Measuring the Digital Divide: A Framework for the Analysis of Cross-Country Differences

Abstract

This article proposes a new model for measuring the digital divide within a set of countries or geographical areas. Starting from a series of elementary indicators the methodology groups these indicators into six factors of digitalization and, subsequently, aggregates the factors in a synthetic index called the synthetic index of digitalization. The dispersion in the distribution of the synthetic indexes of digitalization constitutes the measure of the digital divide. This method is based upon a measurement approach, which is different from the ones previously developed, since it uses principal components analysis for aggregating the variables and avoids many of the problems and limits shown by existing models. In the article an application of the methodology is provided within a set of ten developed countries for 2000 and 2001. The measurement framework for the digital divide presented here reveals new policy implications for public institutions and highlights opportunities and risks for managers working in the ‘digital economy’ environment.