How the "Digital Divide" is Exacerbating the Wealth Gap, and What We Can Do About It

By Kayla Chan

The statistics are in: providing equal access to the internet is essential, not just so that everybody can play the latest video game or binge the newest trending TV show, but because there are significant economic impacts from the lack thereof, both on the individual scale and the national.The “digital divide” - the influence, opportunities, and wealth available to people with internet access - leads to a dangerous situation in which the wealthy gain influence in the increasingly valuable and instrumental digital space, while others face severe disadvantages, widening the economic gap between lower and upper classes, as well as between third and first world countries.

Jeopardizing virtual education in the COVID-19 era

In Hong Kong, 8% of the population lacks internet access. According to NGO Digital Responsibility, the technology gap has the potential to heavily impact children’s education, depriving them of the necessary skills for future success in today’s internet-dependent world. A survey by the Pew Research Center found that, according to teachers, students from lower-income families find using technology to learn significantly harder than their higher-income counterparts.This problem has been exacerbated by the pandemic - as many schools switched to online learning, students without proper access to the internet devices found themselves unable to keep up with their peers. In America, another Pew survey revealed that over 1 in 5 teens are often forced to complete their homework using their phones, about 1 in 8 have experienced problems submitting or completing their work due to poor internet connectivity, with some even resorting to using public wifi. The result of the digital divide on online learning has been unmistakeable: in a report by McKinsey, students in the lower quartile of income were on average 5.2 months behind on their schoolwork, compared to the mere 2.1 months of lag experienced by students in the upper quartile. According to US-based charity Concern, students struggling in classes face difficulties achieving financial stability in the future, so this situation is likely to further widen the digital gap.“At the end of the day we have to do what we can so that our children will thrive in a global economy. We would be doing them an extreme disservice if we didn't prepare them. But it is essential that students have access to the proper materials 24/7,” said teacher Terrence Vitiello (National Education Association).

Global Implications

On a larger scale, the digital divide also widens the gap between the economies of rich and poor countries, rendering poorer countries far less competitive.In a speech at the UN’s 56th General Assembly, South Korea’s former President Han Seung-soo said that increasing access to technology is crucial to economic and social growth, while the lack thereof “threatens to further marginalize the economies and peoples of the developing countries as well as countries with economies in transition.” Moreover, he also spoke to the impact of the digital divide on gender inequality as well as the exclusion of the elderly and disabled in the economy.Furthermore, there is a tangible impact of digital access on the economies of third-world countries - the International Monetary Fund found that, in Sub-Saharan Africa, 1 percentage point increase in internet usage correlates to an increase of up to 0.4 percentage points in economic growth per capita. Especially during the pandemic, internet access can be essential to keeping businesses running, when in-person transactions cannot be made. For businesses in countries with limited access to the internet, another problem they have to contend with is staying afloat amidst competitors from countries with a much stronger digital influence. Increasingly, digital influence - and thus wealth - has accumulated in the hands of a limited number of businesses from countries with high rates of internet penetration. In particular, the UN pointed out that companies such as Microsoft, Apple, Amazon, Google, Facebook, Tencent and Alibaba, which are all from countries with high levels of internet access, are capturing the majority of the market value, with Google comprising 90% of the global search market. In its 2019 Digital Economy Report, the UN warned of the potential implications of this, highlighting the risk of amplifying inequality issues. Indeed, there already is evidence that the digital divide is causing poorer countries to lag behind, with the US and China, two powerful countries in the digital world, dominating lucrative blockchain technologies and cloud computing, which allows them to further consolidate economic power.

No miracle cure

Although the digital divide is a complex issue, members of the World Economic Forum have offered a few solutions to the problem. In addition to no-brainers such as investing in infrastructure to increase internet access,Achim Steiner of the UN Development programme said that education must also be prioritized. Moreover, other members of the discussion also stressed the importance of ensuring quality of internet access in addition to quantity, stating that being able to reliably access the internet is a key part of closing the divide. Meanwhile, Adrian Lovett of the World Wide Web Foundation also emphasized collaboration between the public and private sectors to strive to achieve this goal. The positive economic impacts of bridging the gap are clear: according to the Tony Blair Institute for Global Change, bringing stable internet access to everyone offers an impressive return on investment, with gains in GDP as well as other benefits in the area of health, education, and gender equality. The economics works - but global collaboration and prioritization of the issue by governments is crucial to remedying the problem. “Working together, we can make good on promises to bridge the digital divide, student by student, classroom by classroom, and country by country,” said former UN Secretary-General Ban Ki-moon.In summary, the digital divide makes it difficult for students to catch up, especially in online school. It also exacerbates the economic disparity between richer and poorer nations, further concentrating wealth and power into the hands of those from nations with greater digital access. There are ways for this inequality to be addressed, which require cooperation and investment on the part of governments.