The Role of ICT in Economic Development – A Partial Survey

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The Role of ICT in Economic Development – A Partial SurveyBog'liq zef dp07The Role of ICT in Economic Development – A Partial Survey
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New subscribers derive benefits from these services, but so do all other subscribers
already connected to the system. The expansion of the system allows all earlier subscribers to
communicate and exchange information with new subscribers and vice versa. Thus, the gains
that accrue to each subscriber rise with the number of other individuals and organizations that
have access to the system.
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The decoupling property and externalities of ICTs are further complemented by their
pervasive
nature.
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The use of ICTs is not restricted to a particular sector of the economy. Their
widespread application and the possibility of tailoring them to suit individual, corporate and
government needs explain the wide range of potential positive effects attributed to the diffusion
of these technologies.
Taken together, these three characteristics of ICTs, i.e., their capability to separate
information, their content and size related externalities and their pervasive nature, clearly render
ICTs unique.
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An appreciation of these characteristics and the economy-wide effects they
generate permits a greater understanding of the development potential offered by ICTs. In order
to consider their potential more clearly, the following section uses the characteristics described
here to establish a chain of reasoning linking ICTs to the functioning of organizations, the
efficiency and spread of markets, and to institutional change.
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Another externality is generated from the cost perspective. Expanding internet access, or telecommunications
services often entails declining average costs over a wide range. Hence, expanding the system leads to a fall in the
costs of supplying services to earlier subscribers.
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A report published by the OECD (1988) singles out IT as the most pervasive technical innovation of the post-war
era. More specifically, according to Avgerou (1998), a technology may have pervasive economic effects if it (i)
generates a wide range of new products and services (ii) generates strong industrial interests as a means for
profitability and competitive advantage and (iii) reduces the costs and improves the performance of the processes,
services and products of many sectors of the economy. While empirical confirmation of the effects of ICTs on
performance, especially in developing countries, is still awaited, ICTs certainly qualify and deserve the moniker of
pervasive technologies on the basis of the first two criteria.
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From a technical standpoint, the unifying characteristic of these technologies is “digitisation.” Hamelink (1997),
writes that digitisation is a process through which information (whether relayed through sound, text, voice or image)
is converted into the digital, binary language computers use. This process of digitisation facilitates the convergence
of ICTs, as, in a technical sense, all digital signals are the same, regardless of whether they encode voice, video, or
other data.
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It should be noted here that in restricting the focus of this survey, it is not our intention to deny the importance of
ICTs as a tool for improving education delivery or their impact in other areas. The reason for restricting the focus is
entirely pragmatic.
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