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ICT and the Private Sector Development

ICT and the Private Sector Development. Professor Clement Dzidonu Senior Research Fellow International Institute for Information Technology (INIIT) www.iniit.com. Some Starting Observations….

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ICT and the Private Sector Development

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  1. ICT and the Private Sector Development Professor Clement Dzidonu Senior Research Fellow International Institute for Information Technology (INIIT) www.iniit.com

  2. Some Starting Observations… • The handling of information to support all types of activities in workplaces and home is increasingly becoming a major business sector in most countries. In the USA it is estimated that about half the work force are engaged in the business of information • ICTs are dramatically changing our way of life. --- Today, more Americans make computers than make cars, more build semiconductors than construction machinery and more spend their days processing data than refining petroleum. Over a third of real GDP growth in the US in the past couple of years came from ICT industries. The picture is not different in a number of developed countries where, ICTs are permeating every sector of the economy • Information, Knowledge and Technology are increasingly becoming the key drivers for socio-economic development world-wide. • A nation’s capability and ability to accelerate its socio economic development process and gain competitive advantage depends very much on the extent to which it can develop, use and sell, ---- information, knowledge andtechnology in one form of other. • There is now a consensus that in what is increasingly becoming a highly competitive information-driven world economy, development without ICTs and modern communication services is just not possible.

  3. Developing the ICT Sector: The Leap-Frogging Concept POST INDUSTRIAL SOCIETY DEVELOPED SOCIETY Knowledge-base Services INDUTRIAL SOCIETY DEVELOPING SOCIETY LEAST DEVELOPED SOCIETY Information Services PRIMITIVE SOCIETY Manufacturing & Processing Agricultural & Mining Agricultural INFORMATION AND KNOWLEDGE ECONOMY AGRICULTURAL INDUSTRIAL Evolutional & Expansion Path of the ICT Private Sector Hunting & Gathering

  4. It is about…. The Majority of the ICT Sector in DCs Happens To be on ‘This-Side’ The Basis for the development of the ICT Private Sector in DCs relates very much to the question of the need to move the economies of DCs to the other side --- transforming their economies into IKEs

  5. Opportunity Challenges Threats …But ICTs and PSDs is not a low hanging fruits..affairs they have never been and will never been • To reap the fruits (avail of the Opportunities they offer)…there will be a need to address the inherent Challenges and keep an eagle eye on the Threats. ICTs and PSDs

  6. Scoping the ICT Sector The ICT Sector encompasses aspects of the services sector and the industrial sector. It involves services and industrial based activities relating to ICTs, cutting across a variety of technologies including: • Computer and Comms devices, equipment and technologies • Telecommunications technologies and infrastructure (fixed line, wireless, satellite-based and mobile infrastructure) • Communications and network technologies and infrastructure for voice, data and video • Broadcasting networks including radio and TV networks • The Internet --- incorporating elements of computers, telecom and communications technologies to form an integrated multimedia infrastructure with a global reach • Production technologies including those used in CIM and production systems and operations • Computer-based technologies for supporting specific operations & activities in agriculture, industry and commerce

  7. Educational computer-mediated delivery technologies for supporting teaching, learning and training • Computer-based technologies used for supporting health delivery operations and systems, including those used in computer-aided surgery, and ICUs, • Robotics technologies used in a variety of industrial processes, and manufacturing operations • Microchip technologies used in ranges of consumer products, like: watches, cars, fridges, TVs, radios washing machines etc • Information processing technologies used for processing simple documents to processing and transmitting information to and from space crafts • …..And many…many… others

  8. The Pervasive Nature of ICTs • ICTs in one form or another are a pervasive feature of our societies and economies and will continue to be part and parcel of most of what we do in business, government and in society at large. • The chances are that between the time most of us get out of bed in and morning and go back to bed in the night, we will in some way come into direct contact with ICTs --- or at least shake hands with someone who has used these technologies in one form or another’. • The developmental potentials and opportunities of the emerging information & technological revolution are enormous and our failure to recognize and exploit these could seriously undermine our capacities to embark on a sustain socio-econ development in the emerging information age.

  9. agriculture sector private sector HRD Infrastructure ‘soft’ information ICT Sector service sector social sector knowledge Infrastructure ‘hard’ public sector industrial sector R&D

  10. ICT Private Sector Development: Some Cases The Case of Brazil • In the case of Brazil, the country was one of the first developing countries to put in place in the late 1970’s, policies aimed at promoting the development of its domestic ICT industry and private sector. Brazil began its pioneering approach to leveraging ICT for development in the 1980s, and by the end of the decade, a set of diversified IT corporations with significant presence in the local market had been built. • The Brazilian ICT sector drew on a skilled population base, strong R&D networks, a relatively extensive telecommunications and communications infrastructure and a strong level of government commitment. These policies resulted in the building of a strong technological base that brought about a rapid growth in the ICT sector in the 1990’s.

  11. The Case of Finland • Finland has over the years implemented policies aimed at the development of its ICT industry targeting the export sector. The country’s internationally competitive ICT products have significantly contributed to the growth of Finnish exports & GDP. • For example, the export earning’s of Nokia, one of the leading manufacturers of mobile equipments in the World, has been estimated to contribute substantially to Finland’s GDP growth within the last decade The Case of Ireland • Ireland often regarded as a success story in the area of implementing policies aimed at developing its local ICT private sector and industry targeted at the export market started their process of developing the ICT sector as an engine for growth from the mid-1980s. The unprecedented growth of the Irish economy since the late 1990’s can to a large extent be attributed to the rapid development of the country’s local ICT sector into an internationally competitive manufacturing and equipment assembly industry with high export potentials.

  12. The Case of India • India, like a number of other Asian countries, has embraced the ‘ICT for accelerated development process’ by putting in place a number of programmes and initiatives to drive its ICT private sector and industry. Due to the international recognition of India’s software development industry, the industry grew from a mere US$150 million in 1991 to a staggering US$5.7 billion by 2000. India now targets a yearly export in software and services of $50 billion by 2008. The Case of China • Another Asian country, aggressively embarking development of its ICT private sector to serve as an engine for the development of other sectors is China. The Chinese government has put in place a number of policies and programmes to attract FDI in the area of ICTs targeted at the development of the local ICT private sector and industry. A number of China’s provinces like Shanghai are aggressively promoting the development of their private sector laying emphasis on the ICT sub-sector.

  13. What about African Countries? A number of African countries in recent years have put in place and implemented policies targeted at creating the necessary enabling regulatory framework and environment to facilitate the deployment, exploitation and the development of ICT infrastructure and services. • The explosion of mobile services in recent years in most African countries can be attributed to policy initiatives targeted at developing the ICT private sector. • This has contributed to the creation of jobs as per the numerous mobile service booths dotted on pavements and every street corner in most cities, towns and in fact in villages in most Africa countries.

  14. The Landscape of ICT4D Policies in DCs: The Dual Strategy ICT Sector Development ICT Industry ICT Service sector ICT infrastructure strategic focus infrastructure development R&D ICT as ‘Enabler’ of Broad-base Development We have the Answer…but not the Solution What growth rate can the ICT Private Sector contribute ? agric sector service sector industrial sector social sector public sector private sector The development of a local ICT Sector and industry is as equally important as the deployment, exploitation and utilization of the technology to support the activities of various sectors of the economy and society

  15. Although the mere use of information, knowledge and technology to improve on services, products and processes can improve the socio-economic development fortunes of DCs, evidence shows that: • ….. those nations who in addition are involved in the development and sale of information products, knowledge products and technology products are moving faster on the socio-economic development ladder compared to others. • The development of the ICT Private sector and industry is therefore key to making progress in socio-economic development terms in both the developed and developing countries.

  16. Promoting the Development of the ICT Sector and Industry: The Policy Expectations Although no two developing countries are the same, it is still possible to identify in broad terms a number of common areas of ICT4D policy that need to be taken on board in developing The expectation is that: for each developing country, there is a need to develop relevant ICT sector and industry development policies, strategies and that should among other things address the: • creation of the necessary enabling environment to facilitate the development of its local ICT industry and sector

  17. development of a local ICT industry to facilitate the production, manufacturing, development, delivering, and distribution of ICT products and services; • development of the national human resource capacity to meet the demands of the ICT private sector; • development of the national information and communications infrastructure to promote and support the development of the ICT sector and industry • development of the legal, institutional and regulatory framework and environment required for supporting the deployment, of the ICT sector • development and promotion of the necessary standards practices and guidelines to support the deployment and exploitation of ICTs within the society and economy.

  18. On the Role of Research & R&D in Developing the ICT Private Sector • Using data from a number of low income, middle income as well as high income countries, evidence shows that: there is a direct correlation between, the level of expenditure on R&D (as % of GNI) and the gross national income per capita of a given nation. R&D is essential for achieving global competitiveness in the ICT Private Sector in Developing Countries

  19. Evidence drawn from a number of countries, shows that there is a link between the number of scientists and engineers involve in R&D (per million persons) and high-tech exports (in million dollars) of their ICT Private Sector and industry This finding means that, countries that have a high percentage of their scientists and engineers involved in R&D are those that have ICT sectors that are doing well in the area of high tech exports.

  20. Factors Inhibiting the Growth of the ICT Sector in Developing Countries • Skill Shortage: Shortage of skilled manpower in key critical areas like: software engineers, systems analysts, system developers and programmers, computer engineers, system integrators, network and connectivity engineers and operators, telecommunication engineers and others do hinder the development of the ICT private sector in a number of developing countries. • Limited Physical and ICT Infrastructure: The growth of the ICT sector is also being inhibited by lack of infrastructure development in areas like transport, telecommunications, and electricity. For example the lack of the electricity infrastructure in some sections of the country has been identified as a bottleneck to the expansion of ICT-related services.

  21. Weak Regulatory Framework and Environment:The weak regulatory framework in some of the developing countries is serving as a major constrain on the development of their local ICT private sector and industry • Lack of Capital Investments in the Sector: The ICT sector is capital intensive. The inability to attract adequate capital through domestic and foreign direct investment has been one of the main obstacles to the development of the local ICT private sector in a number of developing countries.


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