The Phenomenon of the Digital Divide

The initial euphoria about the power that the information superhighway can offer to support new services, which will empower citizens and enable their full participation in an emerging 'digital democracy', has been heavily debated. The 'digital democracy' is now threatened by the 'information aristocracy' (Carter, 1997). There is always the concern that in the case that individuals and companies are not able to have access to online services, either because they do not have the means or the knowledge to do so, the result will be the reinforcement of existing patterns of inequalities.

There is a lot of debate about the cultural, gender, and race gap in the use of the Internet and the proportion of users with lower education and income (Hoffman, Novak, & Schlosser, 2000). The penetration of the Internet and electronic commerce in developing countries, which lag far behind North America and Europe, is also an outstanding issue in the existence of 'haves' and 'have-nots' in cyberspace, (e.g., Bhatnagar, 1997; Blanning, Bui, & Tan, 1997; Clark & Lai, 1998; Kim & Hong, 1997). Developed countries have more access to information that is less expensive, easier, and faster, while less technologically advanced regions have to deal with problems of inadequate infrastructure, lack of awareness, and lack of appropriate legal frameworks.

The digital divide or digital gap is a term that is widely used lately to describe these inequalities between developed and non-developed countries. According to OECD (2001), "The term digital divide refers to the gap between individuals, households, businesses, and geographic areas at different socio-economic levels with regard both to their opportunities to access information and communication technologies (ICTs) and to their use of the Internet for a wide variety of activities" (p. 5).

Although Internet moves towards critical mass, social scientists are worried about the current demographic patters of its access and usage (Hoffman, Kalsbeek, & Novak, 1996). Two key demographic characteristics reported are education and income. These two characteristics are also related to race gap, as low income and education occur mostly within particular race origins. For example, white Americans are significantly more likely than African-Americans to have a computer at home (i.e., higher income) and consequently access to the Internet. Similarly, white students are able to take advantage of nontraditional access locations such as homes of friends and relatives with home computers than their black colleagues (Novak & Hoffman, 1998).

Concerning the business use of telecommunication technologies, the penetration of the Internet to small and medium-sized enterprises (SMEs) compared to large corporations is significantly lower, as SMEs have limited access to information and advice, making them hesitant to invest and use advanced telecommunication technologies (Corbitt & Kong, 2000; Hadjimanolis, 1999; OECD, 2000; Riemenschneider & McKinney, 2001).

At a multinational level the digital divide occurs between technologically advanced and less advanced countries or regions. For example, within the European continent statistics show the difference between western and southeastern Europe. That is, while the Internet penetration in the European Union in 1999 was 19% of the population (European Commission, 2001), the same number in this year was 3% to 4% in most southeastern European countries (Seed Consortium, 2001).

Thus, the digital divide manifests as a multidimensional problem visible at individual, firm, national, and international levels. National policies for its elimination are mostly related to the provision of access to information technology though public institutions such as schools, libraries, local authorities, and the development of information centers for individuals and business. Therefore the problem of the digital divide is directly related to information technology diffusion, as policy making for its elimination is the result of effective national and international diffusion policies (e.g., Boon, Hewett, & Parker, 2000; Bozeman, 2000; Corbitt & Kong, 2000; Damsgaard & Lyytinen, 1998; GNCEC, 1999). The policy rationale is the social benefits to be derived from the positive externalities associated with diffusion, and greater use of ICTs and related improvements to the skill base. Policy makers also recognize the economic activity that may result from Internet use by the increased competition in the telecommunication markets that can stimulate new investments and increased demand for communications access and services through falling prices and the offer of new innovative products.

In this chapter we examine the digital divide through the normative aspect of stakeholder theory as a way of getting a better understand of this phenomenon, drawing specific implications for policy makers caring for its elimination.