Is ICT the Key to Development?

Is ICT the Key to Development?

Roya Gholami, Dolores Añón Higón, Payam Hanafizadeh, Ali Emrouznejad
Copyright: © 2010 |Pages: 18
DOI: 10.4018/jgim.2010091104
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Using panel data for 52 developed and developing countries over the period 1998-2006, this article examines the links between information and communication technology diffusion and human development. We conducted a panel regression analysis of the investments per capita in healthcare, education and information and communication technology against human development index scores. Using a quantile regression approach, our findings suggest that changes in healthcare, education and information and communication technology provision have a stronger impact on human development index scores for less developed than for highly developed countries. Furthermore, at lower levels of development education fosters development directly and also indirectly through their enhanced effects on ICT. At higher levels of development education has only an indirect effect on development through the return to ICT.
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Policy makers and researchers hold ambiguous views on information and communication technology (ICT) diffusion and its role in poverty reduction and sustainable development. Many consider ICT to be the only possible mean of achieving development within a reasonable time frame, through technological leapfrogging (World Summit on the Information Society, 2003; 2005). There are, however, alternative views that consider ICT of no great value or even may be unfavorable to the less developed nations (UNDP, 2004). They have argued that governments of poor countries should focus attention on basic education, healthcare, electricity and clean water instead of costly ICT infrastructure (Ngwenyama, Andoh-Baidoo,Bollou & Morawczynski, 2006).

Many developed countries in North America, Western Europe and South East Asia have achieved growth and development with the adoption and use of ICT in sectors of their economies. Based on the assumption that ICT foster development, there has been a joint effort among national governments and international organizations to compose and implement information and communication technology for development (ICT4D) strategies. These strategies have put pressure on national governments to invest both human and financial resources for the ICT expansion (Morawczynski & Ngwenyama, 2007). Consequently, many developing nations have implemented market liberalization and invested huge sums of money into their ICT infrastructure. However, few studies have been conducted to assess the effectiveness of these investments (Bollou & Ngwenyama, 2008).

The empirical literature presents also ambiguous conclusions concerning the link between ICT use and economic growth in developing countries. Earlier studies have failed to find a relationship between ICT and productivity growth in developing countries. While qualitative studies support the belief that ICT is critical to economic growth and development, researchers have not succeeded in finding strong quantitative empirical evidence (Dewan & Kraemer, 2000; Oliner & Sichel, 2000; Schreyer, 2000; Pohjola, 2001, Zhang & Lee, 2007). In essence the contribution of ICT to growth and development is not automatic and depends on the appropriate application and effective use of these technologies as well as on the investment in complementary factors (e.g. human resources, research and development, etc) (Lee, Gholami & Tong, 2005, Molla & Licker, 2005).

Since investments in ICT are made at the expense of the provision of basic services like education and healthcare, many have questioned if this is the right path for less developed countries to achieve development. Some studies caution against the assumption that such linkages would indeed occur in the case of developing countries. For example, Avgerou (1998) and Morales-Gomez & Melesse (1998) argue that the transfer of ICT to developing countries may not contribute to economic development the same way it did in industrial countries, and that it may be best to localize technology and focus on its use in education.

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