ICT UPTAKE CORRELATES WITH NATIONAL ECONOMIC PROSPERITY

BY HELEN GAVAGHAN

Top of the World Economic Forum's 2015 Network Readiness Index measuring ability to leverage information and communication technology (ICT) is Singapore¹. Chad is last, while the US and UK are, respectively, 7th and 8th. Analysis shows the general correlation between ICT competence and economic development, and that digital divides of have and have nots persist in the world's most developed and ICT savvy countries.

"To leverage ICT for development better infrastructure and access are needed...", write the authors in the executive summary.

The Global Information Technology (WEF) report released today is the 15th since 2001. Each drills into national regulatory environment, physical infrastructure, cyber security and social plus educational preparedness. Some 13,000 business executives from large companies in each of the 143 countries - representing 98.4 per cent of GDP - completed the survey, intended to provide information about a nation's operating environment.

Noting that, "we are living in a world of unparalleled digital infrastructure^{*note minor correction}", the executive summary writes, "Some segments of the population may be exposed differently than others to labour market shifts induced by technological innovation, which can aggravate inequalities across groups with different levels of skills."

Although there are nearly as many mobiles on the planet as there are people, not everyone has one. WEF reports that the International Telecommuniation Union (ITU) estimates 48 percent penetration to individuals in developed countries, and 30 percent in the developing world. Of those mobiles only a small portion are of the latest technological generation, many still being 2G technology, which limits communication to voice and text. Nevertheless mobile communication is spearheading agricultural, educational and financial service development, such as crowd funding, in some of the world's poorest economies. In parallel the gap is widening between the countries with greatest correlation between income and ICT usage and those with least.

It looks, too, as though the goal of providing universal and affordable internet access to the least developed countries by 2020 - as set by the UN Open Working Group on Sustainable Development - will be missed.

Citing a McKinsey Study², the WEF report lists barriers to internet adoption as:

Lack of infrastructure, particularly in rural areas of developing countries.

Lack of incentive, such as content in the local language.

Affordability.

Knowledge to use the technology.

Bain & Company, a global management company, considers the biggest opportunity in the next decade is that there are still 4.6 billion people on the planet without internet access.

The issues, says WEF citing varied sources, facing creators of technology for the developing world include erratic power supplies and the need for durable products in difficult meteorological and other natural conditions. If the technology cannot be maintained using local skills it is not sustainable, write WEF, given transport costs.

Those wishing to encourage ICT-technology penetration might also be interested in the report's insights into the relationship between taxation and ICT.

"In many countries," says the report, "ICT products and services are taxed in a manner similar to luxury goods, but lower-income households spend a disproportionate amount of their household income on ICTs. High taxes and interconnection fees put many ICTs out of the reach of the poorest citizens."

Looking to the future, the report notes that the era of big data analytics is here, and will be crucial in future. Emerging ICT needs to provide affordable processing for volume and complex data structures, concludes WEF.

A large part of the 381-page report is an in-depth study of ICT in Brazil and sets of comprehensive indicators for each of the 143 countries covered by the report.

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1. The Global Information Technology Report 2015: ICTs for inclusive growth. An insight report from the World Economic Forum in co-operation with INSEAD.
Released from embargo at 02.01 Gulf Standard Time on 15th April, 2015.

2. McKinsey & Company, 2014.

Published by GC 02.01 Gulf Standard Time 15th April, 2015.

* Minor correction 07.11 BST [UT +1]: In paragraph 4, the word infrastructure should actually read "disruption".