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Toward E-Development in Asia and the Pacific: A Strategic Approach for Information and Communication Technology : II. The Information Revolution
C. ICT and Development7. ICT is thought to impact economic growth in the same way as other major inventions, but evidence relating to ICT’s impact on the economy, although accumulating rapidly, is still incomplete. ICT and the Internet provide the means for a sweeping reorganization of business, from on-line procurement of inputs to more decentralization and outsourcing, and can boost efficiency and productivity in manufacturing and the distribution sector. By increasing rapid access to information, ICT helps make markets work more efficiently, by allowing consumers to seek the lowest price, and firms to get quotes from more suppliers. It also reduces transaction costs and barriers to entry. Farmers can, for instance, get instant information on weather, prices and crop conditions in other regions. Manufacturers can track changes in demand more closely via direct links to electronic scanners in shops. 
8. In developed countries, ICT and the Internet have helped globalize production and capital markets and speed up innovation by reducing the time for designing new products, through powerful computers that make it easier and cheaper to process large amounts of data. This is not generally the case for developing countries, where the cost of computers and telecommunications remain generally high, because of insufficient liberalization and deregulation of markets, and years of chronic underinvestment. The private sector can play a lead role in ICT development but remains skeptical about the profitability of ICT investment in rural areas, especially in least-developed countries. More progressive and innovative policies and a determined leadership are required to enable the full potential of ICT to work for the benefit of developing countries. 9. Without the enabling environment, many developing countries, especially the least developed ones, will account for a smaller fraction of the global digital economy, as the vast majority of economic activity related to ICT will continue to be concentrated in the industrialized world. Concerns for these disparities between industrialized and developing countries, especially with respect to people’s access and use of telecommunications and the Internet (Figure), have started a worldwide debate about the existence of the digital divide and the dire consequences for poor countries if it is not addressed in time. The digital divide may serve to widen the economic divide between developed (advanced) and developing countries with possible repercussions for the future stability of the international community. 10. Many examples of successful ICT applications for development have been documented in governance, education, public health, and environmental and natural resource management. Some developing countries have been creating new ways to dramatically help the poor6. For example, in India, one third of its software workers were tapped in programs aimed to eliminate poverty. The government of Andhra Pradesh, one of the lessdeveloped states of India, has pursued an aggressive strategy to promote the pervasive use of ICT, especially in modernizing governance systems through E-government over the last few years. Farmers in Bangladesh are using cellular phones to bypass intermediaries and get better prices for their products. In Jordan, a nongovernment organization (NGO) reported an increase in village wealth through use of solar energy and Internet facilities for health, education, and communication. In Shanghai, People’s Republic of China, Project Hope created a pediatric hospital to bring high-technology solutions to thousands of health professionals, and in some countries in Africa, village artisans are using web sites to sell their wares in Paris. In Peru, more than 1,000 telecenters7 or cabinas publicas were successfully developed as instruments for E-commerce, creating jobs and small businesses, and teaching Internet access to people who have no telephone or computer8. Box 2 describes another concrete example of an ICT success story. These examples show how diverse and powerful ICT can be— enabling the most sophisticated access to information to very basic applications. However, the digital opportunity can only be fully realized if developing country governments take enlightened and decisive action on ICT development. 11. Among multilateral development banks, the World Bank undertook a study on information technology as early as 19909. The study aimed to maximize applications of information technologies in all sectors, reorient World Bank assistance for telecommunications and information technology industries, and determine the evolving role of the World Bank in line with world development. As a result, the World Bank launched numerous initiatives, such as the Global Knowledge Conference in Canada in 199710, and two recent projects Global Development Gateway and Global Development Learning Network (Box 3). Although some progress has been reported, the impact of these initiatives on developing countries cannot yet be realistically assessed. In 1998 the Inter-American Development Bank approved funds for creating what has become an information technology for development unit to strengthen its efforts to support ICT components in development projects, e.g., health, education, and modernization of the state through E-government.
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