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See discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/28321344

Assessing the regional digital divide across the

European Union-27

Article · January 2011

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Maria Rosalia Vicente Ana Jesus Lopez-Menendez

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ASSESSING THE REGIONAL DIGITAL DIVIDE ACROSS

THE EUROPEAN UNION-27 MARÍA ROSALÍA VICENTE

ANA JESÚS LÓPEZ

FUNDACIÓN DE LAS CAJAS DE AHORROS

DOCUMENTO DE TRABAJO

Nº 483/2009 De conformidad con la base quinta de la convocatoria del Programa de Estímulo a la Investigación, este trabajo ha sido sometido a evaluación externa anónima de especialistas cualificados a fin de contrastar su nivel técnico.

ISSN: 1988-8767 La serie DOCUMENTOS DE TRABAJO incluye avances y resultados de investigaciones dentro de los programas de la Fundación de las Cajas de Ahorros.

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ASSESSING THE REGIONAL DIGITAL DIVIDE ACROSS THE EUROPEAN UNION-27

María Rosalía Vicente* Ana Jesús López* Abstract Over the last years great efforts have been devoted to the analysis of the digital divide at the international level. In contrast, the evidence about the regional digital divide is still scarce, especially in the case of the European Union. Within this context, the aim of this paper is to remedy this deficiency, trying to throw some light on the state of ICT adoption across European regions. On the basis of a set of ICT-related indicators, we perform a factor analysis that leads us to the development of a ranking, identifying best-and-worst performing regions. The Top-10 mainly corresponds to Dutch regions, while Greece and Bulgaria occupy the Bottom-10. Hence, results show that the regional digital divide reflects to some extent the income gap. However, regional policy towards ICT seems to be having some positive implications for technology adoption. Finally, we assess the regional divides within each Member State.

Keywords: Information and communication technologies (ICT), regions, digital divide, European Union, factor analysis.

JEL classification: L86, O33, O52, R12.

Corresponding author: María Rosalía Vicente, Dept. of Applied Economics, Faculty of

Economics and Business, University of Oviedo, Asturias (33006), Spain. E-mail:

mrosalia@uniovi.es *Dept. of Applied Economics-Faculty of Economics and Business--University of Oviedo

INTRODUCTION

The last two decades have seen the revolutionary spread of Information and Communication Technologies (ICT). The developments in hardware, software, and computing fields have resulted in affordable general purpose technologies (Bresnahan and Trajtenberg,

1995) that can be used in most sectors and whose benefits may extend everywhere. Thus, activities such as e-government, e-learning, e-commerce, e-banking, and e-tax have become part of daily life. Likewise, e-mail, web-surfing, social networks, internet news, and online dictionaries are more and more a major component of life for many citizens.

Hence, ICT have been recognised as a major contributor in social and economic development (OECD, 2004, 2007b; Greenstein and McDevitt, 2009). Furthermore, several authors have stressed the importance of these technologies as a catalyst for growth in the economic current crisis (World Economic Forum, 2009). In fact, both American and European recovery plans from the crisis have considered ICT as part of their strategic actions: for instance, the European Commission has earmarked EUR 1 billion of extra spending for investment in broadband, with special attention to the improvement of high-speed connections in rural regions (European Commission, 2009).

ICT are increasingly determining the ability of individuals, firms, and territories to remain competitive and to do things in a more effectively and efficient way, which, in the end, turns into the creation of wealth. Therefore, their path of diffusion suggests how the future distribution of wealth may take shape (International Telecommunications Union, 2006).

In this context, a proper assessment of the state of ICT in a territory has become crucial.

Comparing the ICT achievements of individual territories with those of others stands as an important benchmark to gauge regional and global competitiveness. Consequently, call for monitoring and benchmarking have become more and more frequent at international, national, and regional levels. Special attention has been paid to the measurement and track of the digital divide, that is, the gap between individuals, households, businesses, and geographic areas at different socio-economic levels with regard both to their opportunities to access and use ICT for a wide variety of activities (OECD, 2001). In this sense, the outcome plans of the World Summit on the Information Society requested the international performance evaluation and benchmarking of the information society developments (and the resulting divides) through comparable statistical indicators 1. Such demand led to set a list core of ICT indicators (Partnership on measuring ICT for development, 2005), and to the development of several composite indices in order to summarise the multidimensionality of a phenomena such as the information society. Examples of such indices are the Information Society Index (IDC/World Times, 2005), the Technology Achievement Index (United Nations, 2001), the Infostate Index (Orbicom, 2002, 2003), the Networked Readiness Index (World Economic Forum, 2008), and the Digital Opportunity Index (International Telecommunications Union, 2008)2, among others.





Likewise, the European action plans for the information society (eEurope and i2010) have highlighted the importance of measuring and comparing the diffusion of these technologies across the Member States: only once the situation of ICT is properly assessed and measured, policies can be designed and implemented effectively in order to foster the progress of those territories lagging behind. Hence, the current i2010 plan has considered a set of indicators to track ICT diffusion, and has commissioned the development of an “e-business readiness index” in order to give a broad picture of the level of ICT adoption and e-business development at country level (Pennoni et al., 2005).

However, very little has come of these actions in terms of the regional benchmarking of ICT penetration. Most evidence refers to the US (Progressive Policy Institute, 2002; Atkinson and Andes, 2008), while the references to the European Union are few. This is due both to the limited availability of comparable statistical data across European regions and to the lack of instruments for systematically quantifying ICT diffusion, even though considerable efforts were devoted to that end by some European projects (BISER, 2004; UNDERSTAND, 2006). As a consequence, most research has focused on the analysis of regional ICT disparities within a particular Member State (Vicente and López, 2007) or has just considered one indicator to assess the development of the information society (Billón et al., 2009), neglecting its multidimensional nature.

In this context, the aim of this paper is to contribute to the literature on the digital divide by analysing the state of these technologies across the regions of the 27 Member States of the The World Summit on the Information Society took place in two phases: Geneva 2003 and Tunisia 2005.

See Vicente and López (2008) for complete survey on the development of ICT indices, and Archibugi et al. (2009) for a state-of-art on composite indicators of the technological capabilities of nations in general.

European Union (EU). Hence, we try to assess the level of ICT penetration in each region, and identify best-and-worst positioned regions. Moreover, we use a set of ICT-related indicators in order to capture the multidimensionality of the information society. Therefore, we first present the conceptual framework to measure ICT (section 2) and details of the data (section 3). From this, we perform a factor analysis (section 4) in order to deal with our multivariate data, and we finally summarize our principal findings (section 5).

FRAMEWORK Over the last decade, the rapid diffusion of ICT has gone alongside with the need for indicators, measures and analysis of such phenomena in order to support and inform policy making (Partnership on measuring ICT for development, 2008). According to the OECD (2005) the well-know S curve of technological diffusion provides a useful conceptual framework to

analyze the changes driven by ICT. It considers the following three stages:

 ICT readiness, reflecting the level of networked infrastructure and access to ICT.

 ICT intensity, reflecting the level of ICT use in the society, and the extent to which ICTrelated activities are carried out.

 And finally, ICT impact, reflecting the result of efficient and effective ICT use, and therefore indicating whether ICT make a difference in terms of efficiency and/or the

–  –  –

These elements reflect a time sequence in which they are closely linked: without infrastructure, there is no access; without access there is no use; and use will in the end determine impact. In particular, use indicates the level of absorption of the technologies, which at the same time involves increases in terms of the following three elements: numbers (i.e. more ICT users), level of intensity (for example, more SMS being sent), and sophistication of use (for example, online banking or purchasing) (International Telecommunications Union, 2009).

It is important to bear in mind that in addition to access and use, reaching the final state (ICT impact) depends on a third component: ICT capability or skills. ICT skills are needed to make the best use of ICT. They are critical to the potential impact that ICT can have on development: if the individuals in a territory are not capable to exploit the new technologies and realize their potential benefits, development and progress will be hampered in that area. ICT impact therefore largely depends on the availability of skills and knowledge and the capability to use ICT efficiently and effectively. In fact several authors have pointed out that the gaps in individuals’ abilities to find information online are opening a second-level digital divide in addition to the one in access (Hargittai, 2002; OECD 2007a).

Then, our framework of analysis considers three key elements to track the evolution of a territory towards the information society and the successful reaching of the final stage (impact).

As shown in Figure 1, these three components are ICT access, use, and skills. Indicators on these three dimensions will be therefore indispensable input measurement to properly assess the state of ICT across European regions.

Figure 1. Framework of analysis: Stages of diffusion and related indicators

–  –  –

DATA One of the main constraints to the analysis of the digital divide is associated with the availability of data on a regional basis. In spite of the international efforts to develop statistical information about the information society, there is still a lack of comparable data on ICT adoption at the regional level in the EU. In fact, while at the national level there is much data, the regional authorities lack some of the basic information to understand the level of ICT adoption and to evaluate the impact and the effectiveness of ICT policies (Billón et al., 2008).

As a consequence, there is usually a “trade-off” between breadth and depth in the selection of indicators. That is, the more indicators we try to use, the less the number of territories we can include in our investigation.

Our analysis of the digital divide focuses on the EU-27 and uses data provided by Eurostat. We consider 164 regions at the NUTS-2 level (whenever possible) with the exceptions of Hungary, Romania, and Sweden, for which Eurostat provides no regional ICT disaggregated data. We have decided to include these three countries in the analysis in order to get a full picture of the EU. However, it is important to bear in mind such limitation when interpreting the results for those countries.

Data reports to the year 2008. Although information is also available for the period 2006-2007, the high number of missing values for those years prevents us from analysing the evolution of the regional digital divide.

As already mentioned, the availability of data was the main restrictive factor in the selection of variables3. Eurostat provides data on only five regional ICT indicators related to Internet access, use, and e-skills (Table 1). These indicators are based on the information coming from the annual survey on ICT usage in households and by individuals, collected by the National Statistical Institute or Ministry of each Member State. Part of the data collected is used in the context of the aforementioned i2010 initiative in order to track the progress of the EU in the ICT field. The survey is based on Eurostat’s annual model questionnaire on ICT usage, and is the only homogenous source of such kind covering the whole EU and able to supply regionally disaggregated data on ICT adoption. Specifically, the survey covers the population of all individuals aged 16 to 74 years, and all households having at least one member in such age group.

Such restriction is common to other regional analyses performed at the European level. For instance, the European Innovation Scoreboard includes seven variables at the regional level, while the national one is built upon twenty-five variables (MERIT/JRC, 2007; Zabala-Iturriagagoitia, 2007).



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