ForNotes_Slides2_Global-Digital-Development_Hilbert_wnotes_Apr18

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Unformatted text preview: Global Digital Development Martin Hilbert (Dr., PhD) It is very important and useful to confront our digital daily reality with some kind of conceptual framework in mind. How can we think about global digital development? Technology is a TOOL We can think about the digital revolution as an interplay among technology, society, and policy/ strategy. The digital technology is a tool for social modernization and this tool has to be guided (not naturally good or bad). 1 Infrastructure e-education e-health e-business e-government Generic services Capabilities, skills, culture Source: Hilbert, Martin, ECLAC, 2002; Hilbert, M. (2012). Towards a Conceptual Framework for ICT for Development: Lessons Learned from the Latin American “Cube Framework.” ITID, 8(4), 243–259. Technology can be divided into different sectors. First, we have the physical technology (tangible - phones, computers, routers, etc). Then, we have intangible parts (software, apps, Facebook); these are generic services we use. Third, we have the biology aspect (e.g. skills, cultural changes needed to embrace digitalization). We use a combination of this technology to put parts of communication and information processes in society into electronic networks. That's why we use the word "e" in front of systems, but future generations won't need to do that. Examples: e-dating, e-banking, e-govt. Technology is not automatically good or bad so we have intervening policies and strategies to guide it (2 kinds of interventions: + and -). + means to drive to a dynamic/extreme (e.g. add oil to fire, extinguish criminality). means you want to keep it constant or continuous (e.g. privacy, want people to share stuff on social media, but NOT everything). What are the requisites? What are the requisites for the digital revolution? Infrastructure To answer the requisites question, it all starts with the tangible infrastructure of digital technologies. Source: Hilbert, Martin, ECLAC, 2002; Hilbert, M. (2012). Towards a Conceptual Framework for ICT for Development: Lessons Learned from the Latin American “Cube Framework.” ITID, 8(4), 243–259. 2 Global ICT developments, 2001‐2014 100 Mobile‐cellular telephone subscriptions 90 Per 100 inhabitants 95.5 Individuals using the Internet 80 Fixed‐telephone subscriptions 70 Active mobile‐broadband subscriptions 60 Fixed (wired)‐broadband subscriptions 50 Europe ≈ 80 % 40.4 40 32.0 30 15.8 20 10 9.8 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Africa ≈ 10 % 2013 2014* Note: * Estimate Source: ITU World Telecommunication /ICT Indicators database Global Broadband cost: half of countries < 5% of income ~10 countries = 200 % of income! The 40% number of internet users is an average of areas like Europe and Africa. Global ICT developments, 2001‐2014 100 Akamai (Quarterly Report). The State of the Internet. Mobile‐cellular telephone subscriptions 90 Per 100 inhabitants 95.5 Individuals using the Internet 80 Fixed‐telephone subscriptions 70 Active mobile‐broadband subscriptions 60 Fixed (wired)‐broadband subscriptions 50 40.4 40 32.0 30 15.8 20 10 9.8 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Note: * Estimate Source: ITU World Telecommunication /ICT Indicators database Dimensions of the Digital Divide 2012 2013 2014* The most traditional technological infrastructure is the fixed line phone, initial portals to the internet too. In the entire world, the fixed line telephone decreased around 2005 (20 FL phone per 100 people), but recently, it has gone down to 15. FL phones have been replaced by internet and mobile phones. Almost 1/2 (40%) of human kind is using the internet. There are 95-96 moblie phone subscriptions per 100 people in the world. Relatively, electricity reaches only 80% of the world. Mobiles are considered the fastest diffusing technology of human kind. Most people in the world have access to the internet through a narrowband, which is less than 256 kilobits. Broadband only reaches 10% of humankind. BB is very expensive. The global goal is to bring the price of broadband down to less than 5% of the income of a society of the average income. In the US, we are over this goal. This goal is only met in half the countries in the world. In some countries, BB costs 2x as much as people earn. Hope is shown through the fact that: 1 in 3 people have access to mobile BB, so we can use our phones to access high speed internet. Some people are connected to the digital realm and some are not = digital divide. Rich people might have easier access because technology costs money, but there are other reasons/ explanations for divide too. This graph shows us the relation between internet usage and the educational degree in Brazil. Source: OSILAC, own calculations, based on: Mexico, INEGI 2004; Colombia, National survey of Culture 2002; Argentina, Irol D’Alessio 2003; T&T, NECS 2003; Chile, University of Chile 2000, Dom.Rep., ONE 2005; Brazil, NIC 2005. Until the year 2009, people used their phone mainly for voice (orange). The (blue) bars are data traffic. We now mainly use our phones for data traffic as a portal for the internet (e.g. watch videos). We also use the internet to make voice calls (e.g. Skype). Mobiles are now the most important portal for access to high speed internet throughout the world. 3 Dimensions of the Digital Divide Urban‐Rural household per GEOGRAPHY URBAN fixed URBAN mobile . Argentina (11/01) RURAL fixed Chile (04/02) RURAL mobile Venezuela (10/01) Source: OSILAC, own calculations, based on: Mexico, INEGI 2004; Colombia, National survey of Culture 2002; Argentina, Irol D’Alessio 2003; T&T, NECS 2003; Chile, University of Chile 2000, Dom.Rep., ONE 2005; Brazil, NIC 2005. Dimensions of the Digital Divide Income and degree are two dimensions to see who accesses the digital real. This graph shows a divide between urban and rural households AND fixed and mobile ways of accessing digital technology. Urban access has downward pattern, vice versa for rural. Urban households have more fixed than mobile solutions. Rural households have more mobile than fixed solutions to accessing technolgoy. Young people use the internet more than older people. Urban‐Rural household per GEOGRAPHY URBAN fixed URBAN mobile . Argentina (11/01) RURAL fixed Chile (04/02) RURAL mobile Venezuela (10/01) Source: OSILAC, own calculations, based on: Mexico, INEGI 2004; Colombia, National survey of Culture 2002; Argentina, Irol D’Alessio 2003; T&T, NECS 2003; Chile, University of Chile 2000, Dom.Rep., ONE 2005; Brazil, NIC 2005. Dimensions of the Digital Divide Urban‐Rural household per GEOGRAPHY URBAN fixed URBAN mobile . Argentina (11/01) RURAL fixed Chile (04/02) RURAL mobile The younger generation (up to 35) use their phones more for gaming and videowatching more than middle-age. Fun fact: 3% of the g-mas and g-pas use their iPhone for gaming. Venezuela (10/01) Source: OSILAC, own calculations, based on: Mexico, INEGI 2004; Colombia, National survey of Culture 2002; Argentina, Irol D’Alessio 2003; T&T, NECS 2003; Chile, University of Chile 2000, Dom.Rep., ONE 2005; Brazil, NIC 2005. Important to ask: what kind of tangible technology do we have and who is using it? 4 In addition to the tangible/hardware, digital technology consists of softwares and apps (referred to as "generic services"). An important part of this is the world wide web. Infrastructure Generic services The internetmap.net gives us a visual idea of what the generic service layer looks like. Source: Hilbert, Martin, ECLAC, 2002; Hilbert, M. (2012). Towards a Conceptual Framework for ICT for Development: Lessons Learned from the Latin American “Cube Framework.” ITID, 8(4), 243–259. The circles represent webpages. The size represents how much traffic goes through the webpage. The distance between the dots shows how often people switch from one to the other. The colors represent different communities (e.g. Red is Russian corner). Looking at the ranking of the most visited webpages of the world (as of 2015), we can see that Google, YT, FB are most visited sites. At rank 4, we see baidu.com, which is the leading Chinese search engine. 3 of the top 10 webpages are Chinese. At rank 11, there is an Indian webpage (Indian Google.co.in). Alexa.com is where the rahnkings are available. 5 Webpages have become very powerful, more so than people at times. Health care reform was launched through Obamacare through a webpage. More than $2B were spent in launching the site. There was so much traffic on the site that not everyone could access it, but it still led to Obama's ratings going down. Source: ; ; Front‐end (front‐office) & back‐end (back‐office) iceberg The webpage itself is the tip of the iceberg. It is referred to the "front end." Once you click on something on the page, something needs to happen. We refer to that as "back end." Source: Hilbert, M. (2005). Development Trends and Challenges For Local e-Governments: Evidence From Municipalities in Chile and Peru (Information Society Programme No. 6, LC/W.31). Santiago: United Nations ECLAC. Infrastructure Generic services Human capabilities, skills, culture The third important layer of the horizontal requisites refers to the human component. Usage skills are known as digital literacy. This layer has to do with advanced resources as well as skills and culture. Source: Hilbert, Martin, ECLAC, 2002; Hilbert, M. (2012). Towards a Conceptual Framework for ICT for Development: Lessons Learned from the Latin American “Cube Framework.” ITID, 8(4), 243–259. 6 This graph tells us something about the very crucial group of human capital in the digital age. y-axis Two axes. Y-axis shows the # of software and computer service employees as a percentage of total employment. (e.g. Finland - 2% of the pop. is in IT). X-axis shows amount of computer services/software spending as a percentage of the total ICT spending or the total spending on digital technology (e.g. US spends 45% of its total budget on software/comp services and ~50% of the employment works in this industry). x-axis Ratio of Software & computer service employees: Finland = 1 : 50 Mexico = 1 : 500 More developed countries spend a larger % of their ICT budget than developing countries. Developing countries spend more on hardware (because hardware comes first when building). Developed countries have larger ICT budgets which they can use on software. There is a positive correlation between the amt of $ you can spend on ICT and the share of software/comp employees. In Mexico, 0.2% of the employees work in software/comp services. In Finland, that's 2% (1 IT guy per 50 employees in the country and in Mexico, that's 1 per 500). There is a lot of demand for CS people and stats (since this is a lot of work involving databases). I keep saying that the sexy job in the next 10 years will be statisticians Hal Varian, chief economist at Google ; ; Hal says the sexy job in the next 10 years will be statistician. Just by knowing a statistical software program, you can potentially start off with a six-figure salary. Salaries projected to increase for those involved in data management. The IT revolution hinges a lot on this third layer, which has to do with the human capabilities. 7 What are the opportunities? Infrastructure e-education e-health e-business e-government Generic services Capabilities, skills, culture The opportunities arise by the possibility to modernize different sectors of society by putting parts of the information communication flows in the sectors into electronic networks (e.g. e-health). e-business e-government Source: Hilbert, Martin, ECLAC, 2002; Hilbert, M. (2012). Towards a Conceptual Framework for ICT for Development: Lessons Learned from the Latin American “Cube Framework.” ITID, 8(4), 243–259. Source: ; Jensen, R. (2007). The Digital Provide Quarterly Journal of Economics, 122(3), 879–924. This slide pertains to e-business. Example: use of mobile phone by fishermen in Kerala. Many were able to lift themselves out of poverty with introduction of mobile phone. 1) They could communicate with each other and optimize their fishing routes, 2) This protected them from natural disasters because they could see weather forecast, and 3) They could communicate with the demand and figure out where to go to sell their fish. They could cut out many middlemen. 8 The idea of the digital economy is to digitalize all kinds of information communication processes that happen between supply and demand. ERP = enterprise resource planning software. ERPs share how to manage resources within a company SCM = supply chain management. These are databases that administer the inventory in the company. CRM = customer relationship management. The interface that stores your shopping history are CRM software tools. These are all examples of "business intelligence." Customers have a SCM that communicates with company's CRM. Suppliers have a CRM that communicates with company's SCM. Customers of customers and suppliers of suppliers are all connected through the digital economy. The idea of the digital economy is to digitize the demand of the client in realtime also over internal business to business marketplaces with the supplier and the information flow. Prices are being digitalized. Prices are Digitizing markets the intermediates between supply and demand. Digital networks enable us to adjust prices in real-time. We digitalize buying and selling decisions, such as the stock market which is regulated by algorithms (rather than people). 80% of the buying decisions on stock market are regulated by algorithm alone. THE DIGITAL ECONOMY SCM CRM CRM BI SUPPLIER CLIENT ERP: Enterprise Resource Planning CRM SCM CLIENT ERP SUPPLIER SCM CRM B2B marketplace SUPPLIER CLIENT CLIENT SCM CRM CRM: Customer Relationship Management en.wikipedia.org/wiki/Customer_relationship_management BI: Business Intelligence CLIENT SUPPLIER SCM: Supply Chain Management CLIENT SUPPLIER CLIENT Source: Hendershott, T., Jones, C. M., & Menkveld, A. J. (2011). Does Algorithmic Trading Improve Liquidity? The Journal of Finance, 66(1), 1–33. Wikipedia Commons; Eisen, M. (2011). Amazon’s $23,698,655.93 book about flies. Two books were being sold for millions of dollars on Amazon. This may be because there were bidding wars going on based on algorithms solely without any human supervision. Who buys books for $mil? Video on how algorithms shape our world! Algorithms on Wall St are dependent on speed. They operate on milliseconds and For more see: Steiner, C (2012) microseconds. The internet is distributed Algorithms Are Taking Over The World from systems/places. The further away you are from the distribution, the slower you will be. There is a cable between Chicago and NY to make algorithms run 37x faster than one can click a mouse. Map in the video (red - people, blue places where you need to put servers to have an effective flow of information/ money) e-markets e-government Slavin, K. (2011). How algorithms shape our world. 10:45 – 14:10 min 9 BI CLIENT SUPPLIER CLIENT Amazon robots CRM Digitalization enters companies and digitalizes the entire work flow. Example: biological workers have been replaced by robots and human decisionmaking has been replaced by AI SCM SUPPLIER CLIENT Amazon uses KIVA robots to fulfill an order every 20 seconds. SUPPLIER ERP e-government Source: National Geographic. Car, Airbag, Money: Robots Make Cars. Source: UN DESA e-government survey 2014 E-government = digitalization of public administrative processes (DMV, USA.gov) and local municipalities In half of the countries worldwide, you can go online and create a personal account with the govt. In many countries, you can submit tax declarations online (convenient for users, cheap for govt). You can register a business online or pay fines. In some countries, you can apply for ID cards online, but these are very few countries (~30). e-government An important e-govt application refers to the public procurement process, which is everything the govt buys. A govt manages between 15 and 40% of the money in an entire economy/country. The govt buys things like roads, hospitals, etc. This can lead to a lot of corruption and efficiency, so bringing it online has a lot of benefits. Digitalization can save between 20-30% of expenditures. Digitalization can being transparency A procurement page on Chile is used an example in the video. You can download the details of every purchase Chile makes. You can look at all the providers for supplies and things like who wins what competition (and whether they have a relationship with a govt employee). 10 Recovery.gov shows all the money that was invested in the American Recovery and Reinvestment Act. E-govt represents a huge opportunity for developing countries to leapfrog/advance in the modernization of their public sector. Some low income countries have more advanced e-governments than their peers with higher income! X-axis: you can see e-govt index (more the R means more advanced) Y-axis: Gross National Income E-govt does not necessarily depend on how rich a country is. In general, $$ helps, but the modernization of the public sector can lead to a lot of cost savings. e-government By digitalizing, developing countries can skip many of the intermediary steps of public development and leapfrog into modernization. E-governments in developing countries often exchange experiences to modernize together and serve the people better (e.g. Latin American governments). Digitalization can change the way govt 10:45 – 12:25min communicates with citizens too. Audiences can talk to each other directly now. The complexity of our communication network is the square of the number of participants. In recent decades, most of the media that was available for public consumption was made my professionals. Those days are over. This increased communication between citizens and between citizens and govt can change the way people see govt as well as how the govt controls and observes people. 11 e-protest / e-revolution e-government Examples of govt and citizens affected by digitalization: Twitter Revolution, Arab Spring There is a lot of research on how social media is being to used to organize protests and revolutions as well as how govts can/should deal with it and if new govt responses are emerging based on these new digital channels. Hilbert, M. (04/2009). The Maturing Concept of e-democracy: From e-Voting and Online Consultations, to Democratic Value Out of Jumbled Online Chatter. Journal of Information Technology & Politics (JITP), American Political Science Association, 6, 2; 87-110. e-democracy high Weighted preference voting low large Group size small Semantic Web Social networking (Web 2.0) Direct yes/no vote e-democracy e-business If historians are to look back at this period of time in the future, they will observe the most profound changes to be the way society creates its common will, especially through democratic processes. Trade-off axis Representative prose low Depth of will expression high Argument visualization Democracy usually goes along two axes that constrain how dem can be implemented. On one axis is the group size that can be large or small. If you have a large group, you have to restrict the amt of info you can express (e.g. voting yes/no, A or B). We limit the size of the group to a smaller group size (e.g. representative democracy, Congress) and these people are invited to deliberate openly. Democracy goes along these two trade-off axes. In digital network, we see millions and billions of people openly expressing their opinions. e-democracy: opens up discourse into networks. 12 One solution is to create a rep democracy and let them talk to each other. Another solution is to let them vote. What is the common will of this group? Ex: public spending on education and respective tax adjustment? Business man: “I favor education spending, but preferably with existing resources”. Astronaut: “Ed...
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