ICTs enhance productivity and growth.
Research findings confirm that ICTs contribute positively to economic growth in both developing and developed countries. They boost productivity by improving efficiency of individuals, firms, sectors and the economy as a whole. ICTs can also generate positive side-effects in the economy through learning-by-doing, faster transfers of know-how and increased transparency. However, greater participation in the information economy, particularly by women, is needed before the full potential of ICTs can be realized. If women are excluded from the information economy, the input of a major working force is lost.
Impact of ICTs on industry sectors and firm performance
ICT adoption creates unprecedented opportunities for industries and businesses in developing countries to overcome the constraints posed by limited access to resources and markets. This is particularly true for SMEs in developing countries as they have the potential to mitigate the rigidities created by poor growth performance and high uncertainty. The dissemination of ICTs also provides an opportunity for enterprises in developing countries to get better access to trade finance and e-finance through improved credit and e-credit information structures.
ICTs facilitate international trade in goods and services
ICTs lower transaction costs and facilitate trade. This can make the allocation of resources more efficient across sectors and lead to more products becoming available for consumption. More cost-effective ICTs have opened up new international business opportunities and increased participation levels of developing countries in the information economy. Alongside greater levels of trade, there is more outsourcing and foreign investment from developed - and increasingly from developing countries as well - to developing countries. Developing countries with better and more efficient ICT infrastructure attract more outsourcing and trade more.
Shifts in employment in manufacturing and business services.
ICTs are important factors in determining how, where, when and who works. In developing and developed countries alike, technology has brought stability in employment levels for the manufacturing sector and growth in business services. Output per worker in both these sectors is growing, with the business service sector in the lead. However, the introduction of ICTs is favouring skilled workers and tends to overlook those working in rural areas, the poor, unskilled workers and women. Without intervention, the greater use of ICTs can increase existing social and economic divides. Gender balance and other social issues must be considered.
