The cost of the digital divide

OPINION: My eldest daughter had an entrance interview for her new school last week. The deputy principal asked good probing questions, questions that confirmed that this was going to be the right school for her in 2018.

It finished with the DP explaining the school was fully digital, meaning kids didn’t require exercise books or writing instruments; just a laptop. A good thing, I thought at the time, given people now live their lives through a predominantly digital interface, from buying movie seats to submitting assignments, to curating galleries of images on Pinterest.

Later the same day I was a bit stunned to read on Stuff about Auckland solo mumAnita Sauafea, whose two kids didn’t have any access to the web at home and hence no ability to complete assignments outside of school or the library.

Sadly, Sauafea’s kids are in good company. According to findings from the Digital Inclusion Research Group, about 100,000 New Zealanders don’t have access to the internet. That equates to about 15 per cent of families, but in some places, like Wairoa in Hawke’s Bay, it’s more like 50 per cent.

That’s not just 50 per cent of families who can’t watch Netflix or update their Facebook profile, it’s a hell of a lot more serious.

In the private sector, digital-first has been part of virtually every corporate strategy, although it’s typically framed in more complex terms. That ranges from doing your shopping, to arranging a doctor’s appointment, through to doing your banking or applying for a job.

In the public sector it’s even more evident. Five years ago the-then government set up the Better Public Services programme with 10 required results. Result 10 is about making New Zealanders’ dealings with government easy in a digital environment with the aim of 70 per cent of people’s common transactions to be completed digitally by 2017.

And although a few agencies have dragged the chain, overall there’s been some solid progress.

Which is great, unless you have no internet and no device to access it. Then you’re a bit buggered. Particularly if you are located some distance from the nearest physical branch or store.

I heard a similar story being told by the Pharmacy Guild last week. Community pharmacies are facing trouble in the provinces as online chemists and Australian-owned pharmacy supermarkets start taking market share.

As result, small-town pharmacies may close, leaving rural residents unable to have prescriptions and medication requirements fulfilled. Some of these products can be bought online, but not if you aren’t online yourself.

Research by Dr Miriam Lips in 2015 found several groups were way overrepresented when it came to digital exclusion in Aotearoa. Predictably, these include adults with disabilities, Pasifika, Ma¯ori and senior citizens.

Worse, it found the digital divide was broadening.

Which means we’ve got a problem. Given the demographics of the affected groups it is easy to paint it as a social problem. But it’s not.

It’s actually an economic problem, because the labour markets right now are starved of workers, and in virtually every industry today, workers need at least a basic understanding of devices and the web.

A PWC study in the United Kingdom found 9 per cent of Britain’s population were digitally excluded, equivalent to a lost economic benefit of £22 billion (NZ$40b).

We have 7 per cent of the population of Britain and roughly the same percentage of digitally excluded people, so applying those figures to New Zealand would suggest our current performance around digital inclusion is costing the economy around $2.8b a year. Even if it’s half that it’s not trivial.

So clearly there’s a problem and it’s got a real economic cost. It’s not a simple fix – there’s likely four components.

The first is getting crunchy clear on a definition and where we draw the line.

The next part is creating a genuine appetite amongst the excluded for the benefits of inclusion. Otherwise we are pushing ones and zeros uphill.

The third part is giving them access to the web, spanning both device and connection. Currently this seems to fall on libraries, Citizens Advice Bureaux and some schools; helped to some extent by the likes of the 20/20 Trust and the Spark Foundation. But it’s not enough and it’s not scalable.

The fourth and final part is having the skills to feed the appetite within the access provided. Just the basics around browsers, buttons and bull pucky would be a good start.

The good news is the new Government seems up for it and is pulling together an advisory group. The bad news is that unless the four components are pursued in tandem, it could miss the mark. Which is not just bad for people, it is bad for the economy.

Mike ‘‘MOD’’ O’Donnell is an e-commerce manager and professional director. His Twitter handle is @modsta and he’s always had exclusion issues.