Why ICT Matters for Growth and Poverty Reduction
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
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.
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
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
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:
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
Role of Software in ICT Strategy
, in a special issue
of E. Journal on Information Systems in Developing and Emerging Economies, 2003.