The Global Digital Economy: Worsening Inequality vs. Pockets of Innovation

Author: Friederici, N.
Published in: Observer Research Foundation, Digital Frontiers Blog
Year: 2019
Type: Other publications

When we talk about ‘digital divides’ or ‘digital inequality’, what we typically mean is whether or not people have access to the internet. Everyone should be able to go online, because the internet enables learning, political engagement, and entertainment access. It is good news then that the number of internet users, especially in low and middle-income countries (LMICs), has grown rapidly in recent years: approximately half the world’s population is now ‘connected.’ Economic LevellingHowever, whether or not the diffusion of the internet necessarily results in a levelling of economic opportunity remains a point of contention. About twenty years ago, Thomas Friedman argued that globalisation consisted of three conjoined processes: the democratisation of technology, information, and capital. Other authors later expanded this idea, arguing that the internet would lead to the democratisation of content, business and entrepreneurship. The Economist announced the beginning of a “Cambrian Moment”: thanks to digital technology, start-ups seemed to be exploding in number and kind. In our book Digital Entrepreneurship in Africa, (forthcoming, MIT Press 2020), we examine this contention with the example of digital entrepreneurship in Africa. We wanted to find a micro-level explanation for why digital economies -- despite the internet’s distance-bridging potential -- are unevenly distributed across geographies, in ways that traditional theories like agglomeration and urbanisation cannot quite explain. Africa is thinly integrated in global innovation processes. For example, one study shows that the production of digital content is even more tilted in favour of high-income countries (HICs) than the production of traditional knowledge outputs: the authors show that Sub-Saharan Africa produces 1.1% of the world’s academic articles but only 0.5% of commits on GitHub. For comparison, North America produces 27.6% of academic articles but 38.9% of GitHub commits. We wanted to understand how digital entrepreneurship may change or reaffirm the status quo of unevenness.

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Nicolas Friederici, Dr.

Forschungsgruppenleiter: Innovation & Entrepreneurship