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Thursday, 29 January 2009 11:40

ICT is the key to saving the economy: professor

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A new report demonstrates that the key to turning around the world's economic woes lays with the increased use of ICT, according to the author, a leading business professor. What's more, nearly every country in the world, including the US had room to grow their use of ICT through focussed infrastructure programs.

Professor Leonard Waverman, Fellow of the London Business School and author of Connectivity Scorecard 2009, a report commissioned by Nokia Siemens Networks, measured the extent to which governments, businesses and consumers in 50 countries make use of connectivity technologies to enhance economic and social prosperity.

While the US topped the list for the most "connected" country, closely followed by the Scandinavian countries, Professor Waverman says even the US has considerable scope for further ICT infrastructure expansion.

Professor Waverman calls on governments to stimulate return to growth with investment in the “infrastructure for the 21st Century”. He defines connectivity as the bundle of infrastructure, complementary skills, software and informed usage that makes communications networks the key driver of productivity and economic growth.

“At a time when governments around the world are looking to jump start their economies with a variety of stimuli packages, the Connectivity Scorecard shows that every single one of them, even the United States, has plenty of room to develop their ICT infrastructure and improve the actual use of it to the benefit of both the economy and society,” said Professor Waverman.

“Communications networks are the infrastructure of the 21st century and these networks are very large construction programs. There is great potential for them in using ICT to stimulate growth.” 

The Connectivity Scorecard 2009 ranks the United States first in the group of 25 innovation-driven economies, while Malaysia leads a table of 25 resource and efficiency-driven economies.

Australia ranked 8th in the group of innovation driven economies, behind the US, Sweden, Denmark, Netherlands, Norway, UK and Canada, but well ahead of Japan, Germany, France, South Korea and Italy,among others.

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The rankings are determined by the measurement of each country against two criteria – infrastructure and usage plus skills – in the realms of business, government and consumer, with weightings of each of the three tailored to each country. Low scores reflect gaps in a country’s infrastructure, usage or both.

For each of the six components of the Scorecard, countries are benchmarked against the best in class in their tier; thus if a country was best in all dimensions, it would score a maximum of 10. The Scorecard, therefore, measures countries against the best ICT usage that currently exists rather than an ideal model.

The United States scores 7.71, illustrating that not only is there considerable room for improvement in comparison to its peers in aspects of its performance, but also that there is scope for development beyond that. The Scorecard finds, for example, that the United States achieves a somewhat low score in consumer infrastructure where 3G penetration, and even household broadband penetration, is moderate by standards of other innovation-driven economies.

Australia's score of 6.14 reflects weak consumer connectivity offset by excellent business connectivity, according to the report.

"While 3G telephony enjoys excellent penetration, Australians are less likely to possess the same skills or usage habits as those found in the Scandinavian countries which top the list. However, when it comes to business infrastructure and usage Australia posts excellent numbers in terms of internet commerce and the use of PCs in the workplace.  The country’s recent period of economic growth is accompanied by average spending when it comes to computer equipment, software and services," the report states.

“The example of the United States shows very clearly that even the wealthiest and most technologically advanced countries still have a great deal to gain from further development of ICT infrastructure as well as the training and skills development to exploit those connectivity technologies to the limits of the potential,” said Ilkka Lakaniemi, head of global political dialogue and initiatives at Nokia Siemens Networks.

That need has already been recognized by the leadership of the US Congress which, in alignment with the objectives of the new US administration, is proposing, as part of its economic stimulus plan, multi-billion dollar investments in broadband “in under-served areas to strengthen the economy and provide business and job opportunities in every section of America, with benefits to e-commerce, education, and health care”.

While this initiative was welcomed by Professor Waverman, he argued that there was room for further investment in the United States and beyond:

“The issue is not just infrastructure in under-served rural areas, but also skills development, fibre in urban areas and wireless developments."

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Stan Beer

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Stan Beer co-founded iTWire in 2005. With 35 plus years of experience working in IT and Australian technology media, Beer has published articles in most of the IT publications that have mattered, including the AFR, The Australian, SMH, The Age, as well as a multitude of trade publications.

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