CSIT 304 It in The Global Economy: University of Ghana

CSIT 304
IT IN THE GLOBAL ECONOMY
Session 1 – Introduction
Lecturer: Julius Yaw Ludu, MENG

Contact Information: mcclyconsult@gmail.com
UNIVERSITY OF GHANA
Department of Computer Science
2017/2018 Academic Year
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Topic One
INTRODUCTION & BASIC CONCEPT
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Julius Yaw Ludu, MENG Slide 2 Department of Computer Science, UG
Basic Economic Concepts
 Economics: The social science that deals with the
production, distribution, and consumption of goods
and services and with the theory and management of
economies or economic systems.
 Macroeconomics: The study of the overall aspects and

workings of a national economy, such as income,
output, and the interrelationship among diverse
economic sectors.
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 Megaeconomics: It studies the interaction of national
economies through comparative analysis of the
economic systems.
 International Economics: A branch of economics that
studies economic interactions among different
countries, including foreign trade (exports and
imports), foreign exchange (trading currency),
balance of payments, and balance of trade.
 The study of interactional economics focusses on two
related areas; International trade and International
finance
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 Microeconomics also looks at the economic problem
from the perspective of individual units comprised of
households or consumers (demand side) and firms or
producers (supply side).
 In optimizing resources, also known as inputs (or

factors of production, which traditionally include land,
labour and capital), to produce enough output (or
commodities in goods and services) to satisfy human
wants, economics may also be looked at in terms of
three questions
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 Essentially, economics involves choices in terms of
what goods and services to produce, how to produce
them (i.e., the method or production function) and for
whom (implying the distribution of output).
 Choice involves an opportunity cost, which is defined

as the next best alternative foregone, such as when
resources are allocated to produce more
telecommunications services instead of highways.
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 Efficiency implies that the maximum output is
obtained from a combination of inputs; that is, no
better means of allocating resources exists that can
produce a higher level of welfare for most people in
the society.
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 A PRODUCTION possibility curve, a locus of
combinations of two products that can be produced
given the availability of resources in an economy is
shown in Figure 1
 It is used to illustrates the concept of opportunity

cost and efficiency
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Basic Economic Concepts – Figure 1
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The Law of Demand
 The law of demand
states that there is a
negative, or inverse,
relationship between
price and the quantity
of a good demanded
and its price.
 This means that

demand curves slope
downward.
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The Law of Supply
 The law of supply
Price of soybeans per bushel ($)
6
states that there is a
5
positive relationship
4
between price and
3 quantity of a good
2 supplied.
1
0
 This means that supply
0 10 20 30 40
Thousands of bushels of soybeans
50
curves typically
produced per year have a positive slope.
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Historical perspective on Globalization
and Economic Change
 Globalization: Interdisciplinary subject which relates
to all branches and fields of knowledge
 Main objectives of the study of Globalization of
economics is to:
THINK GLOBALLY AND ACT LOCALLY!

 Therefore knowledge about globalization is an
important part of the academic knowledge
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Change Economic Activity of the
Society
 In our days, no one sphere of life, including economic
sphere can act independent and isolated.
 All processes and events should be examined and

understood in the broad sense of economic, political,
social, ecological and demographic context, taking into
account their interdependence.
 The area of economic science is already too narrow to

explain all the aspects of the complex and
interdependence world.
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Globalization of Economics and IT
 The main spheres of life are inseparable and economics is
one of these spheres of life;
 The technological development fosters the development
of all other spheres;
 This includes Simultaneous development of
communication technologies, culture, education, etc.;
 Trends for universality of global development;
 Economic activity of the society has changed;
Our choice is to examine globalization of economics in the

broad context of development !
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Special Features of Globalization Today
Growing interdependence of all processes
Establishing of a global financial-economic area
Information technologies - WWW
Change in the state’s functions – vanishing of
the national boarders
Universality of the world – dissemination of the
democratic system and socio – cultural values
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Special Features of Globalization Today
 “Global” – a new scientific category, which treats
the processes and events on a global scale
 “Globalization” – an approach which expands and
deepens the economic theory as well as other
scientific fields
 Subject of globalizations are:
• global companies;
• regional structures;
• the state;
• international economic organizations
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Characteristics of the Globalization
Process
The dynamic development of the globalization
process follows the development of the
society.
As a phenomenon it has two levels: general
civilization and formative ones
Contradictory process which has its positive
and negative sides
It is pursued by anti-social phenomena
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Definition of Globalization
Globalization is a very high level of
development of the globality of economics,
and life in the conditions and content of life
activity expanding with a tendency for
planetarism.
Globalization is a compression of time and

space.
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Globalization
Economics
Media and
Technologies
communication
Globalization
Culture Democracy and

politics
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Globalization
The analysis of globalization is made at two
levels:
• General civilization level
• Formative level (social system)
There is a clear dependence of globalization

from the civilization model and from the
dominated social system.
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Formative Basis of Globalization
 It’s the main feature of the capitalistic system:
 Intensified and strong competition between
corporations and leading countries;
 Technological contest – new form of competition;
 The corporate secret and informational isolation;
 The market economy and the state set different
conditions for going off the globalization process;
 Models of development – for each country they
determine the aim and the character of the
economic growth
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Role of Technological Factors
 Technologies are a product of science.
 Technologies are materialized reality of science.
 Technologies are socially neutral and all the
conflicts that occur in society does not relate to
technologies.
The effect and role of technologies of life depend

on its way of application, and the goals pursued.
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Effects of Technologies
 A possibility and necessity for public production to
go out of the national-state frames;
 A possibility and necessity for the management of
the society to be performed by means of
information technologies and communication
networks;
 Formation of a new type of consumer demand
which can not be shut off within the frames of
national markets
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CSIT 304
Session 2 – The Economics of Information

UNIVERSITY OF GHANA
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Topic One
ECONOMICS OF INFORMATION
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Definition of “Information”
 Information is that property of data that represents
and measures effects of processing of them.
– Processing includes data transfer, selection, structuring,
reduction, conceptualization.
– In that definition, ‘data’ is taken as equivalent to physical

“recorded symbols”, exemplified by printed characters; by
binary characters in magnetic, punched or optical form; by
spoken words; by images.
– Whatever the physical form may be, it becomes a recorded

symbol when it is interpreted as representing something.
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Economic Role of Information
 The writings of the economists concerning
information almost universally focus on its role in
decision-making.
 But information clearly is important in operational

management beyond use in decision-making. This role
is supported by management information systems.
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Economic Roles of Information
 Information is a result of environmental scan to
ensure that there is knowledge of external reality in
decision-making.
 Information can serve as a substitute for physical

entities.
 Information is used to influence and persuade.
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 Information is essential in education, serving the
process of learning, supplementing interaction with
teachers, and providing (in books, media, and
databases) much of the substance.
 Information may be an educational objective in itself,

since among things to be learned are the tools for
access to and use of information.
 Information is the substance of cultural enrichment,

entertainment, and amusement.
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 Information can be a product, a commodity
(something produced as a package).
 Information can be a service. Indeed, the majority of

‘business services’ (the national economic account
that includes consulting) are information based.
 Information can be a capital resource, especially for

companies that produce information products and
services.
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General Economic Properties of
information
 While information is represented in physical form, that
form can be changed without changing its content.
 In contrast to physical goods, intellectual goods can

be created with limited physical resources and
frequently as a by-product of other operations.
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information
 Information is easily and cheaply transported. The first
copy represents most of the costs in creation, and
reproduction costs are relatively small. As a result, it
can be produced and distributed with minimal
depletion of physical resources.
 There is an evident and direct relationship between

physical goods and the materials used in producing
them.
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information
 There is a complex relationship between the time of
acquiring information and the value of it.
 Persons differ greatly in perceptions of the value of

information, in kinds of use, in ability and willingness
to use, in assessments of costs, and in ability to pay.
 Use of information is affected by the distance users

must travel to get access to it.
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information
 The theory states that the use of any facility decays as
the distance increases, as a function of the cost of
travel; if the cost is linear, the decay is exponential
and if the cost is logarithmic, it is quadratic. This
theory applies to information resources
 An accumulation of information has more value than

the sum of the individual values because it increases
the combinations that can be made
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information
 There are immense economies of scale. Combined
with the value in accumulation, this provides strong
incentives for sharing information.
 Information is not consumed by being used or

transmitted to others. This imply that information is a
public good.
 However, there is the need to invest in the creation,

production, and distribution of information and that
implies a wish to recover the investment
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The Macro-economics of Information
 The macro-economics of information relates to its role
in national economies, as reflected in the distribution
of the workforce among various types of activities
and functions.
 It also relates to effects on national economic policies.
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National Policy : Economic Values
 Better workforce, better trained and more capable of
dealing with problems.
 Better product planning and marketing, based on
more knowledge about consumer needs.
 Better engineering, based on availability and use of
scientific and technical information.
 Better economic data, leading to improved
investment decisions and allocation of resources.
 Better management from improved communication
and decision-making.
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National Policy : Economic Barriers
 Costs are incurred in acquiring information.
 It is likely that the return is over the long term, while
the expenditure is made immediately.
 Except for the information industries themselves,
information is not directly productive.
 Rarely are results clearly attributable to the
information on which they were based.
 Accounting practice treat information as an
‘overhead’ expense, subject to cost-cutting.
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Economic Policies
 General Economic Policies
– Encourage entrepreneurship
– Shift from low technology to high technology
– Shift from production of physical goods to information
goods
 Develop the “Information Economy”

– Encourage effective use of information in business
– Provide incentives for information industries
– Develop information skills
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Economic Policies
 Management of Information Enterprises
– Establish technical information skills
– Develop information support staff skills
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Income to Providers of Information
 The revenues for the information industries in the
United States in 1990 and 1998, as percentages of
gross national product and absolute dollars, are
shown the following tables (Statistical Abstract of the
United States, 1993, 2000)
 Of special importance is the steady year by year

increase, for the past decade, in expenditures for
“Business Services”, reflecting growing use of
information in the economy.
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Revenues for the information industries in the United States in
1990 and 1998
(percentages of gross national product and billions of dollars)
INFORMATION U.S. Data for 1990 U.S. Data for
INDUSTRIES 1998
Transaction 4.9% $274 B 7.1% $629 B

Industries
Hardware and Software 3.4% 190 B 7.6% 665 B

Industries
Production & Distribution 14.0% 783 B 17.7% 1,545 B
Industries
Total for Information 22.3% 1,147 B 32.4% 2,839 B
Industries
Gross National Product 100.0% $5,600 B 100.0% $8,750 B
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Revenues for the Production & Distribution industries in the
United States in 1990 and 1998
(percentages of gross national product and billions of dollars)
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The Cost of Information
 Costs occur in the following stages of information
production and distribution:
– Information must be created, by generation and processing
of data; these are authoring functions.
– It must be assessed for publishing; these are editorial
functions.
– It must be processed for the generation of a master; these
are composition functions.
– Products and/or services will be produced.
– The products and services will be marketed.
– They will be distributed.
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The Value of Information to Individuals
 The value of cultural enrichment, entertainment and
amusement as uses of information is demonstrated by
the willingness of people to pay for them
 The other major individual use of information is for
education and personal development.
 Another individual use of information is in the area of
industrial training.
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Value of Information to Professionals
 It has been estimated that professionals spend nearly
60 per cent of their time communicating and working
with information (Carroll and King 1985).
 They incur costs in obtaining information and in using

it, but it has been estimated that the direct benefits to
them are as much as ten times those costs.
 More important than direct benefits, though, are

increases in productivity measured by results
produced (reports, management publications).
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Value of Information in Commerce and
Industry
 In view of the importance of information to business,
a business plan should identify the role of information
in support of the business objectives.
 Information is important for support of product
research and development, for access to finance, for
marketing, for knowledge of government regulations,
for use of industry standards, for management of
personnel.
 The returns to profitability from investment in
information are real and large.
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CSIT 304
Session 3 – IT, LABOUR AND EMPLOYMENT

UNIVERSITY OF GHANA
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Topic One
INFORMATION TECHNOLOGY,
LABOUR AND EMPLOYMENT
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Introduction
 The knowledge economy featuring intellectual rather
than physical capital, and information technology,
revolutionizing production and exchange, are set to
affect employment and the labor market as well.
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New capitalism
New capitalism
 Since capitalism emerged from feudalism, the world is in a
period of punctuated equilibrium caused by the
simultaneous movements of five economic plates.
 These are the end of communism, a technological shift to

an era dominated by man-made brainpower industries, a
demography never before seen, a global economy and an
era where there is no dominant economic, political or
military power.
 The economic magma is a fluid mixture of technology and

ideology.
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Knowledge Economy
 In contrast to an industrial or even post-industrial
economy, where raw materials and then man-made
brainpower industries form the basis of production
and exchange, a decoupling has emerged as
knowledge industries become the focus in knowledge
economies .
 Society is in tandem, since the hunt is for knowledge

in the forest of information technology, global
telecommunications networks and electronic
highways.
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Knowledge Economy
 Taken to its logical conclusion, a knowledge economy
and knowledge society is where all economic and
social activities revolve around information.
 What sells is speed and instant gratification.
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Role of IT In Knowledge
Management
 Most of our work is information based
 Organizations compete on the basis of knowledge
 Products and services available in the society are
increasingly complex
 Life-long learning is inevitable needed
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Why KM in knowledge-base business
economy?
 Foster innovation
 By encouraging the free flow of ideas
 Improve customer service
 By streamlining response time
 Boost revenues
 By getting products and services to market faster
 Enhance employee retention rates
 By recognizing the value of employees’ knowledge and
rewarding them for it
 Streamline operations and reduce costs
 By eliminating redundant or unnecessary processes
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The role of IT in KM
 Information technology, by itself is not KM
 However,
 KM is often facilitated by IT
 IT provides solutions to KM
 IT is a tool to increase the “efficiency” and “capability”
of KM
 IT as a facilitator of KM facilitates document

management, data storage, access of information, the
dissemination, exchange and sharing of ideas
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Technological and employment trends
 The factory is the organizational and economic core of
industrialism but cybernation is changing that with the
imminent “workerless” robotized factory (Jones,
1997).
 Automation refers to the age-old trend of replacing

discrete human actions with machine operations by
linking different machines with new controlling
devices.
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 Automation of automation is cybernation such as in a
self-governing control and self-acting factory.
 It converts entire productive functions into a

coordinated machinery or machine-like routines
characterized by regularity, predictability and
precision.
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 Fordism defines the twentieth century expansion of
capitalism as a regulated co-ordination of mass
production with mass consumption, eponymous with
the Ford Motor Company.
 It stands for the large-scale standardization of

products and production methods.
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 The economic effects of Fordism include making mass
consumption affordable as workers’ purchasing
power increases with employment and rising wage
levels.
 Taylorism is the scientific management of work

organization. It complements the process of
mechanization; precision and flexibility and, hence,
efficiency and cost effectiveness.
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New production technologies involving
Computerization
Computer Integrated Manufacturing (CIM)
The flexible manufacturing system (CMS)
Computer aided manufacturing (CAM)
Computer-aided software engineering (CASE)
Computer-aided drafting and designing
(CADD) and the like.
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The IT Economic Impact on Work
The most immediate impact of such new
technologies and developments is on work
and the lifestyle that accompanies work.
 In a job-fixated society, work represents not

only income and a means of sustenance, but
also self-respect, self-worth, hierarchy and the
governance of individuals in a society.
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The IT Economic Impact on Work
In a knowledge economy, there must be new
ways to attract, retain and motivate people
since intellectual capital is owned and resides
with people.
The demands of a better-educated, more self-

confident and independent workforce are such
that they want empowerment, such as in more
responsibility and authority
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Rethinking Work
It is vital to discuss the impact of new
technologies on the economy and to work to
lead into the social impact. With automation and
information technology, the knowledge
economy spawns information workers with new
attributes.
As noted, a job is redefined as a property right in

the knowledge economy corresponding to rising
entrepreneurialism.
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Rethinking Work
The right kind of education and skills in the
knowledge economy is a new form of security as
employability is assured.
As new communication technologies impinge on

work arrangements, a social effect includes that
of de-unionization, since the physical platform
for socialization in the workplace disappears
with tele-computing and the virtual corporation.
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Rethinking Work
 Work becomes more self-directed in knowledge and
information industries, cutting down a layer of
supervision and middle management.
 Strategic pay, rather than administered pay, also

occur with flatter organizations and individualized
work contracts (Murlis, 1996).
 Trade unions may be further marginalied when

differentiated work based on creative qualities are
More important than cognitive manual skills, such as
in traditional supervised production jobs.
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Rethinking Work
 The shifts in thinking about work were noted ahead of
massive downsizing, though they were not taken
seriously then in a job-fixated society (Handy, 1984;
Winslow & Bramer, 1994).
 Universally observed and recurrent changes bespeak
the full employment society giving way to part-time
employment as manual work yields to knowledge
activities, and industry declines as service rises.
 Hierarchies and bureaucracies eclipse as networks and
partnerships dominate.
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Does new technology destroy jobs?
Two kinds of innovation with different impacts:
 Process innovation – new ways of making and
delivering products
 Effects of Process Innovation:
 New technique increases efficiency and thus lowers costs of
production
 Fewer workers can produce same output
 This can cause technological redundancy
 On the other hand, Cost reduction may lead firm to
expand its output as it gains market share
 Potentially this leads to more jobs on balance
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Does new technology destroy jobs?
 Product innovation – firm brings new varieties and
qualities of products to the market
 Effects of Product Innovation:

 Firm can capture new or increased segments of
markets
 Again this is likely to lead to more jobs
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CSIT 304
Session 4 – PRODUCTIVITY IN THE DIGITAL AGE

UNIVERSITY OF GHANA
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Topic One
PRODUCTIVITY IN THE DIGITAL AGE
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Definition of Productivity
 Productivity is the relationship between the outputs
generated from a system and the inputs that are used
to create those outputs. Mathematically,
P = O Where
P = productivity
I O = output
I = input
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System Concept
inputs outputs
transformations Customers
Land Goods
people SYSTEM and
capital services
facilities
equipment
tools O
energy I
materials
information productivity
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Productivity Improvement
 Productivity Improvement (PI) is the result of
managing and intervening in transformation or work
processes.
 PI will occur if:
O O O O O
I I I I I
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Measuring Productivity
 Static: P=O/I in a given period of time (t). Its useful
for benchmarking purposes.
 Dynamic:
p(1)=O(1)/I(1); p(2)=O(2)/I(2); then p(2)/p(1) yields a
dimensionless index that reflects change in
productivity between periods. ([p(2)-p(1)]/p(1))*100
yields the percentage change between periods.
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Measuring Productivity
 Partial-Factor: Uses a single “I” factor; E.g.
output/labor-hour, sales/employee
 Multi-Factor: Uses more than one “I” factor; e.g.

output/direct costs (labor, materials, and overhead).
 Total-Factor: Uses all “I” factors.

(Note: Total-Factor captures “trade-offs” between input
factors.)
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Measurement Problems
 Multiple products/services (aggregation-O)
 Varied categories, types, and levels of input resources

(aggregation-I)
 Price/cost changes of outputs & inputs
 Redesigned products, services, processes
 “Hard-to-measure” factors (e.g., quality)

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Importance of Global-Level
Productivity Measures
 Measure and compare competitiveness among
nations.
 Contribute to the development of a nation’s

economic, social, and political policies.
 Develop global cooperation among nations.
 Help business organizations make investment

decisions.
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CSIT 304
Session 5 – MARKET STRUCTURE AND COMPETITION

UNIVERSITY OF GHANA
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Topic One
MARKET STRUCTURE AND COMPETITION
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Market Structure
 The future society, as a dynamic society, will have each
wave of civilization tending to increase freedom and
choice sets (Snooks, 1996).
 Timescape changes are most readily evident in the size of,

changes in the population and accompanying material
living standards.
 More existential dynamic changes involve the competitive

driving force of the materialist man.
 Dynamic strategies cover family multiplication,

technology, commerce and conquest
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The Product Cycle
 Product cycle is the length of time a vendor actively
markets a product, beginning from the initial stage of a
prototype to a mature product and ending with the
announcement and delivery of a new family of products.
 Because the product cycle is short, there is a constant

shakeout in the industry marked by the appearance of
many vendors, price instability, competition for market
share, the emergence of technological and pricing.
standards, and the dropping out of weak competition with
inferior products.
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Reasons for the Reduction in the
Product Cycle (Tapscott, 1995).
New economy
New technology New enterprise
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Themes Surrounding the Points of a
triangle
There are 12 themes surrounding the points of a triangle formed by
a new economy, a new enterprise and a new technology.
1. Knowledge, 8. Globalization
2. Digitization (Instead Of Analogue), 9. Discordance
3. Virtualization (Instead Of Physical), 10. Immediacy
4. Molecularization (instead Of Mass), 11. Convergence
5. Integration/Internetworking, 12. Innovation
6. Disintermediation (Instead Of Middlemen),
7. Prosumption (A Cross Between Production And
Consumption),
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Converging Technologies
Communications
Computing Content
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Ten technology shifts (Tapscott, 1995)
The 10 technology shifts that drive the convergence of

content, computing and communication are:
1. Analogue Signals To Digital Signals,
2. Semiconductors To Microprocessors,
3. Host based Systems To Client Server Systems,
4. Garden Path Bandwidth To The Information Highway In Network
Capacity,
5. Dumb Access Service To Information Appliance,
6. Separate Data, Text, Voice And Images To Multimedia Forms,
7. Proprietary Systems To Open Systems,
8. Dumb Networks To Intelligent Ones,
9. Craft Computing To Object Computing Software Development,
10. Graphic User Interfaces to multimedia user interfaces.
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Technological change
 A distinction is made between some aspects of
technological change (Antonelli, 1992).
 An effective state of technology uses all scarce and

abstract resources in the economy to produce technology
and technological information.
 Technological information is knowledge that enables

economic production. In contrast, technological artifacts
are physical or abstract products that result from the
application of technology.
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Invention
 Invention is the process by which new technological
information is created; a necessary part of that
process is the embodiment of new information in
scarce physical forms.
 Invention is the necessary first stage of development

of all new technological artifacts, whether techniques,
processes or products.

Innovation
 Innovation involves the realization in practice of the
potential value of inventions, or is the process by
which inventions are implemented such that they
affect production activities in the economy.
 Every invention presents a possibility for innovation in

the future, making every invention a technological
information resource to be exploited through the
process of innovation.

Diffusion of Technological Information
 The diffusion of technological information need not
involve economic transactions, but more information
or communication transactions.
 The diffusion of new technology can be in physically

embodied forms, and there are some inherent public
good characteristics

Significant Technological Change Trend
 Technologically speaking, the most significant trend:
 Digitization turns more and more analogue

transmissions in “waves” into a version of electronic
Morse Code composed of dots and dashes, or ones
and zeroes for transmission through telephones,
televisions and radios

Advantages of Digitisation
 Digital compression is a necessary part of high-
definition television (HDTV), which offers substantial
increases, over the existing standard, of the amount
of picture information possible.
 As a comparison, an analogue HDTV signal requires

ten times more bandwidth than traditional analogues,
and a digitized HDTV can require transmission rates of
a full gigabyte per second.

Technological Trend in the Electronics
Industry
 The electronics industry underpins its new technology
and applications to Information Technology
 Invention of the transistor in 1947 by scientists at Bell
Telephone Laboratories. (birthed the semiconductor)
 1950s, a major innovation was that a single silicon chip
could hold more than a single transistor.
 The development of capabilities with the design and
manufacture of integrated circuits (ICs).

Industry (Cont’d)
 1982, Intel developed a microprocessor that made Mainframe
Computers extinct as Personal Computers took over
 The diminution in size and fall in costs that makes electronic
products more affordable, more accessible and improves
performance (by shortening switching time and the time
needed for higher speed operations) transformed the world
in more ways than one.
 The entry of microelectronics as a branch of the Information
Technology industry devoted to the design and manufacture
of circuitry devices constituted of extremely small electronics
parts.
Industry (Cont’d)
 Broadly defined, electronic technology embodies a set
of human knowledge that makes possible the
production of a wide range of electronic goods and
services.
 The digital age, knowledge economy and information

society have further profoundly impacted governance
and other socio-political structures

Divisions of the electronics
industry
Semiconductors or Consumer electronics Industrial electronics or
electronic components electronic equipment
Passive: resistors, Computers and peripherals, Televisions, radios,

capacitors, inductors, telecommunications, video equipment, audio
relays industrial equipment, electrical
Active: semiconductors, control equipment, testing appliances, video games,
discrete, integrated and watches
circuits, vacuum tubes measuring (e.g, office
equipment,
military, aerospace,
automotive)
Julius Yaw Ludu, MENG Slide 18 18 Data Link Institute

Logic Chips
 Memory chips store data. Microprocessors perform various
arithmetic or calculating functions on data stored in memory
chips.
 Logic chips : Logic chips fall into three types.
 First, standard logic or off-the-shelf chips typically feature five
to fifty logic circuits or gates.
 Second, semicustom chips (ie, application-specific integrated
circuits (ASICs)) with thousands of gates have an extra layer of
metal connection to enable them to be customized to perform
various functions required by end-users.
 Third, programmable logic chips are programmed through
arrays of built-in electronic switches; they are the most
sophisticated and expensive chips

Electronic technology chain
Branches Products
Upstream sectors Advanced materials: TV tubes, special
electronic tubes, ICs
(eg, memory, logic, microprocessor),
transistors
Industrial end-user sectors Telecommunications equipment, computer
systems, software
engineering, industrial instruments (e.g.,
optical, medical,
measuring)
Consumer goods Automotive industry, personal computers,
cellular phones, TV
sets, radios, audio-recorders, video-recorders
Extensions Multimedia information systems, flexible
manufacturing
systems, management systems, industrial
Julius Yaw Ludu, MENG robots
Slide 20 20 Data Link Institute
Artificial intelligence (AI)
 Artificial intelligence refers to computer-based
technologies that replicate behaviors associated with
human thinking such as making decisions, evaluating
options or developing new ideas
 Computer vision in Artificial Intelligence requires three

different, but not necessarily distinct, abstract
techniques

Computer Vision Techniques
1.Psychology in wanting to discover how people think so
as to simulate those processes on a computer act
techniques
2.The logistician uses formal scientific, mathematical
logic to create non-monotonic forms of logic
3.The structuralists, believes that the best way to
simulate the workings of the mind is to recreate the
information-processing capabilities of the brain.
Structuralists (also known as connectionists) thus build
interconnected networks, or neural networks, of
artificial neurons using silicon

Virtual reality
Virtual reality refers to the use of computer-based
systems to create an
 environment that seems real to one or more
senses (usually including sight)
 of human users.
 The computer-generated environment represents
an amalgam
of technologies, notably, a digital computer, software
capable of processing

Virtual reality
 visual and auditory information and a means of
presenting the information to
 the user.
 Applications of virtual reality range from
entertainment to military training.
 Wherever a laboratory, clinical, pedagogic or
simulated situation or event is

CSIT 304
Session 6 – THE DIGITAL ECONOMY AND THE ART INDUSTRY

UNIVERSITY OF GHANA

Topic One
THE DIGITAL ECONOMY AND THE ART

INDUSTRY

THE DIGITAL ECONOMY AND THE ART
INDUSTRY
 Information technology, digitization, converging
technologies, the knowledge economy, interactive
multimedia, a network-centric era, virtual reality and a
host of exciting developments have been identified and
discussed in the course.
 Mankind is stepping into the virtual world and the promise

of things to come in the next millennium has yet to fully
unfold.
 This lecture is devoted to probing the non-economic,

socio-political and legal issues of the information
technology revolution and emerging multimedia industry

Property Rights, Copyrights and the
Digital Economy
 Copyright conveys a sense of monopoly power.
When monopolies have absolute market power, or
enjoy entry barriers, consumer welfare suffers
higher prices and restricted quantities.
 If an argument of positive externality can be made

for products with intellectual property, they should
fall into the realm of other merit products such as
education and health.
Property Rights, Copyrights and the Digital
Economy (Cont’d)
Intellectual property is unlike ordinary
property, making it more difficult to protect.
The revolution in digital technology and

electronic transmission means that
copyrighted materials can be easily
downloaded and reproduced.

Property Rights, Copyrights and the Digital
Economy (Cont’d)
 Information ranging from frivolous recreation to
commercial applications, such as databases and
computer software, can be copied or adapted.
 Copying is almost effortless, costless, widespread and

immediate. It is a business in itself; pirated software,
music, articles and films available on the Internet can
be had by anyone who is determined, be they amateur
or professional.

Piracy
DOES PIRATED MATERIALS ULTIMATELY

ENABLE MORE WIDESPREAD
COMMUNICATION AND TRANSMISSION OF
KNOWLEDGE?

Piracy Cont’d
 The Robin Hood argument creates a vicious circle.
Presently, companies charge more for a small piece of
intellectual property precisely because of piracy and their
need to recover research and development (R&D) costs.
 Most users of pirated materials argue that they would

never pay the full price for such products.
 So long as the originators are getting payment from

corporate and professional users, they see no harm in
benefiting amateurs and less endowed users in the name
of knowledge and development for all.
3- Approaches For Redesigning Copyright
Regulations
 In redesigning copyright regulations, three approaches are
possible (Cairncross, 1997: 206).
 Content can be sold outright to sponsors or advertisers who
can give it away free to attract new customers.
 A combination of a free portion and a chargeable portion.
 A replacement of copyright with by a service right in which

charges are made, not for reproduction, but for a continuity
of service in the form of updates and maintaining the
original material such as in a financial newsletter.

Importance of Copyright to the Economy
 Development of technology to support creativity and
growth of the creative industries;
 Incentivizing creativity and culture;
 Striking the balance between the interests of creators,

distributors and consumers.

Copyright for the Digital Economy
 The value of assets lies in intellectual, rather than

physical capital.
 IP related business opportunities are increasing, either

for the area of creation of product (i.e. upstream), or
for the service of assuring the diffusion and
application of content (i.e. downstream).

Ethics in Information Technology
 Public concern about the ethical use of information
technology includes:
 E-mail and Internet access monitoring
 Peer-to-peer networks violation of copyright
 Unsolicited e-mail
 Hackers and identify theft
 Plagiarism
 Cookies and spyware
Julius
Julius Yaw
Yaw Ludu,
Ludu, MENG
MENG Slide 12 Slide 12 Department of Computer Science, UG
(Cont’d)
The general public has not realized the critical
importance of ethics as applied to IT
Important technical decisions are often left to

technical experts
General business managers must assume greater

responsibility for these decisions
Julius
Julius Yaw
Yaw Ludu,
Ludu, MENG
(Cont’d)
They must be able to make broad-minded,
objective, ethical decisions based on technical
savvy, business know-how, and a sense of
ethics
They must also try to create a working

environment in which ethical dilemmas can be
discussed openly, objectively, and
constructively
Julius
Julius Yaw
Yaw Ludu,
Ludu, MENG
What is Ethics?
 Moral code
 Set of rules
 Establishes boundaries of generally accepted
behaviour
 Different rules often have contradictions
 Morality
 Social conventions about right and wrong
 Widely shared
Julius
Julius Yaw
Yaw Ludu,
Ludu, MENG
What is Ethics? (continued)
 Morality may vary by:
 Age
 Cultural group
 Ethnic background
 Religion
 Gender
Julius
Julius Yaw
Yaw Ludu,
Ludu, MENG
Definition of Ethics
 Ethics are set of beliefs about right and wrong
behaviour
 Ethical behaviour conforms to generally accepted
social norms
 Virtues on ther other hand are habits that incline
people to do what is acceptable
 Vices are habits of unacceptable behavior
 Value system are scheme of moral values
Julius
Julius Yaw
Yaw Ludu,
Ludu, MENG
The Importance of Integrity
 Integrity is a cornerstone of ethical behaviour
 People with integrity
 Act in accordance with a personal code of
principles
 Extend to all people the same respect and
consideration that you desire
 Apply the same moral standards in all situations
Julius
Julius Yaw
Yaw Ludu,
Ludu, MENG
Ethics in the Business World
 Risk is the product of multiplying the likelihood of an
event by the impact of its occurrence
 Risks associated with inappropriate behaviour have
increased due to
Globalization
Heightened vigilance by
 Employees
 Shareholders
 Regulatory agencies
Julius
Julius Yaw
Yaw Ludu, 4/29/20
Ludu, MENG
MENG Slide 19 Slide 19 19
Department of Computer Science, UG
Logic Chips
 Examples of Scandals in IT companies include;
 WorldCom
 Qwest Communications International Inc.
 Adelphia Communications Corp.
 Computer Associates (CA)
 Any in Ghana?
Julius
Julius Yaw
Yaw Ludu,
Ludu, MENG
Why Foster Good Business Ethics?
1. To gain the goodwill of the community
2. To create an organization that operates
consistently
3. To produce good business
4. To protect the organization and its employees
from legal action
5. To avoid unfavourable publicity
Julius
Julius Yaw
Yaw Ludu,
Ludu, MENG
MENG Slide 21 Slide 21 21
Department of Computer Science, UG
Good Ethics Can Mean Good Business
 Produce safe and effective products
 Avoid costly recalls and lawsuits
 Provide excellent service

 Maintain customers
 Develop and maintain strong employee relations

 Suffer less turnover
 Enjoy better employee morale
Julius
Julius Yaw
Yaw Ludu,
Ludu, MENG
Good Ethics Can Mean Good Business
(Cont’d)
 Suppliers and other business partners prefer
companies that operate in a fair and ethical manner
 Bad ethics can lead to bad business results
Julius
Julius Yaw
Yaw Ludu,
Ludu, MENG
Avoiding Unfavorable Publicity
 Public reputation of company strongly influences
 Value of its stock
 How consumers regard products and services
 Degree of oversight received from government
agencies
 Amount of support and cooperation received from
business partners
Julius
Julius Yaw
Yaw Ludu,
Ludu, MENG
Establishing a Corporate Code of Ethics
Code of ethics:
Highlights an organization’s key ethical issues
Identifies overarching values and principles important
to an organization
Focuses employees on areas of ethical risk
Cannot gain company-wide acceptance unless
 Developed with employee participation
 Fully endorsed by organization’s leadership
Must continually be applied to company’s decision
making
Julius
Julius Yaw
Yaw Ludu,
Ludu, MENG
Social Audits
Social audit
Identifies ethical lapses committed in the past
Sets directives for avoiding similar missteps in the
future
Julius
Julius Yaw
Yaw Ludu,
Ludu, MENG
Require Employees to Take Ethics
Training
 Comprehensive ethics education program encourages
employees to act responsibly and ethically
 Often presented in small workshop formats
 Principle-based decision making is based on principles
in corporate code of ethics
CAN GOOD ETHICS RESULT IN SHORT-TERM

LOSSES?
Julius
Julius Yaw
Yaw Ludu,
Ludu, MENG
Creating an Ethical Work Environment
 Good employees sometimes make bad ethical choices
 May be encouraged to do “whatever it takes” to get

the job done
 Employees must have a knowledgeable and potent

resource available to discuss perceived unethical
practices
Julius
Julius Yaw
Yaw Ludu,
Ludu, MENG
CSIT 304
Session 7 – ETHICAL THEORIES

UNIVERSITY OF GHANA

Topic One
ETHICAL THEORIES

Utilitarianism Theories
 Jeremy Bentham (1748-1832),John Stuart Mill (1806 -
1873)
 An ethics of consequences
 An action is good if it produces the greatest good for

the greatest number
WHAT DOES “GOOD” MEAN?
Julius
Julius Yaw
Yaw Ludu,
Ludu, MENG
MENG Slide 3 Department of Computer Science, UG
Utilitarianism Cont’d
 A variety of consequentialism
 "actions are right in proportion as they tend to
promote happiness, wrong as they tend to produce
the reverse of happiness." (John Stuart Mill's
Greatest Happiness Principle)
 In other words, judge an action by the total amount of

happiness and unhappiness it creates

Deontology
 'Duty Based' Ethics
 Deontologists deny that what ultimately matters is an
action's consequences.
 They claim that what matters is the kind of action it is.

What matters is doing our duty.
 There are many kinds of deontological theory

e.g., The 'Golden Rule' - "Do unto others as you'd have
them do unto you."

Kantian Deontology
 Immanuel Kant (1724-1804) is the most influential
deontologist.
 Rejecting Consequentialism: "A good will is good not

because of what it effects or accomplishes." Even if by
bad luck a good person never accomplishes anything
much, the good will would "like a jewel, still shine by
its own light as something which has its full value in
itself."

Categorical Imperative
 Kant claims that all our actions should be judged according
to a rule he calls the Categorical Imperative.
 First Version: "Act only according to that maxim [i.e., rule]

whereby you can at the same time will that it become a
universal law."
 Second Version: "Act in such a way that you treat

humanity, whether in your own person or in the person of
another, always at the same time as an end and never
simply as a means."
 Important to treat people as autonomous agents

Autonomy
 A central element in many deontological theories is the
idea of autonomy
 Autonomy = self + rule
 Roughly, the idea is that people must be respected as

autonomous agents.
 This means there are certain ways we must not treat

people (no matter how much utility might be produced
by treating them in those ways)

3 Elements of ‘Ideal’ Autonomy
 Rationality
 only informed decisions are truly autonomous
 Freedom of Action
 lack of coercion
 Freedom of Choice
 availability of alternative options

Deontological Theories
 An ethics of duty or obligation
 Kant (1724-1804)
 single principle: categorical imperative
 Universality - what maxims pass this test
 persons as ends (what counts as a person?)

Deontological Theories (cont’d)
 Pluralists = many duties
 Ross' additional duties:
 fidelity: be faithful
 reparation: return good for good
 gratitude
 self-improvement
 non-malfeasance: do not harm
 beneficence: do good, benefit
 justice: treat equals equally
 add autonomy: respect individuals
Problems with Deontology and
Utilitarianism/Consequentialism
 Deontology: What if doing your duty has repugnant
consequences?
 Kant on telling lies
 Consequentialism: What if you have to do something
that seems wrong in order to produce the best
consequences?
 Convicting the innocent

Four Principles
 Autonomy
 Beneficence
 Non-maleficence
 Justice
 1 & 4 are deontological
 2 & 3 are consequentialist
It is really possible to have it both ways?

Utilitarianism 1
 Focus on the consequences of maintaining
confidentiality
A tension: Should we focus on
 the consequences of this case alone (act
utilitarianism) or
 on general rules for maintaining confidentiality
(rule utilitarianism)
 Assessing consequences requires attention to the
concrete details of the case

Deontology
Asks us to focus on our duties
Respecting the autonomy of the patient
Helping the person
Helping others

Common Ground?
 In neither case is the duty to maintain confidentiality
absolute
 The possible consequences of absolute
confidentiality are too dire
 Our duty to respect a person’s autonomy may be
outweighed by our duty to help others (and the
persons)

Principles of Behavior
Honesty
 to be truthful in all our endeavors; to be honest and
forthright with one another and with customers,
communities, suppliers, and shareholders.
Integrity
 to say what we mean, to deliver what we promise, to fulfill
our commitments, and to stand for what is right.
Respect
 to treat one another with dignity and fairness, appreciating
the diversity of our workforce and the uniqueness of each
employee.
Trust
 to build confidence through teamwork and open, candid
communication.
Principles of Behavior (cont’d)
Responsibility
To take responsibility for our actions, and to speak
up -- without fear of retribution -- and report
concerns in the workplace, including violations of
laws, regulations and company policies, and seek
clarification and guidance whenever there is doubt.
Citizenship
To obey all the laws and to do our part to make the
communities in which we live and work better.

Broader View of Moral and Ethical
Issues
 As the Association for Computing Machinery states in
its Code of Ethics and Professional Conduct,
computing professionals are obligated to heed a
common set of moral imperatives that reflect duties
to (among others) foster human well-being, avoid
harm to others, be honest and trustworthy, respect
privacy, and give proper credit for intellectual
property.

Ethical Decision Making Model
 Evaluate Information
 Consider how our decision might affect stakeholders
 Consider what ethical values are relevant to the

situation
 Determine the best course of action that takes into

account relevant values and stakeholders’ interests

7 Steps to Ethical Decision Making
1. Get the facts
2. Identify stakeholders and their positions
3. Consider the consequences of a decision
4. Weigh various guidelines and principles
5. Develop and evaluate options
6. Review a decision
7. Evaluate the results of a decision

Basis of Moral Decisions
 Do what the Bible/Quran tells you”--Divine Command
Theories
 “Follow your conscience”--The Ethics of Conscience
 “Watch out for #1”--Ethical Egoism
 “Do the right thing”--The Ethics of Duty
 “Don't ‘dis' me”--The Ethics of Respect
 “...all Men are created ...with certain unalienable Rights”--
The Ethics of Rights
 “Make the world a better place”--Utilitarianism
 “Daddy, that’s not fair”--The Ethics of Justice
 “Be a good person”--Virtue Ethics
Question
WHY IS COMPUTER ETHICS IMPORTANT TO

IT PROFESSIONALS?

Character
 HERACLITUS (c. 540 - c. 480 BC) -- Greek philosopher said "A
man's character is his fate.“
 BOOKER T. WASHINGTON (1856-1915) -- African-American
educator said "Character is power."
 RICHARD NIXON (1913-1994) said "With all the power that a
President has, the most important thing to bear in mind is this:
You must not give power to a man unless, above everything
else, he has character. Character is the most important
qualification the President of the United States can have."
 LYNDON JOHNSON (1908-1973) "The fact that a man is a
newspaper reporter is evidence of some flaw of character."
 CALVIN COOLIDGE (1872-1933) "Character is the only secure
foundation of the state.“
 THEODORE ROOSEVELT “To Educate A Person In Mind And
Not In Morals Is To Educate A Menace Society”
Code of Ethics Canons
Protect society, the commonwealth, and the
infrastructure
 Promote and preserve public trust and confidence in
information and systems.
 Promote the understanding and acceptance of
prudent information security measures.
Act honorably, honestly, justly, responsibly, and legally

 Tell the truth; Treat all constituents fairly.
 Observe all contracts and agreements, express or
implied.
Julius Yaw Ludu, MENG Slide 25 Slide 25 Department of Computer Science, UG

Code of Ethics Canons (Cont’d)
Provide diligent and competent service to principals
 Preserve the value of their systems, applications, and
information.
 Avoid conflicts of interest or the appearance thereof.
Advance and protect the profession

 Sponsor for professional advancement those best
qualified. All other things equal, prefer those who are
certified and who adhere to these canons. Avoid
professional association with those whose practices
or reputation might diminish the profession.
 Take care not to injure the reputation of other
professionals through malice or indifference.

The Ten IT Moral and Ethical
Commandments
1. Thou shall not use a computer to harm people.
2. Thou shall not interfere with other people’s computer work.
3. Thou shall not snoop around in other people’s computer files.
4. Thou shall not use a computer to steal.
5. Thou shall not use a computer to bear false witness
6. Thou shall not copy or use proprietary software for which you
have not paid
7. Thou shall not use other people’s computer resources without
authorization or proper compensation.
8. Thou shall not appropriate other people’s intellectual output.
9. Thou shall think about the social consequences of the program
you are writing or system you are designing.
10. Thou shall use a computer in ways that ensure consideration and
respect for your fellow humans.
CSIT 304
Session 8 – The Digital Economy and Privacy
Regulation, Encryption and Terrorism

UNIVERSITY OF GHANA
Data Link Institute

Topic One
THE DIGITAL ECONOMY AND PRIVACY

REGULATION, ENCRYPTION AND TERRORISM
Data Link Institute

THE DIGITAL ECONOMY AND
PRIVACY REGULATION
 A security firm discovered a botnet responsible for stealing
sensitive data from more than 2,500 companies, gov’t
agencies, and educational institutions .
 The company found a 75GB cache of data that included 68,000
logon credentials, access to email systems, online banking
sites, Facebook, Yahoo, Hotmail, and others. The company
described it as "a vast cache of dossier-level data sets on
individuals including complete dumps of entire identities from
victim machines.”
 Once infected, the botnet can capture everything the victim
types (including passwords), files, cookies, usernames, and
provides full remote control. Once an endpoint is infected, the
attacker then makes their way onto the primary network.
Data Link Institute
Digital Privacy:
 How long does it take to break your password?
 6 days to break a reasonably strong password (10

characters) with 5 lowercase, 2 uppercase and 3
numbers.
 Less than 2 minutes to break an 8 character password

with uppercase, lowercase, and numbers
 More common passwords like "test", "password" or

"123" will be cracked instantly
Data Link Institute
QUESTIONS?
WHICH COUNTRY HOSTS THE MOST
PHISHING ATTACKS?
DO YOU KNOW WHERE YOUR MOBILE

DEVICES ARE?
Data Link Institute

Some IT Privacy Terms and Definitions
 Script kiddie is a term that refers to anyone who is not
technologically sophisticated enough to understand the
Internet vulnerability they are attempting to exploit, who
often uses tools created by others
 Hacker, either white hat (good) or black hat (bad), is the
most commonly used term for people who find software
vulnerabilities
 Cracker applies to those who break into software or Web
servers, often with criminal intentions.
 Ethics, in simple terms, is the study of morality.
 Morality refers to the "rightness" or "goodness" of
matters.
 Character is the moral quality and direction of one’s
decisions and behavior
Data Link Institute
Some IT Privacy Terms and Definitions
(Cont’d)
 Values are the rules by which we make decisions about
right and wrong, should and should not, good and bad.
They also tell us which are more or less important.
 Professionalism
Characterized by or conforming to the technical or
ethical standards of a profession [emphasis added]
Exhibiting a courteous, conscientious, and generally
businesslike manner in the workplace
Of high moral character
 Security Awareness - to ensure all personnel understand
the necessity of, and practice of safeguarding information
processed, stored, or transmitted on all information
systems
Data Link Institute
Cyber Crime
 Identity theft is the fastest growing crime.

 Experts estimate that about 10 million people become
victims each year. That means every minute, 19 people
become new victims of identity fraud.
 Drug trafficking has been replaced by identity theft as
the number one crime.
 The major player is now organized crime, responsible
for 70% and billions in ill-gotten gains.
Data Link Institute

Digital Privacy - Risks
 Identity theft and fraud
 Profiling and commercial targeting
 Personal attacks
Data Link Institute

Digital Privacy - Threats:
Threat = [Equipment + Knowledge +Skills] + Intent
[ Capability ]
 Malware*
 Social networking – many issues
 Phishing
 Impersonation
 Cookies and web bugs
 Cloud computing (HealthVault, Flickr, Gmail)
 Data mining
 Web browsing history
 Digital trails and retained data
Data Link Institute
Malware
(Malicious Software)
 Examples
1. Viruses, trojans, worms 3. Root kits, botnets
2. Key loggers and scrapers 4. Spyware, adware, spam
 “Malware has, in fact, become professionalized.
 Malware is now coded by professional software developers, often
working for organized crime.
 Malware authors now employ encryption to make detection
more difficult, and, in the spirit of the best defense being a good
offense, aggressively target and remove security software and
even rival malware.
 This evolution in the nature of malware behavior is forcing
security experts to change their approach to security, moving
from a threat recognition model to a behavior analysis model.”
The Threat and the Players
Threat = [Equipment + Knowledge +Skills] + Intent
[ Capability ]
Information Reduce Decision Space,
National Strategic Advantage, Chaos,
Security Warrior Target Damage
Threats National Information for Political, Military,
Intelligence Economic Advantage
Terrorist Visibility, Publicity,

Chaos, Political Change
Shared
Industrial Competitive Advantage
Threats Espionage Intimidation
Organized Crime Revenge, Retribution, Financial
Gain, Institutional Change
Institutional Monetary Gain

Local Hacker Thrill, Challenge, Prestige
Threats Recreational Hacker Thrill, Challenge

The loss of privacy and the concept of
“information prison”
 Security threats are increasing in COMPLEXITY,
FREQUENCY and SEVERITY
 Each week over 100 new viruses are identified and 60 new
vulnerabilities are discovered
 There are over 57000 Hacker sites for people to peruse
 $266 BILLION - Estimated cost of damages caused by
viruses and computer cracking in U.S. in 2015
(InformationWeek)
 $1.6 TRILLION - Estimated worldwide loss last year due to
downtime resulting from security breaches and virus
attacks. (InformationWeek)

Vulnerability Opportunities
New Vulnerabilities
Detected
10000
8000
6000
4000
2000
0
2000 2001 2002 2003

Attack Approach
 There are two primary methods that hackers rely
upon to disrupt the Web operations of major
companies and organizations:
 attackers break into systems by "taking advantage
of holes in corporate operating systems and
applications that are out there on Web servers
 attackers take advantage of easy-to-guess
passwords -- and this can come both from outside
hackers and from people working within company.
“

Some Evidence; A wake Up Call
 20 Young Hackers' Plot To Sabotage Internet
Investigations By FBI – TIMES
 Four Israeli Youths have been arrested in that country on
suspicion of planning to disrupt computer systems - FBI
and Israeli national police
 Code Red (Mountain Dew): 1 million computers affected;
Clean-up: $1.1 billion; Lost productivity: $1.5B
 SINGAPORE Nov 13, 2003l– Two 15-year-old hackers have
been placed under probation for two years, one for
flooding his teacher’s e-mail inbox with more than 160,000
messages, the other for posing as the Education Minister
 We have Dutch-born Jan de Wit, the 20-year-old who
wrote the Anna virus using an online worm generator kit

Some Evidence; A wake Up Call
(Cont’d)
 Michael Buen and Onel de Guzman, the 20-something
Filipino college students who allegedly wrote the
ILOVEYOU virus - 40 million computers affected; $8.7 billion
for clean-up and lost productivity
 MafiaBoy, the 17-year-old Canadian who created one of the
best known denial-of-service attacks in February, 2000; and
Benjamin Troy Breuninger, the recently sentenced 22-year-
old who broke into the Lawrence Livermore Labs
 A young hacker was caught breaking into NASA's
computers and sentenced to six months in jail - he took
possession of $1.7 million in software.
 Curador is a 18-year old hacker from rural Wales who in the
winter of 2000 stole an estimated 26,000 credit cards
numbers from a group of e-commerce web sites, and
posted the numbers on the web.
What is Ethics? (continued)
 A teenager from the U.S. was trying to impress other youths
 I was just running my mouth, trying to brag," said another
youth
 "It was teenage talk, is what it was - "I've been throwing up
nonstop," said still another
 “I did it for the thrill and challenge”
 “I wanted to see if I could do it”
 “I did not realize the consequences of my action”
 “I wanted to be cool”
 "it was the first time I was given complete power over
something - I could do whatever I wanted, and there was no
one there to do anything about it"
The solution: Moral Leadership:
A 21st Century Imperative
 Moral leadership is the key issue at all levels for the 21st Century.
 Educators (and Parents) have the unique opportunity to teach
and to model such leadership. They can literally take the moral
high ground.
 This opportunity has a price however. To walk-our-talk, to serve
as a voice of conscience to leaders, to prepare a discerning
citizenry and to avoid being hypocritical "do as I say, not as I do"
moralists, we must get our collective act together first.
 Far too many kids aren't getting (character education) from
their parents," said Josephson, founder of Character Counts and
the Josephson Institute of Ethics. "And if the schools don't do it,
they won't learn it."
 Programs that focus on six character elements: caring, civic
virtue and citizenship, justice and fairness, respect, responsibility
and trustworthiness.
Digital Privacy - Protections
 What Organizations Do to Protect Your Data
 Identify risks to sensitive data
 Implement information security program to ensure
adequate protection of sensitive data:
 Policies and procedures
 Incident response plans
 Security awareness
 Encryption of sensitive data
 Technical security measures
 Comply with industry standard security practices
 Comply with applicable laws and regulations
Digital Privacy – Protections
(Cont’d)
What You Can Do
Protect your PII - Personally Identifiable Information
 Name + SSN, drivers license number, any financial
account number, address, phone number
 Never give it out unless necessary
 Don’t put it on social media, you can’t take it back
 Be sure who you’re giving it to

Digital Privacy – Protections (Cont’d)
What You Can Do
 Practice good security
*Search and surf anonymously *Use strong privacy settings
*Read policies and agreements *Patch and apply upgrades
*Use current AV and firewalls *Use strong passwords
*Report Problems * Opt out
*Don’t click on anything unsolicited
Think – be smart!

The Digital Economy And
Encryption
 Cryptography allows for the protection of sensitive information,
either in storage or in communication, and is a necessary feature of
any secure e-commerce or electronic communication system
(including secure email and voice communication).
 Encryption is the primary tool used for information security in the
digital age.
 In its most basic form, encryption takes a message/document and
scrambles it so that only intended recipients can view its contents.
 An unencrypted document—example, an email message—can be
viewed and understood by anyone who receives it; an encrypted
document, on the other hand, cannot be read or viewed by
unintended recipients, even if they possess the document itself.
How Encryption Works
 Encryption works by taking an original, unsecured
document called the cleartext and using a key to
transform it into a secured document the ciphertext.
 Cryptography is not new; in fact, encryption in simple

forms has been in use for thousands of years.
 However, modern encryption methods in widespread

use today involve complicated mathematical
algorithms
Basic Types of Encryption (Symmetric)
Symmetric (or "private") system
 In a symmetric system, the same key is used to both
encrypt and decrypt the document.
 A common example of this form of encryption is the
password protection function of word processors.
 This form of encryption is sufficient for protection of
personal documents, where a user wants to prevent
everyone but herself from accessing her files.(But
“The key-exchange problem”)

Basic Types of Encryption
(Asymmetric)
Asymmetric key systems(or "public")
 This uses 2 key system, one key(public key) for encryption, and
a separate key(the private key) for decryption.
 The public key and the private key are mathematically related;
the breakthrough that led to the development of asymmetric
cryptography was the discovery of mathematical arrangements
that make it nearly impossible to derive the private key from a
user's public key.

Advantages of Asymmetric Encryption
 The ability to initiate a secure communications channel
between two parties who had never before
communicated and who could be complete strangers, and
even anonymous made possible the growth of all forms of
e-commerce on the Internet.
 Asymmetric cryptography underlies Hypertext Transfer
Protocol Secure (HTTPS), which is the protocol that allows
for secure communication between servers and clients on
the World Wide Web.
 Without asymmetric cryptography, it would be impossible
for users of the Internet to communicate securely with e-
commerce vendors, online banking websites, and the like.
Factors that determines the strength
of Encryption Systems,
1. Key security is the responsibility of users, and hence is usually
the least secure component of a cryptography system.
2. The underlying algorithms have to be extensively researched

and tested to ensure mathematical security.
3. The key length: keys used should be long enough to make a

brute-force attack impractical.
Popular and widely-available encryption software, using tested

algorithms and sufficiently long keys, can make data virtually
impenetrable to attack.

The Concept of Key Escrow
 Because data that have been encrypted with a strong
cryptography system cannot be retrieved without the
decryption key, managing those keys is a matter of great
importance for organizations.
 This is particularly important in the case of asymmetric
cryptography, where a single public-private key pair may be
used for innumerable communications and transactions; if the
private key is lost, all prior communications become
inaccessible, and the key pair itself becomes unusable.
 To manage this risk, the concept of key escrow was developed.
 With key escrow, a copy of each decryption key is placed in
escrow with a trusted third party (TTP); if the key holder loses
her copy of the key, the TTP can recover it.
The Concept of Key Escrow (Cont’d)
 Many large organizations operate their own key escrow
systems.
 A more important example of a key escrow system, however,
is the case of certificate authorities (CAs).
 Certificate authorities are organizations (either private
companies or governmental agencies) that issue public-private
key pairs to authenticated organizations or individuals.
 For example, if an individual wants to start an e-commerce
website that uses encryption and is trusted by consumer web
browsers, that individual can request that a certificate
authority issue a key pair in her name.
 The certificate authority will verify that the person requesting
the certificate is who she claims to be
CSIT 304
Session 9 – The Digital Economy and Privacy
Regulation, Encryption and Terrorism (Cont’d)

UNIVERSITY OF GHANA
Data Link Institute

Topic One
THE DIGITAL ECONOMY AND PRIVACY

REGULATION, ENCRYPTION AND TERRORISM
(CONT’D)
Data Link Institute
Cryptography Regulation
 Most major countries regulate encryption, to varying degrees.
 Encryption is regulated because it is a "dual-use" technology;
that is, it has both commercial and military value.
 The United States pioneered the efforts to regulate
encryption during the Cold War.
 Since then, U.S. encryption regulation has been driven by two
competing concerns:
 (1) The ability of American high-tech industries to compete
in foreign markets; and
 (2) The ability of criminals and terrorists to threaten
national security through the use of strong encryption.
Cryptography Regulation:
The Wassenaar Arrangement.
 In an effort to harmonize regulations on the export and import
of dual-use technologies, many countries have come together
and agreed to a set of principles known as the Wassenaar
Arrangement.
 The stated goal of the Wassenaar Arrangement was "to
contribute to regional and international security and stability
by promoting transparency and greater responsibility in
transfers of conventional arms and dual-use goods and
technologies . . .“ Cryptography is classified as a dual-use good.
 The Wassenaar Arrangement makes symmetric cryptography
products of up to 56 bit key length, and asymmetric
cryptography products of up to 512 bit key length, free from
export restriction.
Cryptography Regulation:
The Wassenaar Arrangement. (Cont’d)
 Furthermore, the Wassenaar Arrangement includes a
personal-use exemption, allowing individuals who travel
abroad to carry with them cryptography devices for their
personal use.
 However, cryptography products that do not fall into
these exemptions are still eligible for restriction.
 The Wassenaar Arrangement sets general parameters for
import and export control to which member states largely
adhere; however, the Wassenaar controls are not binding
on member states and are implemented at the discretion
of member governments.
Impacts of Cryptography Regulations
Restrictions on cryptography have deleterious effects
on at least three groups:
 Information Technology and security companies
wishing to compete in international markets;
 Firms operating abroad that desire to use
cryptography to protect their data and
communications; and
 Individuals and groups in countries with restrictions
on use of cryptography who would like to protect
their data from corporate or government
interference.
Effects of Cryptography Regulations
on IT Industry
• Varying cryptography regulations worldwide place substantial
burdens on information technology and security firms looking
to expand into new markets.
• Many analysts believe for example, that the U.S. export
controls have placed American IT firms at a competitive
disadvantage vis-à-vis foreign competitors.
• Furthermore, all IT and security firms not just those based in
the U.S. face increased costs due to compliance with foreign
import requirements.
• Finally, to the extent that encryption regulations in major
markets (e.g. China) constrain demand for cryptography
services in those countries, security firms are disadvantaged.
on IT Industry (Cont’d)
 The effects of cryptography regulations on IT firms extend
beyond the market for cryptography software, however.
 Many information technology products, services, and
businesses depend upon strong cryptography.
 For example, e-commerce (exemplified by Amazon.com in the
U.S.) would not have flourished had customers feared that
every time they made a purchase online, they were placing
their credit card information at risk of compromise; yet this
fear would be justified in the absence of strong cryptography
to protect the information in transit.
 By limiting the use of cryptography, countries hinder the
development of their IT and e-commerce markets in general
on Global Economic Activities
Restrictions on the import and use of cryptography affect
businesses in several important ways.
 If firms cannot use encryption devices to secure their data and
communications in a given country, then their intellectual
property in that country is put at substantial risk.
 The situation is perhaps even worse where regulations are
unclear and inconsistently applied, as is the case in China,
Russia, and elsewhere; in such situations, a firm must decide
between avoiding cryptography but exposing its data to
compromise, and using cryptography but exposing itself to
sanctions.
 Such regulatory uncertainty will tend to favor well-connected
firms at the expense of market newcomers, undermining the
on Global Economic Activities (Cont’d)
Competitiveness of the market and discouraging new entrants
 As Bruce Schneier, a noted encryption expert, observed, “Rules
are often hard to find and hard to follow [because]
governments want people not to do anything.”
 Finally, limitations on the use of cryptography by individuals
and organizations remove a potent tool to preserve privacy
and communicate in the face of governmental opposition.
 Encryption makes it far easier for human rights advocates,
dissent movements, and the like to communicate and organize.
 Where encryption software is unavailable/illegal, movements
will find it much harder to organize. This can have deleterious
effects on the promotion of socially valuable change
TERRORISM
 Globalization and the Internet are accelerating
terrorist activity and their quest for digital jihad.
 Terrorists use the Internet

to achieve many of their
objectives.

TERRORISM (Cont’d)
The Internet allows small groups of non-state foes to
finance, plan, supply, and execute terrorist
operations globally with little regard to borders,
laws, and governments. ”
John Robb, Brave New War

What is The Threat?
 To identify the threat posed, we need to examine:
 Terrorists’ use of the Internet
 Cyber terrorism
Terrorism
 No universal accepted definition of terrorism.
 •Marsella defines terrorism as :
 “ . . . the use of force or violence, by individuals or groups
that is directed toward civilian populations and intended
to instill fear as a means of coercing individuals or groups
to change their political and social positions”.
Definitions: Terrorism and
Cyberterrorism
 Like terrorism, cyberterrorism has different
connotations.
 Denning holds that cyberterrorism “ . . . refers to highly
damaging computer-based attacks or threats of attack.
 By non-state actors against information systems when
conducted to intimidate or coerce governments or
societies in pursuit of goals that are political or social.”
 What distinguishes cyberterrorism from cyber war is that
non-state actors undertake cyberterrorism, whereas
nation states undertake cyber war.

Definitions - Terrorism and
Cyberterrorism (Cont’d)
 The Center on Terrorism and Irregular Warfare
Monterey, California conducted one of the first
comprehensive surveys of cyber terrorism
 The Center’s original assessment and follow-on work
found that terrorists have at best a marginal and
cursory capability to carry out cyber terrorism.
 Dr. Denning (2007) assessment, A View of
Cyberterrorism Five Years Later, reaches much the
same conclusion as well as others.
 Current literature and research evidence simply does
not support an imminent threat of cyber terrorism.
Electronic Jihad
 While suicide attacks and improvised
explosives devices (IEDs) remain popular
with terrorists, this does not mean we
ignore the threat of cyber terrorism.
 The Jamestown Foundation reports
how ‘electronic jihad’ organized and
coordinated attacks to wage economic
and ideological warfare is being promoted on the internet.
 Dr. Alshech contends that while electronic jihad is capable
of causing some moderate damage to western economy,
there is no indication of an immediate threat.

Internet Not A Terrorist Target
 While electronic jihad promotes coordinated cyber attacks
using the Internet, the internet itself is not a terrorist
target.
 For terrorists, the Internet is a computer-mediated
communication (CMC) platform for:
 Recruiting
 Training
 Funding
 Targeting
 Information operations
 Intelligence collection

Principles of Behavior
Honesty
 to be truthful in all our endeavors; to be honest and
forthright with one another and with customers,
communities, suppliers, and shareholders.
Integrity
 to say what we mean, to deliver what we promise, to fulfill
our commitments, and to stand for what is right.
Respect
 to treat one another with dignity and fairness, appreciating
the diversity of our workforce and the uniqueness of each
employee.
Trust
 to build confidence through teamwork and open, candid
communication.
Computer-Mediated Communication
(CMC)

Convergence:
Terrorism, Crime, Internet
 Terrorists have found that the Internet and criminal
activity (e.g., drug trafficking, financial scams, cyber-
crime, illegal money transfers, identity theft) gives
them ‘discrete advantages.’
 For example, using the Internet and ATMs to move
money illustrates the creativity and sophistication of
terrorists and criminals.
 An example of how terrorism, crime and the Internet
converge is found in the Bali disco bombing.

Terrorism + Crime + Internet
= Operational Funding
• Bali, Indonesia Disco Bombing
• Two hundred and two people died in the Bali, Indonesia,
disco bombing of October 12, 2002.
• A suicide bomber blew himself up on a tourist-bar dance
floor, and then, moments later, a second bomber detonated
an explosives-filled Mitsubishi van parked outside.
• Now, the mastermind of the attacks Imam Samudra, a 35-
year-old Islamist militant with links to al-Qaeda has written a
jailhouse memoir that offers a primer on the more
sophisticated crime of online credit card fraud, which he
promotes as a way for Muslim radicals to fund their
activities.
NetWar, Networking, and Information
Security
 The Internet provides non-state actors a place and a means to
expand their influence, social network, and operational reach.
 Arquilla and Ronfeldt defined ‘netwar’ as unconventional
decentralized warfare: nontraditional warfare carried out by
dispersed groups of activists (i.e., terrorists, criminals, gangs,
tribes, clans, militias) without a central command.
 They often communicate and coordinate electronically via the
Internet.
 Sullivan posits that netwar may result in a distinct and perhaps “
refined form of terrorism . . ." where ’inter-netted’ transnational
criminal organizations (TCOs), triads, cartels, cults, terrorists,
gangs, etc. replace their more state-oriented predecessors.
Information and Operational Security
 A terrorist survival kit (OPSEC
used by Al Qaeda and the Taliban
contained instructions on information and operational
security (OPSEC) for Internet and network communications.
 “Internet use follows protocols based on using public
Internet cafés . . . never go to the same café repeatedly and
not using messages that will betray your ideological
commitment.”
 Zanini and Edwards note terrorist networks’ information
security is bolstered by commercial encryption programs.
 Denning observes there are reports suggesting jihadists are
using steganography, and an issue of The Technical Mujahid
refers to steganography.
Social Engineering
 Social engineering is a compilation of techniques used
to influence and manipulate people into divulging or
exposing guarded, sensitive or confidential
information.
 Social engineering is similar to a confidence or fraud

scam.
 It typically involves trickery, ruses and deception to

gather sensitive information or gain access to
computer network systems

Character
 HERACLITUS (c. 540 - c. 480 BC) -- Greek philosopher said "A
man's character is his fate.“
 BOOKER T. WASHINGTON (1856-1915) -- African-American
educator said "Character is power."
 RICHARD NIXON (1913-1994) said "With all the power that a
President has, the most important thing to bear in mind is this:
You must not give power to a man unless, above everything
else, he has character. Character is the most important
qualification the President of the United States can have."
 LYNDON JOHNSON (1908-1973) "The fact that a man is a
newspaper reporter is evidence of some flaw of character."
 CALVIN COOLIDGE (1872-1933) "Character is the only secure
foundation of the state.“
 THEODORE ROOSEVELT “To Educate A Person In Mind And
Not In Morals Is To Educate A Menace Society”
Using social engineering techniques,
this trio stole more than 37,000 credit
card numbers.
 Left to right, Waseem Mughal, Younis Tsouli and Tariq

al-Daour. The three men pleaded guilty to a terrorism
charge in the UK.
 $3.5 million in fraudulent charges and purchases

 Hundreds of prepaid cell phones acquired
 More than 250 airline tickets obtained, using 110
different credit cards at 46 airlines and travel agencies
Code of Ethics Canons (Cont’d)
Provide diligent and competent service to principals
 Preserve the value of their systems, applications, and
information.
 Avoid conflicts of interest or the appearance thereof.
Advance and protect the profession

 Sponsor for professional advancement those best
qualified. All other things equal, prefer those who are
certified and who adhere to these canons. Avoid
professional association with those whose practices
or reputation might diminish the profession.
 Take care not to injure the reputation of other
professionals through malice or indifference.

CSIT 304
Session 10 – PUBLIC POLICY AND GLOBAL
ECONOMY (CON’D)

UNIVERSITY OF GHANA

Topic One
PUBLIC POLICY AND GLOBAL ECONOMY

(CONT’D)
Julius
JuliusYaw
YawLudu,
Ludu,MENG
MENG Slide 2 Department of Computer
Department Science,
of Computer UG UG
Science,
Public policy development: The policy
life cycle
 As countries develop, they deal with problems
through effective public policies
 But, other problems (e.g., air pollution, ozone

depletion) arise that require further public policy
development
 Policy life cycle: the predictable course of policy

development

The policy life cycle

The recognition stage of a policy life
cycle
 Is low in political weight
 Begins with early perceptions of a problem
 Results from published scientific research
 The media popularize the information
 Public involvement starts the political process
 Dissension is high because opposing views surface
 The problem gets attention from some level of
government
 The possibility of addressing it with public policy is
considered

The formulation stage of a policy life
cycle
 A stage of rapidly increasing political weight
 The public is aroused and debates policy options
 Political battles occur over regulation and who pays

for it
 High media coverage
 Politicians hear from their constituencies and lobbyists

The implementation stage of a policy
life cycle
 The real political and economic costs are exacted
 The policy has been determined
 Focus moves to regulatory agencies
 Public concern and political weight decline
 The media lose interest
 The emphasis shifts to development and enforcement
of regulations
 Industry learns how to comply
 As all players gain experience with the policy attention
is paid to efficiency and equity

The control stage of a policy life cycle
 Years have passed since the recognition stage
 Policies are supported

 They become embedded in society
 However, they are vulnerable to political shifts
 Regulations become streamlined
 The public may forget there was a serious problem

Different problems are in different
stages
 Countries in different stages of development are in
different stages of the policy life cycle for any
problem
 Developing countries have serious problems because

public policies have not caught up with the need for
control
 Discrepancies result from the costs of development

and implementation of public policy
Global trade Policy Issues
 Global trade cannot be judged only on the basis of
theories and analyses. Government policies reflect
objectives that go beyond simple measures of cost and
benefit. Hence, we observe a number of debates on
the policies of global trade. The following are the main
topics:
 Free trade vs. protectionism

 Liberalization in the developing world
 The role of the World Trade Organization (WTO)

Free trade
Free trade means there will be no
restrictions on either exports or imports
in the form of
 Tariffs
 Subsidies
 Quotas
 Restrictions

Cases for free trade
 The first case for free trade is the argument that
producers and consumers allocate resources most
efficiently when governments do not distort market
prices through trade policy.
 National welfare of a small country is highest with free
trade. With restricted trade, consumers pay higher
prices.
 With restricted trade, distorted prices cause
overproduction either by existing firms producing
more or by more firms entering the industry.

Cases for free trade (cont.)
The efficiency
argument for
free trade
suggests that a
trade
restriction, such
as a tariff, leads
to production
and
consumption
distortions.

 When quotas are used instead of tariffs, costs can be
magnified through rent seeking.
 To seek quota licenses or the rights to sell a

restricted number of imports and the profit that they
will earn, individuals or institutions need to spend
time and other resources.
 Thus, another reason why trade allocates resources

efficiently is that it avoids the loss of resources
through rent seeking.
 A second argument for free trade is that it allows
firms or industry to take advantage of economies of
scale.
 A third argument for free trade is that it provides
competition and opportunities for innovation.
 These are dynamic benefits, unlike the static benefits
of eliminating the efficiency losses caused by distorted
prices and overproduction.

 A fourth argument, called the political argument for
free trade, says that free trade is the best feasible
political policy, even though there may be better
policies in principle.
 Any policy that deviates from free trade would be

quickly manipulated by political groups, leading to
decreased national welfare.

Cases against free trade
 For a “large” country, a tariff or quota lowers the
price of imports in world markets and generates a
terms of trade gain.
 This benefit may exceed the losses caused by
distortions in production and consumption.
 In fact, a small tariff will lead to an increase in national
welfare for a large country.
 But at some tariff rate, the national welfare will begin
to decrease as the economic efficiency loss exceeds
the terms of trade gain.
Cases against free trade (cont.)
 For a large country, there is an optimum tariff to at

which the marginal gain from improved terms of
trade just equals the marginal efficiency loss form
production and consumption distortions.
 A tariff rate that completely prohibits imports leaves a
country worse off, but tariff rate t0 may exist that
maximizes national welfare: an optimum tariff.
 An export tax (a negative export subsidy) that

completely prohibits exports leaves a country worse
off, but an export tax rate may exist that maximizes
national welfare through the terms of trade.

 An export subsidy lowers the terms of trade for a
large country; an export tax raises the terms of trade
for a large country.
 An export tax may raise the price of exports in the

world market, increasing the terms of trade.
 A second argument against free trade is that

domestic market failures may exist that cause free
trade to be a suboptimal policy.
Types of market failures include:
 Persistently high under-employment of workers
 surpluses that are not eliminated in the market for
labor because wages do not adjust
 Persistently high under-utilization of structures,
equipment and other forms of capital
 surpluses that are not eliminated in the market for
capital because prices do not adjust

 Technological benefits for society discovered through
private production, but from which private firms can
not fully profit.
 Environmental costs for society caused by private

production, but for which private firms do not fully
pay. Property rights that are not well defined or well
enforced
 Sellers that are not well informed about the

(opportunity) cost of production or buyers that are
not well informed about value from consumption
 Economists calculate the marginal social benefit to
represent the additional benefit to society from
private production.
 With a market failure, marginal social benefit is not
accurately measured by the producer surplus of
private firms, so that economic efficiency loss
calculations are misleading.
 It is possible that when a tariff increases domestic
production, the benefit to domestic society will
increase due to a market failure.

The Domestic Market
Failure Argument for
a Tariff suggests that
if production of a
good yields extra
social benefits
(measured in panel
(b) by area (c) not
captured as producer
surplus), a tariff can
increase welfare.

 The domestic market failure argument against free
trade is an example of a more general argument called
the theory of the second best.
 This theory states that government intervention

which distorts market incentives in one market may
increase national welfare by offsetting the
consequences of market failures elsewhere.

Decision
 Now it’s your turn to decide between free trade and
protectionism

Trade liberalization in developing
economies
 There is some evidence that low and middle income
countries which had relatively free trade had higher
average economic growth than those that followed
import substituting industrialization.
 But this claim is a matter of debate.
 Regardless, by the mid-1980s many governments had

lost faith in import substituting industrialization and
began to liberalize trade.

Trade liberalization (cont.)
The Growth of Developing-Country Trade
 Trade liberalization after 1985 led to a surge in both

imports and exports as a percentage of GDP in the
developing world.
 As with import substituting industrialization,
economic development was the ultimate goal of trade
liberalization.
Has trade liberalization promoted development?
 The evidence is mixed.
 Growth rates in Brazil and other Latin American
countries have been slower since trade liberalization
than they were during import substituting
industrialization,

 But unstable macroeconomic policies and financial
crises contributed to slower growth since the 1980s.
 Other countries like India have grown rapidly since
liberalizing trade in the 1980s, but it is unclear to what
degree liberalized trade contributed to growth.
 Some economists also argue that trade liberalization
has contributed to income inequality, as the
Hechscher-Ohlin model predicts.

 Instead of import substituting industrialization,
several countries in East Asia adopted
trade policies that promoted exports in targeted
industries.
 Japan, Hong Kong, Taiwan, South Korea, Singapore,
Malaysia, Thailand, Indonesia, and China are countries
that have experienced rapid growth in various export
sectors and rapid economic growth in general.
 These economies or a subset of them are sometimes
called “high performance Asian economies.”

International negotiations of trade
policy (cont.)
 Multilateral negotiations mobilize exporters to
support free trade if they believe export markets will
expand.
 This support would be lacking in a unilateral push for
free trade.
 This support counteracts the support for restricted
trade by import-competing groups.
 Multilateral negotiations also help avoid a trade war
between countries.
World Trade Organization
The WTO negotiations addresses trade restrictions in at
least 3 ways:
 Reduction of tariff rates through multilateral
negotiations.
 Binding: a tariff is “bound” by having the imposing
country agree not to raise it in the future.
 Prevention of non-tariff barriers: quotas and export
subsidies are changed to tariffs because the costs of
tariff protection are more apparent.

World Trade Organization (cont.)
 The World Trade Organization was founded in 1995 on
a number of agreements:
 General Agreement on Tariffs and Trade: covers
trade in goods
 General Agreement on Tariffs and Services: covers
trade in services (ex., insurance, consulting, legal
services, banking).
 Agreement on Trade-Related Aspects of Intellectual
Property: covers international property rights (ex.,
patents and copyrights).
 The World Trade Organization was founded in 1995
on a number of agreements (cont.):
 The dispute settlement procedure: a formal
procedure where countries in a trade dispute can
bring their case to a panel of WTO experts to rule
upon.
 The cases are settled fairly quickly: even with
appeals the procedure is not supposed to last
more than 15 months.

 The World Trade Organization was founded in 1995
on a number of agreements (cont.):
 The panel uses previous agreements by member
countries to decide which ones are breaking their
agreements.
 A country that refuses to adhere to the panel’s
decision may be punished by allowing other
countries to impose trade restrictions on its
exports.

 The GATT/WTO multilateral negotiations, ratified in
1994 (called the Uruguay Round),
 agreed that all quantitative restrictions (ex., quotas)
on trade in textiles and clothing as previously
specified in the Multi-Fiber Agreement were to be
eliminated by 2005.
 But as the restrictions were eliminated, China had to
re-impose quotas until 2011 due to political pressure.

 In 2001, a new round of negotiations was started in
Doha, Qatar, but these negotiations have failed to
produce an agreement.
 Most of the remaining forms of protection are in

agriculture, textiles and clothing—industries that are
politically active.

Activity/Essay
1. After examining the arguments for and against

free trade, it’s your turn to decide. Write an
essay on free trade justifying your opinion.

CSIT 304
Session 11 – Public Policy and Global Economy

UNIVERSITY OF GHANA

Topic One

(CONT’D)
Julius
JuliusYaw
YawLudu,
Ludu,MENG
Department Science,
of Computer UG UG
Science,
Definition of Corruption
 Corruption often is defined as: “The abuse of
entrusted power for private gain”.
 While this broad statement encompasses all different

forms of illicit and illegal acts in which corrupt
behavior is manifested, it does not attempt to
enumerate or precisely delimit them.

The United Nations Global Compact
 The United Nations Global Compact was launched at
the UN Headquarters in 2000.
 It was the result of a speech by then UN Secretary-
General Kofi Annan at the World Economic Forum in
1999, proposing that business and the UN jointly
initiate a “global compact of shared values and
principles, which will give a human face to the global
market”.

The United Nations Global Compact
 The United Nations Global Compact is a call to companies
everywhere to voluntarily align their operations and
strategies with ten universally accepted principles in the
areas of human rights, labor, environment and anti-
corruption, and to take action in support of UN goals and
issues.

Background to the GC
 Announced in a speech by UN Secretary General Kofi
Annan at the World Economic Forum in Davos,
Switzerland, in 1999
 “I propose that you, the business leaders, and we, the

United Nations, initiate a global compact of shared
values and principles, which will give a human face to
the global market.”

Understanding the UN Global Compact
 An international initiative designed to bring companies
together with UN agencies, labour, NGOs, and other civil
society actors with the aim of fostering action and
partnerships for a more sustainable and inclusive global
economy
 Relies on the enlightened self-interest of companies, labour

organisations and civil society bodies to initiate and share
substantive action in pursuing the principles
 Seeks to provide a contextual framework to encourage

innovation, creative solutions, and good practices among
participants
Benefits of participating in the Global
Compact
Provides access to practical solutions to globalisation,
sustainable development and CSR problems
By engaging, business leaders demonstrate leadership

with regards to responsible corporate citizenship
Provides companies with access to UN expertise
Offers simple framework for engagement without

expensive certification and intrusive monitoring

The UN Global Compact against
corruption:
 “Businesses should work against corruption in all its
forms, including extortion and bribery”.
 Implementation of the 10th Principle entails avoiding

bribery, extortion and other forms of corruption, as
well as proactively developing policies and concrete
programmes to address the risk and actual instances
of corruption internally and within their supply chains.

Key characteristics of the Global
Compact
A learning approach
A diversity of actors and approaches
A decentralised network

The Global Compact: Key Characteristics
A Learning Approach
Learning focus on how business can respect

universal values
Many ways to achieve goals
Underlying objective of encouraging innovation

and creative solutions

A Decentralised Network
The UN Global Compact Office (in New York) and

various agency focal points
Not a large bureaucracy
The Global Compact relies on the actions of those

involved

The Global Compact is not:
A code of conduct
A mechanism to check compliance
A mandatory set of guidelines
A regulatory system
An attempt to shift governmental responsibilities

to business
CSIT 304

UNIVERSITY OF GHANA

Topic One

(CONT’D)
Julius
JuliusYaw
YawLudu,
Ludu,MENG
Department Science,
of Computer UG UG
Science,
3
International Nature of Cyber Crime

 Access/mobility of data fundamental to economic
systems
 Borders by-passed
 Exploitation by criminals & terrorists
 data hidden abroad
 hackers and viruses abroad
 economic criminals abroad
 illegal content abroad
 communicate to plan

International Nature of Cybercrime
 Minimal risk of detection and apprehension
 Different national laws
 Crime is borderless but enforcement is constrained by

borders
 International cooperation is essential

5
Harmonization of National Laws

 Common framework required
 But , no universal consensus of:

 types of “computer crime”
 set of procedural powers
 specifics of definition or scope

6
Harmonization of National Laws

 Lack of harmonization creates problems:
 no common understanding of problem and how to
respond
 sovereignty (e.g., trans-border search)
 dual criminality
 treaties may not include necessary investigative powers
 No truly international fora

 Problems regarding international cooperation inter-
related with harmonization of substantive & procedural
law

7
Inter-relation with procedural law

 International investigative powers are coextensive
with domestic powers:
 search or production of data
 preservation of stored data
 collection of traffic data
 interception of communications
 Obtain evidence and trace communications

8
Legal Framework for International

Cooperation
 Mutual legal assistance
 scope of cooperation
 mechanics of cooperation
 general obligations
 specific investigative powers
 Extradition
 dual criminality
 nationality

9
Mutual Legal Assistance:

Scope of cooperation
 Scope of offences
 crimes against access, integrity & availability
 crimes committed by means of computers
• facilitate communication crimes
• facilitate communication to plan crimes
 collect electronic evidence of any crime
 Types of investigative powers

 approximate domestic powers

10
Mutual Legal Assistance: Mechanics of

cooperation
 Conventions are generally independent of bilateral or
other treaties
 Council of Europe Convention - hybrid

 convention serves as basis
 existing treaties take precedence
 convention supplements or applies in absence of
other treaties

11
Mutual Legal Assistance: General

obligations
 Afford MLA to widest extent possible
 MLA subject to law of requested state or applicable

treaties
 If no pre-existing arrangement, supplement with new

provisions

12
Mutual Legal Assistance: Specific

powers
 Employ both traditional and new investigative powers
 Preservation of stored data

 volatility of data, inherent delays, increased threat
of loss
 provisional measure to secure availability
• rapid
• protects privacy
• safeguards (e.g., intent to make MLA request;
time limits)

13

powers
 Dual criminality
 modern trend to eliminate or restrict
 preservation less intrusive
 verification counter-productive to quick provisional
measure
 early stages - extent of criminality unknown
 Council of Europe compromise
 may refuse to preserve if reasons to believe that at
time of disclosure dual criminality can not be met

14

powers
Expedited preservation and disclosure of preserved
traffic data
essential to trace communications
traffic data reveals source, path and destination of
a specific communication
multiple service providers
 preservation at each service provider
 disclosure of sufficient amount of data to
identify next service provider and path
cross-border and MLA
15

powers
 Search, access and disclosure
 apply to electronic data
 system searches
 avoids trans-border search
 Real-time collection of traffic data

 historical tracing may not be possible
 crime may require immediate tracing
 cross-border and MLA
 Council of Europe - reservation

16

powers
 Interception of content data
 content may be illegal or afford evidence of crime
 privacy issues
 Council of Europe
• only to extent permitted by Parties’ laws and
treaties
• convention not provide independent basis

17
Mutual Legal Assistance:

Specific powers
 Safeguards
 subject to law of requested state
 safeguards in definition of powers
 Council of Europe
 subject to national safeguards, which must:
• protect human rights under applicable
conventions between Parties
• provide proportionality, judicial or other
supervision, justifying grounds, limitations on
scope and duration
 consider impact on third parties
18
Extradition
 Dual criminality and harmonization of law
 convention may serve as basis
 precedence given to existing treaties
 refusal on grounds of nationality
• obligation to investigate and prosecute

19
G8
 Washington, D.C., 1997:
 Principles and Action Plan to Combat High-tech Crime
 Moscow, Russia, 1999:
 Principles on Transborder Access to Stored Computer Data
 Mont Tremblant, Canada, 2002:
 Recommendations for Tracing Networked Communications
Across National Borders in Terrorist and Criminal
Investigations
 Principles on the Availability of Data Essential to Protecting
Public Safety
 G8 Statement on Data Protection Regimes
 Data Preservation Checklists
20
Commonwealth
 Model Law on Computer Related Crime, 2002
 Guide to assist
 Influenced by text of Council of Europe Convention
 Common framework with Council of Europe

21
24-7 Network
 Need for coordinated law enforcement contacts
 G8

22
Inter-American Conventions
 Consider extent to which Conventions require
amendment or protocol to:
 incorporate new investigative techniques
 supplement existing bilateral treaties
 provide additional safeguards
 24/7 Network

23
Recommendations
 Agree to common concepts of crime
 Agree to common list of investigative powers
 Investigative powers should:
 apply not only to computer-related crime but to
collection of evidence of any crime
 balance powers with privacy and human rights
 provide ability to trace communications
 be available for MLA
Cont’d
24
Information Policy
 Defined as “any law, regulation, rule, or practice

(written or unwritten) that affects the creation,
acquisition, organization, dissemination, or
evaluation of information
 Generally discussed in terms of government
legislation
 Includes information technologies for
educational and industrial uses;
telecommunications; privacy issues; computer
regulations and crimes; copyright and intellectual
freedom; and government information systems

25
Elements of Information Policy

 Common elements in any national information policy
would thus include
 being open,
 accessible,
 universal and
 flexible

CSIT 304
(Cont’d)

UNIVERSITY OF GHANA

Topic One

(CONT’D)
Julius
JuliusYaw
YawLudu,
Ludu,MENG
Department Science,
of Computer UG UG
Science,
What is the NII?
 A broad approach to maximising the value of
information to the nation and to society
 A representation of a Government Information
Strategy
 An information parallel to the National (physical)
Infrastructure
 A structured approach to releasing the greatest
benefit from our information
 A manageable initiative to create, make readily
available and publicise an entity and framework to
promote availability and best practice in fostering
openness and the information ecosystem
What topics are covered in the NII?
 Data, policies about its availability, standards,

applications of the data, producers and users, tools,
organisations involved, etc.
 Potentially, all relevant data matters are in scope
 Realistically, focussed on information and processes

that government can most readily influence – and are
high priorities

What information is in the NII?
 Potentially a wide range of data but focussed first on
PSI
 Not just central government data - devolved
governments, LAs, health, etc, private sector
involved in public (and infrastructure,
communications) services plus independent and
voluntary sectors where they too provide publicly
funded or (tax-) subsidised services
 PSI is a wide definition and is sometimes blended
with data from non-public sources
Private data in the NII
 Can be personal or commercial confidential
 Public confidence must be assured
 Anonymity must be assured
 There are proven good ways to release anonymised
sensitive data
An important element of PSI - needs special attention

Who are the data providers for NII?
 Central government departments
 Devolved administrations
 Key public facing sectors such as local government,
health and social services
 Near-government (e.g. transport, privatised utilities,
those who government pays)
 Non-government sources where there is a public
sector interest

What are the NII applications?
 A vast array – known and unknown
 There is a need to better understand usage and

applications for input to prioritisation and investment.
 The pace of change in electronic methods will greatly

increase the scope and value of data
The NII is a living entity

Is the NII the same as Open Data?
 The NII is a broader concept that embraces Open Data
 Government plans for OD are a relevant and

important component of the NII.

Why is the NII so important?
 The information economy is already worth £billions
and growing rapidly
 There is considerable waste from duplication and data

misuse
 Better data availability in the widest sense will lead to

better applications – quality, relevance, openness,
value

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CSIT 304

IT IN THE GLOBAL ECONOMY

Lecturer: Julius Yaw Ludu, MENG

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INTRODUCTION & BASIC CONCEPT

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 Macroeconomics: The study of the overall aspects and

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 In optimizing resources, also known as inputs (or

 Choice involves an opportunity cost, which is defined

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 It is used to illustrates the concept of opportunity

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 This means that

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THINK GLOBALLY AND ACT LOCALLY!

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 All processes and events should be examined and

 The area of economic science is already too narrow to

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Our choice is to examine globalization of economics in the

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Globalization is a compression of time and

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Culture Democracy and

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There is a clear dependence of globalization

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The effect and role of technologies of life depend

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Session 2 – The Economics of Information

Lecturer: Julius Yaw Ludu, MENG

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– In that definition, ‘data’ is taken as equivalent to physical

– Whatever the physical form may be, it becomes a recorded

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 But information clearly is important in operational

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 Information can serve as a substitute for physical

 Information is used to influence and persuade.

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 Information may be an educational objective in itself,

 Information is the substance of cultural enrichment,

 Information can be a service. Indeed, the majority of

 Information can be a capital resource, especially for

 In contrast to physical goods, intellectual goods can

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 There is an evident and direct relationship between

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 Persons differ greatly in perceptions of the value of

 Use of information is affected by the distance users

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 An accumulation of information has more value than

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 Information is not consumed by being used or

 However, there is the need to invest in the creation,