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ICT in development is a double-edged sword

ICT has been hailed as an engine of innovation and development, but poorly applied, it can reinforce existing inequalities and disproportionally benefit the urban elite.

The Lee Kuan Yew School of Public Policy writes,

"In large measure, development is a function of the ability of nation-states to engineer innovation, apply technology to economic activities, and increase productivity. ICT thus plays a crucial role in the development equation.

While ICT attracts a relatively low proportion of trade and investment in developing countries compared to traditional sectors such as
agriculture and manufacturing, as the World Bank notes its economic impact can be explosive. Indeed, there is increasing evidence to suggest that the careful application of ICT in selected sectors such as agriculture
and commodities, which account for much of the livelihood among the rural poor in Asia, positively-correlates strongly with the development of new and often innovative economic eco-systems that bolster growth and increase market depth.

In Asia as elsewhere, however, the availability of ICT, the economic modality by which it is deployed and the level of competition allowed to operate within the sector, remain highly politicised domains with poor constituencies often disenfranchised from key decision making forums."

Implications

Benefits of ICT can be captured by the elite or used predominantly for corporate activity.

LKYSPP writes,

"But while the application of ICT can create new economic opportunities
and help governments leap-frog the development process, it can also reinforce inequities and set in place parallel economies that ultimately serve the national interest poorly. While the requirements of global competitiveness and modernisation compel governments to invest continually in the acquisition of new technologies and related infrastructure, in developing countries many of these investments are disproportionately captured by urban areas and the urban elite. ICT
infrastructure, for example, is most often deployed as a means of servicing the technology requirements of foreign companies and the communications needs of high value-adding sectors like financial services, both as a means of attracting further foreign investment and growing strategic high-value adding tertiary sectors in the economy. But in developing countries where the vast bulk of the populace tends to be engaged in lower value-adding sectors such as agriculture, textiles, or the
footwear industry, the benefits of ICT are seldom realised. This reinforces income and wealth inequalities, with the productivity gains associated with ICT and the economic opportunities they present, accruing disproportionately to the urban elite.

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Sources:

LKYSPP Asian Trends Monitoring Bulletin, December 2010, pg 4:
http://newsletters.clearsignals.org/LKYSPP_Dec2010.pdf

The World Bank. 2010. Employment in agriculture (% of total employment). Retrieved from

The World Bank. 2010. Employment in agriculture (% of total employment). Retrieved from

UNCTAD. 2005. ICT and e-business: what developing countries stand to
gain. Issues in Brief, 11, 1-2.

Internet World Stats. 2010. Internet Usage in Asia. Retrieved 20 December 2010 from http://www.internetworldstats.com/stats3.htm

Jakarta Globe (2010a) SBY inaugurates ‘Blackout-Free’ Era. July 28. http://www.thejakartaglobe.com/business/sby-inaugurates-blackout-free-era/388131