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Introduction to ICT Policy discussions, fundamental understanding of ICT benefits.
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ICT Benefits
1.
INTRODUCTION TO ICT POLICY
DISCUSSIONS Rene Summer ICT BENEFITS
2.
ICT BENEFITS |
Public | © Ericsson AB 2014 | 2014-04-25 | Page 2 ICT BENEFITS AS WE COMMONLY Quantify THEM TODAY + 1000 BB USERS > + 80 Jobs + 10% POINTS BB PENETRATION > + 1% POINT GDP + 2 x BB SPEED > + 0.3% increase in GDP +1% POINT increase in BB Penetration > 3,5% INCREASE IN new business registration Sources: Chalmers Institute of Technology, Arthur D Little, Stockholm School of Economics EXAMPLES OF FINDINGS OF ECONOMIC IMPACT OF ICT
3.
ICT BENEFITS |
Public | © Ericsson AB 2014 | 2014-04-25 | Page 3 ICT Benefits as we commonly know them today ICTBENEFITS MARKET GROWTH PRODUCTIVITYINNOVATION INVESTMENTS JOB/NEW BIZ CREATION TRADE EFFICIENCY Source: Economic Benefits of ICT
4.
ICT BENEFITS |
Public | © Ericsson AB 2014 | 2014-04-25 | Page 4 Sources: Chalmers Institute of Technology, Arthur D Little, OECD Broadband and the Economy, Future of Internet 2008 Increased global market reach expanding trade but also intensified competition, General increase in economic efficiency and labor productivity, Increased pace of knowledge diffusion and increased positive spill-over effects, Revised view of the role of innovation (innovation-led growth). Economic Impact of ICTChanging Economic Thinking > ICT Source: Jati Sengupta, Understanding Economic Growth, Springer 2011 DIRECT INDIRECT INDUCED ICT BENEFITS AS WE COMMONLY UNDERSTAND THEM TODAY
5.
ICT BENEFITS |
Public | © Ericsson AB 2014 | 2014-04-25 | Page 5 ICT BENEFITS AS WE WILL RECOGNIZE THEM IN THE NETWORKED SOCIETY WELL BEING STANDARD OF LIVING QUALITY OF LIFE SOCIAL PROGRESS NATIONAL COMPETITIVENESS
6.
ICT BENEFITS |
Public | © Ericsson AB 2014 | 2014-04-25 | Page 6 Increase in market size Increase in investments Technological progress Causes of LONG TERM ECONOMIC growth TECHNOLOGICAL PROGRESS IS BY DEFINITION A NET IMPROVEMENT TO THE ECONOMY* * Source: Economist Joel Mokyr, The Levers of Riches.
7.
ICT BENEFITS |
Public | © Ericsson AB 2014 | 2014-04-25 | Page 7 Relative significance of Technological progress CAUSING LONG TERM GROWTH Imagine if we freeze technology, say at some point of the Victorian era WHERE WOULD WE BE TODAY IN TERMS OF WELL-BEING?
8.
ICT BENEFITS |
Public | © Ericsson AB 2014 | 2014-04-25 | Page 8 technological progress Growth Change INNOVATIONINVENTION DIFFUSION & ADOPTION KEY COMPONENTS OF A TECHNOLOGY CHANGE incremental, radical and disruptive innovations ECONOMIC PERFORMANCE Evolutionary micro-innovations Revolutionary macro-innovations
9.
ICT BENEFITS |
Public | © Ericsson AB 2014 | 2014-04-25 | Page 9 Technology Revolutions macro innovations of special kind Source: Professor Carlota Perez Universities of Cambridge, Tallinn and Sussex Single generic and recognizable 1771- The industrial revolution 1829- Steam, coal, iron & railways 1875- Steel & heavy engineering 1908- Automobile, oil, mass production 1971- IT & telecommunication FIVE SUCCESSIVE TECHNOLOGICAL REVOLUTIONS 1770 TO 2000S GENERAL PURPOSE TECHNOLOGIES (GPT) Broad scope of improvement Wide range and variety of use Abundant spillovers
10.
ICT BENEFITS |
Public | © Ericsson AB 2014 | 2014-04-25 | Page 10 Transformational power of technological Progress: Source: World Economic Forum, Global Competitiveness Report 2010-11 Characteristics of a factor- driven economy Source: Jati Sengupta, Understanding Economic Growth, Springer 2011, OECD Broadband and the Economy, Future of Internet 2008; Lipsey, Richard; Kenneth I. Carlaw & Clifford T. Bekhar, Oxford Press 2005; Brynjolfsson, Erik, and Adam Saunders (2010) MIT Press and Ericsson Analysis BASIC REQUIREMENTS › Institutions › Infrastructure › Macroeconomic environment › Health and primary education DIRECT IMPACT › Availability and quality of ICT Infrastructure › Digital Readiness Characteristics of a efficiency- driven economy EFFICIENCY ENHANCERS › Higher education and training › Goods market efficiency › Labor market efficiency › Financial market development › Technological readiness › Market size INDIRECT IMPACT FROM ICT › Improving development of human capital, e- education › Increased access to knowledge › Increasing market efficiency/ reach e-commerce › Increase efficiency in existing processes/value chains Characteristics of an Innovation- driven economy INNOVATION & SOPHISTICATION › Business sophistication › Innovation INDUCED IMPACT ICT › Decreasing barriers to creating of new knowledge (inventions) › Decreasing barriers to innovation in new products, services, processes, and markets COMPETITIVENESS OF NATIONS IMPACT FROM ICT ICT AS TRANSFORMATIONAL GPT
11.
ICT BENEFITS |
Public | © Ericsson AB 2014 | 2014-04-25 | Page 11 Mastering transformations Source: Manuel Castells, The Rise of the Network Society, Second Edition, 2010 IS A STRATEGIC SOCIETAL CAPABILITY Technology (or lack of it) embodies the capacity of societies to transform themselves The ability or inability of societies to master technology largely shapes their economic destiny and social well-being The state can suffocate or enable an accelerated process of technological transformation UNTAPPED OPPORTUNITIESCHANGE TIME Institutions (Governance) MARKET Technology Growth Opportunities Reform Opportunities
12.
ICT BENEFITS |
Public | © Ericsson AB 2014 | 2014-04-25 | Page 12 Why policy makers need to act? Benefits are not automatic No deterministic built in design in to technology There are also challenges that must be addressed Which shapes the size and sustainability of benefits Must be backed by resilient & adequate policy Technology can’t do it alone WELLBEING FIRM AND DURABLE POLICY COMMITMENT CAN DELIVER STRUCTURAL CHANGE WITH LASTING BENEFITS
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ICT BENEFITS |
Public | © Ericsson AB 2014 | 2014-04-25 | Page 13 › Quantifying › Knowing › Understanding › Long view, broad & deep change as a source of value creation › Technological progress as a cause of long term growth › ICT = GPT › Transformational power of GPT › Long term gains are not automatic Summary ICT BENEFITS FUNDAMENTALS A STRATEGIC UNDERSTANDING OF ICT BENEFITS
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