“ICT represents our collective nervous system - a platform for helping solve some of our greatest economic problems.” (ICT for Economic Growth Report 2009)
If SA implements its well-crafted ICT policies, the economic growth will be boosted, and within the next two decades, SA can catch up with the Asian countries in terms of innovation.
There is a positive correlation between ICT investment and economic growth. A recent study by the Boston Consulting Group estimated that when Internet penetration rises by 10% in emerging economies, it correlates with a GDP increase of 1%-2%. In a study on the impact of mobile phones on poor countries by Waverman, Meschi & Fuss, the researchers concluded the impact of an increase of 10 mobile phones per 100 people would have increased economic growth by about 0.59% per annum. Investment in ICT could be likened to investment in the transport infrastructure. Neither is an optional extra, and growth can only be realised if implementation is done properly.
Since the advent of computers, the opportunities for economic development with ICT have been obvious. ICT can contribute to economic growth in a number of ways: firstly, by enabling ICT goods and services to contribute to an economy's aggregate value. Secondly, ICT capital investments can help to increase productivity and efficiency, which in turn leads to the growth of aggregate total factor productivity. Thirdly, ICT can be employed to improve on the production and delivery of educational content.
Creating a network
In order to experience economic growth through ICT, the South African government needs to participate in the creation of an ICT ecosystem and foster an interdependent series of technical, social and business relationships. This ecosystem needs to address the following critical aspects: infrastructure investment, human capacity development, government policies and budgets, content and applications, and support for markets and competition.
The effectiveness of government in achieving the development of such an ecosystem could be measured using the United Nations International Telecommunication Union's Digital Opportunity Index (DOI), which measures the ICT penetration of households and individuals relative to 100% ownership, to measure growth in the ICT development of an economy over time.
Since the advent of computers, the opportunities for economic development with ICT have been obvious.
Rabelani Dagada is president of the Computer Society of SA.
The absence of ICT opportunities, colloquially known as the 'digital divide', is a very real concern that faces developing countries as they discover that their limited Internet connectivity hampers the opportunities for economic growth and life improvement generally enjoyed by advanced economies.
At present, SA's DOI rating is low, having a score of only 0.40. To improve this, it is of utmost importance to provide basic access to telecommunications at affordable costs. This entails laying down proper high-speed broadband infrastructure and creation of structures that support the use of advanced technologies.
It is important to note that there exists a direct correlation between average income and Internet user penetration, where the higher the average income, the higher the level of Internet penetration. This implies a need to make small increases in average income, since this will have a much greater impact in raising digital opportunity at lower levels of income.
Sorry state
The current national ICT policy has been found to be well constructed and intentioned. However, its implementation is wanting. This is the main cause for the saddening observation that SA is retrogressing in competitiveness and e-readiness in the telecommunications sector, as observed in DOI scores.
There is a need to establish practical mechanisms that will regulate the domination of the first tier telecoms operators, with the aim of encouraging fair competition in the ICT sector. The ruling party also needs to move away from its loath to trust structures outside its control, as this reluctance leads to suffocation of worthwhile initiatives due to lack of adequate government support.
To ensure the economic potential of emerging ICT opportunities is realised, decision-makers need to be aware of the essential role they play. It is imperative that all efforts by the various arms of the South African government should all be aimed at seeing ICT as an investment that creates opportunities for people to overcome conditions of poverty and marginalisation. Ensuring the above would help in creating synergy, with the aim of increasing opportunities and thus improving the living standards of the people of SA.
The most basic step to achieve economic growth through ICT is by having a clear and concise national ICT policy that aims at maximising the benefits of ICT and minimising all possible risks.
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