Why ICT Matters for Growth and Poverty Reduction

Why ICT Matters for Growth and Poverty Reduction - Why ICT...

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1 Why ICT Matters for Growth and Poverty Reduction Nagy Hanna 1 This paper aims to improve understanding of the challenges and opportunities of the information and communication technology (ICT) revolution, and their implications for development policy and strategies 2 . It examines why developing countries should look ahead and try to adapt and harness ICT in support of economic and social development . It provides a broad view of the promises and risks of the ICT revolution, and its potential impact on sustainable growth and poverty reduction. Overview A growing number of developing countries have been inspired by the success stories of fast-growing exports of ICT services from a diverse group of countries such as Singapore, India, Taiwan, China, Korea, Malaysia, Ireland, Israel, and Finland. Similarly, the EU countries have been inspired by the dynamism and productivity increases of the U.S. economy in the 1990s and the emergence of the so-called new economy or knowledge economy. The ongoing ICT revolution, combined with the forces of globalization, has provoked the hopes and fears of countries at all levels of development, to leapfrog to the new economy or be left out of the loop. The response of a growing number of governments is to formulate national ICT policies and strategies, where ICT is treated mainly as a sector or industry. Donors and aid agencies have responded by piloting a variety of ICT applications for specific sectors or target groups, by including ICT components in development projects, by dealing with telecommunications infrastructure as a free-standing sector, and most recently, by carrying out assessments of e-readiness. But how effective have such responses been? The paper argues that the current status quo, whereby mainstream development practitioners continue to ignore the potential roles of ICT, poses serious risks to development effectiveness. The complexity and expense of some ICTs and the urgent needs of the poor have led some to doubt the relevance and priority of ICT for 1 Nagy Hanna is currently a senior advisor on e-development at the World Bank.; previously he was a lead economist, corporate strategist, evaluator, and private sector development specialist. He led World Bank assistance on software industry development for several countries, starting with India's software export development in the early 1990's. Currently he focuses on ICT-enabled development strategies and integrated e-development projects. Among his relevant papers and books, see: The Information Technology Revolution and Economic Development, 1991; Exploiting Information Technology for Development: a Case Study of India, 1994; Information Technology Diffusion: Experience of Industrial Countries and Lessons for Developing Countries, 1995; the East Asia Miracle and Information Technology, 1996—all published by the World Bank. He recently published Making Development Work , 2002, Transactions Publications; and co-authored The Role of Software in ICT Strategy , in a special issue of E. Journal on Information Systems in Developing and Emerging Economies, 2003.
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Why ICT Matters for Growth and Poverty Reduction - Why ICT...

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