Contribution of the internet towards sustainable development through its economic growth, social capital and environmental effects

Contribution of the internet towards sustainable development through its economic growth, social capital and environmental effects

Spectacular growth in the use of the Internet has revolutionised many aspects of nations and human lives, including the key pillars of sustainable development such
as economic, social and environmental aspects, among others. However, such phenomenal growth in the use of this enabling technology has also led to different forms of social inequalities, popularly known as ‘digital divide’. However, it is not merely the access divide that haunts the digital landscapes of the world today. With the rapid diffusion of the Internet technology, other forms of divide resulting from various factors such as age, education, speed and e-skills are emerging as potential threats to achieving the expected benefits from this general purpose technology. Empirical literature on the effects of the Internet support the view that digital divide potentially hampers the positive effects of the Internet. Currently, this is the central focus of the debate with regards to the potential economic, social and environmental effects of the Internet and the burning question is whether the Internet significantly impacts these three key parameters of sustainable development.

This thesis seeks to answer this question through economic growth, social capital and environmental effects of the Internet – in the context of Organization of Economic Cooperation and Development (OECD) countries and in Australia, in particular. To accomplish this aim, this study is guided by four research questions: i) Does Internet use affect economic growth in OECD countries, and in Australia, in particular? ii) Does Internet use affect social capital in OECD countries and in Australia and regional Australia, in particular? iii) Does Internet use have any effect on electricity consumption in OECD countries, and in Australia, in particular? and iv) Does Internet use have any effect on CO2 emissions in OECD countries, and in Australia, in particular?

In order to addressing these research questions, this study uses panel macro data for OECD countries, annual time series macro data for Australia, and quantitative survey data from regional Australia. Secondary data are obtained from the World Development Indicators Database of the World Bank. Data on social capital are gathered from the World Values Survey. An advanced panel data econometric estimation technique – the Pooled Mean Group (PMG) regression technique – is applied for panel data analysis, while the Autoregressive Distributed Lag (ARDL) model is used for analysis of time series data. Summated scale method
is applied to quantify the social capital variable and multivariate regression technique is employed to examine the Internet–social capital nexus at a regional level.

This PhD by publication thesis consists of seven chapters. The Introduction and Conclusions are presented in Chapter one and Chapter seven, respectively. A total of nine research outputs delivered by this research are presented in the remaining five chapters. Research question one is addressed in paper one and paper two. Research question two is addressed in papers three, four and five. Papers six and
seven deal with research question three while research question four is addressed in papers eight and nine.

Paper one and paper two examine economic growth effects of the Internet for OECD countries and for Australia respectively. In addition to enriching the existing
literature on Internet-growth association, these two papers make a contribution by identifying the weaknesses of previous studies. Findings suggest that the Internet
stimulates economic growth both for the panel of OECD countries and for Australia as well. Internet use data is analysed for the first time for Australia in paper two.

To address research question two, the potential of the Internet in generating social capital is examined in papers three, four and five. Findings from both OECD panel and Australian time series investigations indicate that the Internet reduces social capital in the long run, while it slightly enhances social capital in the short run. Paper five analyses survey data to explore the relationship between the Internet and social capital in regional Australia.

The survey data was collected from the Western Downs Region of Queensland. The social capital variable was constructed from five theoretically supported and statistically tested dimensions of social capital concept using summated scale method. These dimensions are; bonding social capital, bridging social capital, trust, neighbourhood effects and community engagement. This is believed to be a novel contribution to the existing literature on social capital
measurement which suffers from intense debate on the topic. This paper also provides a conceptual framework on Internet-social capital relationship that may be a useful guideline for similar studies in future in regional context. The key finding indicates a positive relationship between Internet use and social capital implying that Internet-enabled network connectivity stimulates social capital in regional Australia.

Research questions three and four deal with the environmental effects of the Internet. Research question three is addressed in papers six and seven – these papers
investigate the effect of Internet use on electricity consumption for a panel of OECD countries and for Australia, respectively. In both studies, the Internet is found to cause an increase in electricity consumption. Such findings enforced the development of research question four, which investigates the CO2 emissions effect
of the Internet. This is addressed in papers eight and nine. Both investigations found that Internet use does not have any significant effect on CO2 emissions. In other
words, the growth in Internet use is still environmentally sustainable for these countries. All of papers six, seven, eight and nine are believed to make important empirical contributions to the literature on the environmental effects of the Internet. The findings from these studies are expected to provide stimuli for future researchers
to examine such effects for other regions and countries. The conceptual framework of this study is believed to be a contribution by itself as it studies the effects of the
Internet in all three key aspects of sustainable development (economic, social and environmental). Also, the massive literature review of all the three areas will enable
future researchers identify research gaps in a relatively easier way for further investigations.

This study offers a number of policy recommendations. To ensure expected economic benefits from Internet use, it is recommended in paper one and paper two that demand-side issues – such as education and skills – need more attention from policymakers responsible for framing and revising digital divide policies. Despite mixed findings on the Internet-social capital relationship from papers three, four and five, the inclusion of the social capital issue in digital divide policy should not be ruled out in the process of ensuring long-run success in addressing the digital divide. To achieve energy efficiency gains from the Internet and to exploit its emissions abatement potential, ‘green Internet’ and ‘Internet for green’ are strongly recommended in papers six, seven, eight and nine in order to combat future negative environmental effects of this technology. Finally, the overall findings from the
investigations undertaken by this thesis confirm that the growth in the use of the Internet contributes towards sustainable development for the OECD countries as well
as for Australia in particular.