UNIDO 2018__

New UNIDO report explores potential of Industry 4.0 to accelerate transition towards sustainable energy. (UNIDO, 2017)

This article is brought to you thanks to the strategic cooperation of The European Sting with the World Economic Forum.

Author:  Julian VercruysseInfrastructure Resilience Researcher, Fergus ReidStrategy Consulting Analyst

The Annual Meeting of the New Champions is fast approaching, and with it comes one of the greatest celebrations of technological innovation, for which information and communication technology (ICT) is the backbone.

However, against all expectations, ICT as deployed today has been shown to exacerbate age-old inequalities, giving rise to the term “digital divide”. This refers to disparities between different demographics with regards to ICT access and use.

To measure this phenomenon, the most widely used type of metrics focus on measuring access to ICT: ownership of mobile phones, access to the internet, etc. With the percentage of people who own mobile phones surpassing the percentage with access to clean water, and the number of internet users having tripled to 3.2 billion between 2005 and 2015, you could be forgiven for believing that the digital divide is disappearing.

Yet, as ICT access reaches saturation point in developed countries, a new digital divide is becoming discernible: a gulf based on digital skills, on security concerns, and on motivation. This has been defined as a “second-level” digital divide – where the impact ICT has on one’s life is influenced by “soft” inequalities rather than physical access alone.

This can be seen when data is disaggregated based on factors such as education, age and household income. Analysis of such data shows that not only is this second-level digital divide persisting, it is worsening.

The information indicates that, if ICT is left uncontrolled, its effect on society is likely to be “more regressive than redistributive due to current or prior socio-economic inequalities”. Planned interventions may well be required to address this, which in turn depend highly on effective measurement tools.

The Network Readiness Index (NRI) is a good example of this new kind of framework. Created by the World Economic Forum, in partnership with INSEAD and Cornell University, the NRI assesses a country’s capacity to “leverage ICTs for increased competitiveness and wellbeing”. Although the NRI has a well-rounded approach, the authors of the NRI acknowledge that their measurement of impact is still a work in progress as the NRI does not account for areas that do not “directly translate into commercial activities”, such as e-health.

In response, the Centre for Future Infrastructure at the University of Edinburgh has developed the ICT Performance Index (IPI) to provide a more holistic assessment of the digital divide. We build on Amartya Sen’s capability approach, which measures development by assessing the freedoms one acquires to live the life one wishes to. Following this paradigm, the impact of ICT should not be related to the promotion of the technology (i.e. increase in access or usage), but rather on what freedom is enabled by the technology. For example, one should not measure the number of computers available in a school but rather what these computers enable the students to achieve. These achievements will tend to be the fulfilment of a need – for instance, to provide better employment prospects, or greater financial stability.

However, needs – being highly subjective – are constantly changing and extremely diverse, so how can one develop a national ICT strategy to tackle this growing inequality? And equally importantly, how can one measure the effectiveness of such a strategy? We attempted to answer these questions by identifying common themes across highly successful ICT policy strategies from a number of countries.

First, they had a holistic approach. The digital divide affects all facets of society, and as such, a solution must have an equally holistic approach. Yet frameworks that measure the effectiveness of digital policy solutions do not encourage such an approach. This is in part due to the notion of compensability, whereby poor performance in one dimension can be offset by high performance in another dimension. Hence, policymakers are not encouraged to fix the problem, as they can simply enhance or even maintain their strong performance in their area of expertise. Compensability is a by-product of the most popular aggregation method: the arithmetic mean. This is a major stumbling block of many existing assessments of the digital divide, including the NRI.

In contrast, geometric aggregation minimizes compensability by taking the root of all the components multiplied with each other. Due to the multiplication, weaknesses are highlighted, as any poor performance will undermine the whole index, which is exactly what is needed to bridge the digital divide. Policymakers would need to target every area where digital technology permeates society, rather than focusing on a select few.

The second common theme of successful digital policy strategies is their ever-evolving nature. The countries analysed had on average a new strategy every five years to reflect the highly dynamic ICT sector. However, performance measurement tools are much slower to evolve. We have identified new facets of the digital divide that are not being measured by the major indices such as digital security. As societies become increasingly dependent on digital infrastructure, the importance of digital security, both at an individual and institutional level, becomes increasingly important.

These new principles have been applied to the IPI, which resulted in the shuffling of ICT performance rankings. Countries with well-rounded e-societies, such as Estonia, have risen to the top, while previously well-performing countries, such as the UK, have plunged in the rankings due to their poor performance in specific areas.

Such areas include the low percentage of ICT enrolment in tertiary education – 4.14%, compared with 8.35% for Estonia – hinting towards a potential lack of future homegrown talent to maintain Britain’s e-society. The comparison with Estonia offered potential solutions to this UK problem, including ICT-related apprenticeships that would especially benefit individuals from more deprived socio-economic backgrounds, which tends to be a demographic left out of the information society.

As the world hears about the latest groundbreaking technologies at the meeting in Tianjin, we should each be asking: how will we ensure that this excitement translates to a more egalitarian society? Without a more holistic approach to measuring and thus tackling the digital divide, the benefits of the Fourth Industrial Revolution will only reach the privileged, resulting in an ever more unequal society.