A new report says developing countries that do not have broadband access to the Internet are at a big competitive disadvantage with businesses in industrialized countries. The U.N. Conference on Trade and Development, UNCTAD, has just launched its Information Economy Report 2006. The U.N. agency says access to broadband is becoming the big new information and technological divide between rich and poor countries.
The report says developing countries are catching up with the industrialized countries in the number of Internet-users. In 2000, it notes developing countries and transitional economies made up 27 percent of Internet-users. That number reached 48 percent last year.
That is the good news. The bad news is that the digital divide between rich and poor countries still exists. Genevieve Feraud is chief of UNCTAD's information technology branch. She says access in developing countries is generally low. And only a few countries, such as Korea and South Africa, account for the high number of Internet users.
"Approximately, one-third of developing countries still have a [broadband] penetration rate that is less than five percent," she said. "And, it is true that Africa has the highest growth rate since many countries start from very low levels. But, it has the lowest penetration rate."
The report reveals an even greater north-south digital divide in the percentage of enterprises that have access to broadband networks. Last year, it notes 63 percent of businesses in the European Union were connected to broadband while in many developing countries, the level of access was below one percent.
Feraud says broadband is absolutely essential. In this world of globalization, she says it is difficult to have a business without broadband.
"It is of course growing rapidly in developed countries, while in developing countries, dial-up is still prevalent in many places," she said. "So, of course, that has consequences on the integration of e-business in these countries in the information economy. Broadband is so important that we named it this year, a utility just as necessary as water and electricity."
The mobile phone is the one technology in which the poor countries beat out the rich ones. The report says developing countries have surpassed developed countries in the number of mobile phone users. But, even there, penetration rates vary widely. The report says their use in some countries is less than 10 percent.