It is also impossible for these people to use their assets as collateral to take out loans and perhaps even to sell them. It is therefore crucial, according to de Soto, for developing countries to reduce bureaucracy and thereby release a mass of capital with the aid of the law. The World Bank has extended the studies made by de Soto to include more countries. The recentlypublished report Doing Business in 2005: Removing Obstacles to Growth shows, for instance, that it takes on average more than twice as long to register a new company in poor countries than in wealthy countries and that it is also much more expensive, in relation to income. Most companies in developing countries therefore operate in the informal sector. Despite this, wealthy countries implemented more than three times as many reforms to improve their investment climate last year than were made by poor countries. Developing countries can thus, often using fairly simple means, ensure that more job opportunities are created by improving the opportunities for entrepreneurs in the formal sector and thereby promoting economic growth. The final basic explanatory factor behind increased wealth that I wish to highlight here is the pioneering technological advances made, particularly in the fields of information technology, international communications and global transports. These have led to large cost savings, which in turn have enabled the rapid spread of technology around the world. This has helped, for instance, give developing countries the opportunity to diversify their exports to a greater degree.
A third difference is that while the 19th century globalisation was largely driven by falling transport costs, today it is largely falling information costs, thanks to computers and the Internet, that are the driving force. This development has led to entrepreneurship becoming increasingly global, as it has become much easier to localise various parts of the production process to different countries. An example using telegraphy and the current information technology can illustrate the significance of costs for the spread of innovations. Telegraphy was expensive; in the 19th century people had to go to a telegraph office or hire a telegraph boy and pay significant sums if they wished to send a telegram. In today’s money, it cost them around SEK 2,000 to send a long-distance message of 20 words, while the corresponding cost today is around 10 öre for 20 pages. In other words, the variable cost is negligible and the fixed cost is moderate. We can therefore now find powerful computers and Internet access in most workplaces and in many homes. The costs are so low that many people have the financial possibility to use computers and the Internet, at least in industrial nations. This spread also means that the time and the cost that lay in the telegraph boy’s running from place to place have been  4  BIS Review 60/2004  eliminated. It is thus this spread that makes the current information technology much more important than telegraphy was a hundred years ago.