Transcript Next Generation Networks: Challenges for the Future Regulatory

ICTs for Economic Growth:
Theory, Policy Implications,
Case Studies
Jaroslaw K. Ponder
Strategy and Policy Unit
International Telecommunication Union
Briefing Session on Economics
22 May 2006, UNDP, Geneva, Switzerland
Note: The views expressed in this presentation are those of the author and do not necessarily
reflect the opinions of the ITU. Jaroslaw K. Ponder can be contacted at [email protected]
Agenda
•
•
•
•
•
•
•
Trends
Economic meaning of the ICT sector
ICTs versus economic wealth
Theory of economic growth
Policy implications
Global actions
Conclusions
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Trends: Macro Level
• Changes in economic structure in
developed and developing
countries
• Progressing internationalization
process accelerated via modern
communication means
• New challenges coming from
globalization process
• Economic meaning of information
changes: Migration to the
information based economy
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Trends: ICT Sector
• Progressing regulatory reform:
 Pro-competitive policy / Universal
service/access…
• Expansion of the Internet
• High innovation dynamics
• Falling prices of the ICTs:
 Hardware / Software / Services
• New requirements:




Bandwidth
Generalized mobility
Convergent solutions
Open character
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Trends: Broadband Access
Number of countries with broadband
commercially available
160
Number of countries
133
113
120
Data
Both
180
145
140
100
Evolution in Pricing Strategy
166
81
80
60
40
20
160
Time
Flat-rate
133
140
166
143
120
100
68%
80
81%
75%
60
40
20
0
0
2002
2003
2004
2005
2006
2004
2005
2006
T
Speed (kbps)
Median price and speed, 2004-6
1'800
16
1'600
14
1'400
12
1'200
10
1'000
8
800
6
600
400
200
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0
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2004
2005
Median speed
4
Median Price in
USD/100 kbps
2
2006
0
Price (USD per 100 kbps)
180
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Trends: Broadband Access
Table 1: Broadbandprices
prices for for
the cheapest
fifteen economies.
Broadband
the cheapest
fifteen economies
Speed
Price per
US$ per
Change
Economy
Company
kbit/s
month US$ 100 kbit/s 2005-06
Japan
Yahoo BB
51'200
14.2
0.07
-12.5%
Korea (Rep.)
Hanaro
51'200
40.59
0.08
-Netherlands
Internet Access Ned.
20'480
27.97
0.14
-81.3%
Taiwan, China
Chunghwa
12'288
22.67
0.18
-Sweden
Bredbandsbolaget
24'576
56.08
0.23
-6.5%
Singapore
StarHub
30'720
73.17
0.24
-85.0%
Italy
Libero
12'288
37.23
0.30
-73.8%
Finland
Elisa
24'576
85.64
0.36
-51.4%
France
Free
10'240
37.29
0.36
-90.1%
United States
Comcast
4'096
20.00
0.49
-Germany
Freenet.de
6'016
30.95
0.52
-United Kingdom Pipex
8'128
50.89
0.63
-53.6%
Hong Kong, China Netvigator
6'144
51.17
0.83
-0.1%
Portugal
Sapo
8'128
75.82
0.93
-0.8%
Canada
Bell
4'096
41.26
1.01
-3.93%
Average
18'278
44.33
0.43
-45.5%
Best
40'960
27.59
0.10
-46.9%
22 practice
May 2006(top 20%)
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Trends: ICT Sector
• Migration to the IP-environment
 Fixed telecommunications
Incumbents: British Telecom, DT AG, KPN
 Newcomers: Dialog, Metropolitan Networks
Multi-facility
competition

 Wireless communications
Mobile telecommunications: from 2G to 4G
 WiFi, WiMax

 Cable TV
 Broadcasting
 Service and content providers
Service
compet.
• Strengthened process of convergence
 Technology
 Market
 Services
22 May
Institutional
2006
Regulatory
Implications
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FMC?
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ICT Sector: Economic Meaning
Size of telecommunication market compared with GDP in CEE
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ICT Sector: Economic Meaning
Size of IT market compared with GDP in CEE, 2004
IT expenditure as % of GDP in 2004
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
3.00
2.80
2.40
2.20 2.30 2.10
2.00
1.90
1.60
1.40
A
ES
KI
O
VA
SL
TO
N
IA
SL
O
VE
N
IA
LI
TH
U
AN
IA
LA
TV
IA
R
O
M
AN
IA
BU
LG
EU
AR
(2
IA
5
co
un
tri
es
)
C
ZE
C
H
R
EP
U
BL
IC
Y
G
AR
H
U
N
PO
LA
N
D
0.30
Source: ITU (2005)
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ICT Sector: Economic Meaning
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ICT Sector: Economic Meaning
B
A
ICT Infrastr.
and Services
Economic
Wealth
Economic
Wealth
ICT Infrastr.
and Services
What is
true?
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Investigating particular character
of ICT sector potential in region
Diffusion Determinants
Institutional Approach
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Infrastructure
and Services
Economic
Wealth
Economic impact of ICTs
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Investigating particular character of
the ICT sector
Diffusion of ICTs in CEECs
– Muller, Salsas (2003) – Determinants of the
Internet Usage : internet hosts, income per capita,
openness, education, political and civil freedoms,
state of transition towards a liberalized
telecommunications regime, the state of the
telecommunications infrastructure, cost of telephone
 Internet usage costs do not explain cross-country
differences in the number of Internet hosts and users
– Muller, Salsas (2004) – Significant determinants of
the Internet usage in enterprises: trade, company
size, computer usage, degree of the telecom market
liberalization
- Ponder, Markova (2005) – Diffusion of mobile
telecommunications
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Investigating particular character of
the ICT sector
Institutional Approach
• Piatkowski (2003) – New Economy Indicator – level
of institutional readiness of transition economies for
adoption of the New Economy. Slovenia, Czech
Republic, Hungary and Estonia belong to the regional
leaders. (NEI Factors: regulation, infrastructure, trade,
financial system, R&D, human capital, labour market
flexibility, product market flexibility, entrepreneurship,
macroeconomic stability)
• Piech (2004) – Knowledge Assessment Methodology
of World Bank (KAM Methodology: GDP, HDI, Tariffs,
Property rights, Regulation, Researchers in R&D, Manuf.
Trade, Adult literacy, …, Telephones, Computers,
Internet hosts). Czech Republic and Estonia, the most
promising countries of region. The same structure as
developed countries.
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Measuring
Opportunities
Institutional Approach
- WSIS (2005) - Digital Opportunity Index
1/3
Opportunity
WISR 2006
New ITU’s Series
Utilization
1/3
DOI
Infrastructure
1/3
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Digital Opportunity
Index
percentage of population
covered by mobile
cellular telephony
internet users
per 100 inhabitants
ratio of broadband
internet subscribers to
internet subscribers
mobile cellular tariffs
as a percentage of
per capita income
internet access tariffs
as a percentage of
per capita income
DOI
proportion of households
with a computer
Proportion of households
with fixed line telephone
mobile cellular subscribers
per 100 inhabitants
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ratio of broadband
mobile subscribers to
mobile internet subscribers
mobile internet subscribers
per 100 inhabitants
proportion of households with
Internet access at home
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Digital Opportunity Index in
developed economies and CEE
• DOI
 Leaders: Korea, Hong
Kong and Japan
 CEE: High opportunities
but low utilization
• Mobile component
and broadband
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Economic growth and the ICTs
• Sources of economic growth
 Increased use of land, labour, capital and
entrepreneurial resources by using better
technology or management techniques
 increased productivity of existing resource
use through rising labour and capital
productivity
Some Concepts
•Transaction costs
 Transaction costs

Private and business
 Death of distance

Virtual mobility
•Neoklasisc Growth Theory
•Production function
•Innovation dynamics
•Trade Opening-up
• New research challenges
 Broadband, Mobile Telecommunications
22 May
Next
2006 Generation Networks
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Investigating particular character of
the ICT sector
Economic Growth
• Kolasa, Zolkiewski (2004) – Poland: ICT investment
contributes positively to TFP growth
• Piatkowski (2003) – CEEC-8: ICT capital contribution
to output growth and labour productivity (extraordinary
increase in real ICT investment caused by a) falling
prices of ICTs, b) higher-than normal returns on
investment)
• Rajasalu, Laur (2003) – Estonia: low contribution of
ICT sectors in Estonia´s output. The evidence of direct
positive impact of high-tech, medium, high tech and
knowledge intensive industries on economic growth is not
very convincing. High dependence on subcontracting and
transfer pricing makes the contribution of high and
medium-high tech industries rather low. Economic growth
is influenced more by indirect impact of ICT that made
the economy as a whole more competitive and helped to
attract investments and create new jobs.
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Investigating particular character of
the ICT sector
Economic Growth
- ECTA (2006) – Positive and statistically significant
relationship between regulatory effectiveness and
investment
 For every 1% increase in regulatory effectiveness
there will be a 0.47% increase in investment.
Investment needed to build an electronic
communications sector
• Van Ark (2005) – Old and New Europe:
Contribution of ICT investment to productivity growth
is positive and significant but differentiates between
all CEECs exist.
 Champions: Czech Republic, Hungary
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Investigating particular character of
the ICT sector
Economic Growth
• Perminova (2004) – Russia: ICT contribution to the labor
productivity growth 1996-2000 in:
 ICT using sector - even 5 times bigger than in Europe and
2 times as big as in USA,
 non ICT using sector - like in USA,
 ICT producing sector - very small 1/10 of European or USA
achievements.
• Waverman (2005) – Developing Countries
 Positive impact of mobile telecommunications on the
economic growth in developing countries
 Differences in the penetration and diffusion of mobile
telephony certainly appear to explain some of the
differences in growth rates between developing countries.
If gaps in mobile telecoms penetration between countries
persist, then our results suggest that this gap will feed into
a significant difference in their growth rates in future.
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Conclusions I
• Regulatory reform together with
pro-competitive public policy fosters
digital modernization.
• Digital modernization should be a
key word for all economies
• The proves of the economic meaning
of ICT sector opens the new
perspectives in terms of the
economic policies.
• This is in particular important for
developing countries and countries
in transition as the ICT sector may
lead to accelerated catch-up process
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Global Initiative: WSIS
• World Summit on the
Information Society
 Proposed by Tunisia at
ITU Plenipotentiary
Conference, 1998
 Endorsed as UN Summit
in 2001 (UNGA Res
56/183)
• Unique Summit
• Outcome Documents
 First Summit in two
Phases
 True Multi-Stakeholder
Process
 Numerous Parallel
Events
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www.wsis.org
 Geneva Declaration of
Principles
 Geneva Plan of Action
 Tunis Commitment
 Tunis Agenda for the
Information Society
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WSIS Outcome
•Geneva Declaration &
Tunis Commitment
 Shared vision and
principles of overcoming
•Geneva Plan of Action
the Digital Divide and
achieving MDGs
& Tunis Agenda
 Affirmed a unified
 Build an inclusive,
approach to Cyberdevelopment oriented
security
Information Society
 Reiterated Stakeholders
 Set 11 Action Lines
Commitment to freedom
 Target of 2015
of expression online
 Set, benchmarks and
 Enabling environment
evaluation processes
(good governance,
 Financial Mechanisms
transparency and pro Internet Governance
competitive policy)
 Implementation and
 Encouraged development
Follow-up
of localized content and
multilingualism
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Tunis
Commitment
• 12. We emphasize that the adoption of ICTs by
enterprises plays a fundamental role in economic
growth. The growth and productivity enhancing effects
of well-implemented investments in ICTs can lead to
increased trade and to more and better employment.
For this reason, both enterprise development and
labour market policies play a fundamental role in the
adoption of ICTs. We invite governments and the
private sector to enhance the capacity of Small,
Medium and Micro Enterprises (SMMEs), since they
furnish the greatest number of jobs in most
economies. We shall work together, with all
stakeholders, to put in place the necessary policy, legal
and
regulatory
frameworks
that
foster
entrepreneurship, particularly for SMMEs.
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Tunis
Agenda
• 90. We reaffirm our commitment to providing
equitable access to information and knowledge for all,
recognizing the role of ICTs for economic growth and
development. We are committed to working towards
achieving the indicative targets, set out in the Geneva
Plan of Action, that serve as global references for
improving connectivity and universal, ubiquitous,
equitable, non-discriminatory and affordable access to,
and use of, ICTs, considering different national
circumstances, to be achieved by 2015, and to using
ICTs, as a tool to achieve the internationally agreed
development goals and objectives, including the
Millennium Development Goals…
» (Para 90, Tunis Agenda)
• Selected measures: e-strategies, enabling policies,
enabling regulatory environment, ICT capacity, econtent,
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Conclusions II
• ICTs create new opportunities for
accelerated socio-economic catchup process
• ICTs will help to achieve
Millennium Development Goals
• International actions play very
important role but…
• There is no unified public policy
applicable for each country without
exception
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Thank you very much
for your attention!
Jaroslaw K. Ponder
International Telecommunication Union
Strategy and Policy Unit
E-mail: [email protected]
http://www.itu.int/spu
Tel: 00 41 22 730 60 65
22 May 2006
We all build global
Information Society!
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Resources
• Full version of this presentation and
others focusing on ICT4D&EG:
www.itu.int/osg/spu/presentations/
• ITU Strategy and Policy Unit
recourses:
www.itu.int/spu
• ITU Publications:
www.itu.int/bookstore
• WSIS:
www.itu.int/wsis
22 May 2006
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International
Telecommunications Union
We all build the global knowledgebased
information society!
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ITU - International
Telecommunication Union
• The oldest specialized UN agency with
more than 140 years of experience in
communication sector
• Headquarters in Geneva, Regional
Offices Worldwide
• ITU Staff: more than 750 from more
than 80 countries
• 189 member states, more than 700
sector members
• ITU Agenda for Change
• Structure of the ITU
 ITU-T – Telecom Standardization
 ITU-R – Radio-communications
 ITU-D – Development Bureau
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ITU – International
Telecommunication Union
22 May 2006
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ITU’s Strategy and
Policy Unit (SPU)
• New Initiatives Programme
Digital Bridges (2005)
Ubiquitous Network Societies (2005)
Today’s Networks Tomorrow (2005)
What Rules for IP-enabled NGNs? (2006)
Digital Transformations in the Information
Society (2006)
 Regulatory Environment for Future Mobile
Multimedia Services (2006)
 Future of Voice (2007)
• Many other activities…





22 May 2006
http://www.itu.int/spu
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Internship at the ITU
www.itu.int/employment/stages.html
• ITU internship programme
 The Union runs a non-remunerated internship programme for
students who wish to improve their skills and gain experience
working in an international environment. This programme is
open to all undergraduate and graduate students from ITU's
189 Member States. Candidates are selected in response to
specific
needs
identified
within
ITU
departments.
No specific deadline for application
• Strategy and Policy Unit competition
 SPU launched its first essay-writing competition under the
"Young Minds in Telecoms" Programme in November 2004. The
competition was open to graduate students and recent
graduates in economics, political science, law, literature,
telecommunications, computer science, information systems
and related fields.
Deadline: March 2007
[email protected]
22 May 2006
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