10 ICT DIFFUSION AND GLOBAL ECONOMIC GROWTH by tyndale

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									1.0 ICT DIFFUSION AND GLOBAL ECONOMIC
    GROWTH


This section aims to:
• Provide an overview of global economic and financial issues that impact on
   investment decisions regarding ICT projects; and
• Outline investment opportunities in planning ICT projects.



Many issues influence investment in ICT projects and government leaders
need to be aware of these to be able to decide on how best to go about ICT
project development and financing.

Current trends in trade and finance, the state of the world’s economy, and
trends in capital flows, as well as trends in ICT deployment and use, need to be
considered when selecting appropriate project funding strategies. With the
Internet, this information is largely available in real time through international
financial, business and general wire or news services, such as Reuters,
Bloomberg, Associated Press and Agence France-Presse; national news
services like Xinhua; international broadcasting services, such as the BBC,
CNN and Al-Jazeera; and/or the business and financial sections of international
and national newspapers. Investment news is also available for a fee from the
premium services of some of the sources listed here and investment
companies such as Standard and Poors.

Knowledge of financial trends is not the sole purview of economists or
high-level planners working in ministries of finance or planning, or equivalent
executive ministries and related entities (e.g. the Office of the President or the
Prime Minister's Office). All government managers and planners should take an
interest in financial news and analyses, in order to be able to explore alternative
funding scenarios for ICT investments in the public sector.


1.1    Why invest in ICTD?

There are various reasons why a country or a given jurisdiction may want to
invest in ICTD. These include the desire to maintain and/or enhance
competitive and comparative advantage through the promotion of economic
development, to provide education for all, and to broaden access to social
services. Economic development continues to be the key objective of
governments. For the donor community, poverty reduction and achieving the
Millennium Development Goals (MDGs) are the main objectives of
development aid, including funding for ICTD activities.

In the global information economy, information and knowledge are the key
factors of production. According to a recent report of the International
Telecommunication Union (ITU), the evidence is now clear that regions around
the world are benefiting from the impact of ICTs on their economy1 (see Figure
1).




   Figure 1. The contribution of ICTs to economic growth (Source: ITU, World
  Telecommunication/ICT Development Report 2006: Measuring ICT for Social and
                   Economic Development (Geneva: ITU, 2006), 44,
http://foss.org.my/projects/us-my-free-trade-agreement-issues/resources/wtdr2006-e.
                                          pdf)


In developing countries, the diffusion of ICTs “provides new opportunities for
insertion into the global value chains and for diversifying production activities
and exports.” 2 ICT infrastructure is considered to be essential to the
competitive advantage of nations. Even in developed regions of the world,
there is a push towards the greatest diffusion of ICTs, with a particular focus on
broadband, especially fibre, as well as wireless broadband in all of its variants.
The Organisation for Economic Co-operation and Development (OECD)
reports that in Brazil, Russia, India, China and South Africa (BRICS), the rate of
expenditure in ICTs has shown dramatic increases over similar expenditures
made in OECD countries (see Figure 2).




1
  ITU, World Telecommunication/ICT Development Report 2006: Measuring ICT for Social and
Economic Development (Geneva: ITU, 2006),
http://foss.org.my/projects/us-my-free-trade-agreement-issues/resources/wtdr2006-e.pdf.
2
  UNCTAD, Information Economy Report 2007-2008 - Science and technology for
development: The new paradigm of ICT (New York and Geneva: United Nations, 2007), 11,
http://unctad.org/en/docs/sdteecb20071_en.pdf.



                                           2
                   Figure 2. ICT market expenditure 2000-2008
                    (USD current prices, indexed 2000 = 100)
     (Source: OECD, Communications Outlook 2007 (Paris: OECD, 2007), 280,
       http://www.k12hsn.org/files/research/Broadband/OCDE_07_2007.pdf)


The international Internet capacity is growing at a compound annual growth
rate of 45 per cent. According to Broadband Properties Magazine, 3 the 10
fastest growing broadband markets are Greece, the Philippines, Indonesia,
Ireland, India, Ukraine, Thailand, Viet Nam, Russia and Turkey. It is noteworthy
that five of these countries are located in Asia.

In summary, there is significant growth in ICTs everywhere. This permeation of
ICTs is leading to what some US-based researchers have called ‘ubiquitous
computing’.4 ICTs are now available for everyone and for doing many different
things. The pervasive use of ICTs is transforming how people are doing things.
Many previously manual or energy-intensive activities have been automated,
increasing the speed of execution and reducing the carbon footprint of the
activities themselves. Two technologies stand out in their ability to enhance ICT
diffusion and the use of pervasive and increasingly powerful devices and
applications. These are wireless transmission technologies that have enabled
mobile computing, and broadband, which permits rapid access to distributed
computer processing units and related devices and applications.

However, not everyone is benefiting from the diffusion of wireless services.
Although 58 per cent of mobile subscribers are located in developing countries
and their numbers have increased threefold in the past five years, in about 40
developing countries wireless penetration has reached only about 10 per cent
of the population, according to the United Nations Conference on Trade and

3
 Broadband Properties Magazine, http://www.bbpmag.com.
4
 Wikipedia, “Ubiquitous computing,” Wikimedia Foundation, Inc.,
http://en.wikipedia.org/wiki/Ubiquitous_computing.


                                            3
Development (UNCTAD) Information Economy Report 2007-2008.5 Although
40 per cent of worldwide subscribers to wireless services are located in Asia,
penetration rates by per cent of the population are low in the poorer developing
countries of the region, such as Myanmar and Nepal. There is strong growth
where regulations encourage competition, as in Mongolia, or in countries that
promote investment in ICT infrastructure like China. In Central Asia, the
penetration rate is very low at less than 5 per cent (see Figure 3).




                       Figure 3. Mobile phone penetration
     (Source: UNCTAD, Information Economy Report 2007-2008 - Science and
technology for development: The new paradigm of ICT (New York and Geneva: United
        Nations, 2007), 23, http://unctad.org/en/docs/sdteecb20071_en.pdf)


Along with the growth in ICT sales, there has been a significant growth in
e-commerce and e-government. More people are going online to shop,
especially in the developed world. All forms of e-commerce are thriving.
However, one of the main limitations to the rate of e-commerce growth in the
developing world is the rate of ICT uptake by small and medium enterprises
(SMEs). SMEs are important because they are motors of employment and
growth. There are ongoing efforts in several countries to enhance the capacity
of SMEs to use ICTs. These include use of mobile phones to transact business,
since in many developing countries the most popular ICTs are mobile devices.
Using mobile phones for business has been demonstrated to increase the ease
of doing business for all concerned. Communication with suppliers and clients
is increased and efficiencies are realized, resulting in cost savings and greater
market reach. Alternative funding mechanisms can play an important role in
encouraging the development of SMEs in the ICT industry in a country. These
5
    UNCTAD, op. cit.



                                       4
sources of funding have been tapped for funding business incubators that also
provide a sound grounding in e-business to entrepreneurs who are just starting
up.

Like e-commerce, e-government continues to grow significantly around the
world.6 However, developing countries continue to be challenged in providing
e-government services by a lack of resources and funding. Many countries
have developed e-government strategies and plans but lack the resources to
implement these plans. This is limiting the rollout of e-government services
along with the advantages that this entails.


1.2    Issues Affecting Investment in ICT projects
For the information economy in developing countries to continue to grow, there
has to be a sustained demand for and supply of ICT-based goods and services.
At the same time, governments need to ensure that all members of the public
can reap the benefits of a knowledge-based society.

The private sector can continue to provide the goods and services that the
public is prepared to pay for provided governments continue to ensure a
supportive regulatory environment. Sound competition policy; an open,
competitive and accessible market for all manner of goods and services but
especially for ICTs; a well developed regulatory regime; predictability in the way
government works; respect for the rule of law; and government incentives are
all required for this to happen. Many of these principles are enshrined in the
WTO accords on international trade to which many countries are now
signatories. The General Agreement on Trade in Services (GATS) and the
1997 WTO Agreement on Basic Telecommunications (ABT) in particular
encourage trade liberalization in the global markets.7

In many emerging economies of Asia especially, the rise of the middle classes
is ensuring that the demand for ICTs continues to grow as disposable incomes
increase. But to ensure that the public can reap the benefits of the information
economy, continued investment in ICT infrastructure and in e-government will
be required. This is easier said than done, as there are other pressing issues of
concern to governments everywhere. Even with growing corporate and tax
revenues from growing national economies and an increasingly well-off middle
class, the cost of providing public services and e-government is significant.

Other challenges loom as well. There are several global issues that are
affecting countries everywhere. These will have an impact on the ability of
governments to secure the funds required to roll out e-government, as well as

6
  United Nations, UN e-Government Survey 2008: From e-Government to Connected
Governance (New York: United Nations, 2008),
http://unpan1.un.org/intradoc/groups/public/documents/un/unpan028607.pdf.
7
  Tina James, ed. An Information Policy Handbook for Southern Africa: A Knowledge Base for
Decision-Makers (Ottawa: IDRC, 2001),
http://www.idrc.ca/en/ev-11402-201-1-DO_TOPIC.html.



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the ability of countries to raise funds in general. Some of these issues are the
following:

•   The sub-prime crisis in the United States (US) has impacted financial
    markets worldwide and has cut growth prospects in many countries in the
    developed world and beyond by reducing demand and increasing the
    lending requirements of financial institutions. As a result, the world is now in
    the grip of a global recession. Under these conditions, lenders ARE more
    reluctant to lend money and trade is suffering along with the productivity of
    exporting nations in Asia and around the world.

•   The very high and ever increasing cost of energy has increased the cost of
    doing business for government and the private sector, as well as the cost of
    living for consumers. While energy prices have dropped due to the global
    recession, analysts predict that global energy demand will “increase by 50
    percent from 2005 to 2030”, which could lead to an increase in prices. “The
    largest … increase … is for the non-OECD economies.”8

•   The rising cost of food has a serious impact for all countries, especially in
    the Asia Pacific region. An expected continued increase in the price of
    energy and food may be diverting resources from ICT build-out and service
    provision.

•   A lack of power generation infrastructure in countries like China and South
    Africa means that funds will have to be raised to address this issue. Without
    adequate and relatively inexpensive energy, these countries will be unable
    to power their economies and meet the needs of large and growing
    populations.

•   Increasing demands for energy have resulted in increasing pollution and
    green house gas (GHG) emission everywhere. Climate change presents a
    serious challenge to the present fossil fuel based model of economic
    development. People around the world are clamouring for cleaner
    environments in which to live and raise their families.

•   With climate change, natural disasters are more common and the cost of
    disaster management much higher. Poorer populations are increasingly
    vulnerable as they invariably live in those parts of the world that are most at
    risk of serious natural disasters. Enhancing disaster preparedness and
    coping strategies as well as managing disaster relief will present an
    increasing fiscal and logistical burden on governments around the world.




8
  US Department of Energy, International Energy Outlook 2008 (Washington D.C.: Energy
Information Administration, US Department of Energy, 2008), 7,
http://www.eia.doe.gov/oiaf/ieo/index.html.


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1.3      The recession – ICTs to the rescue
The recession

The global economic slowdown has slowed economic activity significantly. The
Baltic Dry Index (BDI)9, which is a measure of economic activity has dropped
significantly from its peak of about 11,600 in mid 2008 before plunging to 663 at
the height of the crisis.

Figure 2 Baltic Dry Index




Financial oversight mechanisms in the USA, including the investment rating
agencies such as Moody’s and Standard & Poors are accused of having failed
to be impartial in their assessment of the risk associated with various complex
investments when they assigned the highest AAA ratings to complex
investments that did not warrant these lofty ratings 10 . Without financial
oversight, there was no transparency. Financial institutions did not submit to
due diligence and these complex investments ensnared banks around the
world which lead to the financial collapse and the present recession.


9
  Wipikedia. 2009. Baltic Dry Index. The index measures the demand for shipping capacity versus the
supply of dry bulk carriers. The demand for shipping varies with the amount of cargo that is being traded or
moved in various markets. Modified Nov. 3, 2009.
10
   Blloomberg. 2008. `Race to Bottom' at Moody's, S&P Secured Subprime's Boom, Bust. E. B. Smith,
Sept. 25, 2008. http://www.bloomberg.com/apps/news?pid=20601109&sid=ax3vfya_Vtdo&refer=home



                                                     7
Banks stopped lending because of uncertainty and a lack of trust. If the ratings
system was not trustworthy, if it was not possible to independently and reliably
assess risk and worth, then banks no longer did business together.

To instill faith in the system and to prevent an outright collapse of the world
financial system, governments had to step in. The result has been a crisis of
confidence and massive losses which have hobbled economic growth and
reined in spending by consumers and businesses alike.

Stimulus spending by governments

With consumers and businesses no longer spending, industries started closing
down and people started losing their jobs. Trade slowed and governments put
into place massive spending programmes designed to get people and
businesses spending money and trading again.

Governments took steps to strengthen the financial system by securing capital
markets with government guarantees, forcing or helping to recapitalize financial
institutions. Steps are being taken by the governments to regulate financial
transactions, a move that is being negotiated at the international level because
of the international nature of the global financial system. Governments have
lowered interest rates to increase liquidity and to encourage lending as a way of
stimulating the economy.

The government is also providing funds, in the form of stimulus packages to
create work. “Shovel ready” public works projects are being funded because
they employ people directly. Other schemes are being put into place to get
people to spend. These include rebates (cash for “clunkers” in the USA), tax
breaks, etc. This creates employment and puts money back into circulation as a
way of stimulating consumer spending, which is key to economic growth.

The problem is that this is artificial stimulus and there is concern that it may not
last, that it may not be sustainable.

Some concerns

There is therefore a need to maintain growth after the stimulus is over.
However, highly indebted people will not spend, and in the USA, people for the
first time in many years are now reluctant to spend until job creation picks up
and the impact of the mortgage crisis has lessened.

While the economy is in recession, other factors are affecting growth and the
cost of business. The concern about “Peak oil”, the fact that oil reserves may be
drying up and there are no other readily available energy sources suggest that
we may be entering an era of increasingly higher energy prices. Some consider
the crisis such that it may result in prohibitively oil prices that could alter the
pace of globalization if not reverse globalization11.

11
  Rubin, J. (2009). Why your world is about to get a whole lot smaller. Oil and the end of globalization.
RandomHouse, Toronto, 286 pp.



                                                   8
To overcome this situation, new approaches are needed. Energy alternatives
are being considered and are needed. These include renewable energy
alternatives that can help countries and society deal with increasing pollution
from the use of fossil fuels and climate change.

Opportunities

ICTs present an opportunity to deal with these issues. Increasing diffusion of
ICTs has created the information economy which has lead to global economic
integration. Countries are now more interdependent than ever, one of the
greatest guarantees of collaboration and peace. Trade is now an essential
component of this mutually beneficial global arrangement. In fact, there is a
growing need to extend trade in order to help countries and jurisdictions out of
the crisis and back to growth and job creation.

Key ICTs are at the fore of this opportunity. Broadband and especially fiber
optic networks are key to connecting countries and communities and delivering
the benefits of the information economy which increasingly depend on high
speed broadband, and the higher the speed, the better.

Other key technologies that are underpinning the growing information economy
are wireless applications, including broadband wireless and smart phones.
Growth in the sales of the Apple iPhone continues to defy the recession and
wireless is a growth sector in many countries, especially emerging market
economies.

Governments have recognized this and stimulus packages are now in place
that address issues related to enhancing the operation of the economy and of
key infrastructure in these countries. The energy sector, and especially the
power transmission and control sector, usually the purview of public utilities and
of large power engineering companies, is undergoing a transformation.

Smart grids, smart meters, demand side management and other applications
are being supported through stimulus funding in several OECD countries as
well as in non-OECD countries as well, including the BRIC countries and
especially in China.

The role of ICTs

ICTs have a role in promoting sustainable development and in helping
countries abate climate change 12 . ICTs can help reduce greenhouse gas
(GHG) emissions, help to reduce and conserve energy, and encourage growth
at the same time. This Green Growth model is being pursued by several
countries which see in this approach, opportunities to grow sustainably. Indeed,
it is considered inevitable by some that ICTs will continue to play an
increasingly important role in promoting the transition to an information enabled
development paradigm based on the principles of sustainable development.

12
   The Climate Group. 2008. SMART 2020: Enabling the low carbon economy in the information age. The
Climate Group on behalf of the Global e-Sustainability Initiative (GeSI). 87 pp. http://www.smart2020.org/



                                                    9
To achieve this objective, there is a need to develop innovative technologies.
Green growth and green ICT are considered by many countries as motors of
the coming sustainability wave. Countries are investing some of their stimulus
packages on research and development as well as on green growth where
ICTs have an important role to play. The recession is considered by some as an
opportune time to prepare and develop the capacity to tackle the green growth
challenge that will surely come to be once the global economy starts growing
again.

As it turns out, there are indicators that suggest that emerging markets are
coming out of the recession at a faster rate than countries in North America and
Europe13.

As a result, many countries have developed stimulus packages with green ICT
component.

Green growth strategies and stimulus spending in Asia

While the recession has limited the investments of the private sector in many
sectors including in green technologies, at least one country Korea, has taken
the decision to focus its stimulus spending on green growth including
sustainable energy production and technologies to reduce greenhouse gas
emissions.

Korea considers this an opportunity to stimulate the economy in a way that will
encourage the development of a nascent green technology sector which seeks
to research and bring to market products and services that conserve energy
and material use, reduce greenhouse gas emissions and contribute to
sustainable development.

According to a recent OECD report14, Korea has “… centered its economic
stimulus package almost entirely on the topic of green technologies designed to
realise low-carbon economy green growth and create more jobs and some
related new “growth engines”. Its Green New Deal package focuses on energy
conservation, recycling and clean energy development to build an
energy-saving economy, green transportation networks and clean water
supplies to upgrade the quality of life and the environment, carbon reductions
and a stable supply of water resources to protect the earth and future
generations, building of industrial and information infrastructures and
technology development to use energy efficiently in preparation for the future
and expanding “green growth” to include major sectors within the
manufacturing and service industries”.

Many other countries of the OECD for which detailed information about
stimulus spending is available are also spending on sustainable or green

13
   AP. 2009. Lower costs, higher volume drive MasterCard profit. By Stephen Bernard, AP Business
Writer.        On      1:34      pm        EST,          Tuesday         November           3,       2009.
http://finance.yahoo.com/news/Lower-costs-higher-volume-apf-3134453400.html?x=0&.v=10
14
   OECD. 2009. Policy responses to the economic crisis: investing in innovation for long term growth. June
2009. OECD, Paris. 37 pp.



                                                   10
technologies, but no other has made this the central component of their
stimulus spending 15 . Japan for example will focus on intelligent transport
systems and the “creation of new industries such as environment-related IT”16.

Among non OECD countries, China has the largest stimulus package of all.
According to press reports, the HSBC bank states that it “estimates that of
China's roughly $586 billion package, $221 billion has green features, making it
the largest green stimulus package in the world, followed by the US at $112
billion and South Korea at $31 billion. HSBC's green features included 'rail' and
'electricity grid', which are not mentioned under the green package in the
original stimulus”17.

According to China's chief climate change negotiator, “more than 15 percent of
the country's 4-trillion-yuan ($586 billion) stimulus package will be spent on
cutting carbon emissions by the end of 2010.” This includes an investment of
210 billion yuan in energy conservation, pollution reduction and ecological
improvements along with another 370 billion yuan to be spent on technological
upgrades and industrial restructuring in the country's energy-intensive
factories18.

According to a recent ITU report, investing in Green ICTs or “Eco-ICTs” as the
report puts it may not be a choice during a recession if the investment is
significant and does not produce an immediate return. Given the scarcity of
credit, this is not surprising. On the other hand, the same report notes that some
green ICTs are actually proving to save money immediately and decrease the
cost of operations and realize major savings. Applications such as smart grids
realize significant savings for customers as well as energy producers at the
same time. For this reason, some governments are considering smart grid
infrastructures as valid recipients of stimulus investment and spending19.

The role of the private sector

The private sector is a partner in the implementation of stimulus packages. In
many cases, the private sector is a direct beneficiary in order to stimulate
business. Unfortunately, the recession and the financial meltdown are likely to
have reduced available credit for alternative funding and for public private
partnerships (PPPs).




15
   OECD. 2009. Policy responses to the economic crisis: investing in innovation for long term growth. June
2009. OECD, Paris. 37 pp.
16
   Idem.
17
   Zhang Qi, China Daily. 2009. $30b set aside for green stimulus to double alternative fuel use. China
Daily. 2009-05-25 08:00. http://www2.chinadaily.com.cn/bizchina/2009-05/25/content_7937667.htm#
18
   Fu Jing and Li Xiaokun, China Daily. 2009. Billions from stimulus tagged to cut emissions. China Daily.
2009-08-06 07:45. http://www.chinadaily.com.cn/bizchina/2009-08/06/content_8531135.htm
19
    ITU. 2009. Confronting the crisis. Its impact on the ICT industry. Geneva. 118 pp.
http://www.itu.int/osg/csd/emerging_trends/crisis/report-low-res.pdf



                                                   11
1.4    Opportunities for Attracting Investment in ICT Projects
On the other hand, there are some positive developments that are noteworthy.

Increasing wealth of some developing countries: Some countries are
increasing their foreign reserves as a result of increased economic activity. For
example, China’s foreign exchange reserves stood at over USD 1.5 trillion at
the end 2007.20

Increasing role of sovereign wealth funds (SWFs): With the increasing public
revenues generated from the payment of fees, taxes, and/or royalties on the
exploration and export of oil and minerals (e.g. in the Gulf States, Russia) or
from a large and very favourable balance of trade (e.g. China, Singapore),
many countries have acquired large amounts of foreign exchange and are
increasingly looking for opportunities to invest this new found wealth. The US
Energy Information Administration estimates “that members of the
Organization of the Petroleum Exporting Countries (OPEC) earned $671 billion
in net oil export revenues in 2007, a 10 per cent increase from 2006.”21 Four
Gulf States accounted for more than half of that income. OPEC accounts for
more than a third of worldwide oil production.

SWFs are a financial vehicle designed to help countries manage and invest
their excess incomes. Already, some of these funds have come to the rescue of
some of the largest US banks in the form of massive multi-billion dollar
infusions of cash in exchange for shares or a stake in the company. The Globe
and Mail reports that the OPEC countries are:

       Building massive overseas investment funds that are recycling
       the oil money into Western economies, notably Kuwait
       Investment Authority's purchase of a $3-billion (U.S.) stake in
       Citigroup Inc. and $2-billion share in Merrill Lynch & Co. Inc. And
       late last year, the Abu Dhabi Investment Authority invested
       $7.5-billion in Citigroup Inc. That recycling of petro-dollars is
       widely seen as a benefit for the world economy, given the shift in
       financial power to commodity-rich countries and away from
       consumer nations. However, the OPEC countries face growing
       pressure to ensure their state-controlled funds play by accepted
       Western rules for governance and transparency. We're into
       uncharted territory with the kind of financial flows that are going
       into a small set of countries said David Pumphrey, a senior fellow
       at the Center for Strategic and International Studies in
       Washington. We're seeing a rebalance of the world's players ...
       and they will be playing a different role in the future, so the




20
   Chinability, “China’s foreign exchange reserves, 1977-2008,”
http://www.chinability.com/Reserves.htm.
21
   US Energy Information Administration, “OPEC Revenues Fact Sheet,”
http://www.eia.doe.gov/emeu/cabs/OPEC_Revenues/Factsheet.html.


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       established players are going to have to make space for them to
       participate.22


This trend is likely to continue and constitutes an opportunity for governments
seeking to expand their ICT ventures and investments. The World Bank has
encouraged SWFs to invest in poorer countries.23 Table 1 shows the most
recent (February 2009) list of SWFs from the Wikipedia website.

                     Table 1. List of Sovereign Wealth Funds




Source: Wikipedia, “Sovereign wealth fund” Wikimedia Foundation, Inc.,
http://en.wikipedia.org/wiki/Sovereign_wealth_fund.


According to The Economist, there are about 29 SWFs internationally that are
monitored by Morgan Stanley, a US dollar investment bank, and they are worth
an estimated USD 2.9 trillion.24 It is predicted that this amount will increase
significantly in the coming years. Government-sponsored projects may be
considered relatively safe investments for these SWFs if the circumstances are
right.

22
   Shawn McCarthy, “Barrelling Ahead: Cartel members are using record crude prices to
finance their global ambitions,” The Globe and Mail, 8 May 2008,
http://www.theglobeandmail.com/servlet/story/LAC.20080508.ROIL08/TPStory/?query=barreli
ng+ahead.
23
   Christopher Swann, “World Bank Urges Sovereign Wealth Funds to Invest in Africa,”
Bloomberg, 12 April 2008,
http://www.bloomberg.com/apps/news?pid=20601116&sid=a3O5_Nx5hf0k&refer=africa.
24
   The Economist, “Sovereign-wealth funds: Asset-backed insecurity,” 17 January 2008,
http://www.economist.com/finance/displaystory.cfm?story_id=10533428.


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ICT use and low or zero carbon growth: The role of ICTs in reducing GHG
emissions and contributing to climate change is the subject of increasing
research and debate. According to some, ICTs can make a significant
contribution to reducing GHG emissions and in the fight against climate
change. The use of ICTs can help reduce the consumption of materials (e.g.
paperless transactions) and thus limit the impact on the environment of
increasing human consumption and activity.

According to a recent study prepared by the American Consumer Institute and
the US Department of Energy,25 the GHG emission reductions that ICTs can
bring about in the US are significant. Figure 4 summarizes the findings of this
study.




Figure 4. Reduction in GHG emissions in the USA for select activities (Source:
     Joseph P. Fuhr Jr. and Stephen B. Pociask, Broadband Services: Economic and
             Environmental Benefits (The American Consumer Institute, 2007),
     http://www.internetinnovation.org/Portals/0/Documents/Final_Green_Benefits.pdf)


The ITU-Development climate change site is another source of information on
the role of ICTs in mitigating and helping to adapt to climate change.26 The ITU
25
   Joseph P. Fuhr Jr. and Stephen B. Pociask, Broadband Services: Economic and
Environmental Benefits (The American Consumer Institute, 2007),
http://www.internetinnovation.org/Portals/0/Documents/Final_Green_Benefits.pdf.
26
   See ITU, “ICTs and e-Environment,” http://www.itu.int/ITU-D/cyb/app/e-env.html; and Green
IT/Broadband and Cyber-infrastructure, http://green-broadband.blogspot.com.


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is responsible for implementing recommendations related to the e-environment
and others made at the World Summit on the Information Society (WSIS).

Increased cost of doing business in China and India: Wages and other
costs of doing business in China and India are increasing. This represents
business and investment opportunities for countries in Asia where labour costs
are lower (e.g. Cambodia, Lao PDR, Viet Nam, and possibly Thailand).



Something to Do

There are several factors that can affect ICT diffusion. Divide yourselves into
groups of 4-8 people to discuss these issues. Consider the following questions:

1. What factors are affecting ICT rollout in your jurisdiction? (Some examples
   of factors are planning, leadership, public demand, expertise, capacity and
   e-readiness)

2. What demand is there for ICTs by sector — i.e. among public sector
   employees, government units, the private sector?

3. What can be done to enhance ICT diffusion? What are the opportunities for
   increasing ICT rollout in your jurisdiction?




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