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For Competitiveness, ICT Best Enables Other Industries

By Wayan Vota on December 10, 2009

Often governments have the idea that that can increase the competitiveness of their country by investing in the ICT industry as an export sector. They are enamored by the success of Silicon Valley in creating wealth and want to have their own Google Guys to brag about.

ICT for teachers

Sometimes this hope becomes hubris, but we all need to keep realistic about the impact of ICT on a country’s economy. ICT is usually best and enabler of other industries, not a viable export industry in itself.

In the Technical Brief When Should the ICT Sector be a Target for Private Sector Competitiveness Work?, USAID goes into detail on why.

Mainly, countries are looking to increase employment, but the high skills required for competitive ICT development cannot be created quickly. Then, ICT as a sector is not a large employer when compared with industries like tourism or agriculture. Last but not least, technology investments can actually reduce employment at the enterprise level – firms can do more with less given the technological inputs.

But ICT can have a large catalytic effect on economic growth – they enhance productivity and innovation in other industries, making them more competitive. In fact, USAID recommends that:

Economic growth projects try to leverage this catalytic effect [of ICT] with a variety of activities that are different from activities that focus on growth of a country’s ICT sector itself. These catalytic activities should be aimed at helping to increase the chances businesses can recognize and implement ways to use ICT to boost their competitiveness and increasing access to affordable telecommunications services and devices to use them.

So rather than looking to replicate Silicon Valley, governments should use the tools of ICT to increase the efficiencies in other industries. Like ensuring Internet marketing by the tourism industry or promoting better crop management through push voice mail for farmers. Its in this use of ICT, as an enabler of other industries, that countries will see the greatest ICT impact.

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Written by
Wayan Vota co-founded ICTworks and is the Digital Health Director at IntraHealth International. He also co-founded Technology Salon, MERL Tech, ICTforAg, ICT4Djobs, ICT4Drinks, JadedAid, Kurante, OLPC News and a few other things. Opinions expressed here are his own and do not reflect the position of IntraHealth International or other ICTWorks sponsors.
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