Connectivity—whether the Internet or mobile phones—is increasingly bringing market information, financial services, health services—to remote areas, and is helping to change people’s lives in unprecedented ways.
New information and communications technologies (ICT), in particular high-speed internet, are changing the way companies do business, transforming public service delivery and democratizing innovation. With 10 percent increase in high speed Internet connections, economic growth increases by 1.3 percent.
“The mobile platform is emerging as the single most powerful way to extend economic opportunities and key services to millions of people, ” says Christine Zhen-Wei Qiang, World Bank economist and editor of a new Bank Group report on information technology and development, Information and Communications for Development 2009: Extending Reach and Increasing Impact.
Zhen-Wei Qiang was online Tuesday, July 28 and answered your questions on information communications technologies.
Rajan B Paudel:
I agree that ICTs are powerful to extend economic opportunities to millions of people. But the way they create opportunities and provide services to rural people will be different than to urban people. Please shed light on this issue.
Further, is the ratio of increase in high speed internet connection and economic growth same for rural and urban economics?
Christine Zhen-Wei Qiang:Hello! Thank you so much for your interest in IC4D 2009, and for all your interesting questions. Let’s get started right away.
ICT provides economic opportunities to both urban and rural populations. One common contribution is that it increases productivity and makes the market work more efficiently, although the magnitude of the impact on economic growth is likely to be different. The fact that virtually all new mobile customers in the coming years will be in developing countries, and more specifically in rural areas, means that the ICT platform is reaching population with low levels of income and literacy.
As a result, ICT is becoming the largest distribution platform of providing public and private services to millions of people in rural and poor areas. Market information, financial services, education and health services had largely been unavailable in those areas in the past due to lack of connectivity of any kind. Now the wireless platform is promoting NEW economic and social opportunities at all levels for the poor population.
Obviously, new information and communications technologies (ICT), in particular high-speed internet, are changing the way companies do business, transforming public service delivery and democratizing innovation.Please, how could small Businesses in the developing world, optimise the returns on their investments on ICT?Our research (see chapter 4 in our IC4D06 report), covering 20, 000 firms from 26 sectors in 56 developing countries, shows that businesses that use ICT (phone, PC and email) more intensively are more productive, grow faster, invest more, and are more profitable. This study includes many small and medium enterprises (SMEs).
Besides the limitations of existing telecom infrastructure in developing countries, the principal constraints in adopting and using ICT applications, especially for small businesses, include lack of capacity to assess returns and costs of using ICT, and a shortage of and inability to retain ICT-skilled labor. In some countries, business associations assist with needs assessment for businesses to invest in ICT (note that not all of them would benefit from using ICT), advise them on technology choice, and provide common business applications (e.g. HR, accounting) at low cost to small businesses. Some governments offer support of training and skills development.
Since ICT plays a major role in economic development not only in urban areas but also rural areas, so How do you make ICT accessible to rural people in developing countries? and What are the roles of World Bank in promoting ICT in developing countries?In terms of ICT connectivity, the World Bank Group has promoted ICT access in developing countries through (1) advising on sector and institutional reforms to encourage competition and private sector participation; and (2) innovative financing mechanisms such as incubators, and public-private partnerships (PPPs) for extending rural access.
Low-income countries which have implemented deep sector reforms supported by the Bank Group generated some US$16 billion in investment between 1997 and 2006. Some US$20 million in output-based aid in Nepal, Nicaragua, Nigeria and Uganda provided access to 3, 356 remote localities, serving over 7.8 million people.
In addition, IFC, the private arm of the Bank Group, has also been financing US$1.5 billion and mobilizing another US$330 million for 84 ICT projects to date in 32 low-income countries (mainly for the extension of mobile and data networks).
SMS, and more generally mobile technology, has increasingly become a tool for a variety of activities in the developing world and particularly in Africa. However, the costs of SMS services such as the one Google recently launched in Uganda can be relatively high, are their any efforts underway to increase mobile infrastructure and business competition to bring prices down so services can benefit a wider range of people?Yes, Africa still has the lowest telephone and Internet user penetration (about 25 percent and 5 percent compared to the world average of over 70 percent and 20 percent respectively) and highest costs (e.g. price basket for Internet per month is over $40 compared to the world average of $20). The costs are big bottlenecks for ICT uptake, given the low income levels in the region.
The World Bank has been working closely with about 30 countries in Sub-Saharan Africa to strengthen regulatory frameworks, build regulatory capacities, and address rural access. Reforms implemented since 2000 have unleashed competitive forces in the sector, particularly in the mobile market. The result has been unprecedented increase in investment: total telecom investment in the region between 2000 and 2007 reached $20 billion. Africa is the fastest growing region in the global cellular market: the number of mobile subscribers increased from 2 million in 2000 to over 150 million in 2007.