High speed internet is key to economic growth and job creation in developing countries, says new World Bank report

 
 
DHAKA, July 1, 2009 — A new report from the World Bank Group finds that access to affordable, high quality internet and mobile phone services enables development across all levels of the economy and society.

Information and Communications for Development 2009: Extending Reach and Increasing Impact takes an in-depth look at how ICT impacts economic growth in developing countries. The report finds that for every 10 percentage-point increase in high speed Internet connections there is an increase in economic growth of 1.3 percentage points. It also identifies the mobile platform as the single most powerful way to reach and deliver public and private services to hundreds of millions of people in remote and rural areas across the developing world. 

“Internet users in developing countries increased tenfold from 2000 to 2007, and there are now over four billion mobile phone subscribers in developing countries,” says Mohsen Khalil, World Bank Group Director for Global Information and Communication Technologies. “These technologies offer tremendous opportunities. Governments can work with the private sector to accelerate rollout of broadband networks, and to extend access to low-income consumers.” 

The World Bank in Bangladesh is providing technical assistance on stock-taking of the ICT sector, including in IT-enabled services (ITES) and government use of ICT, mobile telephone-based payments, and for the Digital Bangladesh program.

Broadband also provides the basis for local IT services industries, which create youth employment, increase productivity and exports, and promote social inclusion. Developing countries should seize this largely untapped opportunity, with less than 15 percent of the potential global market for IT services industries currently being exploited. In 2007, this market represented nearly US$500 billion.

“Governments should proactively encourage the development of local IT services industries through policies and incentives directed at entrepreneurs and the private sector, and through investments in skills and infrastructure,” says World Bank Economist Christine Zhen-Wei Qiang, editor of the report.

The International Finance Corporation of the World Bank Group is looking at a potential investment in a broadband operator in Bangladesh and has supported telecommunications firm Grameen Phone with senior debt and equity investments.

“Access to broadband completes the information foundation for a modern economy and should be a priority in national development plans.” says Katherine Sierra, World Bank Vice President for Sustainable Development. “Governments can play a key role in expanding broadband access by policies and incentives that encourage competition and private investment.”

The report builds on experience drawn from the Bank’s own significant involvement in the sector. The Bank Group is the largest international donor in the field of ICT for development and supports ICT activities projects in over 100 countries with a portfolio amounting to more than US$3 billion.