Analysis of ICT-Access and Usage of Enterprises in Developing countries case study Palestine

1. Analysis of ICT-Access and Usage of Enterprises in Developing countries case study Palestine Khalid Qalawi ICT department Palestine Central Bureau of Statistics Khalid S. Rabayah ICT4D R&D Center Arab American University

2. The impact of ICT on economy is a debated issue; “ Productivity Paradox” • The Solow Computer paradox: “ You can see the computer age every where but in productivity statistics”. • Economists like S. Oliner & D. Sichel deny any significant role of ICT on economy. • SYT Lee (2005): analysis on 20 countries: ICT contribute to economy in developed and emerging countries but not in developing countries. • Similar conclusions predicted by Banerjee, Dulfo, Qiang)

3. Other researchers demonstrated positive outcomes, while others are still attempting to understand • Best et al. 2007: Developing Countries with higher access to telephony enjoyed better services, more competitive markets, growth of non-traditional businesses, etc. • Grameen Phone initiative in Bangladesh is used by many sources to back optimistic claims. • Other initiatives in Africa seems to show positive impacts Researchers are striving to explain using mixed arguments • Time lagging • Law of Inertia • Ineffective use “ people are inspired by the technology not its use” • others

4. This study reports empirically on how business owners perceive ICT in the course of practicing businesses • Overview of Palestinian enterprises • ICT penetration: PSTN, Mobile, media technologies, Computer and Internet, advanced ICT technologies; LAN, WAN, Website, E-commerce, security, … etc. • ICT workforce and literacy • ICT expenditure • Rational behind not using ICT • Interpretation and modeling of ICT usage by enterprises

5. The survey represents a true sample of the business sector and deals with many aspects of ICT usage • 2,966 enterprises, covering all activities and sizes. • Tool: Extensive survey designed by experts in ICT, business and statistics, with over 60 questions. • a team of 30 persons participated, managed by PCBS (http://www.pcbs.gov.ps), throughout 2008. • Survey embarked upon: ICT penetration, ICT usage, Future prospects, and Expenditure • Analysis and reporting: ICT4D research center @ Arab American Univ.

6. 90% of all Palestinian enterprises are unofficial tiny enterprises, 2/3 have no employees, 57% of are retailers

7. Penetration index: number of (PCs + laptops + PCs with Internet connection + printers + copiers + scanners + TV + Satellite receiver + fixed phone + mobile + fax + digital camera + software packages + servers + video conferencing ICT penetration is strongly correlated to the enterprise size

8. Mobile penetration is almost flat, Internet is a function of enterprise size. Results in agreement with 14 African countries (E-Access Africa, 2007)

9. For enterprises with 10+ employees, computer Usage, Internet Connection, and Website Ownership are in line with International records

10. Majority of business owners see no need to use computers or to connect to Internet.

11. Majority of Owners see Internet as communication tool and as a source of Information

12. ICT-related specialists are 3.5% of the total number of work force. Majority are in no need for ICT specialists

13. ICT literacy is not the main barrier hindering ICT utilization

14. Enterprises with intangible commodities have higher computer and Internet usage

15. 13.5% have placed at least one purchase order, while 9.8% have received at least one selling order via the Internet (E-mail)

16. Using Internet in Business is meant to save time

17. The chief obstacle for not using Internet for business transactions has to do with culture and traditions of practices, (76.8%) • 1.3% of all enterprises offer prices list and catalogues, • 0.5% of all enterprises have online payment, on their web

18. About 50% of enterprises plan to boost their ICT adoption, and 2/3 of service sectors

19. Private sector spent 175,282,000 USD, on ICT annually, 109,375,000 USD on telecom. ICT import: 204,884,000 USD, 6.5% of the total import, ICT export: 28,530,00 USD, 14% of imported ICT.

20. Many issues affect the decision to adopt ICTs • Enterprises rely more on tangible vs. intangible. • Law of Inertia: ICT requires dramatic changes in business operation. • Most local enterprises are Micro enterprises with simple business operations, and ICT are more effective in complex business operations. • Social and cultural considerations play a major role, and comes before economic reasons. • Lack of resources and competencies. • Cost and effective utilization of these solutions • Balance between expenses and gains of these technologies to their business operations

21. Three levels of ICT adoption, (Avgerou, and Porter et al.) Low Income Relies on mobility of primary commodities. Simple ICTs: PSTN/Mobile Middle Income More sophisticated and integrated in national & international production system. Adoption of foreign Technologies High Income requires high competitiveness, and high rate of learning ICT is badly needed with rapid Technology innovation

22. Business development should be taken holistically, ICT alone makes NO difference ICT can be effective when Demand side: Effective Business operations, new mind set, operation reengineering, Capacity building, Continuous update and rapid learning processes, … Supply side: ICT production and service providers, government bodies, business associations, academic institutions should work to promote innovation, cooperation, customization, regulations to harness ICT solutions