce draws on
technologies such as mobile commerce,electronic funds transfer,supply
chain management,Internet marketing,online transaction processing,
electronic data interchange (EDI), inventory management systems,and
automated data collection systems. Modern electronic commerce typically
uses theWorldWideWeb at least at one point in the transaction's life-cycle,
although it may encompass a wider range of technologies such as e-
mail,mobile devices social media,and telephones as well.

47. The Digital Divide

48. The Digital Divide
The regulatory framework for the encouragement of e-commerce (such as
authorization of electronic signatures, or payment and taxation facilities) remains
incomplete in most countries of the world, and this is a brake on growth of the wider
commercial applications of ICTs.
Industry and Trade Policy: Facilitating Market Accessed
http://www.forbes.com/sites/limyunghui/2012/12/28/asias-rising-e-commerce-nation-a-qa-with-rakuten-malaysia-ceo-masaya-ueno/ - July 18,2013
The Development in Malaysia
The growth of “online malls” – or single websites that regroup a variety of
individual e – businesses.
E-commerce in Malaysia is fast approaching a growth inflection point. It was
in the mid-90s that e-commerce first burst into the Southeast Asia nation, fuelled
by the global dot-com mania and partly by the Government’s concerted digital
transformation initiative, the MSC Malaysia. After the dot-com bubble burst in the
early 2000s, blog shops started to slowly emerge.Towards the end of 2000s, more
and more are using blogging (e.g. Blogger.com) and social networking platforms
(e.g. Multiply, Facebook) to setup their online stores.
With 28 million people, Malaysia has an internet penetration of 61%, behind New
Zealand (86.2), Korea (81.5), Australia (78.9), Japan (78.7), Singapore (75.1), and
Hong Kong (75) (source: Google). Increasingly better and cheaper online
payment solutions too are catalyzing e-commerce activities in Malaysia.
http://www.tourism.gov.my/en/Master/Web-Page/Events-n-Festivals/2013/6/1Malaysia-Mega-Sale-Carnival

49. The Digital Divide
Rakuten in Malaysia
http://www.forbes.com/sites/limyunghui/2012/12/28/asias-rising-e-commerce-nation-a-qa-with-rakuten-malaysia-ceo-masaya-ueno/ - July 18,2013
Rakuten is the latest entrant in the Malaysian e-commerce market.
The Japanese e-commerce giant launched its e-commerce service in
Malaysia on November 1, 2012. At launch, it managed to recruit 40
local merchants (i.e. Senheng Electric, Best Denki, CARiNG Pharmacy,
and Poh Kong) with over 11,000 products listed on the Rakuten Online
Shopping platform.
According to Rakuten Malaysia CEO Masaya Ueno, it is the first
venture in Southeast Asia region where Rakuten enters the market
without any local partner. Both ventures in Thailand (launched 2009)
and Indonesia (2011) involve partnerships with local players.

50. The Digital Divide
On its differentiation strategy, Rakuten positioned itself as a virtual
shopping mall, based on a business-to-business-to-consumer (B2B2C)
model. Merchants of various product types (i.e. electronics, fashion,
health, pets) build online stores on the Rakuten platform and sell
directly to customers. Unlike other e-commerce platforms, Rakuten
offers a host of value-added services to merchants on its platform. It is
leveraging on operational experience with its flagship Rakuten Ichiba,
Japan’s largest online shopping site with more than 39,000 merchants.
Mr Ueno elaborates:
“Rakuten offers an additional layer of support by providing e-
commerce consultants and experts to advise merchants on their online
business strategy, implementation, sales and marketing as well as lead
and revenue generation. Coupled with access to our team of experts in
Japan and over 15 years of e-commerce leadership and expertise, we are
ideally placed to offer the best of e-commerce to both our merchants and
consumers.”
Rakuten in Malaysia
http://www.forbes.com/sites/limyunghui/2012/12/28/asias-rising-e-commerce-nation-a-qa-with-rakuten-malaysia-ceo-masaya-ueno/ - July 18,2013

51. The Digital Divide
Several governments have encouraged the growth of information
processing for export through the creation of specialized zones. Given
the well-educated, English speaking workforce,
For example in Barbados.The
government and the Barbados Investment
and Development Corporation identified
information processing as a strategic
sector for growth. By 1997, 2% of the
workforce was employed in this sector, in
some 2,500 jobs.
In Jamaica“digiports” or free – trade
Zones for digital work have been
Created,offering incentives such as
low-cost premises, tax concessions,
and 100% profit and dividend
repatriation rights.

52. The Digital Divide
National trade policies need to ensure that
imported inputs can be made available at
affordable prices, in order to encourage the
growth and competitiveness of domestic
industries, such as software development. Such
policies run risks in so doing are not without
tradeoffs.

53. The Digital Divide
Telecommunication infrastructure is a sphere where it is vital to make correct policy decisions, for
information economy to expand. Access and affordability are prime concerns in many developing
countries.
Empirical / Factual Relationships
• Telephone costs tend to be higher in poorer countries when per capita GDP is expressed in
purchasing power parity terms.
• The more expensive the access charges (comprising local telephone calls and internet service
provision (ISP-internet service provider) fees), the less the internet is used.
Inverse Relationships
• Network effect: in most developing countries there are proportionately fewer subscribers to the
telecommunication system than in industrialized countries, and telecommunication costs are
inversely related to the number of subscribers, but government policies in this sector also
appear to matter
• Declining costs are being driven by technological change both in communication devices and in
telecommunications infrastructure
• The decline of telecommunications as a national monopoly and the resulting rise of privatization
and competition are driving prices downward worldwide, as well as increasing access. Over 90
developing countries opened their telecommunications markets to the private sector in the
period 1990- 1998 (World Bank, 2000, p.22)
Telecommunications Infrastructure

54. The Digital Divide
Despite all these factors, only a minority of developing countries
have fully liberalized their telecommunications sector, and many face
a major dilemma as they contemplate doing so. For the settlement fees
received by a national telecommunications systems often represent a
major contribution to the state budget and to foreign exchange
earnings. Liberalizing the telecom market would entail forgoing these
earnings, at least in the short term, before alternative sources of tax
revenue emerge from the greater commercial activity that more
affordable telecommunications are intended to generate.

55. The Digital Divide
This recognition, however, is still fairly recent and, despite the proliferation of
initiatives, little is actually known about the effectiveness of programmes and projects.
Most United Nations agencies are affected by ICTs, either through the use they make of
them or because of their implications for the substance and delivery of technical
cooperation programmes.
Examples:
• Through Trade Points Programme the United Nations Conference on Trade and
Development UNCTAD has sought to promote electronic commerce for small
businesses in developing countries, ensuring their integration into international
markets and value chains.
• World Bank’s various initiatives in this area include the Information Development
Programme (InfoDev), which endeavours inter alia to disseminate policy advice on
ICT for development and on best practice.
• The International Telecommunications Union (ITU) has signed a memorandum of
understanding with Oracle Corporation and Cisco Systems for the creation of 50
training centers worldwide.
• The ILO is exploring is exploring further how ICTs can be harnessed for the delivery
of technical cooperation.
International Initiatives

56. The Digital Divide
Initiatives with broader significance (2001):
The ICT Task Force and Trust Fund, created in July 2000 by the United
Nation’s Economic and Social Council (ECOSOC), which “recognized the key
role of partnership, involving national governments, bilateral and multilateral
developing agencies, the private sector and other relevant stakeholders in
putting ICTs in the service of development” (United Nations Economic and
Social Council, 2000, para. 3). The task force will remain under the oversight of
ECOSOC but will operate outside the United Nations structure, seeking to
exercise a “matchmaking” function, bringing donors and projects together.
Its main objective is coordination: The problem that the Task Force is
established to address is not the global divide per se, but rather
a.The inconsistency and the uncoordinated character of the present
multitude of efforts to bridge the divide
b. Inadequacy of resources that are currently engaged in bridging the
divide, which is at least partly due to (a) (ibid., Annex, para.9

57. The Digital Divide
• The Digital Opportunities Task Force, or DOT Force, which was
created by the G8 states in Okinawa, also in July 2000. The DOT
Force was set up with a temporary secretariat and is jointly
administered by the World Bank and the UNDP; as with the ICT Task
Force, it seeks to match donors with projects promoting ICTs for
development. It is likely that, once inaugurated, DOT Force projects
will come under coordination of ECOSOC’s ICT Task Force.
The Digital Opportunities
Task Force, or DOT Force

58. The Digital Divide
Promising examples in this regard include the
use of online, interactive learning modules to
promote vocational training, as has occurred
through the ILO’s programmes both at
headquarters and at its Internal Training Center,
in Turin.

59. The Digital Divide

60. The Digital Divide
This report is the result of a unique international collaboration.The
Digital Opportunity Task Force (COT Force), created by the G8 Heads
of State at their Kyushu- Okinawa Summit in July 2000, brought
together forty three teams from government, the private sector, no
profit organizations, and international organizations representing both
developed and developing countries, in a cooperative effort to
identify ways in which the digital revolution can benefit all the world’s
people, especially the poorest and most marginalized groups.The
“digital divide” is threatening to exacerbate the existing social and
economic inequalities between countries and communities, so the
potential costs of inaction are greater than ever before.
A Report of the Digital Opportunity
Task Force (DOT Force)

61. The Digital Divide
G8 - The Group of Eight (G8) is a forum for the governments of
eight of the world's eleven largest national economies; not included
are Brazil at 7th (IMF), India at 9th and China at 2nd. The forum
originated with a 1975 summit hosted by France that brought together
representatives of six governments: France, the Federal Republic of
Germany, Italy, Japan, the United Kingdom, and the United States, thus
leading to the name Group of Six or G6. The summit became known as
the Group of Seven or G7 the following year with the addition of
Canada. The G7 is composed of 7 of 8 of the wealthiest countries on
Earth (as national net wealth) and by 7 of 11 of the wealthiest countries
on Earth by GDP, and it remains active despite the creation of the G8.
In 1997, Russia was added to the group which then became known as
the G8. The European Union is represented within the G8 but cannot
host or chair summits
A Report of the Digital Opportunity Task Force
(DOT Force)
Wikipedia accessed July 18, 2013

62. The Digital Divide
The DOT force has analyzed the underlying causes
of the digital divide, the power reducing and
empowering potential of new technologies, and the
complex mix of strategies, policies, investments, and
actions required to create digital opportunities for all
while addressing key development imperatives.

63. The Digital Divide
The DOT force has identified priority actions that must
be taken – by national governments and their citizens, the
international community, the private sector, non-profit and
community organizations – in various forms of partnership,
to make this opportunity a reality.The members of the
DOT force greatly appreciate the opportunity afforded by
the G8 Leaders to build upon the foundation of the G8
Okinawa Charter on the Global Information Society.

64. http://www.itu.int/wsis/docs/background/general/re
ports/26092001_dotforce.htm accessed Aug 3, 2013
The Digital Divide

65. A Nine-Point Action Plan
The DOT Force captures the essence of its recommendations through nine steps:
 Create pro-competitive national e-strategies (with regional cooperation, e-government,
international benchmarking for e-readiness,and creation of an International eDevelopment
Resource Network)
 Improve connectivity, increase access and lower costs (via multiple access technologies,
community centres, rural access,and national network information centers)
 Enhance human capacity development, knowledge creation and sharing (via ICT access in schools,
teacher training, distance learning, collaborative networks,university-based networked centers of
excellence twinned with those in G-8 nations)
 Foster enterprise and entrepreneurship for sustainable economic development (via private sector
mentoring, incubation activities, entrepreneur resources exchanges,private-public partnerships,
and donor assistance in ICT)
 Participate in new international policy issues raised by ICTs like the Internet (via support for
attending international forums and a network of Southern-based expertise)
 Support dedicated ICT initiatives for the Least Developed Countries (eg. via the African
Partnership Initiative, African Connection)
 Promote ICT in healthcare and tackling diseases like HIV/AIDS (via knowledge sharing, media
campaigns)
 Support local content and applications creation (in local languages,via localized e-government
services,open source software, and non-commercial content exchanges)
 Prioritize ICT in G8 and other donor programmes.

66. The Digital Divide
Under each of the priority areas identified in Okinawa, the DOT Force has
identified detailed actions that should be taken:
• Fostering Policy, Regulatory and Network Readiness - through establishing
and supporting both developing country and emerging economy National
eStrategies including eGovernment, and universal participation in new
international policy and technical issues by ICT and the internet.
• Improving Connectivity Increasing Access and lowering Costs – Through
establishing and supporting a range of targeted interventions as well as
dedicated initiatives for the ICT inclusion of the Least Developed
Countries.
• Building Human Capacity – through a range a targeted training, education,
knowledge creation and sharing initiatives, as well as promote ICT for
healthcare and in support against HIV/AIDS and other infectious and
communicable diseases.
• Encouraging Participation in Global e-Commerce and other e-Networks –
through enterprise and entrepreneurship for sustainable economic
development, including poverty alleviation, and promote national and
international effort to support the creation of local content and
applications.

67. The Digital Divide
The international community has set by consensus a
range of goals and political commitments to close some of
the economic and social divides, for example having the
proportion of the world’s population living on less that $1 a
day between 1990 and 2015.
Development Goals

68. The Digital Divide
The international community has identified seven “International Development
Goals” (IDGs) that are at the heart of the flight against poverty and the struggle to create
opportunity, prosperity, health, safety and empowerment for all the world’s people,
especially the poorest and traditionally marginalized groups.The 7 IDGs are:
• Reduce the proportion of people living in extreme poverty by half between 1990 and
2015
• Enrol all children in primary school by 2015
• Make progress toward gender equality and empowering women by eliminating
gender disparities in primary and secondary education by 2005
• Reduce infant and child mortality rates by two-thirds between 1990-2015
• Reduce maternal mortality ratios by three-quarters between 1990-2015
• Provide access for all who need reproductive health services by 2015
• Implement national strategies for sustainable development by 2005 so as to reverse
the loss of environment resources by 2015
The International Development Goals and Information and
Communication Technologies

69. The Digital Divide
The G8 initiated Digital Opportunity Task Force (DOT Force) has a
specific responsibility and potential in pursuing the goal of Digital
Opportunities for All.
• By offering a fresh vision of how to bridge the Digital Divide both within
countries and between rich and poor countries, and by proposing
innovative tools and processes to do this in a participatory fashion, the
members of DOT Force call on the support and continued commitment of
the leaders of the G8 to initiate a broad range of local, regional and
international initiatives to foster a development-supportive process of
globalization.
Making the case for ICT in Development

70. The Digital Divide

71. The Digital Divide
Fresh thinking and attitudes are required from all sides. Such
thinking will need to be cognizant of the need for:
• Holistic approaches with multi-stakeholder involvement
• Leveraging linkages and partnerships into the global economy
• National ICT strategies which also permit bottom-up approaches
• Taking advantage of new and emerging technologies
• New approaches to development assistance
Thinking Differently, Acting Cohesively

72. The Digital Divide
Cost – effective, country-differentiated and empowerment –
oriented solutions are now available to combine the pursuit of a more
equal access to information and knowledge with an acceleration in the
fight against poverty on a global scale. Wherever and whenever such
solutions have successfully been implemented, the international, the
international community should be encouraged to consider whether
such success is:
1. Replicable (in the same country or region)
2. Transportable (to other geographical, social and economic
environments)
3. Scalable (within a country, region or globally).
Making the best of the tools and
experiences available

73. The Digital Divide

74. The Digital Divide
In the light of the considerations presented above, some
priority actions can be identified. In the spirit of the Okinawa
Charter, and as a way to move from statements to real results, we
have identified nine action points, which constitute our proposal
for a Genoa Plan of Action. We believe that in the context of an
increasingly integrated world economy the following Plan of
Action provides the basis for developing economies to achieve
sustainable ICT-enabled development, both economic social.
1. Help Establish and Support Developing Country & Emerging
Economy National eStrategies
2. Improve Connectivity, increase Access and Lower Costs
3. Enhance Human Capacity Development,Knowledge Creation
and Sharing
4. Foster Enterprise and Entrepreneurship for Sustainable
Economic Development

75. The Digital Divide
5. Establish and Support Universal Participation in
addressing New International Policy and Technical Issues
raised by the Internet and ICT
6.Establish and Support Dedicated Initiatives for the ICT
inclusion of the Least Developed Countries
7.Promote ICT for Health Care and in Support Against
HIV/AIDS and Other Infectious and Communicable
Diseases
8. National and International Effort to Support Local Content
and Applications Creation
9. Prioritize ICT in G8 and other Development Assistance
Policies and Programmes and Enhance Coordination of
Multilateral Initiatives

76. The Digital Divide
Specifically, this will
mean fully integrating ICT in
G-8 and other donor
development assistance
policies and programmes, as
well as enhancing
coordination multilateral
initiatives.
The members of the DOT force are convinced that
the basic right of access to knowledge and information
is prerequisite for modern human development. ICT
must be embraced wholeheartedly by the broad
development community at the earliest opportunity

77. “Let the wise hear and increase in learning, and the
one who understands obtain guidance,
An intelligent heart acquires knowledge, and the
ear of the wise seeks knowledge”
Thank you!