2.1.1 The Unique Characteristics of ICT
ICT can be a powerful enabler of development goals because its unique characteristics dramatically improve communication and the exchange of information to strengthen and create new economic and social networks:
- ICT is pervasive and cross-cutting. ICT can be applied to the full range of human activity from personal use to business and government. It is multifunctional and flexible, allowing for tailored solutionsbased on personalization and localizationto meet diverse needs.
- ICT is a key enabler in the creation of networks and thus allows those with access to benefit from exponentially increasing returns as usage increases (i.e. network externalities).
- ICT fosters the dissemination of information and knowledge by separating content from its physical location. This flow of information is largely impervious to geographic boundariesallowing remote communities to become integrated into global networks and making information, knowledge and culture accessible, in theory, to anyone.
- The "digital" and "virtual" nature of many ICT products and services allows for zero or declining marginal costs. Replication of content is virtually free regardless of its volume, and marginal costs for distribution and communication are near zero. As a result, ICT can radically reduce transaction costs.
- ICT's power to store, retrieve, sort, filter, distribute and share information seamlessly can lead to substantial efficiency gains in production, distribution and markets. ICT streamlines supply and production chains and makes many business processes and transactions leaner and more effective.
- The increase in efficiency and subsequent reduction of costs brought about by ICT is leading to the creation of new products, services and distribution channels within traditional industries, as well as innovative business models and whole new industries. Intangible assets like intellectual capital are increasingly becoming the key source of value. With the required initial investment being just a fraction of what was required in the more physical-asset intensive industrial economy, barriers to entry are significantly lowered, and competition increased.
- ICT facilitates disintermediation, as it makes it possible for users to acquire products and services directly from the original provider, reducing the need for intermediaries. This cannot only be a considerable source of efficiency, but has in fact been one of the factors leading to the creation of so-called "markets of one," leveraging ICT's potential to cater to the needs or preferences of users and consumers on an individual basis.
- ICT is global. Through the creation and expansion of networks, ICT can transcend cultural and linguistic barriers by providing individuals and groups the ability to live and work anywhere, allowing local communities to become part of the global network economy without regard to nationality, and challenging current policy, legal and regulatory structures within and between nations.
These characteristics suggest that ICT has the potential, if conceived as a means and not an end in itself, to be a powerful enabler of development. However, the fact that ICT can, in theory, assist development efforts does not mean that it will necessarily do so. In order for ICT to positively foster development goals, it must be employed effectively.
© 2001 Accenture, Markle Foundation, United Nations Development Programme.
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