Module 8-Globalization and the Digital Divide

Introduction

This module includes Globalization and the Digital Divide – The rapid rise of the Internet has made it
easier than ever to do business worldwide. This chapter will look at the impact that the Internet is having
on the globalization of business and the issues that firms must face because of it. It will also cover the
concept of the digital divide and some of the steps being taken to alleviate it

Learning Outcomes

Upon successful completion of this chapter, you will be able to:

 Explain the concept of globalization;

 Describe the role of information technology in globalization;
 Identify the issues experienced by firms as they face a global economy; and
 Define the digital divide and explain Nielsen’s three stages of the digital divide.

Lesson Proper

The Internet has wired the world. Today it is just as simple to communicate with someone on the other
side of the world as it is to talk to someone next door. But keep in mind that many businesses attempted
to outsource different needs in technology, only to discover that near-sourcing (outsourcing to
countries to which your country is physically connected) had greater advantage. This chapter looks at
the implications of globalization and the impact it is having on the world.

What Is Globalization?

Globalization refers to the integration of goods, services, and culture among the nations of the world.
Globalization is not necessarily a new phenomenon. In many ways, globalization has existed since the
days of European colonization. Further advances in telecommunication and transportation
technologies accelerated globalization. The advent of the worldwide Internet has made all nations
virtual next-door neighbors.

The Network Society

In 1996 social-sciences researcher Manuel Castells published The Rise of the Network Society, in which
he identified new ways economic activity was being organized around the networks that the new
telecommunication technologies had provided. This new, global economic activity was different from

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the past, because “it is an economy with the capacity to work as a unit in real time on a
planetary scale.”2 Having a world connected via the Internet has some massive implications.

The Global Firm

The new era of globalization allows virtually any business to become international. By accessing this
new platform of technologies, Castells’ vision of working as a unit in real time on a planetary scale can
be a reality. Some of the advantages include:

 Ability to locate expertise and labor around the world. Instead of drawing employees from their
local area, organizations can now hire people from the global labor pool. This also allows
organizations to pay a lower labor cost for the same work based on the prevailing wage in
different countries.
 Ability to operate 24 hours a day. With employees in different time zones all around the world,
an organization can literally operate around the clock, handing off work on projects from one
part of the world to another as the normal business day ends in one region and begins in
another. A few years ago, three people decided to open a web hosting company. They
strategically relocated to three places in the world which were eight hours apart, giving their
business 24- hour coverage while allowing each to work during the normal business day.
Operating expenses were minimized and the business provided 24/7 support to customers
worldwide.
 Larger market for their products. Once a product is being sold online, it is available for purchase
from a worldwide customer base. Even if a company’s products do not appeal beyond its own
country’s borders, being online has made the product more visible to consumers within that
country.

In order to fully take advantage of these new capabilities, companies need to understand that there
are also challenges in dealing with employees and customers from different cultures. Some of these
challenges include:

 Infrastructure differences. Each country has its own infrastructure with varying levels of quality
and bandwidth. A business cannot expect every country it deals with to have the same Internet
speeds. See the sidebar titled “How Does My Internet Speed Compare?”

 Labor laws and regulations. Different countries (even different states in the United States) have
different laws and regulations. A company that wants to hire employees from other countries
must understand the different regulations and concerns.

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 Legal restrictions. Many countries have restrictions on what can be sold or how a
product can be advertised. It is important for a business to understand what is allowed. For
example, in Germany, it is illegal to sell anything Nazi related.
 Language, customs, and preferences. Every country has its own unique culture which a business
must consider when trying to market a product there. Additionally, different countries have
different preferences. For example, in many parts of Europe people prefer to eat their french
fries with mayonnaise instead of ketchup. In South Africa a hamburger comes delivered to your
table with gravy on top.
 International shipping. Shipping products between countries in a timely manner can be
challenging. Inconsistent address formats, dishonest customs agents, and prohibitive shipping
costs are all factors that must be considered when trying to deliver products internationally.

Because of these challenges, many businesses choose not to expand globally, either for labor or for
customers. Whether a business has its own website or relies on a third-party, such as Amazon or eBay,
the question of whether or not to globalize must be carefully considered.

Sidebar: How Does My Internet Speed Compare?

How does your

Internet speed
compare with others in
the world? The
following chart shows
how Internet speeds
compare in different
countries. You can find
the full list of countries
by going to this article.
You can also compare
the evolution of
Internet speeds
among countries by
using this tool

. Comparison of top
world Internet speeds
in 2019. Source:
https://www.statista.com/chart/7246/the-countries-with-thefastest-internet/ (click to enlarge) So how
does your own Internet speed compare? There are many online tools you can use to determine the
speed at which you are connected. One of the most trusted sites is speedtest.net, where you can test
both your download and upload speeds.

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A New Understanding of the Digital Divide

In 2006, web-usability consultant Jakob Nielsen wrote an article that got to the heart of our
understanding of this problem. In his article he breaks the digital divide up into three stages: the
economic divide, the usability divide, and the empowerment divide6.

 Economic divide. This is what many call the digital divide. The economic divide is the idea that
some people can afford to have a computer and Internet access while others cannot. Because
of Moore’s Law (see Chapter 2), the price of hardware has continued to drop and, at this point,
we can now access digital technologies, such as smartphones, for very little. Nielsen asserts that
for all intents and purposes, the economic divide is a moot point and we should not focus our
resources on solving it.
 Usability divide. Usability is concerned with the fact that “technology remains so complicated
that many people couldn’t use a computer even if they got one for free.” And even for those
who can use a computer, accessing all the benefits of having one is beyond their
understanding. Included in this group are those with low literacy and seniors. According to
Nielsen, we know how to help users, but we are not doing it because there is little profit in doing
so.
 Empowerment divide. Empowerment is the most difficult to solve. It is concerned with how we
use technology to empower ourselves. Very few users truly understand the power that digital
technologies can give them. In his article, Nielsen explains that his and others’ research has
shown that very few users contribute content to the Internet, use advanced search, or can even
distinguish paid search ads from organic search results. Many people will limit what they can do
online by accepting the basic, default settings of their computer and not work to understand
how they can truly be empowered.

Understanding the digital divide using these three stages provides a more nuanced view of how we
can work to alleviate it. More work needs to be done to address the second and third stages of the
digital divide for a more holistic solution

Sidebar: Using Gaming to Bridge the Digital Divide

Paul Kim, the Assistant Dean and Chief Technology Officer of the Stanford Graduate School of
Education, designed a project to address the digital divide for children in developing countries. 8 In
their project the researchers wanted to learn if children can adopt and teach themselves mobile
learning technology, without help from teachers or other adults, and the processes and factors
involved in this phenomenon. The researchers developed a mobile device called TeacherMate, which
contained a game designed to help children learn math. The unique part of this research was that the
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researchers interacted directly with the children. They did not channel the mobile
devices through the teachers or the schools. There was another important factor to consider. In order
to understand the context of the children’s educational environment, the researchers began the
project by working with parents and local nonprofits six months before their visit. While the results of this
research are too detailed to go into here, it can be said that the researchers found that children can,
indeed, adopt and teach themselves mobile learning technologies. What makes this research so
interesting when thinking about the digital divide is that the researchers found that, in order to be
effective, they had to customize their technology and tailor their implementation to the specific group
they were trying to reach. One of their conclusions stated the following: Considering the rapid
advancement of technology today, mobile learning options for future projects will only increase.
Consequently, researchers must continue to investigate their impact. We believe there is a specific
need for more in-depth studies on ICT [Information and Communication Technology] design variations
to meet different challenges of different localities.

Summary

Information technology has driven change on a global scale. Technology has given us the ability to
integrate with people all over the world using digital tools. These tools have allowed businesses to
broaden their labor pools, their markets, and even their operating hours. But they have also brought
many new complications for businesses, which now must understand regulations, preferences, and
cultures from many different nations. This new globalization has also exacerbated the digital divide.
Nielsen has suggested that the digital divide consists of three stages (economic, usability, and
empowerment), of which the economic stage is virtually solved.

References

1. Population Stats. Retrieved from http://internetworldstats.com/↵

2. Castells, M. (2000). The Rise of the Network Society (2nded.). Cambridge, MA: Blackwell Publishers,
Inc.↵

3. Friedman, T. L. (2005). The world is flat: A brief history of the twenty-first century. New York: Farrar,
Straus and Giroux.↵

4. Ghemawat, P. (2011). World 3.0: Global Prosperity and How to Achieve It. Boston: Harvard Business
School Publishing.↵

5. Kim, K. (2005, December). Challenges in HCI: digital divide.Crossroads 12, 2.

DOI=10.1145/1144375.1144377. Retrieved from http://doi.acm.org/10.1145/1144375.1144377↵

6. Nielsen, J. (2006). Digital Divide: The 3 Stages. NielsenNorman Group. Retrieved

fromhttp://www.nngroup.com/articles/ digital-divide-thethree-stages/↵

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7. Miniwatts Marketing Group. (2018, May 23). The DigitalDivide, ICT, and Broadband
Internet. Retrieved fromhttps://www.internetworldstats.com/links10.htm↵

8. Kim, P., Buckner, E., Makany, T., and Kim, H. (2011). Acomparative analysis of a game-based mobile
learning model inlow-socioeconomic communities of India. International Journalof Education
Development. Retrieved from https://www.sciencedirect.com/science/article/abs/pii/S07380

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