Reader's response draft 4

The Euromonitor blogpost ‘Global digital divide persists but is narrowing’ (2011), infer through statistics provided by trade sources/national statistics that developed economies will continue to enjoy higher broadband diffusion rates. This results from larger government expenditure, advanced IT framework and higher wages that allow computer ownership. However, developing countries are slowly catching up due to the rapid economic growth. This has led to a wide range of effects on these societies, such as varying business opportunities, reducing urban-rural disparities with better information diffusion, social and cultural integration and altering government expenditure and policies.

In relation to the article, I would like to discuss is the issue of developing countries such as China, Nigeria and Indonesia having high potential in terms of sheer market size. Although the growth might be apparent in the short term, there might be other factors that might govern the ultimate success of each country. I would not agree that these countries are absolutely profitable in considering a business venture. There are many other factors to consider in determining the potential of a country. Uncontrollable natural forces might impact on the growth in any country. Statistics can only make hypothesis on the issue.

According to statistics that Euromonitor International provides, it is definitely true that these developing countries are catching up. However, there is definitely doubt in the sustainability of the growth displayed by the statistics. There are many different contributing factors when it comes to the measurement of a country’s economic growth. The statistics serves as a platform to formulate a hypothesis but it is still not a definite indicator to depict the overall picture of the situation. It is true that the broadband diffusion rates in developing countries have been growing relatively fast as compared to in developed countries. However, this might not be the representative of a whole country.

For the sake of discussion, I would like to take China as a case study in the analysis of developing countries. According to the Nanjing Marketing Group (2011), out of the total internet users in China, only 27.3% come from rural areas while the majority of users come from urban areas. This statistic starts questioning whether the growth would hit a ceiling as internet penetration in urban areas is so much higher than those in rural areas. This also bring the question on whether the internet would continue to grow in rural areas with the limitations of IT infrastructure foundations in those areas

The Chinese government has been channelling its resources to urban cities such as Shanghai and Beijing to continue to spur economic growth towards China’s journey of becoming an economical power in the world. However, the issue would be whether the Chinese government will channel some of its resources to rural areas. The development would happen but then it definitely would take quite some time to materialise as the basic foundation of building a modernized city is not as easy as it seems as it requires quite a large amount of money, planning and also time. Although the article has mention the benefits of improvement in disparity in the country, the Digital divide gap in the country remains relatively wide.

This brings me to the point of the contribution of wealth. According to BBC News (2014), in the higher end social classes of China, people are becoming wealthier as time goes by and is spending more money, but the spending still does not prove that the wealth is being distributed fairly as the statistics on digital disparity shows the difference in rural and urban areas. This shows that statistics are just a consensus of the whole country on average and not a true representative. The difference in digital disparity concludes that things cannot be seen in such a way that is assuming that everyone is equally affluent.

In addition to the point mentioned previously, there are also a number of contributing factors in determining a country’s growth in terms of the digital divide. An economy might be hit by certain uncontrollable factors such as financial crisis, natural disasters and political instability. Financial woes might cause a currency crisis, for example the Great Depression in 1930, which was preceded in many countries by bank runs and stock market crashes. This would then result in the downfall of an economy and indirectly it would also affect the digital divide when there are fewer absolute resources to distribute and channel amongst the different industries in a country.  Natural disasters such as the 2011 Japanese tsunami can bring down the economy overnight, where resources are being channeled to do recovery work. Political instability, such as the recent protests in Thailand, can deter investors to invest in the country. A developing country would then be slower in terms of recovery since their resources are much fewer as compared to developed countries. These factors are examples that the economic sustainability in the long run would not be definite and cannot be controlled or accurately hypothesize by the sole use of statistics.

In conclusion, statistics alone is not insufficient to make definite hypothesis of the progress and growth of a country. Many other unforeseen factors and policies might impact the absolute growth of any country. Government policies might be curved towards development in urban areas and rural areas continue to lag behind. It is hard to predict whether the growth in urban areas would hit a ceiling like developed countries and slow down growth, as the government continue to channel resources in these areas. Wealthier communities continue to be wealthier while the poor stay the same or becoming poorer.

The development of IT landscape of rural areas still remains slow and not well-developed in the short run. Natural disasters and financial turmoil might also immobilize the countries growth rate, and recovery would be slow as compared to developed countries who hold more resources. With this, developing countries are still lagging behind in comparison to their developed countries counterparts.

References:

Affluence of Chinese is growing. (2014 Feb 2) BBC News. Retrieved September 6, 2014, http://www.bbc.com/capital/story/20140203-the-rise-of-chinas-wealth-dragon

Euromonitor International. (2011, February 2). Global digital divide persists but is narrowing. Retrieved August 25, 2014, from http://blog.euromonitor.com/2011/02/global-digital-divide-persists-but-is-narrowing-1.html

Nanjing Marketing Group. (2011, Oct 28). China rural urban internet usage. Retrieved September 6, 2014, http://www.nanjingmarketinggroup.com/blog/rural-chinese-internet-usage-2011_10_2