Theme 3: The Role of ICT in Economic Growth and Socio-Economic Development
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  (Last updated: October 4th, 2005)
 
 
 
 
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  ICT as Catalyst for Development: Strengths and Weakness  
  Edvins Karnitis, Commissioner  
  Public Utilities Commission of Latvia  
  Latvia  
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  Information processing, wide and ramified knowledge flows are substantial keystones for evolution in the 21st century, while rapid development of ICT provides necessary technical opportunities.  
     
  ICT sector has become a profitable business sphere, but much more important is close relation of given sector with general growth, strengthening positive long-term feedback. Economic growth means increasing public and private investments in ICT technologies and usage of services, that in one’s turn strongly supports dynamic development of all sectors, increase of productivity and capacity of businesses and administration, growing competitiveness of countries and regions, increasing public social expenditures.  
     
  Analysis shows that there is a strong correlation between ICT and economic growth. There is much higher level of GDP and investments in regions where advanced ICT services are used in comparison with regions that are underdeveloped in this sense.  
     
  Number of activities should be included in national ICT strategies. The maximum advantage is achievable not just by simply “informatizing” different processes and maintaining their essence, but by following an innovative approach – modifying and modernizing processes and procedures, increasing their effectiveness by exploitation of capabilities offered by ICT that were not achievable before. On the other hand user interfaces should become simpler.  
     
  Growing vulnerability of society, its dependability on information processing remains the most critical risk. If information flows will be destroyed, it will result as inoperative power networks, destroyed supply chains, collapsed logistics, interrupted financial transactions.  
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  Broadband Demand Aggregation to Accelerate Regional Economic Development  
     
  Ed Brown, Chief Executive Officer  
  Adit North  
  Newcastle Upon Tyne, England  
  United Kingdom  
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Adit North is a UK Government initiated, regional partnership focussed on aggregation of demand, procurement and commissioning of broadband networks and facilities spanning some of Britain’s largest metropolitan centres and England’s sparsest rural communities. This paper positions the initiative within national and regional economic strategies together with information society developments over recent years. It contrasts experiences in the north of England, where it was possible to build on previous relationships and developments, with other regions that have found difficulty in starting from scratch. An extensive regional communications network will be illustrated with cross-sector partners providing services and support to businesses and the public sector.

 
     
 

Early achievements and projects will be reviewed, including:

 
  • ADSL enablement of remote and rural exchanges, providing > 98% availability to the population served  
  • Real Broadband. Regional collaboration to bring fibre connectivity to the kerbside for homes and businesses.  
  • The Northern Internet Exchange, a 155MB link from the north of England to London and international services/markets.  
  • Network integration for health, education, communities (urban and rural) and e-government will be outlined together with the route to self-financing.  
     
  Frank discussions of lessons learned along with how some of the residual obstacles may be addressed. This will include some pre-requisites for success together with cultural and organisational behaviours that influence the ‘competition/collaboration paradox’.  
     
 

The paper will conclude with existing and potential opportunities for international collaboration.

 
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  How are Mobiles Empowering Local Communities in Developing Countries?  
     
  Chaitali Sinha, Research Officer  
  International Development Research Centre (IDRC)  
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  Several studies have documented the increased proliferation of mobile handsets in developing countries. This paper examines the impact of mobile handsets and how they are enabling communities to realize opportunities, whether they are social, economic or political. Network, social capital and scaling up theories are drawn upon to highlight the empowering effects of mobiles. Several case studies are used to show how different communities are leveraging mobiles to improve their livelihoods. The paper argues that mobiles are strengthening networks and allowing marginalized communities to participate more effectively in the global economy. It assesses the mobile penetration trends in developing countries; describes how mobiles are strengthening social networks by connecting isolated individuals and communities; discusses how innovative uses of mobiles are generating economic opportunities; and considers how mobiles are being used to influence policy beyond the locality by raising issues at the national and/or global level.  
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  The Influence of Demographic and Socio-Economic Factors upon Using Information Technology among More, Moderate, and Less Developed Countries in the Globe  
  Ashraf Ragab EL-Ghannam, Professor  
  Department of Sociology, United Arab Emirates University  
  United Arab Emirates  
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  There is now a growing cross-national empirical literature on the information technology, but it is limited, and an important lacuna remains. Although widely hailed as a new, powerful engine of global social and economic change, there has been very little sociological theorizing and research on the globalization of the information technology. This study deals with what happened in global and countries variations regarding the information technology (IT). It investigates whether level of human development and the presence of a sizable growth of Internet host around the globe. The objective is to identify and explore the relationships between the demographic, socio-economic factors and using (IT) among different level of development in the globe. The sample involved 120 countries. This countries divided by level of development as following: 41, 47, and 32 countries as more, moderate, and less developed countries, respectively. The statistical methods include descriptive analysis and regression analysis. In more developed countries, the results suggest that GNP per capita and percent of public expenditure on education were statistically significant upon using IT. The results in moderate developed countries indicate that about 49% of the variance in using IT are explained by percent of rural population, age dependency ratio, and GNP per capita. Percent of educated youth, and percent of expenditure on telecommunications were the best predictors variables of using IT in less develop countries. Clearly, Without governments’ policies and strategies and national organizations’ efforts, the world countries will continue to divide into the information rich countries and the information poor countries.  
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  Corporations, NGOs and IT Training: Blending private and non-profit approaches to achieving socio-economic outcomes  
     
  Raul Roman, Research Associate  
  Center for Internet Studies, University of Washington, Seattle, USA  
     
  Chris Coward, Director  
  Center for Internet Studies, University of Washington, Seattle, USA  
     
  Maria Garrido, PhD Candidate  
  Department of Communication, University of Washington, Seattle, USA  
     
  Beth Kolko, Associate Professor and Director of PhD Program  
  College of Engineering, University of Washington, Seattle, USA  
     
  Andy Gordon, Professor  
  Evans School of Public Affairs, University of Washington, Seattle, USA  
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  Discussions on telecenters in developing countries frequently emphasize the critical role of local ‘champions’, particularly telecenter managers, in enabling the viability and prosperity of such operations. However, there is hardly any empirical evidence about who these individuals really are. There is little we know about telecenter managers’ needs and wants, their interests, and their capacity to carry out their work. In response to this gap, this paper reports the results of a study that surveyed over 200 telecenter managers in different countries of Asia, Africa, and Latin America. Based on this unique data set, the paper analyzes telecenter managers’ skills and characteristics (including individual social capital), needs for training and support, and perceptions about the contributions of telecenters to socioeconomic development. The paper concludes with a set of program planning recommendations for telecenter practitioners and support organizations.  
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  ICT, Knowledge Networks, and Poverty  
     
  David Prosperi, Professor  
  Department of Public Administration, Florida Atlantic University  
     
  Iliana Mizinova, PhD Student  
  Department of Public Administration, Florida Atlantic University  
     
  Fort Lauderdale, Florida, USA  
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  The correlation between poverty and access to information has been widely acknowledged along with the proposition that access to information leads to opportunities generating resources. Three major frameworks are captured in analyzing the relationship between poverty and the access to information: ICT, economics, and institutional structures. The relationship between ICT and economics has implied transnational processes that increase the gap between prosperity and poverty. Other propositions exist that these processes grow and dominate only if the outcome of opportunities and profits is reciprocal; where institutional structures provide limitations and additional costs for both sides, other scales of activities prevail. The discussion becomes less abstract when the transnational forces interact with national institutional structures that bring geographical scale and specific context to change.  
     
  The paper outlines the relationships between the three frameworks - ICT, economics, and institutional structures – to discuss customized approaches to poverty by using ICT tools. An argument is developed that ICT intervention directly through education is the most effective approach to the problem. Based on conceptual and empirical evidence, the research recommends a strategic undertaking to involve decentralized and customized knowledge networks managed by regional educational nuclei employing GIS to map poverty. ICT decision-making and poverty mapping tools are argued to provide optimal customized support of regionalized knowledge networks.  
     
  The research concludes its argument by outlining the priorities of direct educational development approach over economic policies for poverty alleviation.  
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  Broadband Developments in the New Member States: Experiences and Lessons  
     
  Pal Gáspár, Director  
  International Center for Economic Growth - European Center (ICEG EC)  
     
  Renáta Anna Jaksa, Researcher  
  International Center for Economic Growth - European Center (ICEG EC)  
     
  Budapest, Hungary  
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  Broadband has become a central policy priority in the European Union reflected among others in the eEurope and eEurope 2005 initiatives. The New Member States (NMS) are particularly interesting area for broadband analysis as compared to the average of the EU their economies and information societies are less developed, while they have higher growth rates, more flexible economic structures and are expected to catch up fast. This may allow them to leapfrog in several areas of information society development, including broadband. The paper analyses the special conditions and recent experiences of broadband development in NMS countries.  
     
  The first part gives a comparative evaluation on spread of broadband in NMS by using various demand and supply side indicators. Next part briefly describes recent broadband policies: the institutional and regulatory framework, the links between the state and market in broadband development and the special public tasks (demand aggregation, development in remote areas, etc.). This part highlights the special features of broadband development in NMS: broadband development shared between pubic and private sector, loopholes in regulation, presence of market distortions, accompanying policies to stimulate broadband use by the private sector. The paper also presents some of the measurable macroeconomic consequences of broadband developments in the NMS countries.  
     
  Finally, based both on good and bad experiences of the NMS countries, the paper makes some conclusions for other middle income countries concerning the institutional, regulatory and macroeconomic preconditions for fast broadband development.  
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  Achieving the MDGs through the Use of Information and Communication Technologies  
     
  Evika Karamagioli, Grants Coordinator  
  access2democracy  
  Athens, Greece  
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  New technologies can facilitate the emergence of new types of development solutions and economic opportunities for developing countries. The bring efficiency and new opportunities to areas from small enterprises development to international trade, to education and health care.  
     
  There use is considered as a priority for the achievement of MDG as it is outlined in the UN Millennium Declaration. “…Ensuring that the benefits of new technologies, specially information and communication are available to all."  
     
  They can enhance accountability, transparency, Development effectiveness but also facilitate networking, collaboration of stakeholders.  
     
  The proposed paper will explore the potential benefits of using ICT in achieving the MDGs, will highlighted best practices and stress potential risks and conditions for their successful implementation.  
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  Information Technologies and Employment in Serbia  
     
  Gordana Stojic Atanasov, Faculty of Philosophy  
  University of Nis  
  Serbia and Montenegro  
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  The paper deals with the possibilities of creating new jobs based on ICTs development in Serbia. Employment effects of information technologies development are: creation of new jobs, possibilities for part-time jobs and self-employment, increasing opportunities for employment of women, disabled people and other vulnerable groups. ICTs are changing the nature of work, the occupational structure and the skills requirements of workforce. The educational structure of the labour force in Serbia is inadequate to the requirements set by the modern technological development. Without access to information, computer and Internet, as well as adequate skills, one is excluded from new occupations. Growth of the “e-economy” changes links between producers and consumers and enable new forms of work and self-employment. Computer literacy increased chances of the unemployed to find a job.  
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  The Ideology Underneath the Technology: Chilean Microenterprises and Public ICT-Policies  
     
  Dorothea Kleine, Doctoral Student  
  London School of Economics and Political Science  
  London, England  
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  Digital Divides reflect the social and regional inequalities between and within countries. This paper presents a case study from Chile, a country which is among the leaders in Latin America both for levels of e-readiness and for social and regional inequality. The ICT policies of the left-of-centre government reflect its “Third Way” approach, showing a tension between neoliberal economic policy and state programmes to support weaker sectors of the economy such as microenterpreneurs.  
     
  The paper presents a multi-level policy analysis of two ICT initiatives: Chilecompra, an online public e-procurement system aiming at transparent and competitive transactions in line with neoliberal economic theory, and Red Comunitaria, a network of Community Information Centres which offer free Internet access and training to microenterpreneurs. Interviews were conducted at the national, regional and local level.  
     
  It is argued that while Community Information Centres have opened the Internet to the microenterpreneurs who cannot afford cybercafes, these microenterpreneurs are only just beginning to draw economic benefits from their Internet usage. Meanwhile, the premature shift to e-procurement directed by central government means that the same local microenterpreneurs lose vital orders from the local public sector to larger companies located in the regional and national capitals.  
     
  The paper argues that these two conflicting state ICT policies in Chile mirror the underlying tension between a neoliberal economic model and concerns of social and regional equality. More widely, it calls for a closer analysis of the economic and social models underlying state ICT-interventions.  
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  Macroeconomic and Social Determinants of ICT Diffusion and Economic Growth  
     
  Michelle Commosioung, Doctoral Student  
  Department of Economics, Manchester Metropolitan University  
  Manchester, England  
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  In September 2000, at its 55th General Assembly, 189 Member States of the United Nations adopted the Millennium Declaration. The Declaration commits to the achievement of eight Millennium Development Goals (MDGs) designed to bring about an improvement in living conditions of the worlds’ poor. With regards to technology, the Millennium Declaration clearly states that adherents should “in cooperation with the private sector make available the benefits of new technologies, specifically information and communications”. Undoubtedly, over the last decade, the global ICT industry has evolved at an astonishing rate and increased ICT diffusion is commonly seen as an effective way of promoting higher economic growth and have the ability to generate social, cultural and political changes. However, much of the variation in a country’s technology outcomes may be determined by the type and level of both macroeconomic and social factors at its disposal.  
     
  Within the context of the MDGs, the focus of this paper is centred on macroeconomic and social factors that influence ICT diffusion within a country. A logistic growth model and data for up to 212 countries, from 1998-2002, is used to examine the rate of technology diffusion in both developed and developing countries. Results show that the speed of technology diffusion is faster in developing countries, as they are able to take advantage of their “late-comer” status and use ICT to “leapfrog” development. Important determinants of diffusion are per capita income, openness to trade, economic freedom and civil and political liberties. (243 words)  
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Mobilizing Digital Resources for Social Change and Development

 
     
  Royal D. Colle, International Professor Emeritus  
  Department of Communication, Cornell University, Ithaca, New York  
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The converging of Millennium Development Goals initiatives and the World Summit on the Information Society reflects the importance of mobilizing resources to create digital opportunities especially related to poverty, health, and education. The establishment of telecenters around the world signifies an effort to bring information and communication technologies within the reach of those who are stuck on the wrong side of the digital divide. The challenge is to look beyond the connectivity issues, where we are making enormous progress, and increase the relevance and accessibility of the digital world for all. Largely ignored in this challenge is the role of universities whom one expert suggests need to be "reinvented" in developing countries to play a larger role in development. This paper lays out a specific plans for building developing country universities into partnerships with telecenters and into the information and communication technology for development movement.

 
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Mobilizing Digital Resources for Social Change and Development

 
     
  Ia. Paterson, W. Polasek, and U. Schuh  
  The Institute for Advanced Studies, Vienna, Austria  
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The research question focuses at a thorough analysis of productivity growth in EU service sectors. Recent studies have drawn attention to the higher growth rates in the USA since the mid 1990s, particularly in industries that produce ICT, or that make intensive use of ICT technologies. Findings from research into the barriers to productivity in the ICT-intensive industries will be used to suggest future options for economic policy aimed at higher productivity growth.

 
     
 

As a basic first stage in the analysis, the facts concerning productivity in the EU member states (and relative to the data on productivity in the US) will be presented. Productivity growth rates for individual service industries in individual EU member states are calculated, and their development of the period 1980 to 2002 is observed. In this way the relative strengths of countries in particular types of service is made transparent.

 
     
 

Following on from the primary description of relevant (ICT-intensive) sectors, causes for the delayed deployment of ICT in Europe compared to the US since the 1990s and the relative low growth in productivity will be studied in detail. The expected effects on further liberalisation in the internal market for services will be assessed. Further research will be conducted on the structure and policies in those EU member states and branches that do indeed show relatively high productivity increases, in order to suggest possible actions to be taken in less productive branches. Regional differences in productivity and employment in ICT-intensive branches will be further highlighted and possible trade-offs between productivity increases and product quality, or between productivity and employment will be investigated. Special attention will also be given in a part of the report to other factors that may influence the development of labour productivity in ICT-intensive service sectors. An output of the analysis will be to list barriers to productivity growth and economic policies that should be focused on in order to improve productivity.

 
     
 

Central to the analysis is an empirical investigation of the link between ICT investments and sectoral development over time of productivity and employment in the EU member states (where data is available) and in the USA. Based on the quantitative results it will be possible to estimate the effects of the completion of the internal market for services. The role of other factors (e.g. Innovation, infrastructure, degree of privatisation) will be discussed on the basis of current literature.

 
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Opening the gates of opportunity for Arab People

 
     
  Najat Rochdi, Regional Director  
  ICT 4 Development in Arab Region - ICTDAR, UN Development Programme, UNDP  
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  The Arab Human Development Report (AHDR) showed that the active gaining of knowledge plus its effective usage in building human capital is the key element in economic growth. Statistically, more than 40% of the Arab population are under the age of 18 and in view of the fact that the youth of today are the Arab leaders of tomorrow, there is a pressing need to invest in the future of Arab societies.  
     
  Addressing key issues in the Arab region calls for reform, which is a long-term process. The UNDP aims at achieving two of its Millennium Development Goals, namely poverty reduction and the creation of a global partnership for development, by empowering youth. These goals will be achieved through the UNDP’s Regional Program ICTDAR (Information and Communication Technologies for development in the Arab Region).  
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