1 Introduction: A Global Call to Action
2 ICT for Development: Making the Case
2.1 ICT as an Enabler of Development
2.1.1 The Unique Characteristics of ICT
2.1.2 From Promise to Action: Evidence and Potential
2.2 ICT for Specific Development Goals
2.2.1 ICT for Health
2.2.2 ICT for Education
2.2.3 ICT for Economic Opportunity
2.2.4 ICT for Empowerment and Participation
2.2.5 ICT for the Environment
2.2.6 Lessons Learned from Specific Interventions
2.3 National Approaches to ICT
2.3.1 ICT as a Production Sector
2.3.2 ICT as an Enabler of Development
2.3.3 Lessons Learned from National ICT Approaches
2.4 Making the Case: Conclusions
3 Creating a Development Dynamic
3.1 Components of the Development Dynamic
3.1.2 Human Capacity
3.1.5 Content and Applications
3.2 Strategic Compacts
3.3 A Framework for Action
Millennium Summit Development Goals
Specific Interventions: Evidence of Impact
Case 1 - Scaling Micro-finance: Pride Africa
Case 2 - Rural Connectivity: Grameen Village Pay Phones
Case 3 - Community-Based Content: Infocentros Telecenter Model
National ICT Approaches
Case 1 - Brazil
Case 2 - Costa Rica
Case 3 - Estonia
Case 4 - India
Case 5 - Malaysia
Case 6 - South Africa
Case 7 - Tanzania
Digital Opportunity Initiative Partner Profiles
The Digital Opportunity Initiative thanks representatives of the International Telecommunication Union (ITU), the Organization for Economic Cooperation and Development (OECD), the United Nations Educational, Scientific and Cultural Organization (UNESCO), and developing countries for their valuable contributions to this report.
We also thank the following experts for their contributions and review of the report:
Despite many steps forward in social and economic conditions around the world in recent decades, there remain huge disparities in the quality of human existence. We are now at a critical juncture. Unprecedented global flows in information, products, people, capital and ideas offer great potential for radical improvements in human development, but left unabated, they may also serve to worsen and entrench the spiral of poverty which already exists in many communities and countries.
These flows are enabled by Information and Communications Technology (ICT): their sheer scale and pace would not be possible without the ability to connect vast networks of individuals across geographic boundaries at negligible marginal cost. This is why decisions about the use of ICT will be critical in determining which road we go down, to wider development or greater inequality. The old debate, about choosing between ICT and other development imperatives, has shifted from one of trade-offs to one of complementarity. The Digital Opportunity Initiative (DOI) aims to provide some fresh answers for this new reality. The uniquely diverse nature of this partnership has made it possible to combine for such a purpose the skills and expertise that each of its membersAccenture, the Markle Foundation and the United Nations Development Programme (UNDP)enjoys in their respective fields.
Numerous factors influence the extent and speed of social and economic developmentnot least political stability, physical infrastructure, basic literacy and basic health care. There is no suggestion that ICT can eliminate the need for these or offer a panacea for all development problems. But detailed analysis of experience around the world reveals ample evidence that, used in the right way and for the right purposes, ICT can have a dramatic impact on achieving specific social and economic development goals as well as play a key role in broader national development strategies. The real benefits lie not in the provision of technology per se, but rather in its application to create powerful social and economic networks by dramatically improving communication and the exchange of information.
ICT is already being used highly effectively to directly address development goals. In Gambia, for example, it is being used to achieve better health outcomes. In Chile, it is starting to reap significant results in primary school education. In Bangladesh, it has led to the creation of direct employment for thousands of local women and men, while in parts of India new Internet-enabled centers mean better access to different government services for remote communities. In Indonesia, too, ICT is enabling local citizens groups to monitor compliance with environmental standards.
What lessons can we draw from these success stories? The identification of, and continued focus on, both economic and social development goals is a key determinant of success. Solutions should also be realistic, flexible and sensitive to local conditions, and should be backed by strong public and private institutional support. Above all, there should be a strong commitment to local participation and the fulfillment of local needs, as well as political will at the highest level.
Additional analysis of the approach to ICT policy taken by developing countries shows that ICT can play a significant role as part of an overall national strategy for development. In this respect, countries have pursued diverse strategies: some have focused on developing ICT as an economic sectoreither to boost exports (Costa Rica and Taiwan) or to build domestic capacity (Brazil, India and Korea)while others are pursuing strategies which seek to use ICT as an enabler of a wider socio-economic development process. Countries which use ICT as an enabler may be further subdivided into those which have focused primarily on repositioning the country's economy to secure competitive advantage in the global economy (Malaysia, Trinidad and Tobago) and those which explicitly focus on ICT in pursuit of development goals such as those set forth in the UN Millennium Summit (Estonia and South Africa).
These varied experiences have revealed some important lessons about the role of ICT in development:
Based on these lessons, the DOI has developed a strategic framework to help guide stakeholders in investing in and implementing strategies which take advantage of the potential of ICT to accelerate social and economic development. The framework consists of five critically interrelated areas for strategic intervention:
Infrastructure deploying a core ICT network infrastructure, achieving relative ubiquity of access, and investing in strategically-focused capacity to support high development priorities.
Human Capacity building a critical mass of knowledge workers, increasing technical skills among users and strengthening local entrepreneurial and managerial capabilities.
Policy supporting a transparent and inclusive policy process, promoting fair and open competition, and strengthening institutional capacity to implement and enforce policies.
Enterprise improving access to financial capital, facilitating access to global and local markets, enforcing appropriate tax and property rights regimes, enabling efficient business processes and stimulating domestic demand for ICT.
Content and Applications providing demand-driven information which is relevant to the needs and conditions experienced by local people.
This strategic framework does not assume that action in these five areas can be taken all at once. It is imperative to acknowledge the practical limitations faced by development efforts. Development gains can be achieved through interventions in any one area, but there are considerable benefits from a more holistic approach. This framework offers a tool which can be used at global, national and local levels to prioritize development initiatives so as to maximize their long-term impact. Providing such strategic interventions are properly conceived and implemented, interaction between them has the potential to create significant multiplier and network effects. These can ignite a virtuous circle of sustainable social and economic development"a development dynamic."
For this to happen, there is a need not only to understand, in the context of local conditions, the critical relationships between strategic interventions, but also to secure the participation and commitment of all key stakeholderslocal communities, NGOs, governments, the private sector and multilateral institutions. Heads of government should provide the necessary leadership to confront existing barriers and promote innovative solutions. National and international private industry should work closely together to adopt, adapt and develop technologies to meet the unique needs and challenges of the less fortunate. Civil society should be a critical player and help assure that ICT is used in a way that targets and addresses specific development goals and priorities. Through innovative vision and leadership, win-win situations can be created, thus aligning stakeholders' critical objectives and unleashing the potential of new collaborative alliances and strategic compacts to harness the power of ICT for development.CONTENTS
Despite real progress on some fronts, there remain dramatic disparities in levels of human development: one in five of the world's people lives on less than one dollar per day and one in seven suffers from chronic hunger.1 The international community has responded to the pressing need to address this state of affairs at the recent United Nations Millennium Summit by agreeing on the key development goals for the next decade: reducing poverty, raising levels of education, improving standards of health, enhancing empowerment, and reversing the loss of environmental resources.2
This consensus reflects not only the necessity of addressing poverty and other human needs, but also an emerging sense that the international community is at a crossroads in the development process. The unprecedented pace and scale of global flows in information, products, capital, people and ideas, if properly harnessed, offers the potential to create new opportunities for those who have thus far been excluded from gains in human development. But the same forces could also actually widen the gap and trap developing countries, especially least-developed countries (LDCs), in a perpetual spiral of poverty and exclusion.
The current debate on the importance of access to ICT and its value in addressing global development disparities is part of this wider discussion on the potential benefits and risks of globalization. This is because ICT is itself a key enabler of globalization: the level and pace of global flows in physical and intangible assets have been dramatically boosted by the ability to connect vast networks of individuals across geographic boundaries, at negligible marginal cost. This relationship between ICT and globalization makes ICT interventions critical to development policy.
Industrialized nations that have a high degree of ICT penetration also experience high levels of wealth (see figure 1.1) and human development. However, there is still considerable uncertainty about the nature of the relationship between ICT and development. Recent efforts launched by the international communityincluding the G8's Digital Opportunity Taskforce (Dot Force) and the United Nations ICT Taskforcedirectly recognize the urgent need to harness ICT to contribute to the achievement of development goals. These efforts are significant, not only because they seek to develop strategies and initiate innovative and effective action on the ground, but also because they represent and encourage new forms of collaborative interaction among government, private sector, multilateral, and non-profit organizations.
As a contribution to this global effort, at the G8 Okinawa Summit,4 Accenture, the Markle Foundation, and the United Nations Development Programme formed a public-private partnership5 to launch the Digital Opportunity Initiative (DOI). The DOI aims to help mobilize, focus and coordinate action by developing a strategic approach to harnessing the benefits of ICT for sustainable development. The present report will focus on lessons learned to date about the value of ICT for achieving development goals, and will offer an analytical framework that developing countries and the international community can use as a guide for designing and implementing a more strategic approach to the use of ICT for development.
Source: International Telecommunication Union, 2000.
Debate regarding the effectiveness of using ICT to help achieve development goals arises not only around questions concerning the evidence in support of a relationship between ICT and development, but also more substantially from inherent doubts about the relevance of ICT to achieving sustainable development and fears that investment in ICT will draw resources away from traditional development goals.
This report will seek to demonstrate that ICT can be a powerful tool for development, both because of ICT's inherent characteristics and the mounting empirical evidence that suggests it can in fact contribute a great deal to development goals. It can do so at both the micro and national level by increasing the effectiveness and reach of development interventions, enhancing good governance and lowering the costs of service delivery. Moreover, the right complement of targeted ICT interventions has the potential to play an even more substantial role in accelerating a sustainable dynamic of social and economic development in developing countries.
While the focus of the DOI is the role that ICT can play in the development process, it should be clear from the outset that ICT is not a panacea for the developing world's problems. Social and economic development is dependent on many factors, which should be addressed through an overall development strategy. Factors such as political stability, macroeconomic governance, transparency and accountability of national and local administrations, the rule of law, physical infrastructure (for example, clean water and energy), and basic literacy should also be addressed in an explicit manner -- and ICT should not be seen as a substitute. However, the integration of ICT into overall national development strategies can help facilitate implementation, expand the scope and coverage, and increase the results for most of these factors. Moreover, development goals cannot be achieved by government efforts alone. The involvement of civil society and the private sector is crucial.
ICT can be a powerful enabler of development goals because its unique characteristics dramatically improve communication and the exchange of information to strengthen and create new economic and social networks:
These characteristics suggest that ICT has the potential, if conceived as a means and not an end in itself, to be a powerful enabler of development. However, the fact that ICT can, in theory, assist development efforts does not mean that it will necessarily do so. In order for ICT to positively foster development goals, it must be employed effectively.
In fact, there is already ample evidence that a focused, micro-level application of ICT can contribute to individual development goals, including health, education, economic opportunity, empowerment and participation, and protection of the environment (this evidence is reviewed in Section 2.2).
Even more importantly, emerging evidence from country case studies suggests that ICT can play a more profound and far-reaching role in development than simply through interventions focused on specific development objectives. Five case studies are reviewed in Section 2.3, which draws on these and other case studies detailed in the appendices and leads, in Section 2.4, to some conclusions about how national ICT strategies can contribute to improved development outcomes.These findings, at both the micro and national level, highlight the need for a framework that can help guide stakeholders in developing and implementing strategies which take advantage of the potential of ICT to accelerate social and economic development. The DOI provides such a framework, in Section 3, around which ICT initiatives can be implemented strategically to ignite, accelerate and sustain a network of positive effectsor a "sustainable development dynamic."
The two types of interventions discussed herethose aimed at development goals and those aimed more broadly at developing a national ICT strategyare complementary and can both contribute to accelerating a development dynamic.6
This section reviews the experience of efforts to apply ICT in five key areas identified by the UN Millennium Summit as development imperatives:7 health, education, economic opportunity, empowerment and participation, and environment.
Some of the most promising and clearly demonstrated applications for ICT in development are in the improvement of health care delivery. Experience to date suggests there is a number of specific ways ICT can be applied to achieve better health outcomes.8
ICT is being used in many developing countries and communities to facilitate remote consultation, diagnosis and treatment. In Gambia, for example, nurses in remote villages use digital cameras to download images of symptoms onto a PC and transfer them to nearby towns for examination by doctors. The same model is being applied to facilitate collaboration among physicians themselves. When an expert opinion is required, doctors in rural towns in Gambia send the images captured by the nurses to specialists in the United Kingdom for advice. The principle of ICT-facilitated collaboration extends to medical research also. This is illustrated in West Africa, where malaria researchers use a network of satellites and ground stations to submit data for clinical trials conducted at tropical disease research facilities in London and Geneva.
Health workers in developing countries are accessing relevant medical training through ICT-enabled delivery mechanisms. Several new malaria Internet sites for health professionals include innovative 'teach and test' self-assessment modules. In addition, centralized data repositories connected to ICT networks enable remote healthcare professionals to keep abreast of the rapidly evolving stock of medical knowledge. In Bangladesh, for example, the local MEDINET system provides access to hundreds of medical journals via email for less than US$1.50 per month.
When applied to disease prevention and epidemic response efforts, ICT can provide considerable benefits and capabilities. Public broadcast media such as radio and television have a long history of effectively facilitating the dissemination of public health messages and disease prevention techniques in developing countries. The Internet also can be utilized to improve disease prevention by enabling more effective monitoring and response mechanisms. For example, across Sub-Saharan Africa, the Internet is used to monitor daily cases of meningitis and to help coordinate mass vaccination programs when threshold levels are reached.
A number of countries, such as Estonia and Costa Rica, have invested in ICT to improve the administrative efficiency of their public health systems and ICT can also be applied to improving the efficiency of medical facility administration through, for example, the streamlining of medical procurement or the creation of patient record databases.
HealthNet is a system of local telecommunications sites used to provide low cost access to healthcare information in developing countries through a link to basic email. Usersmainly physicians and medical workersconnect to the network through local telephone nodes to access services such as physician collaborations, medical databases, consultation and referral scheduling, epidemic alerts, medical libraries, email and shared research reporting databases. HealthNet is provided by a non-profit organization, SatelLife, with assistance from local and international donors.
HealthNet is used by 19,500 health care workers in more than 150 countries worldwide. The development impact of HealthNet has been most prevalent in Africa, where the model has contributed to increased rural and urban connectivity, capability building among the user community, increased demand for IT services, and in some cases, commercially viable IT service enterprises. For example:
Many physicians in developing countries rely on HealthNet as their sole source of information on the treatment of AIDS and tropical diseases, essential drugs, pediatrics and public health promotion.
Although HealthNet has made a real contribution, important challenges remain. Implementations in Africa have not always delivered the hoped-for level of success due to a number of factors, including: a lack of reliable and affordable telecommunications and power infrastructure; the failure and high cost of local Internet service providers (ISPs); unfavorable regulatory, licensing and taxation regimes; insufficient grant sustainability; poor organizational design; and user dissatisfaction with low band-width and delayed response.
Sources: www.healthnet.org; HealthNet management interviews and project reports (2000); ITU (1999).
Across a range of educational applications, ICT is being harnessed to improve the efficiency, accessibility and quality of the learning process in developing countries.9
One of the most clearly demonstrated applications is distance education. Distance education has been a particularly successful model in developing countries where affordability and geography have been real barriers to access. The six largest distance-learning universities in the world are located in developing countries: Turkey, Indonesia, China, India, Thailand and Koreaall of which offer expanding virtual campuses. To date, distance learning has mainly been applied to tertiary education where the motivation and commitment of students is high. In the case of primary and secondary education, ICT has been found to significantly enhance the learning process by enabling increased access to knowledge and more collaborative and interactive learning techniques, but is not an effective substitute for close personal supervision from teachers or parents. In Chile, for example, the Enlaces Project wired 50 percent of the primary schools, enabling teachers within the schools to improve the quality of the curriculum and allowing students from different schools to conduct collaborative projects.
The development of scientific research networks on a worldwide basis, usually over the Internet, is also helping to empower indigenous research and development programs in developing countries. Virtual research groupscomposed of interconnected specialists in different parts of the worldallow databases to be shared, conferences to be organized, papers to be circulated and discussed, and collaborative research and reporting to be undertaken. A proliferation of such collaboration is occurring on both a North-South and South-South basis. The African Virtual University, for example, provides online communication tools such as chat rooms, email, bulletin boards and home pages to encourage shared research efforts among both academics and students.
Another rapidly growing area of ICT-mediated learning is in the delivery of technical and vocational training. Because ICT can facilitate sophisticated and customized performance simulation at low marginal cost, many organizations and vocational training facilities are employing ICT to train workers in an array of functional areasfrom healthcare to IT serviceseven to train teachers themselves. For example, Cisco's Networking Academy Program provides a 280-hour technical training course over the Internet. This course trains workers in developing countries in designing, building, and maintaining computer networks, enabling students to obtain jobs in the local IT industry.
ICT-enabled solutions also present significant opportunities for enhancing the efficiency and effectiveness of education administration. Through the use of ICT data repositories and networks, curricula can be developed collaboratively, educational materials can be procured more cost effectively, staff and student time can be scheduled more efficiently, and individual student performance can be monitored more closely. In Southern Africa, Educor, a private conglomerate of education institutions, uses ICT networks to facilitate collaborative curriculum development among educators across its schoolsimproving the quality of the curriculum and avoiding duplication of effort.
University of South Africa (UNISA)
UNISA is the oldest and largest university in South Africa and one of the largest distance-learning institutions in the world. UNISA has internationally-recognized certificate, diploma and degree courses up to doctoral level across six faculties: Arts, Economics and Management Sciences, Law, Science, Education and Theology, and Religious Studies. In addition to on-campus instruction, UNISA provides educational programs via Internet and online classrooms, video and audio lectures and correspondence instruction. Students can also access UNISA's well-equipped library over the Internet.
While UNISA has a key strength in the quality and relevance of its educational content, a number of key challenges must be overcome before it can achieve critical scale with its online offering. Chief among these is securing the skills and capabilities required to develop and maintain a rich and broad program of educational content. The development of applications to deliver content to a broader and more diverse audience is also a priority.
ICT can contribute to income generation and poverty reduction. It enables people and enterprises to capture economic opportunities by increasing process efficiency, promoting participation in expanded economic networks, and creating opportunities for employment.
There are a number of ways ICT is enhancing rural productivity. ICT enables solution sharing between local people and communities, providing access to practical information on small business accounting, weather trends and farming best practices, for example. Timely access to market information via communications networks also helps farmers make astute decisions about what crops to plant and where to sell their produce and buy inputs. In Chile, for example, an Internet network among farmer organizations has dramatically increased farmers' incomes by providing information about crop status, weather, global market prices and training.11 ICT is also providing unprecedented access to rural finance. The financial and information service network provided by Pride Africa12 offers micro-finance opportunities for local people and small enterprises that previously had no access to flexible financing due to rigid banking regulations and the information monopolies of government and large businesses.
ICT enables improved business process efficiency and productivity. Businesses can reduce operational costs by decreasing material, procurement and transaction costs, resulting in lower prices for intermediate and finished goods, and they can also use more and better information to improve the value of their output. Utilities Afrique Exchange, for example, provides an e-trading platform to utilities companies in Africa and helps both sellers and buyers simplify their procurement processes and reduce costs.13 In another example, a number of companies in developing countries are using the Global Technology Network, provided by the US Agency for International Development (USAID), to find comparable small and medium-sized US companies to share business solutions that satisfy their existing technological needs.14
ICT facilitates global connectivity, resulting in new ways of creating and delivering products and services on a global scale. New business models and market configurations enabled by ICT, including business process outsourcing, value chain integration and disintermediation, provide developing countries with access to new markets and new sources of competitive advantage from which to drive income growth. Through PEOPLink's global artisans trading exchange, for example, local craftspeople in developing countries are increasing their incomes not only through access to new markets, but also because the wholesaling intermediaries for their produce have effectively been removed.15 Local craftspeople can now receive up to 95 percent of the selling price for their produce where previously they received only 10 percent.16 Viatru is a similar initiative offering indigenous peoples opportunities to globally market their traditional crafts and farm products.17
ICT can contribute to better employment opportunities in developing countries both through improved labor market facilitation and direct employment. Using electronic job marketplaces, employers and employees can match labor skills and availability to satisfy their demands. For example, TARAhaat,18 a portal designed to serve villages in rural India, provides job opportunity information on local web sites in local languages. In addition, the establishment of local telecenters in countries such as Bangladesh, India and Senegal has created direct employment for thousands of local women and men.19, 20
Village Pay Phones, Bangladesh
Village Pay Phones is an initiative of the Grameen Bank aimed at reducing poverty through the economic empowerment of women in rural Bangladesh. The Grameen Group manages the entire phone system, operating the GSM network and loaning money to village women to purchase GSM cellular phones. Phone owners rent the phones out to village farmers and other community members for a fee and also provide messaging and incoming call services.
While Village Pay Phones is a model for community development, the Grameen network is not integrated with the national fixed line network. This is due to telecommunications regulation in the country which, to a large extent, is being challenged by the rapid expansion of Grameen Phone. The wireless technology chosen by Grameen, based on well-known international standards, is expensive and not optimal for rural areas.10 Service quality has been inconsistent among phone owners and may have a negative impact on customer satisfaction.
Sources: ZEF Bonn-Center for Development Research, Insights from a Grameen Bank Initiative in Bangladesh, June 1999; Iqbal Z. Quadir, Connecting Bangladeshi Villages (www.devmedia.org/documents/ACF1055.htm), February 2000; Allen Hammond, CIO and Senior Scientist at the World Resources Institute (see Appendix 2).
ICT can contribute to fostering empowerment and participation and making government processes more efficient and transparent by encouraging communication and information-sharing among people and organizations, and within government.21
Using ICT, governments can improve the quality and responsiveness of the services they provide to their citizens as well as expand the reach and accessibility of services and public infrastructure. This is facilitated by e-government applications that provide services and information to citizens over the Internet and other communication networks. In the Indian state of Madhya Pradesh, the government is introducing an experimental intranet computer network for government services and local information. This allows citizens to have faster and more transparent access to government services. For example, farmers can get copies of land titles for 10 cents that previously cost as much as US$100 from corrupt officials. Andhra Pradesh in India has also launched Internet-enabled integrated service centers providing access to different types of government services.22
ICT connects individuals and local communities with information and resources beyond their geographic boundaries, encouraging information dissemination, information exchange and communication. Citizens are encouraged to participate in the democratic process through ICT mechanisms such as electronic forums and bulletin boards, which enable participation in public discussions. This is especially relevant for marginalized communities and groups such as women, youth and ethnic minorities: they can share and exchange information of mutual interest, strengthen their collective power and shape their own development solutions. A women's group in Mexico City, for example, used email to ask sympathizers in California to do research on the textile factory where they worked. When the women's jobs were threatened, they came to management armed with information on the company, its profits and its ownership to negotiate better conditions and more secure tenure. 23, 24, 25
Organizations in developing countries also find it increasingly feasible to participate in information-sharing that strengthens governance and collective power, allowing them to influence political and institutional decision-making processes. Trade unions, for example, have used the Internet as a campaigning tool to organize labor globally in the fight against exploitation. Global networks played a crucial role in helping unionized Guatemalan workers to join with other union groups and lobby governments and multilaterals to gain recognition and wage increases from Pepsi-Cola in the mid-1990s.
SANGONet is an electronic information and communications network for development and human rights workers in Southern Africa. It provides relevant information to people working on development issues by allowing them to communicate with each other on its web site (www.sn.apc.org/sangonet), and by building capacity in electronic communications within non-governmental, community-based, government and private sector organizations. SANGONet's priorities include open government, ICT, education, health, economy, labor, women, human rights and the environment. SANGONet is a member of the non-profit Association for Progressive Communications (APC).
The lack of reliable and affordable telecommunications and power infrastructure is still a barrier to encouraging widespread utilization of SANGONet's functions. In addition, although people and organizations can effectively use ICT to improve their information exchange and communications, strong leadership and management capabilities are required to translate information into coordinated action.
ICT can make a valuable contribution to sustainable environmental management by improving monitoring and response systems, facilitating environmental activism and enabling more efficient resource use.
Scarcity of relevant and reliable information has always been a substantial obstacle to more effective environmental management. Used to collect, process and disseminate information, ICT enables a better understanding of issues such as climate change and biodiversity and helps to monitor ecological conditions so that prevention and mitigation measures can be activated. SIDSNet, for example, provides a medium for sharing information and good practices among the forty-three Small Island Developing States (SIDS) on common issues such as biodiversity, climate change, coastal and marine management and energy sources.26 In Nepal, computer imaging has been used to build a land resource database for the Arun River basin. This has generated the first ever basin-wide map of land use indicating forest degradation hotspots. The database, together with simulation models, was crucial to designing and implementing the land management program for the area.
ICT is also being deployed extensively to monitor and respond to environmental disasters in developing countries. This is demonstrated in Mexico, where fire emergency services are using satellite images to direct response teams to critical areasresulting in significant reductions in casualties and property loss.
The power of ICT as an information and networking medium can also enable citizens to act as environmental enforcement agents, alerting decision makers to compliance infringements27 and leveraging the power of ICT to reach and influence public opinion. In Indonesia, officials discouraged by weak enforcement of water pollution standards created a public access database for rating the degree of factory compliance. Citizen groups have used the ratings to pressure under-performing factories. Within the first 15 months of activism, one-third of non-complying factories had met regulations.
ICT applications can be used to reduce the consumption of energy, water and other essential natural resources through more efficient agriculture and industrial procedures. For example, precision agriculture techniques28 using GIS and GPS systems can facilitate weather and soil monitoring, crop forecasting and the ability to optimize farm return on investment ensuring more efficient use of scarce resources.29
In the future, ICT may also play an important role in the fight against pollutionnot only by providing more useful metrics and information, but also by enabling population decentralization and large-scale telecommuting.
Global Forest Watch (GFW)
Global Forest Watch is an international network of more than 90 local forest groups linked by the Internet. It aims to slow forest degradation around the world as well as infuse transparency and accountability into the industry. The initiative was started by the World Resources Institute in 1997 to give the general public a clearer picture of the threats to the world's forests. GFW uses a combination of satellite imagery, Geographic Information Systems (GIS), mapping software, the Internet and on-the-ground observation to record forest coverage and condition, including where and how forest product companies are cutting. GFW compares the activity to forest leases to identify illegal cutting. These maps are posted on the Internet, naming specific companies that fail to comply with environmental policies and agreements.
GFW is ensuring fair and objective scrutiny of the practices of forest product companies. The group is already operating in 8 countries, and plans to cover 25 countries within a few years. It has negotiated agreements with IKEA, Home Depot, Loews and other major forest product retailers that constitute 40 percent of the North American market. The retailers have pledged to source only from sustainably-managed forests and forest companies and have agreed to use GFW's expanding database to guide their buying. GFW also provides governments, local communities, consumers and activists with information about what is happening to the forests, enabling the promotion and establishment of successful forest management practices. Results in a few countries demonstrate that GFW can produce information that is not obtainable by satellite systems and exceeds that currently available to governments and United Nations agencies.
Key challenges for GFW are: limited Internet access among concerned groups who have information to contribute and are also target information recipients; and securing political support and sponsorship among governments, industry groups, and NGOs in new geographic markets. If success in the North American market is any indication, this challenge is not insurmountable.
The analysis of ICT initiatives targeting key development imperatives suggests that, while individual ICT interventions can have a positive impact on social and economic development outcomes, many initiatives experience barriers to scalability and sustainability under current conditions. The following is a synthesis of the common lessons found among initiatives that have thus far exhibited a substantial and sustainable development impact.
1. Initiatives should be explicit about their development goals and how they will directly impact the target population. Initiatives that clearly identify development goals within the needs and context of the target population are more likely to develop effective operating models and deliver tangible results. For example, one of Grameen Phone's explicit goals is to have a significant impact on poverty through the economic empowerment of women in Bangladesh. PEOPLink has clearly determined its role of helping talented artisans in developing countries to market their products directly to buyers on the Internet, cutting out the middleman.
2. Initiatives should be driven by user demands, identified and realized through direct participation and ownership. Experience from many initiatives, such as Pride Africa in providing micro-finance, and the African Virtual University in meeting demands for skilled and knowledgeable workers, demonstrates the importance of designing initiatives to be demand-driven and locally-owned. Technology imposed on a community of users who have not independently identified a need for it is unlikely to flourish. SANGONet in Southern Africa experiences high rates of local use because local people and NGOs, who are interested in development and human rights, participate in shaping the service to meet their own needs.
3. ICT solutions should be "built to last." Initiatives that are planned and managed using a business model are likely to be more sustainable and have a more substantial impact. Initiatives need to include mechanisms for growth and replication into their operating models from the outset, so as to offer scalable and sustainable solutions. SatelLife established a business model for HealthNet to deliver email and electronic information resources for better health and medical services. The model provides for training both end users to effectively use the system and technical staff to manage and operate the system so that local operations can be sustainable. On the other hand, some Digital Villages in South Africa have not been successful because operations did not include components such as a solid business plan, a cost recovery system, a marketing strategy, or emphasis on local community services to make the initiatives sustainable.
4. Initiatives should be sensitive to local conditions and limitations. Technology employed should be affordable, physically accessible, easy to use and maintain, and flexible enough to accommodate user demands for new services. Similarly, initiatives demonstrating a capacity to embrace adaptive and flexible solutions are more likely to be sustainable. For example, PEOPLink provides CatGen software, which enables local artisans to easily capture and transmit digital images of products over the Internet with minimal training and in conditions of poor connectivity. The solution is feasible due to the existence of public access points such as cybercafes and telecenters.
5. The interests of key stakeholders must be broadly aligned with each other and with the goals of the intervention. Identifying or engineering "win-win" situations is critical to securing lasting commitment from all necessary parties, including participation from the local community, private enterprises, non-government organizations, multi-lateral organizations and governments. Strong public and private institutional support and leadership is required to maintain commitment and alignment from all parties. This requires clear vision and direction, defined roles and responsibilities for all partners, adequate funding, sufficient technical and administrative means, and integration with existing local institutions. As an example, in the Madhya Pradesh State Initiative in India, roles and interests among stakeholders are well coordinated: government is responsible for content, farmers own their computers, and educated local citizens operate the information services. In another example, NIIT, a leading software service and education provider in India, formed a partnership with state governments and private sector companies to provide student loans promoting the Internet and computer-based education. All partners have defined roles and well-aligned interests in the initiative.
6. Initiatives with the most impact have approached development problems in a holistic and coordinated way, not only through the provision of ICT. HealthNet, for example, has focused on infrastructure and connectivity by providing low cost access, and also on building human capacity through training of both users and technical operators, transferring enterprise capability including management and operation skills, and creating effective partnerships with both local organizations and medical institutions in developed countries. While the Grameen Phone initiative faces a scalability challenge because of its technology choice and the telecommunications policy environment, a similar initiative undertaken by the TeNet Group in India uses more adaptable technology and works within national telecommunications policy guidelines to overcome this challenge. The Indian initiative has chosen a multi-point wireless technology which is more functional for rural areas (with greater transmission range), integrates easily with the national system, and meets regulatory standards.
These examples suggest that ICT interventions focusing on development goals must address a variety of interrelated dimensions to secure an enduring impact. The limited scope and scale of many of the initiatives described through Section 2.2 has prevented them from achieving even greater impact since, as stand-alone initiatives, it is difficult for them to address the policy and infrastructure issues necessary to ensure their success. While grassroots entrepreneurial activity is to be universally encouraged, the potential impact of these ICT interventions would be far greater had they been conceived as part of a comprehensive national ICT strategy for development imperatives. Pursuing ICT interventions in this manner would enable the creation of synergies that standalone initiatives cannot achieve by themselves.
In fact, successful initiatives have not only effectively coordinated efforts in different areas, they have leveraged the synergies created by the complementarity of aligned ICT interventions. These successful initiatives can provide useful lessons on how to better coordinate national "ICT for development" strategies. The next section is devoted to the analysis of how ICT has been leveraged in different countries.
From the early 1980s, developing countries began adopting national ICT policies. This process was propelled to a large extent by the advent of the personal computer and increasing demand for related hardware and software applications. The emergence of the global network economy in the 1990s, fueled by the digitalization of telecommunications and later by the rapid expansion of the Internet, created additional impetus for a wider variety and number of developing countries to adopt national ICT policy frameworks. For many countries, these policies and strategies are not clearly differentiated from ICT sector and telecommunications policies and, in most cases, have no explicit connection with national development goals.
Developing countries' diverse ICT policies and strategies vary substantially in terms of their objectives, design and approach to implementation. Nevertheless, while the strategies pursued by each country have unique features, the role assigned to ICT can be broadly characterized in one of two ways:
Within these two overall approaches, it is possible to discern a second tier of strategic choices, which in turn influence the particular policies and strategies adopted by developing countries (see figure 2.1).
These four types of interventionsexport market focus, national capacity/ domestic market focus, global positioning focus and development goals focusare neither mutually exclusive nor necessarily complementary. But this typology is useful in helping to understand the development impact of different approaches and contributes to building a framework which can guide future efforts.
Representative country examples are presented in the following section to illustrate each of these basic types of policy and strategy interventions and to highlight the similarities, as well as differences, in terms of implementation and outcomes. The purpose of this typology is not to comprehensively describe any specific country's ICT policies, but to highlight the main focus of their approach, at a point in time, for the purposes of analysis.CONTENTS
The global networked economy offers opportunities for developing countries not only to respond to market opportunities in developed economies, but also to develop national capacity and create domestic spillover effects and niche opportunities for nationally-located enterprises, including small and medium enterprises (SMEs).
The following case studies illustrate these two different approaches to the development of ICT: leveraging ICT for export opportunities (Costa Rica) and as a sectorbuilding national capacity for domestic market development (Brazil).
1. Costa Rica: Focusing on ICT as an Engine of Export Growth
Like many other Central and South American countries, Costa Rica has focused on developing its export sector and on increasing foreign direct investment (FDI) as a means of generating employment and foreign exchange. However, instead of concentrating in labor-intensive industries like some of its neighbors, Costa Rica focused its attention on the high-tech sector.
In 1996, faced with declining prices of its primary source of exports and growth, Costa Rica saw the need to develop alternatives to coffee production. The government recognized the potential of the emerging ICT sector and the importance of attracting a global corporation such as Intel to locate in the country.30 Today, the Costa Rican factory is Intel's second largest for final assembly and testing of computer microprocessor chips. One-third of all Intel microprocessors used in computers around the world come from the Intel plant in Costa Rica.
Costa Rica's location vis-à-vis North and South American markets, its peaceful and stable political environment, the business-friendly policies it adopted in the 1980s,31 its excellent infrastructure,32 and its educated and skilled workforce have all made it an attractive location for high-tech, export-oriented firms and other IT-enabled industries. Once the success of Intel in Costa Rica was demonstrated, other major US companies followed, including consumer products maker Procter and Gamble, medical devices manufacturer Abbott Laboratories and money transmitter Western Union.
Costa Ricas export focus is being broadened to include software and IT services exports. Over one hundred software development companies currently operate in Costa Rica, employing more than 1,000 professionals and exporting to countries in Latin America, the Caribbean, North America, South East Asia, Europe and even Africa. The total exports of the six largest software development companies in 1997 surpassed US$25 million. The target for 2001 is to export over US$200 million. According to the Costa Rican government, "software is destined to become in the coming century what coffee represented for the Central American country for over two centuries."
A critical element of Costa Rica's approach has been a focus on education. Not only does Costa Rica have high national standards of education, it has also worked on ensuring that education institutions produce appropriately skilled workers and professionals. Given the limited number of engineers and technicians, the government has embarked on an aggressive campaign to transform the knowledge base of the country in alignment with the requirements of the high-tech sector. The Instituto Nacional de Aprendizaje (INA), an autonomous institution financed with public resources and private contributions, and the private Instituto Tecnológico de Costa Rica (ITCR) are the main providers of engineering professionals. Costa Rica has been supported in its efforts to upgrade its education system by the Inter-American Development Bank and private investor funding.
To encourage demand, computer duties were removed in the 1980s. The falling computer prices stimulated usage and Costa Rica now has one of the highest rates of usage in Latin America.
Achievements and Limitations. Intel's impact on the Costa Rican economy is indisputable. The balance of trade turned positive due to the dramatic increase in exports (20 percent annual increase). Traditional exports, such as bananas and coffee, could not create such a boost in exports and in any case were declining. The gross national product (GNP) also grew by approximately 6.4 percent and 8 percent in 1998 and 1999, respectively. In 2000, computer products accounted for 37 percent of Costa Rica's exports. This is higher than bananas at 10 percent and coffee at 5 percent, making the technology free trade zone regime the most important foreign exchange earner for the country.
This kind of export focus requires developing countries to compete with each other for limited foreign capital. Offering financial incentives can have a costly impact on the budgets of small countries, particularly when foreign companies operations do not create many linkages with the rest of the economy. Countries such as Ireland have experienced growth in local satellite industries around large foreign investment such as that of Intel. Although this has not yet happened in Costa Rica, the government is trying to use foreign companies' presence to spur development of domestic-owned suppliers and other satellite businesses such as software development firms.
The Costa Rican Government has launched several separate initiatives to use ICT to address developmental goals (for example, schoolnets and public access sites), but these are not integrated with the wider export promotion approach.
2. Brazil: Building National IT Capacity for Domestic Market Development
Brazil's ICT policy has been consistently focused on the development of a domestic ICT sector and market, although the mechanisms to secure this have changed. In the early phase (1980-90s), the focus was on the creation of a diversified industrial structure and the development of the technical capabilities of national firms. In more recent years, with greater liberalization of the economy, the strategy to support domestic capacity has shifted from protection to promotion. Development of the sector is taking place with a greater presence of, and collaboration with, external partners. Brazil is now poised to become a major production center for export as well as domestic demand. Brazil offers a large market, manufacturing capabilities, installed industrial base and access to other South American markets. Having encouraged the growth of the IT sector, the Brazilian Government is now moving to extend the benefits of ICT to a broader base in society.
Brazil was among the first developing countries to put in place policies promoting the development of a national ICT industry. The Brazilian ICT (principally computer) sector drew on a skilled population base, strong research and development (R&D) networks, a relatively extensive telecommunications infrastructure33 (put in place by the end of the 1970s) and a strong level of government commitment.
Brazil's IT policy in the early 1980s came in the wake of the debt crisis, the attendant need to reduce imports and the desire to avail the country of the opportunity to expand and diversify its industrial base. Its so-called "market reserve" policy was established to create a "greenhouse" environment that could nurture locally-owned companies (for micro and mini-computers) and protect them from direct imports and competition with world industry leaders for Brazils relatively large and fast growing national market. Domestic R&D grew because technology transfer agreements were difficult to obtain. Local firms developed their own products based on reverse engineering or in-house design. By the end of the 1980s, Brazil had attracted a set of IT corporations that brought significant local market presence and job creation benefits. Among the 50 main ICT firms involved in hardware production, total employment increased from 43,000 in 1984 to over 74,000 in 1989. The output of local computer hardware producers grew from less than US$200 million in 1979, to more than US$4 billion in 1990.
However, the debt crisis also led to a decline in telecommunication services.34 Partly in response, the government introduced liberalization measures in the telecommunications sector. The first step was a constitutional amendment abolishing the telecommunications monopoly. This was later followed by legislation allowing private enterprise to bid for cellular licenses. Lower prices resulted and telecommunication services were not only restored, but grew, making the expansion of the domestic computer industry more viable.
Following an initial decline in the production of hardware with liberalization, production expanded again in the 1990s on the basis of local production led by Compaq, Itautec (a national company) and IBM. Liberalization thus resulted in the computer industry being rebuilt on new terms, although based on the legacy of previously created technological capabilities. In 1997, the Brazilian PC industry produced over 1.2 million systems worth US$2.5 billion, or 37 percent of the Latin American market. Opening up the market has also led to rapid growth of contract manufacturing in Brazil. Compaq and Epson are outsourcing their production of integrated circuit boards to Brazil. Hewlett Packard does the same for its printers.
Another development is that software has risen as a proportion of the IT industry, going from 15.7 percent in 1991 to 21.3 percent in 1997, and it is currently growing at 25 percent a year. Software production accounts for over 10,000 firms in Brazil, and for more than 200,000 jobs. Brazil is the largest "packaged software" market in Latin America. The growth of the Brazil IT market has encouraged a number of foreign software and information services firms to set up local subsidiaries for customization and various service functions, but national firms, given their previous experience and well-established user-producer relationships, were also able to find profitable niches in banking automation and R&D.
Achievements and Limitations. Thanks to the IT policy pursued over two decades, Brazil is poised today to become a major production center. Brazil offers a large market, manufacturing capabilities, installed industrial base and access to other South American markets with which it has trade agreements. Several major computer hardware firms have located regional production centers in Brazil, and this has slowly begun to attract component suppliers as well as major parts distributors and specialized contract manufacturers. Brazil has a tradition of excellence in IT-related research and a large university trained workforce that, taken together with the size of its domestic market, provide good opportunities to create both demand for and production of software and services aimed at local users.
With the current income distribution, growth of the internal market is limited and skill shortages are emerging. In addition, the focus on developing ICT as a sector has resulted in limited impact on development goals. Aware of these issues, the government launched the "Information Society Program in December 1999. The Programs scope includes: promoting business competitiveness, universal access for citizens, education, e-government, research and development in key technologies, local content development, and basic infrastructure deployment.
Recently some developing countries have begun to stress the role of ICT as an enabler of broad-based social and economic development. Two non-mutually exclusive approaches can be pursued to carry out this strategy. The first is deploying ICT to improve positioning in the global economy. The second is using ICT to directly target the full range of development objectives.
In more detail, the following case studies illustrate these two different approaches to using ICT as an enabler of developmentfocusing on improving global positioning (Malaysia) and leveraging ICT to directly address social and economic development goals (South Africa and Estonia).
3. Malaysia: Positioning as a Competitive Economy
The intent behind Malaysia's Multimedia Super Corridor (MSC) has been to create a high-tech environment and infrastructure that can attract national and international investors and create spillover effects in the rest of the Malaysian economyallowing it to leapfrog its neighbors to become Southeast Asia's leader in information technology. Its aim has been to replicate the conditions that underpinned the economic success of Silicon Valley, and also to use this as a starting point to develop spin-off applications intended to transform major sectors of the society through the use of ICT: education (smart schools, distant university), healthcare (telemedicine), government (paperless administration), commerce (electronic commerce) and manufacturing (electronic processes).
The Malaysian government was one of the first to attempt to replicate the Silicon Valley model in a developing country. In its attempt to move to the technology sector to attract domestic and foreign private investment, the Malaysian government invested in creating what was expected to be a world class physical and information infrastructure. This US$40 billion initiative, called the Multimedia Super Corridor, serves as the backbone for the countrys information superhighway. The network is supported by a high-speed link (10Gb/s network), which connects the MSC to Japan, ASEAN, the US and Europe. The network is also capable of supporting extensive public, education and business applications.
A strong emphasis has been put on the expansion of telecommunications infrastructure and the telephone penetration rate as a measurement of the ICT readiness of the country. The telephone penetration rate rose from 16.6 percent to 23.2 percent between 1995 and 1999, while fixed lines in the rural areas rose from 5.2 percent in 1994 to 11 percent in 1999. The country aims to establish an infrastructure with 25 Internet access points, 25 mobile phones and 50 fixed lines for every 100 people within the next 5 years. In addition, other supporting infrastructure such as power, transportation, airports, office buildings and extended business areas are being developed to enhance the primary infrastructure of the country.
Beyond infrastructure, the Malaysian government provides attractive tax incentives for world-class technology-led companies to participate in the MSC initiative. And most importantly, it has launched actions to provide a well-educated work force with relevant skill levels ranging from technical to researchsince the MSC implies an enormous demand for IT skills that the Malaysian society is currently unable to provide.
To address skilled labor shortages in all industries, education institutions such as the National Institute of Public Administration (NIPA) and the Multimedia University are developing curricula to better prepare the Malaysian workforce for the e-economy. In addition, to meet demands for knowledge workers, Malaysia offers unrestricted and user-friendly work permit policies for foreign knowledge workers. At the same time, the country has made several efforts to increase ICT literacy because widespread computer illiteracy among the general population is viewed as inhibiting the diffusion of ICT.
Achievements and Limitations. Malaysia has provided attractive inducements to global and local capital through the creation of strong ICT infrastructure in major enterprise zones, by improving business processes, and by providing business incentives. Its development strategy has already stimulated growth in investment and trade. In 1999, GNP rose by 5.4 percent, much faster than initially forecasted. This increase was led by manufacturing, particularly the export of ICT-related electronicspositioning the ICT sector as the economic driver of Malaysia. ICT's contribution to GNP was approximately 36.5 percent primarily from semiconductor and electronic equipment.
Nevertheless, it is too early to draw definitive lessons from the implementation of the MSC and other related programs. Observers already point to some issues that need to be faced with regard to achieving the ambitious goal of transforming the Malaysian society from a developing third-world economy into a knowledge/informational economy. The first relates to doubts about the shortage of skilled labor and ability to generate sufficient numbers of knowledge workers. Second, it is not clear that the goal of entering the knowledge society is best served by a capital intensive focus on multimedia applications, as opposed to a strategy which is more focused on extending infrastructure, increasing ICT and general literacy, and focusing on SME and government usage of ICT so as to improve Malaysia's positioning through more widespread productivity gains and deeper access to global markets for local businesses. Another concern is the possibility of an emerging gap between the information-rich and those who do not have access to technology, notably because of the high cost of computers compared to average incomes.
Despite real determination to make Malaysia an ICT-centric economy, with the MSC being the catalyst for ICT development, there is still much opportunity for progress in bringing the real benefits of this policy to 22.7 million Malaysians.
4. South Africa: Using ICT for Economic and Social Development
South Africa's challenge after the first democratic transition was to balance sustainable economic growth with social empowerment. This is the challenge addressed by several related ICT initiatives including the South Africa IT strategy Projecthow to make South Africa regionally and globally competitive and, at the same time, use ICT as an enabler of social equity.
The South Africa IT Strategy Project (SAITIS) was developed by the Department of Trade and Industry and the Department of Communication, in consultation with the private sector and other stakeholders. SAITIS has four fundamental objectives: (1) to create a robust, growing and sustainable ICT sector; (2) to increase use of ICT as an enabler for socio-economic development; (3) to create a knowledgeable and growing ICT workforce; and (4) to create a world-class culture of ICT innovation. Specific initiatives sponsored by SAITIS include: providing Internet access in schools; creating an academy for software development training; providing community Internet access points; and installing public information terminals for access to government services.
In the design of the SAITIS strategy, it was recognized that the development of the local market could act as a powerful stimulus to the ICT sector and, at the same time, could have substantial socio-economic benefits for other sectors. To achieve this, the extension of ICT usage is viewed as needing to take place in four areaslocal market development, applications development, information infrastructure development, and achieving ubiquity of access.
Until now, access has been heavily concentrated in the urban commercial areas and among higher socio-economic groups. While some rich suburbs have 70 phones per 100 people, in parts of the country this statistic falls as low as 0.1 per 1,000 peoplethe same is true for access to PCs. An important objective of the 1996 Telecommunications Act was the promotion of universal service and affordable provision of telecommunication services.
To leverage the cross-sector benefits of ICT, the government has organized a number of ministerial clusters: Efficient Governance, Investment and Employment, Human Resource Development, Poverty Eradication and International Affairs. Each of these areas is to be addressed at the national level through the development of prioritized policies. The aim is to try to reduce the potential waste of resources and to create reinforcing strategies through coordinated deployment of resources, visible sponsorship and wider stakeholder involvement. In addition, the government has created International and National Task Forces for ICT, as well as a Local Content and Production National Task Force within the media and broadcasting industry which will focus on the implementation of the ICT strategies generated by the taskforces.
Private and public sector firms have been involved in training and development of IT skills. For example, Telkom, has been awarded funds to build ICT skills at its training centers across the country and the Howteq training center has had funds earmarked to build capacity in software development skills. The department of education has also started emphasizing ICT in secondary schools where connectivity is available. Education curricula are being reworked to include ICT courses from early stages of learning.
Achievements and Limitations. The South African ICT sector has been able to build on a relatively good infrastructure and a small, but highly skilled, IT professional base. Software development production grew by approximately 20 percent in 19992000. However, most of the development has been limited to small scale local projects or within foreign-owned companies. Packaged software is 100 percent imported. R&D spending has thus far been low and there is scope for expansion, both in terms of the range of products available and the number of domestic markets which are served.
South Africa has been able to extend its base of ICT usage with the development of infrastructure and applications made available through government community initiatives, as well as by the private sector, which extended both usage as well as training to its employees. South Africa has the largest GSM market outside Europe and is ranked in the top 20 globally in terms of Internet users (despite the uneven access). The government has also increased the degree of computerization of its own operations: it has become the standard for every government official to have access to a computer and to use email to communicate with other departments. However, not every citizen is enabled to use ICT because access and technology are only available in primary and secondary towns and not in remote and rural areas. ICT education is improving in some instances but not all schools have infrastructure and computers, and even when they do, they fall into disrepair without maintenance. There is a shortage of IT-literate staff to use and maintain them.
It is not clear whether the development focus of the South African strategy has been fully translated into action on the ground. Slow progress may be due to skills, access and regulatory constraints. Approximately 25 percent of ICT-skilled workers leave the country each year; meanwhile demand is growing at 40 percent per annum. The cost of access is still high by international standards and many areas are without access at all. There is not yet a transparent regulatory regime which could facilitate the development of the telecommunications sector.
Potentially differing priorities among stakeholders also present a challenge. The multi-stakeholder taskforces are an important step in this regard, but consultation also needs to be extended to the implementation stage to ensure that initiatives are demand-driven and sustainable.
5. Estonia: Using ICT for Economic and Social Development
Estonia's focus on ICT goes beyond an attempt to position itself to take advantage of the global information economy, although that too appears to be a major determinant of its policy.35 Given its limited natural resources and the declining competitiveness of labor-intensive exports, Estonia is attempting to leverage people and knowledge capital as key assets in its pursuit of economic development. Estonia also has a strong focus on using ICT to address equityequity in access to opportunities to acquire ICT related skills, equity in addressing the needs and challenges faced by people in rural areas, and equity in terms of ensuring the right to access information.36
An important element of Estonia's approach has been the heavy emphasis on building infrastructure. Connectivity was extended throughout the nation, including the remote island Hiiumaa, starting in the early 1990s. In addition, 300 public Internet access points providing free email and Internet access are expected to be in place by 2002. These will also provide places where citizens can conduct most of their transactions with the public administration. A concession agreement between foreign telecommunications suppliers and the Estonian Telephone Company37 helped to ensure that connectivity in rural and scarcely-populated areas was addressed. Compared with just 7 percent in 1997, 36 percent of the population now has Internet access, either at home or at work.
The telecommunications market in Estonia was fully liberalized from January 1 2001. Increased competition in the telecommunications market since 1991 has resulted in a 5080 percent reduction in the price of international long-distance calls, lower prices on national long-distance calls and price reductions of 50 percent for Internet connections.
Connectivity and net access have helped to contribute to economic development. Rural telecottages38 supported by local and state governments help to promote economic development, education and scientific research in rural areas. Farmers from the remote island of Hiiumaa are expanding their access to markets by offering their produce on local versions of eBay. Web design firms, some in remote locations, work for clients all over the world and other national technology firms fulfill orders outsourced by Estonia's neighboring hi-tech giants in Finland, Norway and Sweden.
Estonia has become a country where mobile phones are manufactured, not just used. Local entrepreneurship has produced some major new companies including Microlink, the largest IT company in the Baltic states. To gain access to relevant regional and global markets, Estonia has leveraged its location at the crossroads of Eastern and Western Europe and its strong historical ties to the Nordic countries, which are leaders in the use and manufacture of ICT products.39
To meet the growing demand for ICT workers, university curricula are being adapted to adequately prepare students with relevant and practical skills. A new IT college was established in September 2000. Two universities, a number of polytechnics and many training companies also provide basic and specialized education in information technology. The Estonian government has also initiated a number of programs, including the innovative Tiger Leap Program,40 to increase computer literacy in schools. As a result of Tiger Leap, the generation of Estonians currently in school is 100 percent computer literateevery school in Estonia is now connected to the Internet. The Tiger Leap Program also trained school teachers in computer skills and sponsored the design of special educational software packages, especially in the sciences. Associated with Tiger Leap is the annual "Tiger Roadshow" which is aimed at spreading the reach of Internet access and computer literacy, especially among people who have not had a chance to use computers in school or at work and older Estonians.41
ICT has also been used to make government more transparent and efficient.42 From late 2000, cabinet ministers were able to read proposed laws, make comments and suggestions, and carry out votes online. Real audio broadcasts and full-text transcripts of parliament sessions are posted instantly and almost all government documents can be accessed online by ordinary citizens. In May 2000, the government approved the "Estonian Healthcare Project 2015," a key component of which is the use of ICT to achieve efficiency gains.
Achievements and Limitations. When Estonia started its ICT program in the early 1990s, the infrastructure was old and inadequate. Ten years later, Estonia boasts a modern telecommunications network and a computer literacy rate higher than many of its Western European neighbors. Toomas Hendrik Ilves, the Estonian Minister of Foreign Affairs, points to "a combination of well-designed concession agreements with foreign telecommunications operators, clear government support for a broad e-readiness program, aggressive public awareness-raising, and governmental commitment to the digital revolution (particularly in education and e-government) as being the factors making for Estonia's successful adoption of ICT to both position the economy, but also to address selected development goals."
Estonia's approach is not without its constraints. Despite the investment in human capability, educated Estonians are continuing to leave the country to pursue employment abroad. Until this is reversed, skilled labor shortages threaten to become a bottleneck in the development process. In addition, there has been some discord between Estonia's emphasis on both global positioning and addressing specific development goals. The focus on competitiveness and the associated adoption of liberalization policies is having a social cost (reflected in a declining human development index) that ICT alone has not been able to abate. Additional attention should be given to using ICT to ensure vulnerable and disadvantaged communities are not further marginalized by liberalization policies.
Having reviewed five case studies illustrating the different types of focus for national ICT strategiesexport, national capacity, global positioning and development goalsas well as the experiences of other countries (see Appendix 3), the following section assesses each approach and derives some general lessons about how ICT can best address development goals.
1. An export focus can produce economic growth, improve balance of payments and reduce dependence on traditional commodity exports. An ICT-related export focus has had a positive impact on the balance of payments and GNP of some developing countries. In Costa Rica, ICT accounts for 38 percent of exports (mostly Intel) and contributed to a major increase in GNP. Costa Rica also leveraged the high profile investment from Intel to entice other ICT firms, such as Acer and Microsoft, to invest. In India, the focus on software exports has also borne fruitsoftware exports have been increasing by over 50 percent per annum since the early 1990s. A 1999 Nasscom-McKinsey report estimates that by 2008, there will be 2.2 million additional jobs created, that foreign investment will rise to US$5 billion and that software will account for 7.5 percent of India's gross domestic product.
2. An export focus tends to have a limited impact on the development of national infrastructure and capacity. Since the focus is on the lucrative, already developed external markets, there is no immediate incentive to focus on the infrastructure needs of the domestic market, despite its being limited by market failure or under-development. For example, India's concentration on the export-oriented software industry meant that the primary focus was on ensuring good external connectivity and incentives for enterprise (secured through the software park scheme). Improvement of domestic infrastructure and reduction in access charges, which would have helped to expand the domestic market for ICT, was not a priority.
3. Gains from an export focus do not automatically translate into broader development gains. In Costa Rica, most of the inputs used are imported and there are few backward and forward linkages with the rest of the economy. This is often the case with assembly operations, although it is not inevitable. Under the export focus approach, developing countries are forced to compete with each other for the same limited supply of capital. The pressure to offer competitive financial incentives to draw in such investments can take a toll on the public budget of smaller countries if not offset by rising growth and revenues.
4. A national capacity focus may fail to achieve the full potential benefits from the use of ICT. If a national ICT sector develops without being subject to competitive pressures, incentives for the adoption of cutting edge technologies can be lost. In addition, lower costs typically associated with ICT may not be passed on to users, inhibiting the expansion of ICT demand and deployment. This was the case in both Brazil and India in the first phase of their ICT sector development.
5. A national capacity focus creates diversified producer capabilities. Unlike the case of an ICT export sector, a national ICT capacity focus is more likely to lead to the development of local technical capabilities, spare parts production, component supplier networks and other linkages. As Brazils experience shows, these developments can help to facilitate the diffusion and deployment of ICT more broadly.
6. A national capacity focus has the potential to be more adapted to local needs. A national capacity focus leads to research and development into and domestic production of ICT goods and services that are more likely to be tailored to local needs, and also to result in better user support and after sales service. Moreover, if already competitively priced, there is the added benefit that equipment prices will be buffeted from adverse changes in the exchange rate. Brazil's real devaluation in 1999 increased prices of imported computers by 40 percent, but prices of local products remained relatively stable.
7. A national capacity focus may facilitate the achievement of development goals in the long term, but the impact is indirect and limited in scope. A strategy that is focused on developing capabilities in the national ICT sector may lead to an increase in jobs and enterprises created both directly and indirectly. It may also facilitate a higher level of deployment of ICT in areas that have an impact on development imperatives. However, to the extent that the main focus is the ICT sector, the spillover effects may be limited and development goals addressed only indirectly or in the long run.
8. A global positioning focus is essential to the long-term economic success of developing countries in the global network economy. As opposed to a national capacity focus, a concentration on the deployment of ICT to improve global positioning allows countries to use ICT to make the overall investment climate more attractive and to facilitate increased competitiveness in sectors and products in which the country may already have, or can create, a competitive advantage. Malaysia and Singapore have deployed ICT-enabled strategies to increase their global and regional positioning. They have seen dramatic increases in foreign investment as a result of adopting this strategy.
9. A global positioning focus may fail to meet certain specific development goals. While global positioning is essential for countries to realize opportunities in the global economy, it does not necessarily translate into gains for the population, particularly vulnerable and disadvantaged groups. Moreover, a focus on such positioning needs to be supplemented by the use of ICT to achieve specific development objectives, such as improving the competitiveness of SMEs producing for local or external markets. Malaysia's focus on global positioning has allowed the country to achieve substantial economic development gains. However, the level of social development has not progressed at an equivalent rate.
10. A development goal focus allows countries to achieve both broad-based economic growth and specific development goals. Strategies that focus on development goals typically involve the adoption of comprehensive approaches to integrate ICT into broader development strategies, thereby gaining from the synergies between different elements of a holistic approach to development. In the case of Estonia, the national ICT initiative, Tiger Leap, had a dramatic effect within a single sectorimproving access and content in schoolsand also a spillover effect in other sectors, such as health, banking and public administration, which have realized the importance of the role ICT can play.
Two overall conclusions can be drawn from the lessons about strategic focus: First, although not all countries can benefit from a focus on developing ICT as a sector, all can benefit from using ICT as an enabler. Countries that launched national policies to support ICT as a sector based their efforts on local comparative advantages that included relatively advanced technical and human capabilities, basic telecommunication infrastructure, and substantial R&D investment, in addition to which, they offered large incentives to national or foreign direct investors. In some cases, such as Brazil and India, it took over 10 years to create an internationally competitive ICT sector and the impact on development goals was not immediate or direct. This suggests that promoting ICT as a sector might not be the best or most viable option for all developing countries. However, by focusing on ICT as an enabler, all countries can, in principle, achieve a degree of success by directly incorporating ICT into their existing development strategies and goalsfor example, to address poverty or health and education. If local conditions are suitable, within the context of an enabler strategy, countries can also try to develop a competitive ICT sector.
Second, a focus on development goals places development at the core of the strategy and ensures a more broad-based diffusion of the benefits of ICT. When ICT as a sector is taken as the focus of the ICT strategy, there are some development gains. Principally these take the form of an increase in jobs, gains to enterprise development, enhancement of domestic capabilities and some spillover to other sectorssuch as demand for the products of other sectors and supply of ICT goods. The development gains are potentially higher when the focus is on building domestic capacity as opposed to an export focus. When ICT is used as an enabler, the gains for development are potentially higher still. An ICT as enabler strategy focused on global positioning does not directly address development imperatives, but it is necessary for countries to position themselves to leverage the social and economic development opportunities associated with the global economy. Making development goals the primary focus has greater impact than any of the other three strategies in isolation because it ensures that the latter are aligned with meeting development goals.
This section outlines some lessons from national experience about how to implement ICT strategies to ensure development goals are met. These issues will be discussed in more detail in Section 3 where a more comprehensive framework for action is introduced.
1. A comprehensive and holistic approach is the most effective way to benefit from synergies and ensure the impact of ICT deployment is optimized. Even with India's explicit software sector export focus in place since the 1970s, it became clear that a number of related factors needed to be addressed if the strategy was to be successful. Despite the abundant supply of English-speaking, skilled IT professionals, it was only when competitive international connectivity and enterprise incentives were put in place that software production could really take off.
Adopting an ICT as enabler strategy often demands a more comprehensive approach because there is a need to go beyond the requirements of a single sector and to facilitate a more general deployment of ICT. In the case of South Africa, development-focused ICT deployment could not go beyond micro-level initiatives until the central and state governments recognized the need to address infrastructure, access, local language content, SME support and e-government.
The main components that are important for an ICT strategy to addresswith some variation in range and scope depending upon the focus of the strategy43are:
Although each of these components produces benefits, because they are interrelated, they work better if addressed together as part of a coordinated strategic approach.
2. There is a need to recognize the roles played by different stakeholders and to support strategic partnerships. The country studies indicate that success depends on the contributions of a number of different actors, especially in areas such as infrastructure and human capacity development. The ICT as enabler strategy requires coordination and involvement from a wide range of interested parties, a process facilitated by visionary leadership and mechanisms to promote broad-based participation. This can take the form of formal taskforces (South Africa) or public-private partnerships (Brazil), and should include the local level to ensure that initiatives are demand-driven and implementation incorporates bottom-up approaches.
3. Global, national and local linkages need to be leveraged. The country studies demonstrate that national strategies are critical to using ICT effectively for development goals, but there are significant limitations to what a single country can accomplish on its own, even when it takes advantage of all the opportunities within its control. There needs to be coordination and partnerships, not just at the national level, but also at the global level to bring together developed and developing countries, multilateral institutions, civil society and the private sector to assist developing countriesparticularly the least developedin leveraging the potential of ICT to address development goals.
Section 2.2 (ICT for Specific Development Goals) demonstrates that ICT is already having a powerful and direct impact on achieving specific development goals in diverse communities in five key areas: health, education, economic opportunity, empowerment and participation, and environment. Section 2.3 (National Approaches to ICT) widened the lens to reveal how national ICT strategies are enabling developing countries to generate export-led economic growth, strengthen national capacity and reposition themselves in the global economywhile simultaneously, in some cases, addressing broader social and human development goals. The case studies in this section strongly suggest that in order to maximize the impact of ICT on development goals, it is important that national strategies have an explicit development focus.
The initiatives profiled in this studyand the resulting lessons learned for development policy and implementationsuggest strong linkages between direct ICT interventions and national-level programs that deploy ICT as an enabler of development. In addition to the direct and powerful impact these initiatives can have on specific development needs, they have the potential to contribute to the success of, and should therefore be aligned with, a development goal-focused national strategy.
The decisions to be made by developing countries and communities are not easy or simple. A framework for deploying ICT for development is needed to prioritize ICT interventions, identify synergies, maximize development impact and coordinate the actions of stakeholders. The framework in Section 3 draws on the empirical evidence available and from the analysis developed in this section. The objective of the framework is to assist developing countries and communities to embark upon bold strategies to harness the power of ICT for the benefit of all members of society.
The unique characteristics inherent in ICT and the evidence from both micro-level initiatives and national ICT approaches suggest that a development-focused ICT strategy that leverages the powerful synergies of ICT as an enabler of social and economic development can lead to the creation of a development dynamic. The lessons learned point to five important interrelated areas for strategic intervention: policy, infrastructure, enterprise, human capacity, and content and applications (these will be referred to as components of the dynamic).
The development dynamic's distinctiveness arises from the fact that it draws on:
Taken together, these factors suggest that an approach which addresses several components of the dynamic is likely to be more effective than one which focuses in just one area. However, the development dynamic framework does not call for an "all or nothing" approach, nor does it suggest that such a dynamic can only be ignited if action is taken in all five areas at once. While acting on any of the components of the dynamic can produce valuable results, interventions taken across several component areas can generate returns to scale much greater than those achieved by a concentrated focus in any single area. As critical mass and threshold levels are achieved, feedback, multiplier45 and network effects46 can ignite a virtuous cycle of sustainable development.
Consider the following example, which takes a change in infrastructure access as its starting point. Investments in ICT infrastructure can lead to improved access by reducing costs and extending coverage to additional areas. This can have a catalytic impact on enterprises and provide additional incentives for increased adoption of ICT. For example, it can help SMEs improve their competitiveness and expand market access. This in turn can create a feedback effect as demand for additional and faster access will entice additional investments in ICT infrastructure. The increase in both infrastructure and SMEs can lead, through spillover effects, to an increased demand for skilled labor and knowledge workers. This increased demand for labor can then trigger additional investments in human capital. Such a combination of effects illustrates the connection between the different components that characterize the dynamic. To the extent that these interconnections are foreseen and addressed through complementary interventions, multiplier and feedback effects are realized and the emergence of bottlenecks is avoided.
While the above example just looks at the generic case of a change in the conditions under which infrastructure is provided, the initiating effect could have started from any of the components of the dynamica change in IT policy, legislation favorable to enterprise creation, or a demand stimulus for increased deployment of ICT. In South Africa, the government requirement that all public procurement be done with electronic tenders led to a series of dynamic interactions between policy, enterprise and human capability development. Similar results have been achieved through infrastructure roll-out policies centered on development goals. Estonias Tiger Leap Program has demonstrated how ICT deployed to improve education can have positive impacts in other sectors.
The complementarity between components of the development dynamic has substantial policy implications for national strategies focused on ICT as an enabler of development goals. Each of the five components has specific sub-components that allow policy makers and stakeholders to adopt and adapt them to reflect local priorities and conditions. This provides for a flexible policy tool that can be used in different contexts without tying countries to specific development paths.
The following section addresses, in more detail, each of the five dynamic components, or areas for action.
Addressing infrastructure in the context of a strategy deploying ICT as an enabler to enhance the achievement of development goals would involve the adoption of the following broad principles, adapted for the particular national context:
Strategically Focused Capacity. The strategy should focus on developing strategically focused network infrastructure capacity for key sectors to take advantage of leading edge technologies. To take advantage of global positioning possibilities, such focused capacity should also include a reasonable level of global connectivity.
Relative Ubiquity. Unlike policies focused on export expansion or only on global positioning, the above should be complemented by interventions to promote ubiquitous access through universal access funds and support of community networks and public access points.
Until recently, the financial situation of a country's public telecommunications company defined its ability to build and maintain core network infrastructure, as well as to provide universal access. However, with privatization, liberalization and policies aimed at increasing competition in the sector, there is a greater involvement of the private sector in infrastructure provision.47
Ubiquity and the move toward universal access48 is becoming more and more feasible due to rapidly declining costs for networking and telecommunication technologies. These declining costs allow developing countries to leapfrog ahead through the use of cutting-edge technologies. In Botswana, for example, the information network is composed of an all-digital microwave and fiber-optic system with digital exchanges at the main centers. The involvement of the private sector has hastened the adoption of these technologies, particularly in the case of wireless and mobile.
Thus, the framework associated with the development dynamic suggests a move away from either a "build it and they will come" infrastructure policy or one that does not see ICT infrastructure as a development priority. Instead it focuses on the complementarities and synergies between the five strategic areas for action, and on coordinating the work of multiple actors. Infrastructure is rolled out as part of an overall program that includes simultaneous actions in other areas. These could include: the introduction of a supportive regulatory framework, partnerships with NGOs, private enterprise and non-profit community initiatives to expand ICT access and services, support for SMEs and strengthening demand as a beneficial side effect of addressing development imperatives through a public infrastructure strategy (for example, through schoolnets or e-government).49
Such initiatives can also help to enhance the financial sustainability of the infrastructure created. Human capacity and skill development would not appear as a bottleneck limiting effective deployment and use of infrastructure. An overall strategy which focuses on strengthening human capacity will result in much more effective spending on infrastructure because insufficient skills will not create a bottleneck to its effective deployment and use.CONTENTS
Basic literacy is of crucial importance for development and, as such, is one of the development imperatives adopted by the UN Millennium Summit. However, for the purposes of adopting a strategy that deploys ICT as an enabler, it is not an absolute requirement that a country begin with a high literacy rate. In order to deploy ICT for development, it is important for countries to develop a critical mass of knowledge workers, technology users, and motivated entrepreneurs.
Knowledge Workers. Countries should focus on educating and retaining a core of professionals with the technical capabilities to provide and maintain ICT infrastructure and related ICT services, and to adapt new technologies for local requirements. Both tertiary education and corporate training are important components of ICT skill development.50 Progress in these areas requires an increase in the number of tertiary institutions, the promotion of relevant educational curricula, and the creation of new educational facilities with specific emphasis on ICT skill development. Skill development and retraining of the existing workforce is key. Policies encouraging businesses to allocate resources to employee development and training, as is happening in South Africa, can be an important mechanism for achieving this outcome.
Intermediaries and Technology Users. Also important for achieving development goals and sustainable growth are the institutions to link the technology to those who would benefit from its use. A number of different actors, including the national and global private sector,51 as well as community networks (particularly for the development of ICT intermediaries and users) have been involved in skill development and the creation of ICT awareness. However, it is not just the creation of skills that is important, but also the development of incentives52 to reduce brain drain.53 In South Africa, for instance, the 15-20 percent per annum exodus of skilled technical workers has hindered ICT deployment and the growth of the ICT sector. This process may be reversed if proper measures are taken by policymakers to improve market and social conditions through a development dynamic.
Motivated Entrepreneurs. The development dynamic is also accelerated by the creation of a critical mass of motivated entrepreneurs, people with business expertise to leverage new opportunities.54 This is a function not just of entrepreneurial skills and financing, but also of a supportive policy environment and opportunities for development. In South Africa, for example, the transition to universal democracy in 1994 has led to a proactive approach by the government to the development of local entrepreneurs and managers. Its Black Economic Empowerment program creates incentives for black businesses. Currently, the number of black entrepreneurs and managers is growing, although beginning from a very low base.