ICT for Development

1
ICT for Development
Carlos A. Primo BragaSenior Adviser,
International Trade Department The World Bank
WITSA Public Policy Meeting Athens May 18, 2004
2
Outline

• ICT and Development
• The Regulatory Environment
• Reality check
• Concluding remarks

3
Knowledge makes the difference between poverty
and wealth
Thousands of constant 1995 US dollars
14
Rep. of Korea
12
Difference attributed to knowledge
10
8
6
4
Difference due to physical and human capital
2
Ghana
0
1960
1965
1970
1975
1980
1985
1990
1995
2000
Source World Development Report, 98/99
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Knowledge Changes the Development Process

• Creation and effective use of knowledge are key
  to rapid economic growth
• ICT is changing the terms under which knowledge
  can be created and disseminated
• - ICT facilitates the process of codification and
  transmission of knowledge about technology
• - ICT enhances the positive learning
  externalities of knowledge generation by
  magnifying the possibilities for recombination of
  ideas and information
• - ICT dilutes the tyranny of geography by
  providing new ways for researchers to escape
  national boundaries. The rate of international
  co-authorship of scientific and technical papers,
  for example, has increased significantly over the
  last decade
• - ICT increases the distribution power of
  innovation systems, diminishing the time to
  market of new products and services, while
  enhancing the dissemination, application, and use
  of mature technologies.

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But can ICT be of any help in LDCs?
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ICT and development

• ICT and Economic Growth - enhanced
  competitiveness - increased business
  opportunities - access to market for
  rural communities
• ICT and Improved Delivery of Social Services
• - health/education/environmental/microfinance
  services - reducing vulnerability to natural
  disasters
• ICT for Greater Transparency
• - improved efficiency on government procurement
• - reduced corruption
• - increased civil society participation
• ICT for Empowerment of the Poor
• - allowing the poor to better communicate their
  concerns

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The concept of sustainable development
Economic Sustainability (productivity)
Intergeneration Concerns
Social Sustainability (equity)
Environmental Sustainability (protect/enhance
natural resources)
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ICT and sustainable development
Direct Impact
Indirect Impact

• Production
• - Toxic components such as lithium and cadmium
  (batteries), lead (cathode ray tubes)...
• Operation
• - Energy use
• Disposal
• - Short lifetime cycle, growing challenge of
  managing electronic waste

• Effects on transportation of e-commerce and
  telework
• - Growth vs. more efficient logistics vs.
  leisure choices
• Dematerialization
• - e-books MP3 files vs. CDs email vs. snail
  mail
• Acceleration of life-cycle of products
• - Incentives for agglomeration vs. dispersion

Network Effects
Opportunities for more knowledge sharing,
improved coordination, transparency and monitoring
9
Virtualization of material products myths and
reality
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Digital divide

• Infrastructure (income levels, rural vs. urban)
• Digital literacy (barriers to absorption of IT)
• Content
• Gender
• Large companies vs SMEs
• E-business practices

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The network explosion
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Digital divide/infrastructure
Income Divide
User distribution, by income group, 2001
6.1 billion
986 million
741 million
361 million
100
90
High Income
80
70
Upper-mid Income
60
50
Lower-mid Income
40
Low Income
30
20
10
0
Population
Telephone lines
Mobile users
Internet users
Source ITU World Telecommunication Indicators
Database
13
Telecoms and Internet the cost of being
connected
300
250
200
150
278
100
191
50
80
60
1.20
0.135
0
Source Human Development Report Office
calculations based on data ITU 2000 and World
Bank 2001
14
Secure servers and e-commerce
Share of Secure Servers in non OECD
countries (October 2000)
Source OECD, 2001
15
Facilitating trade in less efficient countries
would bring significant gains services/e-business
are key in promoting trade facilitation
Source Calculations based on table 4 in Wilson,
Mann, and Otsuki, Trade Facilitation and
Capacity Building Global Perspective, 2003,
mimeo.
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The regulation maze
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Reality check implications for developing
countries

• Infrastructure rapid improvement but major gaps
  in coverage/affordability
• Regulatory environment progress complexity
  (cyberlaws, security, PKI, IPRs, content
  regulation, e-payment infrastructure, privacy)
• Digital literacy institutional constraints in
  the educational sector IT HR development at
  firm level
• Content localization/relevance/IPRs

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Concluding remarks

• E-business and ICT use will continue to expand on
  a global basis and their benefits can be
  substantial not only at firm level, but also in
  promoting trade and enhancing productivity at a
  macro level
• Convergence in e-business practices can happen
  (developing countries and industrialized
  countries, SMEs and large enterprises), but
• Unless governments provide the proper regulatory
  environment for private action and support
  efforts to expand digital literacy, with special
  attention to the needs of SMEs, the digital
  divide between the developed and the developing
  world, at the level of business practices, will
  widen.

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Concluding remarks (cont.)

• More evolution than revolution, but potential for
  significant distribution impacts (within nations
  and internationally), particularly, as e-commerce
  practices spread.
• Importance of keeping in focus the implications
  of the regulatory environment for innovation
• Cross-border disputes will also expand in the
  absence of regulatory convergence (no hope for
  advancing this agenda in a significant manner in
  the WTO in the near future ).

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More information

• The World Bank
• www.worldbank.org
• Development Gateway Portal
• www.developmentgateway.org