6 December 2006

Nigeria: Effects of ICT On Economic Growth in Nigeria (i)


Lagos — Information and Communication Technology (ICT) offers many promises and opportunities, even while posing serious threats and uncertainties. Its impact is likely to be invasive.

Harnessing ICT for development requires a strategic framework that takes advantage of various ICT roles which helps integrate the options made possible by technological revolution into the design and implementation of sector development strategies. As such, ICT is not just a sector of the knowledge economy, but a lens through which new possibilities and modalities of comprehensive development can be realised.

Thus, ICT should be viewed not only as a sector in competition with others for scarce resources, but also as a cost-effective tool that enable all sectors to meet human rather than traditional means.

Past general-purpose technological revolutions such as electricity and the railroads have clearly yielded major benefits, although their diffusion took several years.

ICT has several striking similarities with past revolutions, but also notable differences: the fall in the relative prices of ICT goods has been very sharp, and the benefits seem to be coming much faster than those of past revolutions.

Production of goods embodying the new technology is much more globalised.

The impact of ICT in Nigeria may be in infancy. Since the industry is still undergoing revolutionary change, much of these technologies are yet to diffuse to the majority.

The Three Fundamental Roles of ICT in the technological evolution are:

- Accessing information and knowledge, with dramatic increase in the power and speed to access, process, adapt, and organise information. This, in turn, has accelerated learning, innovation, and knowledge creation and dissemination. In this sense, ICT may have the profound impact of the invention of the printing press.

- Speeding up and reducing the costs of production and transactions throughout the economy. ICT is increasingly embedded into all types of production, processes, and transactions, giving rise to intelligent products and real-time control processes, facilitating trade, outsourcing business-support and back-office services, and enabling complementary organisational innovations. In this sense, ICT may have implications similar to those of the steam engine, electricity, and the railways in transforming production and transportation systems.

- Making connections among people, NGOs, enterprises, and

communities. This gives rise to empowerment, participation, coordination, decentralisation, social learning, connecting communities of practice, mobilising social capital, and globalising civil society concerns.

ICT should not be treated as an isolated sector; it should be used as a lens to re-think development strategies, as a tool to enable all sectors, and as a new and powerful means to empower the poor. This does not mean that i believe in ICT as a technology fix, but that an understanding of the full potential and implications of the ongoing technological revolution is necessary to realise its potential for development far beyond its contribution as a sector.

It is critical to understand how ICT is vital to the lives of the citizen especially the poor, and how ICT could enhance their access to markets, institutions, services, education, and skills.

Lack of efficient information and communication processes makes public institutions slow and unresponsive, and shifts much of the burden of transactions onto citizens, particularly the poor. Poverty has multiple and mutually reinforcing causes, and lack of access to information and communication exacerbates all of them. The poor lack access to information about income-earning opportunities and market prices for goods they produce, about health, about their rights, and about public and welfare services. They lack access to knowledge, education, and skills to improve their livelihoods. They lack voice in the political and development processes that shape their lives. If they can have access to relevant information and the tools to communicate with others, the poor can make their choices, articulate their interests, engage in social learning, and have more power over their lives.

The impact of ICT touches almost all areas of life, in organisations, markets, innovation, education, employment, poverty alleviation and many more.

Impact on Organisations: The reorganisation of production and distribution around ICT has enabled the adoption of new processes, procedures, and organisational structures, which in turn have led to sustainable gains in productivity, quality, and responsiveness. The forces of globalisation and increased competition, combined with the ICT revolution, have spurred organisations to focus on their core competencies while outsourcing increasing amounts of activities and services. These organisations are also designing their supply chains ever more tightly and strategically. Multinational corporations have become dense communication networks, with vast extended boundaries.

ICT has made it possible to have very large-scale organisations that are at the same time flexible, agile, and focused.

Together, ICT and complementary organisational innovations are enhancing access and management of information resources, accelerating product innovation, empowering project-based teams, and enriching learning and knowledge sharing at all levels of the extended enterprise. A new breed of event-driven organisations is emerging to exploit and tailor real- time information for decision making and service delivery.

Consequently, companies are giving increasing attention to their information infrastructure, knowledge management, and communication competencies.

Information revolution is changing the institutions of governance by enabling more access to information, and thus transparency, accountability, and citizen empowerment.

This potential presents many promises and daunting challenges for governance. Power over information is being decentralised, fostering new types of community and different roles for government.

Moreover, governments are the largest collectors, users, and disseminators of information resources on individuals and the economy, and their information-sharing infrastructures and knowledge management practices have major consequences for citizens, businesses, and the functioning of government institutions. Thus, ICT and the Internet in particular, can be harnessed to transform public agencies, public service delivery, and even the basic function of governance. ICT is also being applied to the legislative and judiciary branches of government to enhance citizen participation in policy formulation and monitoring and to promote democracy and the rule of law.

Creating information rich environments means not only assuring transparency, but also assuring that multiple voices including those of the disadvantaged are heard.

Impact on markets: ICT is transforming global and local markets. Electronically mediated markets are profoundly affecting the cost, speed, and transparency of market based transactions. For example, available evidence shows that electronic markets are more transparent and efficient. Countries that are more fully integrated into the global market or that have high shares of trade in sectors where e-commerce is used intensively, must position themselves to adopt e-commerce practices, or otherwise risk losing their position in the value chain.

E-commerce transforms traditional transactions and creates new marketplaces in three ways: (I) By altering the process by which transactions takes place e.g., putting the supply chain online to improve inventory control and quality management. (II) By creating new products and services e.g., personally tailored products such as garments. And (III) By creating new markets in time, space, and information that did not previously exist e.g., global auction markets, sales of artisanship.

Business to business net based transactions is transforming supply chains across the globe, leading to the rise of new channels.

At a more basic level, information and communication are the lifeblood of efficient markets, and ICT could develop markets and alleviate poverty even without advanced ICT applications like e-commerce. Market prices act as coordinating signals for producers and consumers.

Implications on poverty reduction: The impact of ICT on the poor is at an early stage, but the potential is being demonstrated at the micro, intermediate, and macro levels. The impact of earlier information and communication technologies, particularly radio and television, are better known, although their use as tools for informing and educating the poor is still not fully exploited. The new ICTs do not replace the older technologies but can blend with them and extend their reach, enrich and tailor their content, and add new forms of many-to-many communication and action that bypass traditional power relations.

ICT opens up opportunities for the poor and small enterprises, even in remote areas. ICT offers the opportunity to provide investment resources to groups previously denied them, ICT can also help intermediary institutions and local agents to work more efficiently and responsively and to target interventions to the needs of the poor: intermediaries such as health workers, agricultural extension agents, teachers, local planners, and local NGOs. Various applications of ICT are also used to reduce vulnerability to natural disasters, where the poor are the most vulnerableóespecially in communication and response, awareness raising, and community involvement in hazardous reduction activities.

ICT can also allow monitoring and enforcement of environmental quality.

Other impacts will be discussed later in this column.

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