ICT Policy forging links between technology, policy and

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					    ICT Policy: forging links
    between technology, policy and
    productivity & growth
                    Andrew Wyckoff*
                    OECD
                    Statistics Sweden Conference
                    23 October 2008

* The views expressed are personal and do not reflect the opinions of the OECD,
 its governing Council or its Member countries.
                Pre-History
• Late-1880s:
          Current Times
• Wyckoff’s knapsack: 2008
         3 ICT Characteristics
• Information
  Processing:



• Storage:



• Commun-
  ications:
• Information
  Processing:   DECSYSTEM-20 (1983)
       A 25 Year Time series
• Information
  Processing:
 Moore’s Law
                Dell –
               Pentium




DEC-20




                  7
                2007
The Solow paradox

        "we see the computer
        age everywhere but
        in the productivity
        statistics"
 Moore’s Law
                  Dell –
                 Pentium




DEC-20


         Solow



                    9
                  2007
        Price Deflator for Computers
600

             PCs
500


400
                   Mainframe and PC price indices
300   Mainframes



200


100


  0
      1982    83    84   85   86   87   88   89   90   91   92   93   1994
US Productivity in Nonfarm Business Sector
                               (Index 1992 = 100)
     120                                                                      120
                          1995 to 1999 trend growth
     110                    of 2.9 percent per year                           110


     100         1973 to 1995 trend growth                                    100
                   of 1.4 percent per year

      90                                                                      90


      80                                                                      80
                                                           Actual


      70                                                                      70
                73        76    79       83      87   91            95   99
           Source: OECD
                                      US: FRB




The Resurgence of Growth in the Late 1990s: Is Information Technology the Story?
Stephen D. Oliner and Daniel E. Sichel FRB Discussion Series 2000-20
Contributions of ICT Investment to GDP Gains
              (percentage points)
1.0
      %

0.9
                                                                                                                                      1990-95                           1995-2002 (1)
0.8

0.7

0.6

0.5

0.4

0.3
0.2

0.1

0.0
      Sweden


               United States


                                 Denmark


                                           Belgium


                                                     United Kingdom


                                                                      Netherlands


                                                                                    Australia


                                                                                                Ireland


                                                                                                          Canada


                                                                                                                   Greece


                                                                                                                            Finland


                                                                                                                                       Japan


                                                                                                                                               New Zealand


                                                                                                                                                             Portugal


                                                                                                                                                                        Spain


                                                                                                                                                                                Italy


                                                                                                                                                                                        Germany


                                                                                                                                                                                                  France
                               #15 “Key ICT Indicators” www.oecd.org/sti/ictindicators
                    US Contributions to MFP
                                  (% points, Domar weights)
0.6
             1987-1995
0.5
             1995-2001
0.4

0.3

0.2

0.1

0.0

-0.1
       Electronic   Industrial      Other    Wholesale   Retail trade   Finance and    Other
       equipment    machinery      goods-     trade                      insurance    services
                                 producing



                                      Source: Bosworth and Triplett, 2003.
Growth Continues
• Communications:
          Acoustic Coupler – 300 baud (1983)
       A 25 Year Time series
• Communications:
           Technical Communication
           Speeds (bits per second)
300 baud modem


1200 baud modem


             3G


      Bluetooth


          ADSL


          VDSL


          Wi-Fi


    FttH (Japan)

                   1   100   10,000   1,000,000   100,000,000 10,000,000,000
        Price of “always on” Internet access
              (per kilobit / second, USD, US incumbent operator)




$0.40
                  $0.36

$0.30


$0.20


$0.10
                                                        $0.01
$0.00
                  1997                                  2005       19
          Broadband Subscribers
                    per 100 inhabitants (12/06)
35
                         December 2006
                               Other   Fibre/LAN   Cable     DSL
30



25



20
                                                           OECD average


15



10



5



0




     Source: OECD
• Storage:   RP06 (1983)
        A 25 Year Time series


• Storage:
                Storage (megabytes)
    RP06




 USB Key




iPod Nano




     Dell



            1          100       10,000
            Software
 1969: TCP/IP          1992: WWW




1993: Browser          1995: Windows
The Near Future
     Mesh Networks / Ambient Computing
   Supply Chain Management       Security & Access Control




   Work In Process Tracking      Consumer Applications




   Asset Management              Environmental Applications




                                                           26
Mobile Computing Devices
ICT Policy
                   Computing
Policy Issue                  Analysis Needed
• ICT sector as a             • Role of public support;
  particularly innovative       ICT as a forger of new
  sector;                       methods of Innov.

• Digital content as a        • Drivers of DC; economic
  growth sector / source of     analysis of IPR regimes /
  piracy;                       variants;

• The Internet as a           • Web 2.0 – barriers being
  platform for innovation       lowered, broadening of
                                the base of innovators
              Communications
Policy Issue                  Analysis Needed
• Growth & productivity       • The “C” in ICT
  from convergence to IP      • Competition in NGN
  networks and NGN
• The Internet as a           • The impact of “open”
  platform for innovation;      standards;
                              • The barriers / drivers for
• IP address: v4 to v6          deployment / take-up;

• Deregulation and the role   • “behavioural economics”
  of consumers                  – effects of defaults,
                                bundles, discounting
      The Telecom Boom



“Internet Traffic is doubling
 every 100 days.”
…and bust
                       Storage
Policy Issue                   Analysis Needed
• Personal data as the         • How appropriate are
  currency of the Internet       market solutions? How
  Economy (behavioural           would a market be
  advertising / D.PI / click     formed? (informed
  stream data);                  consent / price elasticity);

• Mobility of computing        • How do we begin to
  and globalisation results      internalise the externality
  in data flows and data         of security?
  breaches
                   Software
Policy Issue                Analysis Needed
• Buggy software combined   • Better indicators of
  with global reach and       “trust” and
  “social engineering”        understanding the
  (phishing) tricks have      “economics of malware”
  eroded trust.
• Establishing and          • Modulating identification
  protecting our digital      in the Internet Economy
  identities.
               The Big Picture
Policy Issue               Analysis Needed
• ICT is no longer a       • How important is ICT to
  “sectoral” issue but a     the economy and society?
  broad-based              • What is the role of
  infrastructure for the     intermediaries (e.g. ISPs)
  economy and society        in public policy?
• Using ICT to combat      • The importance of the
  climate change             “edges” / users
• Using ICT to spur        • Can the market succeed
  development                in bridging the digital
                             divide?
Thank you
Andrew.wyckoff@oecd.org

www.oecd.org/futureinternet