Curtis Otiende

HDB212-D1-0001/2020
MAY-AUGUST SEMESTER 2020
FIRST YEAR SECOND SEMESTER
ICT AND THE SOCIETY
ASSIGNMENT 1

Question: discussion on the relationship of ICT and national development

1. ICTs as Drivers of Economic and Productivity Growth

A powerful parameter for use in measuring an economy’s well-being is its ability to increase in
productivity. Rise in productivity is allows firms to increase employees’ wage without necessarily having
to increase product prices. This creates not-inflationary income growth. Therefore, the best and most
reliable way for sustainable economic growth is by investing in assets that can enable increase in
productivity.
There have been arguments among economists on the relationship between ICT and productivity. These
have resulted into conclusions that ICT investment, especially when linked to fundamental organizations
change, can have a significant positive impact on productivity. This is not just about direct returns on
investment but for instance in the United States, firms in the recent past have had a wide spread and
lasting revival of the national productivity growth. This is an indication enough to conclude that ICT
when effectively used can help organizations make proper utilization of resources and improve their
competitive advantage.

A recent OECD (Organization for Economic Co-operation and Development) also led to the conclusion
that while there are good reasons for believing that ICT use is positively correlated to productivity
growth, acquiring ICT is not enough for countries to derive economic benefits. 1 Other factors, such as the
regulatory environment, the availability of appropriate skills, and the ability to spur organizational
dynamics, often have some significant influence on the ability of firms to fully utilize ICT to their
advantage.

While most economic studies to date on the link between ICT and productivity have mostly set their focus
on developed nations, there are good grounds to believe that ICT have also been important in economic
growth in the developing countries. Information and knowledge are the foundation of the Knowledge
Economy. In today’s increasingly integrated global economy, firms across the economic landscape,
including those in developing countries, will need to learn how to acquire and use information effectively
if they are to succeed.

While ICT remains under-utilized in the developing countries, case study evidence suggests that ICT is
beginning to provide a basis for productivity and economic growth in developing nations. For instance,
ICT is being used in Africa, India, and other nations to create rural trading networks that connect local
craftspeople directly with their customers. For instance, the PEOPLink project links over 100,000
artisans from various developing nations to potential customers through its online trading portal,
FairTradeDirect.com. At a business-to-business level, Utilities Afrique Exchange provides an e-trading
platform for utilities companies in Africa to simplify procurement and reduce costs.

1
OECD, ICT and economic growth: Evidence from OECD countries, industries and firms (2003).
 2. ICTs as Enablers of Social Development

The most notable and impressive examples of ICT’s potential to promote national development have
occurred in the context of development projects targeting social inclusion and cohesion. These include
projects that provide excluded communities with greater opportunities to participate in community life.
Many challenges facing traditionally underserved communities have been caused partly by inadequate
access to knowledge and information. ICT can help overcome these challenges by making it easier and
less expensive to gather, analyze, and relay information to the people who need it most. The Internet in
particular is performing this purpose creating nearly endless opportunities for individuals and
communities in developing countries to obtain knowledge and communicate with others.

ICT therefore have nearly endless potential as enablers of social development. Although the
multifunctional, flexible nature of ICT means that they can be applied to virtually any development goal,
areas in which ICT has already proven effective include healthcare, education and environment.

3. ICTs as Enablers of Good Governance

Government administrations are also increasingly putting to use the power of ICT in seeking for
efficiency and effectiveness in operations. For example, many governments in both developed and
developing countries are working to replace paper-based documents and records with digital formats, and
are even beginning to “link up” databases of these records for use between various departments. These
efforts are making governments more responsive and making it easier for citizens to access public
records, information, and services through the Internet as and when needed.

Implementation of “e-Government” can also provide an important “democratizing” function by giving

people a new and powerful way to participate in government and interact with public officials. These
efforts can at times raise important civil liberty issues, particularly to the extent they share personal
information without the individual’s knowledge or consent, but ICTs can also make government
processes more open and transparent to citizens. ICT can also provide an important oversight function by
enabling people to understand more clearly how taxpayer money is being used to provide public goods
and services.