Results: National Infrastructure

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Infrastructure can be defined in many ways. A simple technical approach is to count web sites. That can be summarized in a sentence: A July 2002 domain name count shows that there are 43 million.com sites in the US, and no sites at all in seven nations, including Haiti and Sudan (Internet Software Consortium, 2002). In short, there are massive technical differences between leading nations and LDCs.

Others would urge us to consider social infrastructure. The classic work of Rogers points to social systems as crucial in the diffusion of innovations (Rogers, 2001). Herbig's "Innovation Funnel" posits the need for a series of innovation supports including a technology base, sociocultural supports, institutional infrastructure (government), industrial competitiveness, firm size, and appropriate managerial attitudes (Herbig, 1994). Vadim Levitin, of the e-commerce Institute in San Diego, California asserts, "The first thing we have to do is convince governments — persuade them, train them, scare them perhaps — that it is in their best interest to do something to catch up with this world... I truly believe that anyone can participate in the new digital economy... it is not about technology tools" (Domeisen, 2001). Stephen Corea argues along a similar vein when he says, "low-income countries should place greater priority on developing innovative behavior in their societies than on achieving pervasive ICT adoption" (Corea, 2000,p. 10).

Another perspective promotes organizational structures. Helpman (1998) asserts that general purpose technologies like the internet require complementary investments including organizational and institutional changes. Radosevic argues that technology transfer has become more difficult. In his view the shift from the electromechanical to electronics-based technologies will make transfer more difficult based on the rising complexity of technical change, the changing transferability of new technologies, the increasing knowledge intensity of new technologies, and the increasing significance of organizational change (Radosevic, 1999).

While more mundane, those who have worked in developing countries are quick to point out that logistics are also an aspect of infrastructure. They note that government ownership and management of ports and airports often results in inefficient, costly, and unreliable services, and bureaucratic export and import procedures add costs to goods and slow processing down below the speeds expected of e-commerce consumers (Lake, 2000). Transparency International would also add that customs procedures are often a place where corruption both slows processes and adds costs.

Finding ways of measuring these many aspects of infrastructure is no easy task. While not overtly subscribing to any theory of innovation diffusion, the United Nations Development Program (Human Development Report, 2001) seems to recognize the role of multiple factors in IT development success. In evaluating the current level of technical development of countries around the world, it looked beyond a simple count of Internet hosts to the importance of patents and royalties, the nature of exports, the telephone and electrical infrastructures, and educational opportunities available to citizens. Its Technology Achievement Index aims to highlight the ability of nations to create innovations (as measured by patents and royalty income), integrate old and new technologies and develop human capacity. The index shows the substantial divide between the leading nations and followers. Table 1 presents the UNDP's summary numbers for the most advanced nation (Finland), and for the nine least technologically developed nations.

Table 1

Country	Patents per one million people	Royalties per one thousand people	Internet Hosts per one thousand people	% high and medium tech exports	Phones per one thousand people	Electricity consumption per capita	Mean years of schooling	% tertiary science enrollment
Finland	187	$125.6	200.2	50.7%	1203	14,129	10.0	27.4%
Nicaragua	0	0	0.4	3.6%	39	281	4.6	3.8%
Pakistan	0	0	0.1	7.9%	24	337	3.9	1.4%
Senegal	0	0	0.2	28.5%	27	111	2.6	0.5%
Ghana	0	0	0	4.1%	12	289	3.9	0.4%
Kenya	0	0	0.2	7.2%	11	129	4.2	0.3%
Nepal	0	0	0.1	1.9%	12	47	2.4	0.7%
Tanzania	0	0	0	6.7%	6	54	2.7	0.2%
Sudan	0	0	0	0.4%	9	47	2.1	0.7%
Mozambique	0	0	0	12.2%	5	54	1.1	0.2%
(Human Development Report, pp. 48–49).

The eight measures of technological innovation created by UNDP show stark contrasts between the world's leader and these marginalized countries. Where Finland files many patents and receives licensing income from unique products and processes, the nine marginalized countries patent nothing and receive no royalty income. While Finland has 200 Internet hosts per one thousand people, the marginalized countries may have just one or two hosts for the entire country. Whereas more than half of Finland's exports are high and medium technology exports, marginalized countries continue to struggle with low-tech (and low profit) commodity exports. Because so many people in Finland have both traditional telephones and cell phones, Finland has more phones than people. Marginalized countries struggle with five to 39 phones per one thousand people. And then there are huge differences in electricity consumption (availability), educational attainment, and number of college students who select math and science as a major. In every category, the differences between world leaders and world followers are daunting. The point all of these numbers make is that individual firms in these nine nations can expect to be at a significant disadvantage in any e-commerce effort. Their national infrastructure presents them with fewer phone lines, fewer educated workers, and less scientific innovation.

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