The case for ICT-led development
Tuesday, May 9, 2006
Information technology (IT) is fundamental in driving productivity and economic growth. A McKinsey study found that IT-producing sectors of the US economy generated 36 per cent of its productivity growth in 1993-2000, in spite of accounting for just 8.0 per cent of gross domestic product (GDP). A similar study, by the United Nations International Telecommunications Union, recently found that 27 per cent of GDP growth in the Group of Seven (G-7) leading industrial nations in 1995-2003 was a function of investments in IT. These dry numbers translate to real economic opportunity and the kind of well-paying jobs that are greatly needed in all parts of the world.
Some developing nations are already experiencing significant gains. India, for example, generates more than $21bn a year in revenue from its IT industry — up from $150m 15 years ago — and over the past two decades employment in India’s IT industry has increased from just 6,800 to more than 1.0m. Similarly, China now exports more IT goods than any country. Likewise, Malaysia, with only 25m people, has become the US’s 10th largest trading partner in part by creating an attractive environment for IT investment.
But for every China, Malaysia and India, there is a Chad, a Paraguay and a Bangladesh – countries where information technology is practically non-existent. Building domestic IT sectors in countries such as these may seem a daunting task, given the many other day-to-day challenges. But a number of countries have created templates for how it can be done. In 1991, Singapore set out to transform itself into a high technology hub and took important steps such as building a national broad band network and eliminating the 49 per cent cap on non-state ownership of public telecommunications companies. Today, Singapore is a technology centre and the World Economic Forum recently ranked it second when measuring countries’ ability to participate in, and benefit from, information and communications technologies.
Ireland has also realised great gains by focusing on IT.