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Measurement of Impact ICT in Latin America and the Caribbean Martine Dirven Officer-in-Charge Division of Production, Productivity and Management UN-Economic Commission for Latin America and the Caribbean. 2008 Global Event on Measuring the Information Society
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MeasurementofImpact ICT in Latin America and the Caribbean Martine DirvenOfficer-in-Charge Division of Production, Productivity and ManagementUN-Economic Commission for Latin America and the Caribbean 2008 Global Event on Measuring the Information Society Partnership on Measuring ICT for Development Geneva, 27-29 May
1- ICT context in LAC a) ICT diffusion: international and national b) ICT development: hardware, software, telecom c) ICT for development: applications and content 2- Recent measurement efforts coordinated by ECLAC a) Growth accounting b) Evolutionary economics c) Orbicom d) Other
a1) ICT diffusion: the international gapThe relative gap closed in mobile phones but not in broadband; collective access for advanced services Source: OSILAC based upon ITU’s , “World International Indicators Database”, 2007.
International gap in communication capacity: LAC continues lagging behind Fixed and mobile phones, and Internet)(megabytes per second per inhabitant) Source: Hilbert, López, Vázquez, ECLAC.
Many determinants: localization/geography age ethnic group sex But two fundamental ones: income and education level(correlated with the other determinants). a2) ICT diffusion: the internal gap
Internal gaps: % Use in different types of establishments Source: OSILAC, ECLAC, 2008.
Internal gaps: Income and education …same income, more education => more connectivity …more income, more connectivity Source: OSILAC, ECLAC, 2008.
b) ICT development (1) Hardware:Little local production capacity, less R&D/Innovation capacity but … tradable goods, widely available internationally. For society at large, using cheap, modern hardware is preferable. Software and connex services:Some local capacity (TN and national SMEs). Usually tradable, but some developments are highly dependent on local characteristics. However, limited supply of specialized labour: 340.000 tecnicians (0.19% of total employment), a good proportion of which works for exports. : SourceECLAC (2008)
ICT development (2) Telecommunications:Most services are not tradable. Some have natural monopoly characteristics. Convergence leads to differenciation between provision of basic networks/infrastructure and services, layered upon the existing network/infrastructure. (New) regulation is required, as is reaching an equilibrium between efficiency, universal access and investment. : SourceECLAC (2008)
c) ICT for development: applications and content • education • health • public administration • trade • firms • disaster management • etc. • Appropriation:Professionals from all sectors have to incorporate ICT in their organizational processes. • Digitalization:There are advances in front- office (web pages), but the pending challenges are in the back-office (interconnection of data bases), including interoperability (common standards and data security) : SourceECLAC (2008)
2- Measurement of ICT impacts (1) “ICT is a pervasive technology with multisectoral impacts and implications. This means that, while common core technologies associated with digital information processing are extremely widely adopted, the pace of adoption, the development of applications, the configuration of systems, and the modes of usage can evolve in dissimilar ways across different branches of the economy – and across organizations of different types (e.g. larger and smaller firms) and in different locations (e.g. metropolitan andmore remote areas). ” Ian Miles Source: Ian Miles’ comments on an ECLAC draft paper on using the Delphi method for priority setting for ICT policies
Measurement of ICT impacts (2) • As a result of the foregoing: • Difficulties in measuring impact: • what to measure? Use, productivity, cost/income, well-being? • how to measure? Economy-wide, per sector/sub-sector, per household, per individual? • where to measure? National accounts, surveys (industrial, innovation, household, opinion)? • when to measure? Time-lags for partial/full effects?
a) Growth accounting (1) • % ICT investment in total investment • % ICT growth in total growth • difficulties in isolating ICT for production and ICT for pleasure/other uses Source: ECLAC (2008).
b) Evolutionary economics perspective % ICT investment in GDP labour productivity Source: ECLAC (2008) Note: Each point cooresponds to a year value.
c) Orbicom (1) Based upon ICT subsectors (as per OECD list) and using a mix of national account data (VA), household, industrial and/or employment survey data, calculation of: - employment - value added weight in the economy difficulties to separate ICT form non-ICT apllications (e.g. electric wire, computers owned by households, use of Internet at the office, etc.)
Orbicom (2) Value added by subsectors, 2004 Source: Parada and Meneses (2007): “VALOR AGREGADO Y EMPLEO EN LOS SUBSECTORES DE TECNOLOGÍAS DE LA INFORMACIÓN Y COMMUNICACIONES en Argentina, Brasil, Colombia, Chile, México y Uruguay”, ECLAC, input for Orbicom (2007): Emerging Development Opportunities – The making of Information Societies and ICT Markets.
Orbicom (3) ICT and non-ICT employment Source: Parada and Meneses (2007): “VALOR AGREGADO Y EMPLEO EN LOS SUBSECTORES DE TECNOLOGÍAS DE LA INFORMACIÓN Y COMMUNICACIONES en Argentina, Brasil, Colombia, Chile, México y Uruguay”, ECLAC, input for Orbicom (2007): Emerging Development Opportunities – The making of Information Societies and ICT Markets.
Orbicom (4) Occupational groups employed in ICT sub-sectors, 2003 Source: Parada and Meneses (2007): “VALOR AGREGADO Y EMPLEO EN LOS SUBSECTORES DE TECNOLOGÍAS DE LA INFORMACIÓN Y COMMUNICACIONES en Argentina, Brasil, Colombia, Chile, México y Uruguay”, ECLAC, input for Orbicom (2007): Emerging Development Opportunities – The making of Information Societies and ICT Markets.
Orbicom (5) Employed in ICT sub-sectors by age-group Source: Parada and Meneses (2007): “VALOR AGREGADO Y EMPLEO EN LOS SUBSECTORES DE TECNOLOGÍAS DE LA INFORMACIÓN Y COMMUNICACIONES en Argentina, Brasil, Colombia, Chile, México y Uruguay”, ECLAC, input for Orbicom (2007): Emerging Development Opportunities – The making of Information Societies and ICT Markets.
d) Social and other impacts • ECLAC/OSILAC with National Statistical Institutes and Ministries of Education is working on indicators (a working group coordinated by the Dominican Republic was established in March 2008) • Other?
Economic Impact: findings & Conclusions • Positive impact of ICTon economic growth and productivity: investment in ICT explains some 10% to 14% of growth in LAC region during the 1995-2004 period. • Larger impacts in developed countries: because of complementarities among production, organization, education, infrastructure, innovationand institutional development. • Reaching full potential impactrequires equilibrium between expenditures in ICT and complementary factors; absorption capacity is indispensable for efficient adoption. Source:ECLAC (2008): The Information Society in Latin America and the Caribbean: Development of Technology and Technologies for Development