Harnessing the private sector to bridge the digital divide

Bridging the digital divide can transform and empower people and help boost economic growth according to a new study.

The digital divide is narrowing. Today, almost 90 per cent of the world’s population are within range of a mobile signal.

Yet, as technology giant Huawei’s Adam Lane recently explained to a group of IT focussed MEPs, that digital divide is deepening as the gap between the electronic haves and have-nots becomes more difficult to bridge.

“The digital divide is narrowing, we know this”, says Lane, adding, “More and more people are getting connected up and getting online, globally and across Europe. But we see that the digital divide is deepening. That those people who are still not connected are missing out more and more compared to those that are not connected.”

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Up to a billion people are unconnected to any form of telecommunications, while around four billion remain offline, unable to access vital information.

While the introduction of new technologies can help transform and empower people, it also has the potential to create unprecedented digital divides, virtually overnight, potentially accentuating the gulf between those with and those without access or skills.

It was against this background that Huawei commissioned an extensive new study to look at why and how the digital gap is deepening and what can be done to overcome this divide.

Following a worldwide launch last November, MEPs were invited to attend a breakfast briefing in the European Parliament, hosted by Italian S&D group MEP Nicola Caputo to hear more about the new study entitled; ‘Digital Enablement: Bridging the Digital Divide to Connect People and Society’.

Huawei’s Vice President for EU public affairs Tony Graziano, presented the report and explained that the goal of the study was to examine how the world could achieve long-term economic, social and environmental benefits by bridging the digital gap.

Graziano also highlighted that although closing the deepening gap between those that are digitally connected and those that aren’t was a significant global challenge, the findings of the report indicated that it was also one that presented ICT companies and other innovative enterprises with significant business opportunities.

Taking up these issues, Lane, Huawei’s director of sustainability programmes, said that, around 19 per cent of the EU’s population don’t have internet access.

“But the key issue is that this is an average across the whole bloc. In the lowest income groups it’s around 40 per cent and that’s really a problem.”

Understanding what the barriers to digital engagement are, explained Lane, was crucial to overcoming the digital divide.

“In the report we have this framework that tries to understand the whole picture on the digital divide. How do you get connected? It’s actually very complicated varying by country and even within a country. We took a look at several key issues such as availability, affordability, appetite and ability.”

For those not regularly using the internet, the concern is that they will become more disconnected. “If you don’t have a smartphone with internet it can be difficult to get a taxi or hard to know when the next bus is coming.”

“It’s also potentially harder to pay nowadays if you aren’t connected as most payments are electronic; it’s becoming harder to learn or to find jobs, without digital access and we think it’s important for the health of individuals, for productivity and for basic services as well that we close this digital divide.”

Lane also warns that there are worries that the situation will become even worse in the future. “We are talking about this divide between things that are connected, ultimately to other people that use those things, or unfortunately cannot use those things. A divide between the people that use these connected devices and services and those that don’t.”

Affordability, attitude and ability are at the heart of the three levels of network connection. So although most of Europe now has a network connection, and most people have some kind of connected device, it’s important to understand how attitude and ability impact on the digital divide.

“Many people actually don’t want to go online, or are not aware of the benefits of going online or are afraid of using certain technologies such as mobile banking,” says Lane.

For many of us, it’s very natural to press a button and transfer money somewhere, but for others he explains, “it’s not so obvious and they are afraid, especially with issues such as cyber security and hacking regularly appearing in the news. This fear is actually something that’s happening as technology gets more complicated. And it could potentially become more extreme.”

However, these unconnected or digitally unaware groups are potentially large new customer markets for businesses. But to harness the commercial opportunities of digitally enabling these groups and communities, “companies are going to have to think differently.”

Says Lane, “new business models need to be developed and around the so-called ‘value proposition’ of connectivity”. The role of the private sector is a key factor in the whole digital enablement conversation.

“It has to be beneficial to the private sector as well as obviously being beneficial to people and to countries. Why should mobile phone companies be interested? What’s in it for them? Well it’s a huge opportunity actually.”

Lane predicts that hardware such as smart phones will be free in the future, if you sign up for a package deal. “I expect that smart phones will be free no matter what within a few years. I think we will find all sorts of companies desperate to give smartphones to consumers with some conditions, but not as onerous as a one and a half year contract for example.”

A typical commercial model would be based on a bank believing that it’s much cheaper to supply a customer with a smart phone to access their online banking as it would be to maintain a branch in the countryside or in a village.

Lane says that the traditional commercial models are changing as internet connectivity grows. “Nowadays most of the revenue, the potential profit in the ICT industry isn’t so much from the hardware, it’s from the services. So all the major companies are looking at that commercial space,” says Lane. This represents a large potential market of customers, but it will take new thinking to reach them and provide services profitably.

“Similar challenges face those in developing countries, where traditional models or solutions are neither economically viable for operators nor affordable for lower income populations,” says Lane.

“As the world works towards the U.N.’s newly released Sustainable Development Goals, technology can play a vital role. The next five years represent a crucial opportunity to bridge the gap, bringing the power of 5G networks, the internet of things, advanced cloud analytics and more to everyone, whether rich or poor, young or old, urban or rural, male or female. There is much to be done and it is imperative we do it together, quickly and effectively.”

Huawei’s report, although warning of the seriousness of a deepening digital divide, concludes on an upbeat note arguing that if they can work together, governments, regulators, the technology industry and business leaders can utilise the power of digital technologies to transform the lives of people.

“Better outcomes result when everyone has something to gain from digital enablement, but gain is not about raw financial returns, it’s about delivering benefits across people and communities.”

Colin Marrs

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