## ICT REVOLUTION: SOME REVERBERATIONS

**The views expressed in this and other papers associated with the NIC
2020 project**

**are those of individual participants. They are posted for discussion
purposes**

**only and do not represent the views of the US Government.**

**ICT REVOLUTION: SOME REVERBERATIONS**

**Introduction**

This short paper touches on some of the reverberations the Information
Communication Technologies (ICT) Revolution has set off. It is more of a
kick start for our discussions than a compressive analysis of the
subject.

When the Agrarian Revolution took place, no one recognized it as a
revolution while it was underway, not even for centuries afterward. The
Industrial Revolution, again, was not called a revolution while it was
coursing through the entire Western world, but only in late 19^th^
century, after seeing the effects of revolutionary changes in the
industrial landscape. The ICT Revolution has the distinction of being
recognized as one even as it was unfolding. The magnitude and the impact
of this phenomenon have come to be felt widely and quickly the world
over. But for the same reason, the judgments about this revolution are
often rushed and unrigorous.

Though the first commercial computer was produced in the early 1950s,
the widespread use of computers and the consequent Information
Communication Technology did not come into common use till about 1980s.
Internet came into public use only in the 1990s. But, once ICT put out
its roots in the key domains of our collective life such as academia,
government and business there was no stopping of its tentacles reaching
into every aspect of our life, whether at work, at play or at home.

However, the spread of ICT through the world has not been even or
equitable. ICT has added one more layer of division between the haves
and the havenots, leading to a Digital Divide. The world is now
struggling to cope with a technology that has tremendous potential as a
boon but with its own attendant threats of a bane.

The ICT Revolution has not merely given technological tools to boost
innovation and productivity but to a much larger and deeper articulation
of how humankind should live as a society. As with the Agrarian Society
and the Industrial Society, ICT has led many to dream of an Information
Society. Visions of Information Society have been articulated not only
by the technologically advanced nations but even by the developing
world, as evident in Africa, South America and Asia. Poor countries
actually see ICT as an opportunity to leapfrog over generations of
technologies to cope with their persistent economic and social ills.

As UN Secretary General Kofi Annan pointed out "it is precisely where no
infrastructure exists that (ICT) can be particularly effective, helping
people to leapfrog generations of telecommunication technology and
infrastructure and empower people."

Let's first look at some specific domains in which ICT has had its
greatest impact.

**Impact on Innovation & Productivity**

The reports on the effect of ICT on innovation and productivity are
mixed. Some evangelists had extolled the virtues of ICT and predicted
all sorts of innovations and productivity gains, much of which are yet
to be realized. On the other hand, the luddites continue to claim that
ICT has made little or no difference. The truth seems to lie, as usual,
somewhere in between.

An OECD report, released in 2003, concludes that "all the evidence
suggests that ICT remains a major positive dynamic force in OECD
countries...and an important driver of growth and productivity." [^1]
The report also identifies a number of factors that will enhance the
positive effects of ICT. These include not only continuous investment in
ICT development and deployment, but also policy frameworks that are
conducive to investment and competition, upgrading of related skills and
major organizational changes.

The above factors are not confined to the experiences of OECD countries.
An IMF Working Paper[^2], also released in 2003, reports that ICT's
contribution to growth in Asian economies is clear and especially
significant in the second half of 1990s. One important note in this
report is that ICT's contribution is much more evident in capital
deepening and labour productivity but less so in Total factor
Productivity (TFP).

But, it is also clear from the Asian report that Asia (ex-Japan) lags
far behind US, the leader in ICT. For example, between 1992 and 1999,
total spending on ICT capital and services in key Asian economies[^3]
(other than Japan) was about 14% of that in US and 30% of Japan's
spending.

The report also emphasises a common trend in ICT development and impact
almost everywhere it has spread: "The effects of such revolutions have
generally occurred in three main stages. First, technological changes
raises productivity growth in the innovating sector; second, falling
prices encourage capital deepening; and, finally, there can be
significant reorganisation of production around capital goods that
embody technology. " What this finding leads to is the probability that
the bulk of the benefits from ICT in Asia will emerge in the future.
Thus, it is still too premature to pass a final judgment.

# Asian Choices & Challenges

Asia, which still includes a lot of developing countries, faces complex
challenges in the choice technologies it should adopt. For example, in
many old urban centres, government agencies or government-run
corporations have long monopolised the telecommunication sector and have
invested heavily in the old wired networks. For these networks to be
replaced either by fibre or by wireless networks will prove to be
enormously costly, partly because of the disruption of services and
partly because of the cost of replacing existing equipment. On the other
hand, a poor district which never had any telecommunication facilities
in the first place could leapfrog to the latest technology available
without much disruption and at relatively reasonable cost. What is also
noteworthy is that the new ICT facilities can be installed by the
private sector, made more efficient by competition, rather than by state
organisations.

On the other side of the coin, some Asian governments are at the
forefront of pushing the new technologies, by liberalising the
telecommunication market, providing government support, modifying the
regulatory regime and by encouraging private sector participation and
competition. South Korea, Singapore and Malaysia are good examples of
such developments. However, even with liberalisation there are many
instances of incumbent companies still dominating the sector and
preventing or marginalising new entrants. Statistics show that in 2002,
incumbents controlled more than 80 percent of broadband access market in
OECD and more than 90 per cent in EU. In Asia, the same story seems to
repeat itself.

However, the bottomline for Asia is that it cannot afford to be left
behind in the onward march of ICT innovation and deployment. Japan,
South Korea and Singapore, the leading ICT countries in Asia, have
demonstrated the benefits of both government planning and private sector
participation in the ICT sector. Those that lag behind need to ramp up
quickly if they too want to taste the fruits of the ICT Revolution.

# Impact of Broadband

One of the key elements of ICT is "broadband," a platform that brings
together three converging ICT sectors: computing, communications and
broadcasting. Broadband takes internet several notches above the
"dial-up" technology it started with.

At present only one in ten internet subscribers in the world have
broadband connection. In total there are around 63 million broadband
subscribers compared with 1.13 billion fixed-line users and 1.6 billion
mobile phone users. But in South Korea, the broadband leader of the
world, more than nine out of ten have such connectivity.

Broadband is opening up new opportunities for interactive applications,
online games, virtual reality, digital broadcasting, to name just a few.

But, broadband in not without its attendant problems. For example, it is
going to increase the tensions that already exist between owners of
Intellectual Property Rights and those set on infringing them through
new technologies. If the earlier slow speed internet could allow the
Napster-type downloads of individual songs, now whole albums and movies
could be downloaded in seconds or minutes. The music industry alone
claims a loss of 7% of its income in 2002, due to illegal downloading of
music.

Governments promote broadband not only for economic gains but also for
its own governance reasons. Broadband makes E-Government much more
viable be enabling the provision of numerous e-services for the public
including education, health and other government services.

Singapore provides a good example of how broadband has enabled
E-Government developments. This is how the government envisions its
future: "By 2006, an e-lifestyle will be prevalent in Singapore. Both
individuals and businesses prefer to transact online with the
Government. Citizens readily provide feedback and actively contribute to
the policy review process through electronic consultations and virtual
communities. A vibrant infocomm industry works closely with the
Government to transform work processes and service delivery through
Infocomm Technology (ICT)."[^4]

It is a vision that will make it a leading e-Government to better serve
the nation in the digital economy. The focus is "to transform the Public
Service into a Networked Government that delivers accessible, integrated
and value-added e-services to our customers, and helps bring citizens
closer together."

Many other countries in Asia are looking to good e-government models
including Singapore, US and Canada. However, the political, economic an
social environments in much of Asia are so diverse that no single model
will serve as an object lesson for all of them Perhaps each will have to
adopt and adapt good models or elements of them to suit their individual
environments. This would be one of the biggest challenges for the state
in this era of ICT Revolution.

**Digital Divide**

Some participants at the recent World summit on Information Society
(WSIS) argued that "access to information is primarily determined by
three elements: connectivity, capability and content. Many lack
connectivity and this is still considered the biggest challenge to the
development of the information society."

It used to be said that Tokyo has more telephones than the whole of
Africa. That was true 20 years ago but now there are more than twice as
many telephone lines in Africa as in Tokyo. According to one report, by
the end of 2001, 28 African nations had more mobile than faxed
subscribers, a higher percentage than any other continent! [^5] On the
other hand, there is a growing divide in the quality of ICT
availability. For example, the 400,00 citizens of Luxembourg are
reported to share among them more international internet bandwidth than
Africa's 760 million citizens. The new digital divide is now about
quality, not just quantity.

It has also been pointed out that less than one per cent of the world's
inhabitants had access to a mobile phone in 1991 and only one third of
countries had a cellular network. By the end of 2001 -- in just ten
years -- over 90% of countries had a mobile network and almost one in
every six of the world's inhabitants had a mobile phone.

As the World Telecommunication Development Report 2002 points out, the
Least Developed Countries (LDCs) "surpassed the psychological threshold
of one telephone user per 1000 inhabitants during 2001. This is an
unmistakable sign that the digital divide is being reduced, albeit at
too slow a pace."[^6]

While the quantitative divide is shrinking, qualitative digital divide
may increase if corrective actions are not taken. Such efforts will need
the concerted and collective efforts of government, development agencies
and the private sector.

Some observers have noted that the developed countries could be
especially helpful by, for example, funding grass roots projects to
harness ICTs to improve the likelihood of local communities, incubating
developing nations dot.coms and by facilitating international
connectivity to internet.

But this is a two way street. Observers have also suggested that
developing country governments must also play their part by adopting
appropriate national ICT strategies based on private sector
participation, market liberalisation and independent regulation and by
developing universal access policies.

In 1984, the Commission for Worldwide telecommunications Development,
headed by Sir Donald Maitland, published the *Missing Link* Report. The
main point of the report was that the lack of telecommunication
infrastructure in developing countries impeded economic growth. The
Maitland report made a plea that all of humanity be brought into the
reach of a telephone by the end of the century.

As part of the Millennium ICT Goals, some new and specific targets have
been set. These include:

For high and upper middle income economies \-- more than 90% household
telephone penetration; more than 50% household PC penetration; and more
than 50% household internet penetration.

For lower-middle and low income economies \-- more than 90% mobile
population coverage.

One key difference in the two sets of goals is that for the first
category the emphasis is on *universal service* while for the latter it
is *universal access*.

For some comparisons, in 2000, Iceland was the leader with 98% telephone
penetration, 61% PC penetration and 51% internet penetration. Singapore
was a close second with 98%, 61% and 50% respectively. South Africa
scored 33%, 25% and 5% respectively.

**Governance in Cyberspace**

When internet first exploded into public space in the 1990s, there was
an overwhelming sense that this was a unique medium -- it was
uncontrolled and uncontrollable by anyone, any firm or even any state.
Internet was deemed to have created a cyberspace that was borderless and
leaderless -- it was truly for the people, by the people and of the
people. However, this early euphoria has now given way to more sober
judgments that acknowledge the inexorable pressures by states and
corporations to gain greater control of the cyberspace. 9/11 has, as it
has in so many other cases, added urgency and further impetus to the
debates over who controls the cyberspace. When America stirs, all other
countries shudder.

It is interesting that the US Government, which actually initiated
internet as a defence mechanism, seemed to lose total control of it for
a while and now seems to be coming back with a vengeance in its attempt
to exert control over it. But this is not just an American phenomenon.
The Council of Europe has indeed taken the lead in drafting the first
international Cybercrime Treaty in 2001 and has been pushing for its
ratification since. The treaty is designed to establish international
criminal standards related to copyright infringement, online fraud,
child pornography and network intrusions, with provisions for policing
the internet both within and across national borders. Civil
libertarians, of course, condemned it as a violation of individual's
privacy.

And, it is not just states that are putting "borders" on the borderless
world of cyberspace. Even private sector actors are trying to impose
borders, though for very different reasons. AOL, which owns a gigantic
database of "names and presences" linked to its AIM instant messenger
service, has imposed a "security" cordon around this namespace, which
makes it impenetrable to other instant message operators. More recently,
Microsoft has introduced a digital passport for all its netizens which,
in effect, will make its own system impenetrable to other such systems.
Thus, there are both state inspired "Big Brothers" and private sector
initiated "Big Brothers" in the cyberspace, not to mention numerous
"Little Brothers" trying to snoop on and control all kinds of internet
users.

However, such controlling attempts are not being accepted as inevitable
or unstoppable by all users. There is a counter-culture in the
cyberspace that is fighting back in a "spy versus spy" mode. Controlling
technologies are being challenged by liberating technologies in this
cyberwar. The jury is still out on who will be the final victor.

The internet has also brought about a hybrid governance system that is
probably unique -- Private Governance Arrangements by the Alternative
Governance Organisations, the AGOs.. Internet Corporation for Assigned
Names and Numbers (ICANN), The Internet Engineering Task Force (IETF)
and World Wide Web Consortium (W3C) are three examples of private,
international AGOs that actually lord over the cyberspace through their
technical expertise to make rules, to set standards and to act as
advisors. They are not at all accountable to the public at large an yet
they wield enormous power and make far reaching decisions.

There is another form of control that often escapes the attention of
many critics -- the "code" (software, hardware and network design) as an
instrument of regulation in cyberspace. Larry Lessig, a thought leader
on ICT issues, has argued that code is in fact less amenable than law to
resistance by individuals and to the oversight by democratic
institutions.[^7] Most ICT users are not technically savvy to take on
the code makers which are mostly giant firms with financial as well as
technological muscle to get what they want.

Thus the issue of who governs cyberspace continues to be a hotly debated
question and there is no emerging consensus anywhere in sight.

# Conclusion

The foregoing are snippets of issues that exercise the minds of those
trying to cope with the ICT Revolution. As a revolution that is still
unfolding and as a force that affects every aspect of our life, the ICT
Revolution is a Work In Progress. Easy conclusions at this stage will
prove to be as untenable as the easy predictions that were made when
this revolution first appeared at the horizon.

[^1]: "Seizing the benefits of ICT in a digital economy", OECD, 2003

[^2]: Il Houng Lee & Yougesh Khatri, "Information technology and
    productivity growth in Asia," IMF Working Paper 03/15, 2003

[^3]: China, Indonesia, Hong Kong, Malaysia, Philippines, Singapore,
    South Korea, Taiwan, Thailand

[^4]: http://www.egov.gov.sg/egovt_action_planii.htm

[^5]: World Telecommunication Development Report 2002: Reinventing
    Telecoms, ITU, 2000

[^6]: *Op cit*

[^7]: Lawrence Lessig, Code and Other Laws of Cyberspace, Basic Books,
    2000