Slide1: ICT for Development Carlos A. Primo Braga Senior Adviser, International Trade Department The World Bank WITSA Public Policy Meeting Athens May 18, 2004


Outline: Outline ICT and Development The Regulatory Environment Reality check Concluding remarks


Slide3: 0 2 4 6 8 10 12 14 1960 1965 1970 1975 1980 1985 1990 1995 2000 Rep. of Korea Ghana Thousands of constant 1995 US dollars Difference attributed to knowledge Difference due to physical and human capital Knowledge makes the difference between poverty and wealth Source: World Development Report, 98/99


Knowledge Changes the Development Process: 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.


Slide5: But can ICT be of any help in LDCs?


ICT and development: 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


Slide7: The concept of sustainable development Economic Sustainability (productivity) Social Sustainability (equity) Environmental Sustainability (protect/enhance natural resources) Intergeneration Concerns


ICT and sustainable development: ICT and sustainable development Direct Impact Indirect Impact Network Effects


Slide9: Virtualization of material products: myths and reality


Digital divide: 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: The network explosion


Slide12: Income Divide Digital divide/infrastructure Source: ITU World Telecommunication Indicators Database User distribution, by income group, 2001 High Income Upper-mid Income Lower-mid Income Low Income 6.1 billion 986 million 741 million 361 million Population Telephone lines Mobile users Internet users 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%


Telecoms and Internet: the cost of being connected: Telecoms and Internet: the cost of being connected 278% 191% 80% 60% 1.20% 0.135% 0% 50% 100% 150% 200% 250% 300% Source: Human Development Report Office calculations based on data ITU 2000 and World Bank 2001


Secure servers and e-commerce : Secure servers and e-commerce Share of Secure Servers in non OECD countries (October 2000) Source: OECD, 2001


Slide15: 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: The regulation maze


Reality check: implications for developing countries: 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: 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.): 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: More information The World Bank www.worldbank.org Development Gateway Portal www.developmentgateway.org