www.worldbank.org/ict/strategy ICTStrategy@worldbank.org

1. World Bank Group Information & Communication Technologies Strategy Consultations 2011 CONNECT • INNOVATE • TRANSFORM • www.worldbank.org/ict/strategy • ICTStrategy@worldbank.org

2. Objective The World Bank Group is developing a new ICT Sector strategy. We seek views from stakeholders on where and howto focus our financial and advisory services • www.worldbank.org/ict/strategy • ICTStrategy@worldbank.org 2

3. 2000 2010 Green Technology Mobile Banking Phone Social Networking Email Smart Grids Video on Internet

4. ICT Going Forward Governance & Social Development Governance & Social Develop. Climate Change Largest Ever Delivery Platform: > 3 Billion Mobile Phones in Developing Countries Education & Health Urban Infrastructure Rural Social Protection Finance

5. 2001 ICT Sector Strategy

6. 2001 Strategy Preliminary Assessment Sector Reform Access to ICT ICT Applications Human Capacity Clear positive outcomes Promising pilots but unrealized potential

7. Sector Reform & Access to ICT: Clear Positive Outcomes • Sector reforms in > 100 countries (including >60 IDA countries) • Outcomes: • Large impact on economic growth • US$ 30 billion private sector investment (1997-2007, IDA countries) • US$ 3.2 billion for 203 projects (US$1.8 billion in 32 IDA countries) • Mobilized another US$ 1 billion • 225 million new mobile subscribers • Recognized tools for telecom regulators and policy makers in other sectors eg ICT in Education • Global network of business incubators innovative SMEs and job creation • 38 Guarantees ~ US$ 1.3 billion for 21 projects (12 in Africa) • Contributed to ~ US$6 billion FDI 7

8. Examples of Promising Pilots Unrealized Potential ICT Applications: Unrealized Potential but Promising Pilots More than half of WB projects include active ICT components (US$ 7.7 billion, FY07) • IFC: • Mobile banking in South Africa • Mobile health in Rwanda • Bank: • Ghana: e-Customs PPP • Afghanistan: Use of geo-referenced photos for verification of project outputs • Sri Lanka: Satellite imagery for fisherman communities • Tunisia & Ethiopia: Access to Internet for disabled QAG Assessment: Low quality of ICT components ICT inputs insufficient in most cases Focus on automation, recent focus on transformation

9. ICT Human Capacity: Promising Pilots, but not at scale • Examples of promising projects and initiatives • infoDev’s incubator network: 300 incubators supporting 20,000 + micro-enterprises and SMEs in over 80 countries • WBI courses for policy makers • infoDev’s ICT in education toolkit • E-Development thematic group: 1,600 external members and > 300 internal members • IFC: ~ 57,000 IT jobs created in 54 companies • World Bank: New Economy Skills for Africa Program in 8 African countries (especially Kenya, Nigeria and Ghana) • World Bank: South-South knowledge exchange on IT industry development However, not at scale and models not fully mature 9

10. WBG in ICT Sector: 2000 - 2010 • Sector reform: Bank active in 105 countries in last 10 years, infoDev’s regulatory toolkit and Open Access research • PPPs for backbone infrastructure: IFC-led EASSy Project (22 countries, 30 operators, 4 other DFIs) in Africa – Bank-led Regional Communications Infrastructure Program (RCIP) • Wireless: IFC financing have so far contributed to 225 million mobile subs • Infrastructure: IFC financing for Shared towers (Turkey and Brazil); Bank support for rural infrastructure (India, Sri Lanka); • New broadband solutions: WiMax (Ukraine, Uruguay), Cameroon / Central Africa (Pipeline), West Africa (Electricity Transmission), Broadband wireless (Afghanistan) Sector Reform / Access to ICT • Banking the unbanked: IFC support to m-banking - WIZZIT (South Africa), Digicel in Caribbean, Millicom; infoDev’s m-banking knowledge map and research • e-Government: Bank support in Vietnam, Ghana, Mongolia, Kenya; IFC support to Sonda (Chile), IBS (Russia), Meteksan (Turkey), Chinasoft; infoDev’s egovernment toolkit • e-Health: Investing in cellular-based health systems, Voxiva (Africa – LAC), health data management • Education: IFC support to Socket Works (Nigeria), new Bank-led ICT Skills development Initiative, infoDev’s ICT in education toolkit in partnership with UNESCO • Partnerships and Knowledge: M-Banking Conference (GSM Assoc., DfID, CGAP), Industry Partnerships, Government Transformation Initiative ICT Applications • Supporting the growth of IT/IT enabled service industry: Bank’s support in Ghana, Mexico, Kenya, Sri Lanka; infoDev’s research on ITES industry and IT parks • Cellular Distribution Facility: IFC- financed working capital facility program offering local banks creditline to cellular distributors to buy bulk airtime aimed for retail market • Supporting the development of an ICT-Enabled innovation network: Leveraging infoDev’s business incubator initiative, which provides financing and TA to over 300 incubators for 20,000 MSME businesses in over 80 countries • Supporting the development of holistic ICT policy frameworks: Increasingly developing countries are recognizing the linkage between innovation and economic development and GICT is working with several countries • Creating systems of innovations: DFID Low Carbon Innovation Centers, clean energy innovation centers Human Capacity and Innovation 10

11. The ICT Sector in 2010

12. Trends in ICT Sector • Growing role of high-speed internet in developing countries • Information and content available at high-speeds on phones • Mobile phones as the single largest service delivery platform in the world • IT-enabled services industry an engine of growth and employment generation • Convergence causing disruptions in government policies and business models

13. Average Monthly Lease Cost for a High Speed Internet Connection (2Mbps) 10x More $600 $400 $200 $0 Up-Mid Income High Income Low Income Low-Mid Income Market Gaps in ICT Sector IN COST IN COVERAGE Total Telephone Lines To be Connected: 1.8 bn Developing Countries: 2.9 bn Developed Countries: 1.3 bn IN CONTENT IN SERVICES Access to the Internet remains a challenge Market for business information India: Rural versus urban teledensity Middle East 1% Latin America 2% Africa 0% Asia 8% % of global revenues 2007 (total market - US$89 billion) Urban Rural Europe US & Canada 28% 61% 13

14. Lessons Learned • The role of private sector continues to be paramount • The level of connectivity in client countries varies and requires a differentiated approach to ICT sector development in client countries • Skills are a binding constraint in developing local IT-enabled service industries and supporting ICT applications • ICT applications present high-risk, high-reward opportunities, and require selectivity and greater checks and balances • IT coordination across sectors of government can help lower costs and create operational efficiencies • Deliberate policies are needed to promote social inclusion and gender equality • IT-enabled service industries are capable of creating opportunities for youth and women 14

15. Proposed ICT Sector Strategy

16. Emerging Directions for the New Strategy 2001 Strategy Emerging Directions Transform Innovate Sector Reform Access to ICT Human Capacity ICT Applications Connect CONNECT – Maintain a focus on the connectivity agenda with an emphasis on high-speed Internet INNOVATE - Increase support for the use of ICT to unleash innovation across the economy and for the growth of local ICT industries TRANSFORM – Scale up support to client countries to use ICT to transform all areas of the economy 16

17. Connect: Maintain Focus with an Emphasis on High-Speed Internet Areas of WBG Interventions Continue reform agenda for more private sector investment Need for public-private partnerships Public sector financing interventions ramping up across country segments. Examples: Finland, Australia, Germany, USA, Russia, Brazil, Uganda, Ghana, Rwanda, etc. ICT and Growth • 10% point increase in high-speed Internet connections accounts for 15-25% of a country’s growth Significant gaps remain in High-Speed Internet • Only 250 million subscribers in developing countries • Private sector investments lagging behind policy objectives Policy and Regulation(WB, infoDev) Private sector investments (IFC)Guarantees (MIGA) Catalytic public sector investments (WB)

18. Innovate: Promote innovation across the economy and grow local ICT industries Ecosystem for Innovation and ICT Industry Development • 300 incubators of ICT-enabled enterprises • in over 80 developing countries supported by infoDev • 20,000+ enterprises creating over 220,000 jobs Innovation at the Micro-Enterprise and SME level Stages of Enterprise Development Policy and Regulation Start-up Venture Capital Public Equity Markets Growth Infrastructure Credit (Debt) Markets Established R&D and Skills Finance Policy, Infrastructure and Skills INNOVATION AT THE GRASS ROOTS SME Development & Job Creation Young firms contribute to over 60% of job creation Over 80% of incubated SMEs stay in local communities 50 jobs created by an incubator client generate 25 in community

19. Transform: Increase Support to Leverage ICT Across All Sectors Cross-Sector Agenda Strategic Template Governance & Social Development Governance & Social Develop. Environment &Climate Change Sector / Theme Outcomes Climate Change Infra-structure Human Develop-ment Gover-nance Largest Ever Delivery Platform: > 3 Billion Mobile Phones In Developing Countries Mobile and Other e-Services Education & Health Urban Government Private Sector & NGOs Foundations Back-end Applications (MIS, FMS, Procurement, etc.) Rural Infrastructure • Enabling Environment: • Regulatory framework (sector-specific) • Policies and standards • Shared infrastructure • Interoperability framework • Cyber security Social Protection Finance Need for Sector/Theme Specific Strategies (Annexes) – for Sector-Led Implementation

20. Working with partners: The eTransform Initiative COMPONENTS

21. Consultations

22. Consultations & Strategy Preparation Internal and External Consultations for Strategy Preparation November 2010 – February 2011 Internal Management Reviews Preliminary Board review June 2011 Global Consultations on Full Draft Strategy July 2011 Board Discussion September 2011 Strategy drafting November 2010 – May 2011 • Analytical Work • Broadband policy • ICT and Climate Change • Mobile applications for development • ICT for Innovation, ICT in Agric • AFR ICT-enabled Transformation, AFR ICT in Health 22 • www.worldbank.org/ict/strategy

23. Consultation Questions Q1 WBG ROLE in Where do you think the help of the World Bank Group in the ICT sector in developing countries is most needed? Q2 NEEDS OF COUNTRIESDo the proposed priority issues – connect, innovate and transform – adequately address and balance the needs of countries? Q5 TRANSFORM How could the World Bank Group adequately support countries planning to use ICT to transform their economies and the way governments deliver services to citizens and businesses? Q4 INNOVATE Should the World Bank Group be active in the innovation space (ICT skills Development, SME job creation, IT-enabled industry development) and how? Q3 CONNECT What is the role of public sector financing and the World Bank Group in advancing the connect agenda and overcoming the gap in high-speed internet connectivity? Q6 SELECTIVITYWhich activities—lending, equity investments, guarantees, technical assistance, capacity building, research and other analytical work, and the provision of public goods—are the most effective in supporting countries and what is the optimal mix of the activities? 23 • www.worldbank.org/ict/strategy