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ICT for Development
Carlos A. Primo Braga
Senior Adviser, International Trade Department
The World Bank
WITSA
Public Policy Meeting
Athens
May 18, 2004
Outline
•
•
•
•
ICT and Development
The Regulatory Environment
Reality check
Concluding remarks
Knowledge makes the difference between
poverty and wealth
14
Thousands of constant 1995 US dollars
Rep. of Korea
12
Difference
attributed to
knowledge
10
8
6
4
2
Ghana
0
1960 1965 1970 1975 1980 1985 1990 1995 2000
Source: World Development Report, 98/99
Difference due
to physical and
human capital
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.
But can ICT be of any help in LDCs?
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
The concept of sustainable development
Economic
Sustainability
(productivity)
Intergeneration
Concerns
Social
Sustainability
(equity)
Environmental
Sustainability
(protect/enhance
natural resources)
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
Virtualization of material products:
myths and reality
Digital divide
•
•
•
•
•
•
Infrastructure (income levels, rural vs. urban)
Digital literacy (barriers to absorption of IT)
Content
Gender
Large companies vs SMEs…
E-business practices
The network explosion
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%
30%
Low Income
20%
10%
0%
Population
Telephone
lines
Mobile
users
Source: ITU World Telecommunication Indicators Database
Internet
users
Telecoms and Internet:
the cost of being connected
300%
Monthly internet access
charge as a percent of
monthly average income
Nepal
250%
Bangladesh
200%
150%
100%
278%
191%
Bhutan
Sri Lanka
Sri Lanka
50%
0%
80%
60%
United
States
1.20%
Denmark
0.135%
Source: Human Development Report Office calculations based on data ITU 2000 and World Bank 2001
Secure servers and e-commerce
Secure Servers, OECD and non OECD
(October 2000)
Share of Secure Servers in non OECD countries
(October 2000)
Non-OECD
5%
Africa
0.4 % Oceania
OECD 95%
Source: OECD, 2001
Central and
South America
Non-OECD
Europe
Non-OECD Asia
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.
The regulation maze
Layers of
communication
systems
Layer
characteristics
Relevant
regulations and
policies
Relevant fora for
international
negotiation/coordi
nation/debate
Content layer
Services, images,
and applications
transmitted by the
network
Cyberlaws, taxation,
IPRs, consumer, privacy
and data protection,
competition law, content
regulation, trade
policies
WTO, OECD,
WIPO…
Code layer
Protocols and
software that make
the network run
Internet governance,
competition policy,
IPRs, standards
ICANN, ISOC,
ITU, WIPO…
Telecom regulation,
competition policy,
IPRs, trade policies,
standards
WTO (BTA, ITA),
ITU, WIPO…
Physical
Wires, cables,
infrastructure layer computers,
satellites… across
which bits of
information travel
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
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.
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 ).
More information
The World Bank
www.worldbank.org
Development Gateway Portal
www.developmentgateway.org