Concerns over the widening technology gap between the world's haves and have nots — frequently referred to as the digital divide — have attracted increasing attention from government and technology companies.
Governments recognize that development programs that ignore technological inequalities are bound to fail since access to telecommunications and the Internet is an important part of the global economy.
Technology companies, meanwhile, see opportunities for future growth within developing economies as important new markets for products and services.
I recently had the opportunity to experience digital divide issues first-hand as a member of a United Nations mission to India. The mission focused on developing Internet and e-commerce law infrastructure and included training sessions in Mumbai, India's financial hub, and Bangalore, its technology centre. Discussions with lawyers, law students, business people, and government officials left me with powerful impressions, some consistent with my earlier thinking, some not.
India's technology sector provided a terrific example of how global the business of technology has become and how companies that confine their operations to a local presence are likely to face stiff competition in the years ahead.
The force of globalization became particularly apparent during my first day in Bangalore during a training session of Indian lawyers and technology officers.
Soon after the first break, several people rushed out hurriedly, only to return later in the day. When I inquired why they had left, they informed me that in India morning corresponded to the end of the business day in North America. Standard practice at their firms was for the North American branch of the company to finish up the day by sending a list of bugs and other technological glitches in need of fixing.
The lesson was clear — while North America sleeps, Indian programmers work. Technology companies that do not ensure that the sun never sets on their productivity are placing themselves at a competitive disadvantage.
Reviewing India's e-commerce law framework provided a good indicator of the power of global e-commerce law.
Canada's Uniform Electronic Commerce Act, which serves as the model for e-commerce legislation coast-to-coast, bears a striking resemblance to India's Information Technology Act. The reason is simple — both are based on the same U.N. model law that is serving as the basis for e-commerce legislation worldwide. The advantages of this common e-commerce law framework are also readily apparent — companies engaged in e-commerce business can increasingly rely on a consistent set of legal norms and principles to enforce online contracts.
The attitude toward intellectual property rights was perhaps the most interesting revelation of the trip. While perceptions of piracy in the developing world abound, conversations with law students and policy makers made it very clear that there is actually considerable respect for IP rights.
In fact, government officials went out of their way to call attention to their zero-tolerance for piracy, while students similarly indicated that they complied with their institution's prohibition on copyright infringement.
Interestingly, respect for IP rights did not mean that the students rushed to license popular commercial software. Instead, many students turned to open source software such as Linux, which may be used by end-users at no cost.
The students noted that while academic pricing is available for commercial software, the reduced prices are still beyond the means of many in the developing world. Their choice in complying with anti-piracy programs is not, therefore, to license commercial software but is instead to pursue open source alternatives.
Finally, the danger of servicing a global e-commerce market with a uniform marketing strategy became clear during a discussion with a senior executive of a leading Indian consumer e-commerce site. The site, which services hundreds of customers per day, observed the successes and failures in the North American market but ultimately determined that their company was operating under markedly different dynamics. For example, online groceries have become a core offering of the company because of differences in the overnight shipping market.
Unlike North America and Europe, where distance may be factored into shipping costs, many private Indian courier companies charge a flat rate regardless of the package's destination. This enables them to service the entire Indian marketplace from a limited number of distribution centres.
As policy makers and technology companies cast their eye toward the long-term potential of massive markets such as India and China, they would do well to cross the digital divide. In doing so they will face interesting challenges to long-held assumptions about law, policy, and the marketplace in the global technology sector.
