Having reviewed five case studies illustrating the different types of focus for national ICT strategiesexport, national capacity, global positioning and development goalsas well as the experiences of other countries (see Appendix 3), the following section assesses each approach and derives some general lessons about how ICT can best address development goals.
1. An export focus can produce economic growth, improve balance of payments and reduce dependence on traditional commodity exports. An ICT-related export focus has had a positive impact on the balance of payments and GNP of some developing countries. In Costa Rica, ICT accounts for 38 percent of exports (mostly Intel) and contributed to a major increase in GNP. Costa Rica also leveraged the high profile investment from Intel to entice other ICT firms, such as Acer and Microsoft, to invest. In India, the focus on software exports has also borne fruitsoftware exports have been increasing by over 50 percent per annum since the early 1990s. A 1999 Nasscom-McKinsey report estimates that by 2008, there will be 2.2 million additional jobs created, that foreign investment will rise to US$5 billion and that software will account for 7.5 percent of India's gross domestic product.
2. An export focus tends to have a limited impact on the development of national infrastructure and capacity. Since the focus is on the lucrative, already developed external markets, there is no immediate incentive to focus on the infrastructure needs of the domestic market, despite its being limited by market failure or under-development. For example, India's concentration on the export-oriented software industry meant that the primary focus was on ensuring good external connectivity and incentives for enterprise (secured through the software park scheme). Improvement of domestic infrastructure and reduction in access charges, which would have helped to expand the domestic market for ICT, was not a priority.
3. Gains from an export focus do not automatically translate into broader development gains. In Costa Rica, most of the inputs used are imported and there are few backward and forward linkages with the rest of the economy. This is often the case with assembly operations, although it is not inevitable. Under the export focus approach, developing countries are forced to compete with each other for the same limited supply of capital. The pressure to offer competitive financial incentives to draw in such investments can take a toll on the public budget of smaller countries if not offset by rising growth and revenues.
4. A national capacity focus may fail to achieve the full potential benefits from the use of ICT. If a national ICT sector develops without being subject to competitive pressures, incentives for the adoption of cutting edge technologies can be lost. In addition, lower costs typically associated with ICT may not be passed on to users, inhibiting the expansion of ICT demand and deployment. This was the case in both Brazil and India in the first phase of their ICT sector development.
5. A national capacity focus creates diversified producer capabilities. Unlike the case of an ICT export sector, a national ICT capacity focus is more likely to lead to the development of local technical capabilities, spare parts production, component supplier networks and other linkages. As Brazils experience shows, these developments can help to facilitate the diffusion and deployment of ICT more broadly.
6. A national capacity focus has the potential to be more adapted to local needs. A national capacity focus leads to research and development into and domestic production of ICT goods and services that are more likely to be tailored to local needs, and also to result in better user support and after sales service. Moreover, if already competitively priced, there is the added benefit that equipment prices will be buffeted from adverse changes in the exchange rate. Brazil's real devaluation in 1999 increased prices of imported computers by 40 percent, but prices of local products remained relatively stable.
7. A national capacity focus may facilitate the achievement of development goals in the long term, but the impact is indirect and limited in scope. A strategy that is focused on developing capabilities in the national ICT sector may lead to an increase in jobs and enterprises created both directly and indirectly. It may also facilitate a higher level of deployment of ICT in areas that have an impact on development imperatives. However, to the extent that the main focus is the ICT sector, the spillover effects may be limited and development goals addressed only indirectly or in the long run.
8. A global positioning focus is essential to the long-term economic success of developing countries in the global network economy. As opposed to a national capacity focus, a concentration on the deployment of ICT to improve global positioning allows countries to use ICT to make the overall investment climate more attractive and to facilitate increased competitiveness in sectors and products in which the country may already have, or can create, a competitive advantage. Malaysia and Singapore have deployed ICT-enabled strategies to increase their global and regional positioning. They have seen dramatic increases in foreign investment as a result of adopting this strategy.
9. A global positioning focus may fail to meet certain specific development goals. While global positioning is essential for countries to realize opportunities in the global economy, it does not necessarily translate into gains for the population, particularly vulnerable and disadvantaged groups. Moreover, a focus on such positioning needs to be supplemented by the use of ICT to achieve specific development objectives, such as improving the competitiveness of SMEs producing for local or external markets. Malaysia's focus on global positioning has allowed the country to achieve substantial economic development gains. However, the level of social development has not progressed at an equivalent rate.
10. A development goal focus allows countries to achieve both broad-based economic growth and specific development goals. Strategies that focus on development goals typically involve the adoption of comprehensive approaches to integrate ICT into broader development strategies, thereby gaining from the synergies between different elements of a holistic approach to development. In the case of Estonia, the national ICT initiative, Tiger Leap, had a dramatic effect within a single sectorimproving access and content in schoolsand also a spillover effect in other sectors, such as health, banking and public administration, which have realized the importance of the role ICT can play.
Two overall conclusions can be drawn from the lessons about strategic focus: First, although not all countries can benefit from a focus on developing ICT as a sector, all can benefit from using ICT as an enabler. Countries that launched national policies to support ICT as a sector based their efforts on local comparative advantages that included relatively advanced technical and human capabilities, basic telecommunication infrastructure, and substantial R&D investment, in addition to which, they offered large incentives to national or foreign direct investors. In some cases, such as Brazil and India, it took over 10 years to create an internationally competitive ICT sector and the impact on development goals was not immediate or direct. This suggests that promoting ICT as a sector might not be the best or most viable option for all developing countries. However, by focusing on ICT as an enabler, all countries can, in principle, achieve a degree of success by directly incorporating ICT into their existing development strategies and goalsfor example, to address poverty or health and education. If local conditions are suitable, within the context of an enabler strategy, countries can also try to develop a competitive ICT sector.
Second, a focus on development goals places development at the core of the strategy and ensures a more broad-based diffusion of the benefits of ICT. When ICT as a sector is taken as the focus of the ICT strategy, there are some development gains. Principally these take the form of an increase in jobs, gains to enterprise development, enhancement of domestic capabilities and some spillover to other sectorssuch as demand for the products of other sectors and supply of ICT goods. The development gains are potentially higher when the focus is on building domestic capacity as opposed to an export focus. When ICT is used as an enabler, the gains for development are potentially higher still. An ICT as enabler strategy focused on global positioning does not directly address development imperatives, but it is necessary for countries to position themselves to leverage the social and economic development opportunities associated with the global economy. Making development goals the primary focus has greater impact than any of the other three strategies in isolation because it ensures that the latter are aligned with meeting development goals.
This section outlines some lessons from national experience about how to implement ICT strategies to ensure development goals are met. These issues will be discussed in more detail in Section 3 where a more comprehensive framework for action is introduced.
1. A comprehensive and holistic approach is the most effective way to benefit from synergies and ensure the impact of ICT deployment is optimized. Even with India's explicit software sector export focus in place since the 1970s, it became clear that a number of related factors needed to be addressed if the strategy was to be successful. Despite the abundant supply of English-speaking, skilled IT professionals, it was only when competitive international connectivity and enterprise incentives were put in place that software production could really take off.
Adopting an ICT as enabler strategy often demands a more comprehensive approach because there is a need to go beyond the requirements of a single sector and to facilitate a more general deployment of ICT. In the case of South Africa, development-focused ICT deployment could not go beyond micro-level initiatives until the central and state governments recognized the need to address infrastructure, access, local language content, SME support and e-government.
The main components that are important for an ICT strategy to addresswith some variation in range and scope depending upon the focus of the strategy43are:
Although each of these components produces benefits, because they are interrelated, they work better if addressed together as part of a coordinated strategic approach.
2. There is a need to recognize the roles played by different stakeholders and to support strategic partnerships. The country studies indicate that success depends on the contributions of a number of different actors, especially in areas such as infrastructure and human capacity development. The ICT as enabler strategy requires coordination and involvement from a wide range of interested parties, a process facilitated by visionary leadership and mechanisms to promote broad-based participation. This can take the form of formal taskforces (South Africa) or public-private partnerships (Brazil), and should include the local level to ensure that initiatives are demand-driven and implementation incorporates bottom-up approaches.
3. Global, national and local linkages need to be leveraged. The country studies demonstrate that national strategies are critical to using ICT effectively for development goals, but there are significant limitations to what a single country can accomplish on its own, even when it takes advantage of all the opportunities within its control. There needs to be coordination and partnerships, not just at the national level, but also at the global level to bring together developed and developing countries, multilateral institutions, civil society and the private sector to assist developing countriesparticularly the least developedin leveraging the potential of ICT to address development goals.
© 2001 Accenture, Markle Foundation, United Nations Development Programme.
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