Bridging the Digital Divide in Microeconomies: US Virigin Islands New Research Agenda

1. Bridging the Digital Divide in Microeconomies: US Virigin IslandsNew Research Agenda William DeLone IT Research Seminar September 17, 2003 DeLone: E-Development

2. DeLone Success Research • DeLone & McLean Success Model • Impacts/Net Benefits • Individual level • Firm level • Market level • Country Level ** DeLone: E-Development

3. Brief History of IS • Back office automation • Decision Support • Competitive Advantage – AA, Walmart, • Productivity Paradox • Information economy • “wealth is information applied to work to create value.” (Wriston) DeLone: E-Development

4. IT & GNP (Dedrick,Gurbaxani & Kraemer, 2003) DeLone: E-Development

5. IT Has Hit the Big Time Research Challenge: Expand our horizons as IT researchers to high impact research such as industry, market and country level research DeLone: E-Development

6. IT Research & Social Responsibility • The potential of the Global Digital Divide • What about the Small Fries (Small country economies/micro-economies)? Dewan & Kraemer 1998, 2000 => Bad News • DeLone 1982 Small business computer use • DeLone 2002 Small country IT use DeLone: E-Development

7. DigitalDivide Katharine Fierro (Peru) Victor Orantes (Guatemala) 2001 DeLone: E-Development

8. Fighting the Digital Divide • “Everyone, everywhere, should be enabled to participate in, and no one should be excluded from, the benefits of the global information society” IT charter of G-8 summit DeLone: E-Development

9. Four Main Challenges • Reduce the poverty levels • Stop the brain drain • Lack of educational opportunities • Lack of political will DeLone: E-Development

10. How can we address those issues? • Competition • Friendly regulatory environment • Liberalization of trade in every aspect in order to promote economic growth • Government participation in playing a subsidiary role in providing in infrastructure and education for the poorest DeLone: E-Development

11. Anticipated Outcomes • Direct foreign investment will come to the area • Income levels will raise • It will lessen the brain drain • Finally it will help to bridge the gap between developed and developing countries DeLone: E-Development

12. Implications for Caribbean Economies? DeLone: E-Development

13. New Paradigms • Wealth created via intellectual assets • Geographical constraints removed • Natural resources not required • Knowledge workers in demand DeLone: E-Development

14. Digital Divide & Microeconomies • Poor Economies of Scale • Lack of Economic Resources • Poor telecommunications Infrastructure • Limited Educational Opportunities • Limited Intellectual Capital DeLone: E-Development

15. E-Development Economic growth via the information-based businesses or e-businesses DeLone: E-Development

16. E-DevelopmentCompetitive Factors • Telecommunications Infrastructure • Trained Workforce • Business Incentives • Business Climate (Time is money) • Business Infrastructure • Political Stability • Government, Industry, Labor, Education DeLone: E-Development

17. E-Development Obstacles • Organizational legacy • Administrative heritage • Political will DeLone: E-Development

18. Crossing the Digital Divide The Role of Leadership DeLone: E-Development

19. IT, Productivity & Mediating Variables • IT + Organizational Capital => Firm Productivity (Brynjolfsson & Hitt, 2000; Bresnahan et al. 2002) DeLone: E-Development

20. IT, Productivity & Mediating Variables • IT + Institutional Capital => Economic Productivity ?? DeLone: E-Development

21. The Virgin Islands Case UVI Technology Park SWOT Analysis DeLone: E-Development

22. Virgin Islands - Strengths • United States legal jurisdiction • Tax benefits • Access to high bandwidth • Business friendly University = decision-making speed • Near shore location DeLone: E-Development

23. Virgin Islands - Weaknesses • Lack of IT support infrastructure • Lack of IT-skilled workforce • High cost of living • Lack of private-public sector partnership DeLone: E-Development

24. UVI Technology Park Mission • To create a technology sector in the Virgin Islands by attracting and developing new knowledge-based businesses that will spur economic development, create jobs for local residents and generate revenues for the financial support for the University. DeLone: E-Development

25. Goals and Objectives • Promote technology-based economic development • Broaden research and teaching capabilities • Collaborate with corporate partners in the creation and commercialization of new technologies and applications • Provide an integrated response to job creation and job training. DeLone: E-Development

26. Examples of Park Tenants • Web hosting companies • E-commerce companies • Telecommunications companies • Software Application Companies • Data Centers/Call Centers • E-customer service operations • Knowledge-based companies • High Tech research and development DeLone: E-Development

27. Key Benefits • Business Investment/New business creation • Increased employment/High Paying Jobs • Revenues for Government and UVI • Diversified economy/Boost to Tourism • “Brain Gain” • Adjunct faculty/Learning laboratories • Environmentally Friendly development DeLone: E-Development

28. Where are We Today • Board of Trustees approval secured • Legislation (Act 6502) signed into law • Kogod Field Study • Development site identified on St. Croix • Park Corporation Board Appointed • Strategic partner for world-class e-commerce hosting • Local & Federal Financial Support DeLone: E-Development

29. Key Actions Going Forward • Telecommunications connectivity • Procure development funding • Site development • Create Park Corporation organization • Alliances with more strategic partners • Create VI Technology Education Center (VITec) DeLone: E-Development

30. Park Success Factors • Educational Leadership • Single source of tenant services => UVI & Government collaboration • Tax incentives for high-tech tenants in the Park. • Professional Management of Park as a profit-making enterprise. • Reliable cost-effective broadband connectivity and power. DeLone: E-Development

31. Park Success Factors (cont’d) • An integration strategy that links training and workforce development with job creation. DeLone: E-Development

32. Research Question Can investments in Information Technology aided by complimentary institutional capital investments improve the economic performance of Micro-economies? DeLone: E-Development

33. Research Model (Dedrick,Gurbaxani & Kraemer, 2003 DeLone: E-Development

34. Help! • Citations • Models • Methods – Case studies, econometrics, • Measures DeLone: E-Development

35. Barbados 2000 - Strengths • Unifying culture, nationalism • Social partnership for economic reform • Government stability • International Business Companies Act granting favorable corporate tax (1 to 2.5%) • Double taxation agreement with Canada • Barbados Investment & Development Corporation (BIDC) – DeLone: E-Development

36. Barbados 2000 - Strengths • Welcoming business climate • Business infrastructure – quality office space, reliable telecommunications and power. • Highly literate population; easily trainable workforce • Relatively cheap high tech workforce • Workforce availability • Near shore operation (travel access, time zone advantage) DeLone: E-Development

37. Barbados 2000 - Weaknesses • Cost of telecommunications • Lack of workforce trained in IT skills • Local business environment/services • Slow processing of business transactions by government • Non proactive private sector • Lack of local entrepreneurship • Lack of economic statistics DeLone: E-Development

38. Barbados 2000 - Opportunities • Software Development • Business Information Services DeLone: E-Development

39. Barbados 2000 - Threats • Competing countries • Bermuda • Dominican Republic • Government inability to act quickly DeLone: E-Development