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In a story dispatched out of Berlin, Reuters is reporting on a joint IBM-Economist Intelligence Unit report that suggests India and China are closing the digital gap. The report cites the fact that Shanghai and Bangalore have similar connectivity to developed nations as proof of the fact.

Peter Korsten, the European Director of IBM's Institute for Business Value, even told Reuters "This is the first time we see a level playing field between developed and developing nations in terms of connectivity."

A level playing field in terms of connectivity.

Right.

It is not an uncommon error for foreigners to reach broad conclusions about China's development based on what they see in Beijing, Shanghai, Guangzhou, Shenzhen, or even Chengdu. What is uncommon is to see this mistake made by researchers who should know better.

To say that China has a level playing field of connectivity with the U.S., Europe, or Japan is such a gigantic exaggeration it suggests that IBM is thoroughly deluded. At worst, the report is a farce. At best, the top-line conclusions IBM and the EIU are reaching are not supported by the data.

The facts should speak for themselves:

  • Less than 9% of China's citizens have regular access to the Internet.
  • There is one computer in China for every 20 people.
  • There is one home computer in China for every 50 people.
  • Less than 1% of China's population can reach the Internet via a mobile phone.
  • Mr. Korsten suggesting that digital gap is narrowing in China - to the point of parity with developed nations, no less - is irresponsible because it suggests that the problem of digital exclusion is going away.

  • It makes China appear to be a bigger technology market than it really is;
  • It exaggerates China's level of development and the extent to which China is a competitive threat to knowledge and creativity based industries in developed countries; and
  • It suggests to China's leaders that critical investments necessary to provide connectivity outside of the tier-one cities is not a high priority.
  • I would wager the average truck stop in the United States has more connectivity than your average Chinese village.

    The IBM Institute for Business Value is an in-house think tank supporting IBM's consulting business. This, in other words, is where the folks who design and sell IBM systems to major companies get their world view and their perceptions of the market.

    Can you think of anyone who would want to do business with a company so out of touch that it would draw parallels between connectivity in China and in the U.S. in the face of readily accessible data to the contrary?

    IBM is looking incredibly out of touch. This calls at the very least for a public clarification.

    Source: IBM Out of Touch on China, India? (IBM)