The issue of Internet diffusion in an economy over time is of interest to several stakeholders, including policy makers, regulators, investors, and businesses. It is particularly important in developing countries, which see the Internet as a major driver in achieving social and developmental goals. Concerns about the so-called ìdigital divideî also lend some urgency to the issue. However, Internet diffusion is driven by social as well as technical factors, and developing countries have distinctive characteristics that make their adoption process different from that in industrialized countries. This paper develops a causal model of Internet diffusion in developing countries, using the systems dynamics methodology. The modeling approach allows us to combine standard contagion mechanisms inherent in diffusion, such as innovators and imitators, with the distinctive regulatory, economic, and social circumstances in developing countries. The structure of the model is first justified using India as a specific developing country context. Next, the simulated values generated by this structural model are compared against actual values for Internet adoption in India for the period 1996ñ2001, and the fit is found to be reasonably good. These initial findings support model validity. Using a technique called dominant loop analysis the model suggests that, among all the different drivers, poor telecom- munications infrastructure and high telephone charges are the major barriers to diffusion. In conclusion, we discuss the issues to be addressed in the remainder of this ongoing work.
Dutta, Amitava and Roy, Rahul, "The Mechanics of Internet Diffusion in India: Lessons for Developing Countries" (2001). ICIS 2001 Proceedings. 76.