Raul L. Katz

The Economic Impact of Telecommunications in Senegal

While the economic impact of telecommunications has attracted the focus of attention of research in the past, the area of sub-Saharan Africa has only recently become the subject of inquiry. Furthermore, the study of the region represents a case study by itself. Socio-economic parameters like economic stability and growth, compulsory education, access to basic services, rule of law and control of corruption shape an unpredictable environment and certainly affect the impact that wireless and broadband may have. Additionally, embryonic fixed line networks, limited banking facilities and patchy transport links may have an accentuated impact on the development and use of digital networks. In this paper a unique country-level sample was assembled for Senegal for the period 2004-2011 in order to measure the effect of wireless and broadband on the economic growth of the country. Our preliminary results suggest that mobile phones have a measurable impact on economic growth and lie within the estimates of previous work on a much larger scale. On the other hand, the economic effect of broadband cannot be measured yet because the technology is at its very early stages of adoption. However, the rapid growth of third generation services during 2011 suggests a transformation in this type of network access, which might result in important economic effects in the future.

The Latin American path towards digitization

Purpose – Digitization is defined as the social transformation triggered by the massive adoption of digital technologies to generate, process, share and transact information. This paper seeks to present a methodology followed to calculate the Digitization Index, a concept originally developed by Booz & Company, the global management consulting firm, with the support of the authors.Design/methodology/approach – This index consists of six elements capturing Ubiquity, Affordability, Reliability, Speed, Usability and Skill and 24 sub‐indicators measuring tangible parameters of perceived digitization metrics.Findings – The index indicates that countries are clustered as Digitally Constrained, Emerging, Transitional or Advanced, with varying degrees of contribution of digitization to economic growth. The Index is used to assess the situation of Latin American countries in terms of their progression to digitally advanced societies. In this context, the areas to focus on in the formulation of Latin America digita...

Measuring Socio-Economic Digitization: A Paradigm Shift

Digitization is defined as the social transformation triggered by the massive adoption of digital technologies to generate, process, share and transact information. Unlike other technological innovations, digitization builds on the evolution of network access technologies, semiconductor technologies, software engineering and the spillover effects resulting from their use. This paper presents a methodology followed to calculate the Digitization Index, a measure of country level of digitization, a concept originally developed by Booz & Company, the global management consulting firm. This index consists of six elements capturing Ubiquity, Affordability, Reliability, Speed, Usability and Skill and 23 sub-indicators measuring tangible parameters of perceived digitization metrics. The sample spans across 150 countries from 2004 to 2010. Countries are clustered as Digitally Constrained, Emerging, Transitional or Advanced. Once the index is defined, hypotheses regarding the contribution of digitization to economic growth, job creation and welfare are tested. In addition, a critical mass hypothesis is also tested as additional returns might derive from network externalities and spillover effects. The results provide strong support for the effect of digitization across all growth generating metrics.

Addressing the Broadband Demand Gap: Drivers and Public Policies

The debate about the digital divide in the field of Internet use and broadband has, in large part, been generated around statistics of households that own a computer and have purchased a broadband subscription (in other words, service penetration). As a result, the political discussion and public dialogue have focused until now on the need to increase adoption based on wider coverage of telecommunications networks. The underlying premise of this statement is that if the problems that delay infrastructure deployment were addressed, the challenge of the digital divide would be overcome. Without denying that there is some causal relationship between investment and adoption, it is important to note that one of the key variables that explains the digital divide is located on the demand side, rather than on the supply side. The purpose of this paper is to analyze the divide from this perspective in industrialized countries and compare it with a similar phenomenon in Latin America.First, quantitative information is presented to demonstrate the existence of a gap in demand, even in industrialized countries. Based on this, the paper reviews the research conducted in the developed world, identifying common causal variables through statistics from different countries, pointing at the root cause of this shortfall. Having presented the situation in industrialized countries, the Latin American demand gap is then examined, focusing first on its size for those countries for which data are available. Following the same process as that of developed countries, the results of research carried out for Latin American countries are presented with the aim to explain the nature of the demand gap. This diagnosis provides a context for outlining policy recommendations that make it possible to address some of the adoption barriers.

The Impact of the Broadband Internet on Employment

This chapter argues that, based on the evidence, broadband contributes to the creation of jobs in certain industries and geographies, while also being a key factor in capital-labor substitution under certain conditions. First, broadband construction programs create direct, indirect, and induced jobs under attractive multipliers. Second, deployment of broadband in emerging countries enables them to attract employment from industrialized economies. Third, broadband Internet in advanced economies leads to the emergence of businesses that were previously nonexistent. Fourth, broadband enables businesses to redeploy functions in different geographies to benefit from the availability of wider labor pools or lower factor costs; this leads in turn to job creation in certain regions. Fifth, firms can rely on broadband to deploy distribution channels in unserved remote geographies, leading to additional job creation.

The Impact of Policy on the Performance of the ICT Sector

This chapter discusses and provides evidence surrounding the link between public policy initiatives, ICT sector performance, and its corresponding economic impact. In particular, it investigates the way in which policies might influence ICT diffusion and adoption, examining models of regulation and public policy and their relationship to specific sector performance. In doing so, it identifies certain public policies and frameworks consistently associated with above par sector performance. Going beyond specific policies, it aims to understand why some countries are more effective than others in implementing policy tools.