Thesis Statement

This report is prepared to develop literature review on the comparative analysis of regulatory policies developed for closing the gaps existing between digitally literate people and those who are unable to access internet of US and China. This report will also include the effectiveness of these policies in overcoming the gaps. It will also evaluate that how these policies are helping countries in tapping economic opportunities presented by tech giants in the country.

The thesis statement of this literature review report is “To conduct comparative research on the effectiveness of government policies of US and China for closing gap prevailing between digitally literate people and the people with no access of digital technology and internet”.

According to Chesser et al. (2016), there is need of government regulations and policies for overcoming the gaps existing between digitally literate people and people with no access to internet in USA. It is so because the USA is consistently facing issue of digital divide. Digital divide stands for the situation, in which inequality exists between groups, households and individuals with regards to access to information and communication technologies. In accordance to census of 2016, 11.5% of whole population of the United States does not have access to internet. This is a very big data in current context. The existence of this situation is creating need for creation of regulatory policies for closing the gaps existing between digitally literate people and people with no access to internet. In contrast to this, Baron and Thurston (2016) depict that need for development and implementation of government regulations and policies has also occurred in USA due to digitization of most of government benefit programs in the country. If the gap of digital divide is not resolved, the effectiveness of government welfare programs can get hampered. Key government services like passport services, visa services are also available online. In this case, utility of online governance services can only be enhanced through development of government regulations and policies for overcoming the gaps resulting from digital divide issue in USA.

In the views of Lu et al. (2015), the issue of digital divide is also prevailing in China. The digital divide issue is wider in China as compared to US. For example, by the end of 2010 only 31.6% of entire population of China was having access to internet. It means 68.4% of the population in China was facing issue of lack of access to internet. This means, there is greater need for designing and implementing the regulations and policies for overcoming gaps resulting from digital issue in China. In support of this Weihuan et al. (2015) argue that the government of China is initiating efforts for promoting companies in different sectors to accept payment through digital wallets like Ali Pay in electronic as well as tourism sector. In addition to this, the banking firms also offering online banking services through mobile applications and internet connectivity. But the full success of these programs can only be achieved through planning and implementing of strong regulations and policies oriented towards minimizing digital divide gaps existing in country.

Literature Review

In the views of Clark et al. (2014), US government has planned and implemented different regulations and policies for overcoming digital gaps. The US State Department has launched the Global Connect initiative for supporting the aim of World Bank of making 1.5 billion additional people online by end of 2020. There are different legislations being framed for addressing the digital divide issues in United States. Example of these legislations includes American Recovery and Reinvestment Act of 2009, Broadband Data Improvement Act of 2008, America COMPETES Act of 2007, Workforce Investment Act of 1998, Internet Tax Freedom Act of 1996, Telecommunication Act of 1996 and Maine Learning Technology Initiative of 2000. According to Marcum (2017), apart from these, the government and regulatory bodies of USA have also implemented some other legislation for mitigating gaps of digital divide in the country. These legislations are Massachusetts IT Bond Bill of 2014, California Advanced Services Fund of 2013 and the Eliminate the Digital Divide Law of 2000 (Illinois). In United States, approximately 150 municipal systems offer the broadband services to their local households. This initiative is also quite effective to overcome the issue of digital divide in country.

As per the opinion of Greyling (2018), China state government plays a vital role in the monitoring and regulation of internet and internet providers. Digital Opportunity Task (DOT) Force is one of the examples of programs run by government of China for overcoming the digital divide gaps. Main purpose of DOT Force program is to help the marginalized and poorest people to enjoy benefits of digital revolution. Under this program, the integrated efforts of private sector companies like tech giants, non-profit organizations and government were used to overcoming the digital divide gaps. Following diagram is helpful to understand the digital divide issue in China:

Initially in China, Ministry of Posts and Telecommunication was enjoying the monopoly power in telecommunication industry of China. But with the passage of time, different reforms took place in China, and the structure of market changed to oligopoly market. The ministry of information industry (IMII) was developed in China in 1998 that became a major regulator in the industry. The government of China has also developed and implemented 9^th Five Year Plan for ICT development and overcoming the digital divide issue in country. During execution of this plan, the telecom industry of China grown with rapid pace. The joining of China to WTO was also a major change that accelerated the developments in telecommunication sector and increase in access of people with digital technologies. Event of “The 2010 World Expo” that was organized in Shanghai has also helped the China for development of ICTs as well as to bridge the digital divide to some extent.

The regulatory measures and policies adopted by US and China are quite effective in tapping the economic opportunities offered by digital companies. For example, the tech giant companies are able to capture greater market share in country with greater pace. Due to regulatory support, the companies are able to launch highly advance technology and digital services across entire locations of countries in effective manner. For example, now the companies are working 5G technology for better quality calling and internet surfing services. Due to regulatory support, the companies are able to expand technological infrastructure in different geographical regions in easier manner with ease or licensing and permit issues. In context of the customers, these policies and regulations have helped customers to enjoy internet as well as calling services with high quality and at competitive price. Regulations also provide protection to the customers from issues like call drop, poor quality of network issues, poor quality of internet speed, as companies have to deliver the service that is promised by them in any data plan purchased by customers. Due to regulatory efforts of government in China and US, the people residing in rural areas and distant geographical regions are able to use digital services like social media applications, online banking and the e-commerce applications with greater ease.

The government regulations of United States and China are very effective in tapping the economic opportunities offered by digital companies. For example, due to promotion of digital services and digital habits like adoption of digital payment mechanism, use of mobile applications for different purposes including shopping, purchase/ reading of e-books, getting participated in online learning programs etc the financial performance of companies is increased. This has provided enhanced tax revenues to the companies. Whenever, any issue of breach of any regulation is faced by any company, the regulatory fines are imposed on the companies. At the same time, consumers or users of online services are provided greater level of security while using online payment services. Customers or individuals are also motivated for use of online services through better benefits in the form of lower price of products and better cash back offers while enjoying the online shopping services. The government policy measures complement the rise of US/ Chinese tech giants because it is very important for meeting the goal of overcoming digital divide gaps existing in countries. For example, due to support from government, the companies will be able to expand their telecom and high speed internet networks across rural regions also. In addition to this, the revenue growth of companies resulting from regulatory support will also help in increasing GDP of the nation and will help to address issues like unemployment due to resulting new job opportunities. Apart from these, the growth of these companies will also add increased tax revenue to the government.

Conclusion

On the basis of above analysis, it can be concluded that the issue of digital divide is existing in both China and United States. The gap of digital divide is wider in case of China as compared to USA. There are different regulatory and legislative measures that have been adopted by United States for overcoming the digital divide gaps such as American Recovery and Reinvestment Act of 2009, Broadband Data Improvement Act of 2008, Internet Tax Freedom Act of 1996, Massachusetts IT Bond Bill of 2014, California Advanced Services Fund of 2013 and the Eliminate the Digital Divide Law of 2000 (Illinois). Similar to this, government of China has also implemented different regulatory initiatives for mitigating digital divide gaps existing in it. Example of these initiatives involves development of Digital Opportunity Task (DOT) Force, ministry of information industry (IMII), development of 9^th and 10^th Five Year Plan for ICT development and The 2010 World Expo.

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