Volume 03 Issue 01-2023
21
International Journal Of Management And Economics Fundamental
(ISSN
–
2771-2257)
VOLUME
03
I
SSUE
01
Pages:
21
-25
SJIF
I
MPACT
FACTOR
(2021:
5.
705
)
(2022:
5.
705
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
ABSTRACT
This article provides information and necessary sources and statistics about the development of ICT in recent years,
its impact on the global economy, benefits and benefits in the field of commerce, health care, as well as in the macro
and micro economy.
KEYWORDS
ICT, global economy, commerce, industry, social benefits, economic sustainability.
INTRODUCTION
The ICT industry
—
including telecommunications
operators, computer and software producers,
electronic equipment manufacturers
—
is playing an
increasingly important role in the global economy. It
created approximately 5 percent of total GDP growth
between 2003 and 2008, and it represented 5.4
percent of world’s GDP in 2008.That share is expected
to reach 8.7 percent by 2020.1 Because of its size and
the nature of its products, the industry has a notable
role to play in encouraging economic growth and
contributing to other social goods, including improving
education and healthcare access and services.
Furthermore, recent McKinsey research shows that
the ICT industry can potentially contribute to reducing
worldwide CO2 emissions by 15 percent in 2020
—
an
enormous contribution
—
but we will focus here on the
economic and social contributions of the industry.2 ICT
enables economic growth by broadening the reach of
Research Article
THE ADVANTAGES OF ICT ON THE WORLD ECONOMY
Submission Date:
January 14, 2023,
Accepted Date:
January 19, 2023,
Published Date:
January 24, 2023
Crossref doi:
https://doi.org/10.37547/ijmef/Volume03Issue01-03
Rasuleva Maprat
Tashkent University Of Applied Sciences, Uzbekistan
Aliyeva Nodira
Tashkent University Of Applied Sciences, Uzbekistan
Journal
Website:
https://theusajournals.
com/index.php/ijmef
Copyright:
Original
content from this work
may be used under the
terms of the creative
commons
attributes
4.0 licence.
Volume 03 Issue 01-2023
22
International Journal Of Management And Economics Fundamental
(ISSN
–
2771-2257)
VOLUME
03
I
SSUE
01
Pages:
21
-25
SJIF
I
MPACT
FACTOR
(2021:
5.
705
)
(2022:
5.
705
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
technologies such as high-speed Internet, mobile
broadband, and computing; expanding these
technologies itself creates growth, and the fact that
technologies make it easier for people to interact and
make workers more productive creates additional
benefits. McKinsey estimates, for instance, that just
one action
—
bringing mobile broadband levels in
emerging markets up to those of more mature
markets
—
could add between US$300 and US$420
billion to the world’s GDP and 10 to 14 million direct and
indirect jobs in areas such as equipment manufacturing
and outsourcing/offshoring services. ICT’s role in
enabling economic growth has become more
significant as governments are investing to stem the
effects of the global financial crisis.As US President
Barack Obama noted in January 2009, “Increas
ed
broadband spending, electronic medical records,
green energy investments, and new computers for
schools and libraries are all smart ways to keep
America competitive while also creating new jobs and
spending.”3 And UK Prime Minister Gordon Brown has
like
ned his government’s efforts to extend the
country’s digital infrastructure to “the roads and the
bridges and the railways that were built in previous
times to stimulate the economy.”4 They are far from
alone
—
Korea, Rep. (Korea) has long been a leader in
broadband investment, and today countries from
Greece to Malaysia have committed large amounts of
money to develop their ICT sectors. Beyond economic
benefits, the ICT industry is uniquely positioned to help
build a more socially sustainable future. McKinse
y’s
most recent consumer survey shows that the ICT
industry is perceived to be among the top four
industries in terms of its potential contribution to
society behind only healthcare, agriculture, and utilities
.The importance of ICT increased more than any other
sector since 2006,5 showing that consumers place
growing importance on the industry as social
contributor.
Governments have also realized that ICT can offer
social benefits, so they have started large programs to
improve the level of health, education, and
government services they offer to their citizens. For
example, as we will explore later in greater depth, ICT
is making an important contribution to health delivery:
doctors can directly access their patients’ medical
records from anywhere. Creating these economic and
social benefits will require not only large investments
and commitment from different stakeholders but also
changes
to
existing
regulatory
frameworks,
compromises between governments and industries,
and strong public engagement.
Investing in ICT to drive economic sustainability .
Countries have started to invest in ICT because they
know that the sector can have a substantial positive
impact on social and economic sustainability. Investing
in ICT is a key driver of economic development for
emerging and developed markets alike.
In fact, investing in ICT can help countries increase their
annual GDP growth by 0.6
–
0.7 percent on average, on
an annual basis, for each increase of 10 percent in
household penetration, as several studies have shown
. This impact is created by a combination of direct and
indirect effects on the economy. Direct effects come
from investments in infrastructure (by government
and operators), increased availability and penetration
of services, and increased employment in the ICT
sector. A good example of direct effects is seen in
Korea, where growth in the ICT sector was 43 percent
between 1999 and 2003; in the same period, it was
negative in Japan, less than 1 percent in Malaysia, and
5 percent in Singapore.9 Korea drove this growth by
pushing forward a national vision to develop its ICT
sector; this required a concerted effort between public
and private parties and large subsidies from the
state.The country invested more than US$700 million
Volume 03 Issue 01-2023
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International Journal Of Management And Economics Fundamental
(ISSN
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VOLUME
03
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01
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21
-25
SJIF
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FACTOR
(2021:
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705
)
(2022:
5.
705
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
in subsidies between 1995 and 1997 to link around
15,000 institutions in 80 major areas of the country
with high-speed fiber networks. The direct effects of
ICT can also be seen in bringing ICT services to remote,
underserved areas. In this case, direct investments will
bring job creation and extra spending that benefit the
population in these areas.Telefónica, for example
developed the Intégrame initiative in Peru, which aims
at extending ICT
services via public-private
partnerships.As a result of these partnerships, mobile,
landline, Internet access, and television services are
now offered using wireless technology at better tariffs
to 62,300 people in 180 locations throughout the
country. Further, Intégrame has opened new markets
for Telefónica and increased the speed of social and
economic development through the inclusion of rural
communities.11
ICT’s
indirect
effects
include
productivity gains for businesses, increased foreign
direct investments as a consequence of a country
being ICT-enabled, the creation of innovative industry
clusters such as knowledge cities, and higher exports
of ICT services such as outsourcing. The Indian Tobacco
Company, an Indian conglomerate, illustrates ICT
productivity gains for an economy.Their agri-business
division, one of India’s largest exporters of agricultural
commodities, created e-Choupal in 2000 as a supply
chain management system to reach farmers.These
have traditionally sold their products through
inefficient physical marketplaces where they are
forced to take whatever price is offered because they
have limited access to information on market prices. E-
Choupal, a kiosk with computers and Internet access,
is a virtual marketplace where farmers can sell their
products (e.g., soy, tobacco, wheat, shrimp) directly to
producers, without paying fees to traders or
commissions to agents.The tool also provides
information in local languages about the weather,
market prices, and farming best practices, as well as
general news. According to Mr Singh, a farmer in the
northern state of Uttar Pradesh, annual incomes in
Kurthia have risen from up to Rs50,000 (~ 800) before
e-Choupal to Rs100,000
–
Rs120,000 (~ 1,600
–
1,900).12
E-Choupal has been useful not only for users but also
for ICT, because it has created profitable direct access
to farmers and raw materials without intermediary
fees.As of 2009, e-Choupal had reached 4 million Indian
farmers in 40,000 villages through 6,500 kiosks; the
goal is to reach 10 million farmers by 2012.
ICT’s impact on government services .Early
breakthroughs in e-government
—
such as the use of
ICT to provide and improve public-sector services,
transactions,
and
interactions
—
have
enabled
government organizations to deliver better services
more efficiently. In many countries, more than 70
percent of taxpayers now file taxes electronically, for
example, and many other transactions
—
ranging from
renewing drivers’ licenses and paying parking tickets to
managing government benefits
—
can be conducted
online. Citizens have a much easier and faster access to
government services. In Singapore, for example,
citizens can buy replacement identity cards online by
submitting digital passport-sized color photographs
and scanned copies of existing identity cards. Also,
when citizens are changing their residential address,
they need to submit just one single report and all
government agencies, educational institutions, and
selected private companies will automatically be
notified. A customer perception survey conducted by
the Ministry of Finance and Info comm in Singapore
showed that, in 2008, 85 percent of respondents made
transactions with government electronically, and 88
percent were satisfied, for four main reasons: it is easy
to find information, it is user friendly, the transaction is
fast, and it is easy to complete.21 In Malta, to take
another example, citizens can purchase online copies
of personal documents for themselves and family
members (e.g., birth, marriage, and death certificates)
dating back to the 1880s. Benefits for governments
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VOLUME
03
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21
-25
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(2022:
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)
OCLC
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1121105677
Publisher:
Oscar Publishing Services
Servi
that are offering these types of services are huge.
“As
recent research shows,” noted Eurochambres
Secretary-General Arnaldo Abruzzini in November
2009,“electronic procedures will
lead to more bidders
and thus increased competition, which could create
savings in the order of 150 billion EUwide.”
Unleashing the potential of ICT requires investments.
The economic and social benefits of ICT are clear.
However, this impact could be significantly increased if
the penetration of ICT, including mobile phones,
broadband, and PCs, was expanded. Figure 5 shows
the coverage of these technologies in the different
regions of the world. Developed countries have room
to continue to expand their current penetration of
these technologies, but also
—
and possibly more
pressing
—
emerging economies need to close the gap
with more advanced economies to reap the benefits of
ICT. If they can, ICT will likely bring them even more
significant benefits than it will to developed
economies. Increasing the penetration levels of high-
speed broadband, mobile, and PCs wasin developed
and developing countries will be extremely costly and
is not likely to be profitable for ICT companies alone.
For example, in the EU15 countries, McKinsey
estimates that the capital investments required to
bring high-speed, fixed broadband networks will be as
much as 250
–
300 billion over the next couple of
years.30 But in this same region, the industry will
generate some 250 billion in cash flows over the next
five years.31 That means that the industry would need
to invest all available cash to build these networks,
leaving nothing for maintenance or other types of
network upgrades, or anything else.At its current
investment rates, the industry would take some 15
years to roll out new networks.The situation is
obviously even more unbalanced in emerging
economies, where penetration levels are lower
—
and
consequently the necessary investments would be
higher
—
than in Europe. The estimates above indicate
that governments, at least in Europe, will need to
invest large amounts of money to enable their
countries with ICT. Making these investments work will
require a concerted approach among all industry
stakeholders.
Supporting the ICT strategy financially. Initial
government financial support to a country's ICT
strategy is crucial since economic benefits and demand
for some of the new services will necessarily be unclear
for industry players. Many countries in the world have
made significant investments in the past couple of
years.
The industry’s role: Deploying state
-of-the-art
networks and creating innovative products. The ICT
industry
—
more specifically, ICT companies
—
should
re-examine its potential and take advantage of its
significance in order to create social, economic, and
environmental benefits.This is not an industry that
should be looking for profit alone; it is an industry that
is part of the solution for many countries that face key
challenges such as climate change or economic
development for their people. Other industry
stakeholders, such as governments and regulators, will
start to expect more and more from the industry.
Failing to participate in helping countries and people
reap the benefits of ICT can actually put the industry’s
current business models at risk, if, for instance,
unfavorable regulations were to be passed. Industry
stakeholders can do this by concentrating on what
they do best: deploying state-of-the-art networks that
all citizens can access and developing innovative
products that help countries increase their social,
economic, and environmental sustainability. If done
strategically, many sustainability activities create
financial value for the ICT industry. Other recent
McKinsey research shows that these activities can
Volume 03 Issue 01-2023
25
International Journal Of Management And Economics Fundamental
(ISSN
–
2771-2257)
VOLUME
03
I
SSUE
01
Pages:
21
-25
SJIF
I
MPACT
FACTOR
(2021:
5.
705
)
(2022:
5.
705
)
OCLC
–
1121105677
Publisher:
Oscar Publishing Services
Servi
create financial value along the four dimensions of
value the market typically assesses: growth, return on
capital, risk management, and management quality.
Conclusion: ICT is an increasingly important industry
economically, and
—
because of the nature of its
products and services
—
one that can create significant
benefits for society as well. Increasing the reach of ICT
creates economic growth and enables better
healthcare, education, and government services,
among many other social benefits. And all this can
happen while ICT reduces its carbon emissions. The key
to reaping ICT’s economic and social benefits is
cooperation among the industry, regulators, and
government policymakers. Government has a central
role to play: in countries that have succeeded with ICT
investments, government has provided both a clear
strategy and crucial initial funding.We hope that a
better understanding of ICT benefits will encourage all
stakeholders to work together on the next generation
of ICT investment.
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