On the weightless economy: Evaluating ICT sectors in the European, Asian and African regions
Doctoral thesis, 2012
One of the most distinctive characteristics of the weightless economy is the increasingly important role of the Information and Communication Technology (ICT) sectors, which, according to the OECD (2009), consist of ICT products and media and content products. The ICT sectors have been identified as contributing significantly to the economy through production, measured by the value of the ICT outputs produced and the spillover effects to the other sectors, and the diffusion due to the higher penetration rate of ICT products and services and the impact of the end-users. This dissertation aims to investigate the problems underlying the production and diffusion sides of the ICT sectors based on specific characteristics in the European, Asian and African regions.
On the production side, the dissertation found that the low contribution by the ICT sectors to the output of the European economy during the later period of observation (2000-2005 compared with 1995-2000) is due to the sectors’ high dependence on export effects and technological change effects, which have both declined. In Asia, a case study in Indonesia showed that the lower impact of the ICT sectors on the economy can be addressed from the dominant size of the domestic final demand affecting the change in output. Thus, the country is unable to upgrade the ICT sectors, as the general purpose technology (GPT) is supposed to allow greater linkage to be generated to the other sectors.
On the diffusion side, the dissertation found no evidence that any of the ICT devices have a long-term relationship with the socio-economic variables in Asia, particularly primary education and health. As in Asia, access to ICT devices (cellular and the Internet) has had very little impact on closing the income gap or on other quality of life (QOL) indicators, namely participation and productivity, in the African region.
On responding to these problems, the study found that a continual price decrease in the ICT sectors will lead to higher GDP growth as well as an increase in the inter-relatedness between ICT and the rest of the economy, solving the problem of disconnection in the European region. Moreover, the upgrading of broadband deployment that corresponds to increasing the speed level is also believed to enable greater opportunity for the European region to move forward in terms of economic progress. In Asia and Africa, there is an urgent agenda to build a stronger linkage between the rapidly growing ICT sectors and the socio-economic variables in the future as many studies have found that there is no linkage between production and diffusion in the region. Infrastructure provision is the most important issue in this regard.