Information Technology and Development: Beyond “”Either/Or””

James B. Steinberg
James B. Steinberg Former Brookings Expert, University Professor, Social Science, International Affairs, and Law - Maxwell School, Syracuse University

March 1, 2003

After years of drift and inattention to the problems of global development, during the past half decade the international community has dramatically increased its focus on strategies to help the people of the world’s poorest countries share in the benefits of globalization and escape the traps of poverty, disease, and lack of education. The decision of the world’s leaders at the United Nations Millennium Summit in September 2000 to adopt eight specific development goals provided an agreed political benchmark for measuring progress. Left open, however, were crucial issues about how best to achieve those goals.

A key unanswered question is the potential contribution that information and communication technology (ICT) can make to this effort. The question is not new. In 1984 the Commission for Worldwide Telecommunication Development (the Maitland Commission) issued an influential report, The Missing Link, citing the lack of telephone infrastructure in developing countries as a barrier to economic growth. The advent of the global information technology revolution in the 1990s set off a heated, sometimes acrimonious debate among development specialists and policymakers about the place of ICT in development.

On the one hand are those who see wiring the global South as a way to transcend decades of painful economic development and catapult even the poorest countries into the information age. As United Nations Secretary-General Kofi Annan observed in his Millennium Report, “New technology offers an unprecedented chance for developing countries to ‘leapfrog’ earlier stages of development. Everything must be done to maximize their peoples’ access to new information networks.” Proponents of this view not only stress the potential benefits of ICT but also argue that in an increasingly globalized economy, countries that fail to “get connected” will fall further and further behind.

At the opposite end are those who assert that “you can’t eat computers.” In the words of Microsoft’s Bill Gates, “Let’s be serious. Do people have a clear view of what it means to live on $1 a day? . . . There are things those people need at that level other than technology. . . . About 99 percent of the benefits of having [a PC] come when you’ve provided reasonable health and literacy to the person who’s going to sit down and use it.” Investing in ICT for poor countries, they argue, draws precious resources away from more urgent development needs. The lack of critical infrastructure, such as adequate energy grids, and of education keeps citizens of poorer countries from tapping ICT’s potential.

Modern ICT began to have an impact in some developing countries even before widespread adoption of the Internet. In Brazil, for example, the computer industry accounted for more than 74,000 jobs and $4 billion in revenue by 1990. In 1988 India launched a set of policies that fostered a software-development industry whose exports grew to $5.7 billion by 1999-2000.

But the explosive growth of the Internet in the mid- to late 1990s drew increasing attention to the so-called digital divide. Just how serious is the gap? For telephones, the picture is mixed. In 1991, total telephone penetration (fixed plus mobile) per 100 inhabitants stood at 49.1 for the developed world, 3.3 for emerging economies such as Eastern Europe and China, and only 0.3 in the least developed countries (LDCs). By 2001, the gap between developed (121 per 100) and emerging (18.7) had narrowed considerably (from a ratio of 15:1 to 6:1), but that between emerging countries and LDCs had grown (from 12:1 to 17:1). For the Internet, the gap remains significant, although bright spots exist. China, for example, saw a 75 percent increase in Internet users, to 59 million, from 2001 to 2002, making it the second-largest Internet-using country in the world (in addition to being the largest mobile telephone market). Africa now has 5 million Internet subscribers. Moreover, according to the IMF World Outlook, 2001, “The rate of diffusion of IT to developing countries has been rapid compared to earlier all-purpose technologies” such as railroads. But today, says the International Telecommunications Union’s World Telecommunications Report 2002, “[T]he 400,000 citizens of Luxembourg between them share more international bandwidth than Africa’s 760 million citizens.” In October 2000, 95.6 percent of all Internet hosts were in the industrialized countries; Africa had only 0.25 percent and its share was falling.

Taking Action

Growing awareness of the digital divide spurred several initiatives by the developed world and the international organizations responsible for development, including the United Nations Development Program (UNDP) and the World Bank. At its July 2000 summit the Group of Eight (G-8) industrial countries created the Digital Opportunity Task (DOT) Force. The DOT Force, composed of representatives of G-8 and developing countries, as well as members of industry and nongovernmental organizations, was asked to make concrete recommendations for fostering policy, regulatory, and network readiness; improving connectivity; increasing access and lowering cost; building human capacity; and encouraging participation in global e-commerce networks. Its report, Digital Opportunities for All: Meeting the Challenge, became the basis of the Genoa Action Plan, adopted at the G-8 2001 summit. The focus of the plan was on “mainstreaming” ICT as an essential component of overall development strategies “as a fundamental tool for reducing poverty and for spurring sustainable development.”

The private sector also stepped up. In January 2000 the World Economic Forum launched its Global Digital Divide Initiative involving leading ICT, communications, and media executives. Hewlett Packard announced a $1 billion “World e-inclusion” program to sell, lease, and donate products and services to developing countries. Cisco Systems (in partnership with the ITU) set up Internet training centers for students and ICT and telecommunication professionals in the developing world.

The increasing international attention to the digital divide has moved to the forefront a key policy question—just how significant is the divide for the overall prospects for developing countries, and what role should closing that gap play in overall development strategies?

Four characteristics of ICT make it an attractive element of any strategy to meet development challenges. First, ICT is highly versatile. It can be tailored to meet a variety of diverse challenges and need not be “purpose built.” The same network, server, and peripheral devices (such as PCs or cell phones) can help support distance education and remote health delivery and connect rural communities to global markets. Second, ICT can help transcend barriers of geography. It allows individuals and entities anywhere in the world access to the same information without the time and cost associated with physical transportation, an advantage substantially enhanced by the advent of wireless and satellite communications, and voice-over-Internet protocol long-distance service. Third, it allows users, even in poor and small communities, to harness the benefits of scale and “network effects” (the exponential increase in value that comes with each additional user). Finally, it facilitates the transfer of know-how across the full spectrum of knowledge, allowing developing countries to reap productivity gains and harness state-of-the-art technology.

Several problems have nevertheless impeded the widespread adoption of ICT in the developing world and led to some deep disillusionment. Images of unused computer screens in rural schools and telecenters attest to good intentions gone awry. Among the reasons for ICT’s failure to deliver on some of its more overheated hype are lack of skilled workers to maintain equipment and train potential users, inadequate infrastructure (such as electricity), poor government telecommunication policies that have put costs for interconnection out of reach, and lack of applications tailored to meet the unique needs of developing countries (including language barriers).

ICT’s Development Potential

Assessing the potential value of ICT in supporting development requires addressing the three different channels through which it could work: its inherent worth in bringing new ideas to those outside the global mainstream; its part in helping to achieve specific development objectives; and its role in fostering broader economic development.

First, ICT has enormous potential to enrich the lives of people everywhere—regardless of any instrumental role it may play in meeting broader development needs. These technologies can help bring ideas and experience to even the most isolated, opening to them the world outside their village, town, and country—including family members and friends who have moved away. It also allows their experience to be shared with the world at large, at the tap of a keystroke or the touch of a cell phone keypad. The case for including information technology in development strategies would be strong even if it contributed little to explicit development goals. ICT can also empower individuals to participate in the social and political institutions of their community, giving voice to those who have traditionally been excluded.

Second, ICT-based solutions have already proved their value in addressing several specific challenges identified in the UN’s Millennium Development Goals (MDG). Health care workers in more than 150 countries, for example, are using Health Net to bring needed expertise and help deliver health services in underserved, often remote communities. Distance learning initiatives, such as those at the University of South Africa, are training a new generation of teachers, who are critical to meeting the MDG’s objective of universal primary education by 2015. The contribution of ICT is not confined to Internet-related projects: radio- and telephone-based services, for example, are making real contributions in areas such as training for health workers in Uganda and Kenya.

Third, in the end the key to self-sustaining development is economic growth. Although supporters have a strong intuitive sense that ICT can make a significant contribution to economic growth by increasing productivity, the empirical evidence remains somewhat uncertain. Anecdotal evidence suggests that effective use of ICT does, at least under some circumstances, make a difference. In the first place, it can provide an important source of income. India’s software sector attests to as much. And Costa Rica has attracted some 32 foreign electronic firms since 1995, including Intel and its investment of more than $1 billion. Even more important in the long run, however, ICT can strengthen overall productivity in developing countries by increasing efficiencies and technological competitiveness and by linking local producers to global markets. The experience of Estonia, which sought to overcome its lack of natural resources and outdated manufacturing sector by embracing an all-encompassing strategy of promoting ICT throughout its society and economy is an example of ICT’s potential. A recent study analyzing the positive impact of access to telephones on income in rural China has helped further our understanding of the ways in which ICT can contribute to overall development.

Other studies seem to confirm that with the proper “enabling environment,” developing countries can increase their rate of adoption of ICTs, a valuable, though not sufficient, condition for accelerating economic growth.

In 2001 a report by the Digital Opportunity Initiative, a collaboration between the Markle Foundation, the UNDP, and Accenture, identified five core elements to a comprehensive approach to create such an enabling environment—infrastructure (the hardware and “pipes,” physical and wireless); human capacity (skilled individuals who can maintain, adapt, train, and use the technology); government policies (telecommunication policies that facilitate the adoption of ICT, along with sound governance and trained regulators more generally); content (applications geared to the specific need of developing communities, such as local language and tools for rural agricultural development); and support for enterprise (much of the ultimate gains from employing ICT largely stem from a vibrant private sector, but the public sector too can improve productivity and performance through ICT).

Although getting each element right can make a significant contribution, an integrated strategy offers the best promise for greatest gain. As a result, many developing countries—from Tanzania to Kyrgyzstan—are beginning to adopt “national strategies” to address in a comprehensive way these various elements. A key to success is to bring together all the stakeholders—government, the local private sector, and civil society, as well as the donor community—both to develop the plans and to oversee their implementation. Studies suggest that local “ownership” and the involvement of stakeholders is especially critical to successfully harnessing ICTs.

How can the developed world help developing countries make effective use of ICTs? The lesson of the 1990s was that simply providing technology will have marginal impact. This supply-side approach has led to inflated expectations and mistrust that the purveyors of the technology care more about opening markets than helping the poor. Rather, the idea behind mainstreaming ICT into a broader development context is to seek ways to leverage ICTs to achieve core objectives. Sharing expertise (such as training programs for policymakers and regulators in the developing world) and best practices is often more valuable than the hardware itself. Recognizing the limits on the role of official assistance is also critical. Ultimately the broad-scale adoption of ICTs in the developing world will depend on the private sector. But government assistance can play an essential role, both in providing public goods and in helping to create the enabling environment that will encourage private investment.

For developing countries to benefit fully from the ICT revolution, they must have a voice in setting the policies that will affect them—and that voice must be heard not simply in organizations involved in development policy, such as the World Bank and UNDP. On issues ranging from international telephone tariffs to spectrum allocation to property rights, in institutions ranging from ICT-specific groups like the ITU and ICANN (the Internet Corporation for Assigned Names and Numbers), to the multisector World Trade Organization, key decisions are often made with little or no input from the poorest countries. All these institutions will need to take concrete actions ranging from increased transparency, to technical assistance, to training and financial support if these nations are to overcome structural barriers to participation.

Debate on the place of ICT in development has moved beyond the black-and-white arguments of proponents and skeptics in the 1990s. These new technologies, it is now clear, are not an end in themselves. Nor will a one-size-fits-all approach work—the challenges faced by developing countries vary too greatly by history, geography, and level of economic attainment. In particular, the challenges facing larger countries and economies (even where the overall level of poverty is high) differ considerably from those facing smaller nations whose internal markets are small and who are thus critically dependent on linkage to markets and knowledge beyond their borders. But evidence is growing that ICT is a potentially powerful tool when used judiciously as a part of an overall development strategy. The challenge, both for developing countries and for the broader international community, is to build on the experience to date to make these tools available to the stakeholders who are best positioned to adapt and apply them to their most pressing needs.