Digital Divide

Date: Sun Apr 30 2000 - 07:54:27 MDT

In his very interesting editorial <Tensions on the Net, 4/24/00>
Mortimer B. Zuckerman, Editor-in-Chief of U.S. News, wrote:
America exults in its dominance of the emerging digital economy
that will not only transform our domestic economy and society but
profoundly affect our relations with the rest of the world.
Resentment of American ascendancy is already apparent in the
perennial resistance to the export of American popular culture and
newer objections to American political and military dominance.
Anti-Americanism is sure to intensify when more businesses in
other countries experience the hollowing-out effects of the
acceleration of foreign-market penetration by American
E-commerce. Even sovereign states will not be immune, for their
national tax revenues and their currencies will be vulnerable to the
unique nature of the global E-economy. This may strike some as
overstatement, even given the manifest speed of E-commerce
growth. Yet just a few years ago no one foresaw the spread of
E-commerce and no one talked about the possibility that the
Internet might become the major worldwide distribution channel
for goods and services that it promises to be.
There are areas where European countries lead. European
technology producers have an advantage in wireless broadband, a
platform that may well emerge as the dominant technology in the
next few years. The European notion is that the mobile telephone
rather than the personal computer is poised to become the
principal tool for communicating and transacting. But the first
round goes to U.S. producers, and the rest of the world remains
years behind. The American model has now become the world
standard, and this standard will dominate at least for the next
several years. We certainly lead the world in building the new
infrastructure of the information age. Morgan Stanley Dean Witter
analyzed the 46 leading suppliers of the infrastructure of the digital
economy that were considered to have a competitive advantage
 are American; only four
are European. Altogether the pressure on other businesses, other
societies, and other economies is going to be enormous.
European and Japanese companies in industry after industry will
find themselves at a growing disadvantage vis--vis American
That is not all. The impact on national economies will be
substantial. Three areas where growing American predominance
will be felt are currencies, trade, and balance of payments. The
United States will benefit from the long-term IT trade surplus; it will
benefit from the dramatic growth of U.S. exports of intellectual
property rights, namely royalties and fees that have now emerged
as the largest component of U.S. exports; and it will benefit from
the continued strong export growth in a number of
technology-intensive service activities, especially computer data
processing and database services. These trends will strengthen
the American dollar and weaken other currencies over the long
Other national consequences will follow. The Internet will have
such a transforming effect on business models that it will divert
profitable activities from European and Japanese companies to
American companies, and extend the reach of American
companies, in an unprecedented way, into the service sector of
foreign economies. This will inflict a loss of profits on the foreign
companies, which in turn will reduce tax revenues collected by
governments. The fiscal effect will be compounded by the fact that
the Internet is a borderless technology that makes physical
location virtually irrelevant. This creates the incentive to shift
business activities to the lowest tax regimes. Companies may be
physically farther away from their customers, even though they are
only a mouse click away.
No developed country is going to sit back and allow its fiscal
revenues to erode. American firms will be seen as the cause of
these declines, and the governments will be lobbied by
businesses on the losing en
ine their doing anything that makes economic sense. But that
won't stop the attempts and the subsequent strain in relations
between America and the rest of the world.

In my opinion M.B. Zuckerman is right but that new
anti-americanism is not yet started (in EU), because we live, just
now, a sort of honeymoon, with the net.

What about the future? Will anti-americanism be a temporary
problem or a real, definitive question?

Rome (Italy)

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