© OECD 2013
Capturing Digital Dividends and Closing Digital Divides
Existing empirical studies, including OECD work, suggest a positive link between increasing Internet adoption and use and economic growth, as the Internet can serve as a means for the creation of productive networks (OECD, 2012). It can have an impact on poverty reduction by opening up new economic and market opportunities, and improve health conditions, for example, by providing information on diseases. Furthermore, the Internet can serve as a platform for stakeholders to share information and thus help build global partnerships, and can offer educational insights as well as political and social information. ICTs can also make access to market information available at a lower cost, which can boost competitiveness and entrepreneurship, and in turn impact on economic growth, the creation of enterprises, and social development (
).However, there is still a big digital divide between developed and developing countries. In the African region, penetration rates of mobile networks were only estimated at 41% at the end of 2010 (ITU, 2010) compared to 90% worldwide. Also, in Internet technology, developed countries are a decade ahead of the rest of the world, with developing countries reaching an Internet user penetration rate in 2011 that developed countries reached in 2001 (
). In 2012, internet penetration in Africa only reached 16%, far behind the world average (34%) and Asia’s average (27%) (Internet World Stats, 2012). In other words, developing countries are lacking or underutilising a potential enabler for development.Missing, costly or slow Internet connections are often due to a lack of, or outsourced Internet Exchange Points (IXPs). The IXP is the location where Internet trafﬁc moves between networks based on agreements between network operators, which can make an exchange of data and access very costly. Close to half of the economies in the world do not have such IXP (
); most African countries still rely on telecommunication ﬁrms based in OECD countries or satellite connectivity for their bandwidth access. This leads to slow Internet connections and high costs, as trafﬁc is routed and handled internationally on expensive lines, and transferred across networks, which cost around USD 2 000-5 000 per Mb per month for international bandwidth access (OECD, 2009a).Internationally handled trafﬁc and low penetration ultimately does not only hinder Internet usage per se, but also harms the exchange, production and access to local content, whose characteristic is that it is created and distributed domestically without paying for expensive international data transit.
The growth of Internet users over time
DID YOU KNOW?
In 2009, an entry-level ﬁxed (wired) broadband connection in developing countries cost on average USD 190 PPP per month, compared to only USD 28 PPP per month in developed countries (ITU, 2010).
OECD et al., 2013 after ITU.
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