Transcript New Economy, Growth and Poverty

New Economy and Poverty
Presentation by
Pietro A. Vagliasindi
“New Media” & “New Economy”:
Institutions, Regulations and
Implications for Growth and Development
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Market system facilitated by the interactions between:
• technology (high-speed communications, powerful
network of computers and the Internet,
• globalisation reflecting also a deliberate policy to
reduce barriers to the mobility of goods and capital.
It implies:
• new rules of the game (new way of organising
production and delivering value to consumers),
• long term growth when markets are supported by
appropriate regulatory frameworks.
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Building Blocks: Telecom Infrastructure + Internet
Availability/Affordability + E-services Readiness;
Connectivity (Access),Cash (Financing), Competition,
Competencies (Human Resources), Creativity,
Communities, Cooperation
•Issues:
 turbulence, instability, complexity, interdepend.
 regulation but also openness and freedom
 time is “accelerating”: convergence or inequality
 knowledge is the essential driver of development
 significant opportunities for new entrants
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Source: WB report
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There are benefits and risks in joining, but not
participating may imply greater losses:
• Costs of being left out may be permanent:
poverty and marginalisation may increase
• The forces of globalization are making this
one economy and one world
• Probably there is no longer an alternative.
Opportunities:
 Overcoming geographical barriers
 Cutting transaction cost
 Streamlining the distribution chain
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Info Infrastructure (scope and quality)
Adopter
Countries’
revolution
US revolution
Convergence
Divergence
Latecomer
Countries
Time
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Access is Concentrated in a Few Countries
Divide Between
62%
High Income
16%
v
Population
Mainlines per 100 Inhab. in 1998
Mainlines (inc. cellular)
Divide Within
70
60
50
40
30
20
10
0
High Upper Mid. Low Mid.
Income Income
Income
Urban
Low
Income
Rest of the Country
7
Telephone Lines per 100 Population
Rest of the
Country
Teledensity
Urban
High Income
49.5
60.2
47.8
Upper Middle Income
15.4
24.3
13.8
Low Middle Income
8.0
23.3
6.6
Low Income
1.4
5.7
1.0
10.3
25.0
9.1
World Average
Source: ITU, World Telecommunication Development Report, 1999
8
30
293
25
49
20
15
10
5
0
Latin
America
East
Asia
Baltics
CEE
SEE
CIS
EU
USA
ITU (2000) Internet host (computer linked to the worldwide Internet network) per 1000 inhabitants
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Developed:
312 host per
10’000 people
Canada & US
Australia,
Japan & New
Zealand
7.0%
Developing:
6 host per 10’000
people
Other
4.6%
64.1%
Europe
24.3%
Developing
Asia-Pacific
2.9%
LAC*
1.2%
Africa
0.5%
Data Source: ITU 1999 “Challenges to the Network: Internet for Development”
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Internet diffusion in EU accession countries
40
1995
2001
35
30
25
20
15
10
Source: ITU(2001) Internet hosts per 1000 inhabitants
Romania
Bulgaria
Lithuania
Latvia
Poland
Slov Rep
Slovenia
Hungary
Czech Rep
0
Estonia
5
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Source: EU12
report
• Favour economic growth and develop enterprise.
- enhanced competitiveness
- increased business opportunities
- access to market for rural communities
- human resource policies are critical
- proactive approach to promote investment in poor areas
• Improved public and social services
- improved responsiveness & efficient services
- better health/education/environmental services
- reducing vulnerability to natural disasters
• Empower the poor and break marginalisation.
- cut costs, speeds delivery of gov’t services
- equal access to government for all
- allowing the poor to better communicate their concerns
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•Make the population part of governance process,
guaranteeing greater transparency.
- improved efficiency on government procurement
- reduced corruption
- increased civil society participation
Digital Public Service Quality
Source: EU report
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• The US miracle can be in part credit to ICT and its
impact on the rest of the economy.
• It may represent a great opportunity for Italy, EU
and other countries to accelerate development.
 Enhanced telecoms facilitate participation in the
information economy and international trade.
 Internet adoption is strongly correlated to
innovation, foreign competitive pressure, export
orientation and to better performance in terms of
employment and sales growth.
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Government
C to C: eBay
(auctions)
B to G : public procurement
trade procedures (Customs)
Partners
Enterprises
B to C
(at home or abroad)
Consumers
B to G
Tangible products
Intangible (digital)
Services
B to B
B to C : Internet sales, interactive B to B : Internet, Intranet, Extranet
EDI-based transaction (tenders)
TV and telephone sales, etc...
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Cost of banking transactions
1.4
1.2
1
Cost of trading transactions
160
140
120
100
80
60
40
20
0
US$1.27
0.8
0.6
0.4
0.2
0
Branch
$150
$69
service
Full-
US$0.27
broker
Discount
$10
broker
Online
ATM
US$0.01
Internet
Source: Andersen Consulting
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Source: EU report
• for sellers:
– lower barriers to entry and transaction costs
– world-wide access to buyers
– faster adjustment to changing market
conditions
– more information on transactions and
customers
• for buyers:
– More information on available goods and
services
– Lower prices and more choices
– Time saving and convenience and 24 / 7
access
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– Access to hardware, software, Internet
– Taxation, government licensing & regulation
– Speed of Internet connections
– Skills needed to use new systems
– Privacy, consumer protection
– Security, payment mechanisms,
authentication
– Spamming and other advertising issues
– Adjustment to constant, rapid change
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•
•
•
•
•
•
•
Development is characterized by choices and
influenced by institutional diversity.
Multi-dimensional and path-dependent.
Technological and institutional changes.
Learning process and imitation.
Social transformation and power of ideas.
Mechanisms linking growth and poverty are
time-dependent and context-specific.
Public and private sectors critical to growth
and poverty.
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• Shared prosperity and a fair economic system.
• Broader participation
economic future.
in
shaping
socio-
• New policies and institutions for workers,
families and communities in the new economy.
 Trough policy, legislation and regulatory reforms.
 Spreading knowledge and new technologies.
 Incentivating research, education, training and
foreign investment.
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Economic Growth
Redistributive Issues
• “The size of the pie”
• “Who gets the biggest
and smallest slices”
• Total output
• Per capita (average)
income
• Decent standard of
living for all?
• Shared prosperity and
a sound economy
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Poverty Worldwide
Poverty in the US by Gender
Source: WB report
Worldwide Perspective
Source: US report
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• Assist in info gathering and dissemination
• Many health problems (cf. HIVpandemic)
are related to prevention and access to info
• Help controlling epidemics and contagious
diseases, improving health care for the poor
and remote population.
• Telemedicine can bring medical expertise to
local communities by direct diagnosis, XRay reading, etc.
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• Economic develop. and poverty reduction
are strongly correlate with education
• Applications to teacher training and
updating in remote areas
• Overcome problems of empty libraries and
inadequate staff in higher education
• Can reach areas and individuals where
traditional Universities do not
• Information and feedback are key to
adaptation and learning.
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Lectures via Internet
Content
Providers
On-Line
Library
• Full-text
journals
• Abstracts
with index
Textbooks
WWW Site
Course notes
Journals
Local
Support Students
Live Sessions / E-mail Interaction
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Who is lagging behind?
• Education: do income rise with higher degrees?
• Gender: is gender gap still relevant?
• Older: are pensioners’ conditions worsening?
• Geography: do we have large north-south gaps?
• Union: do union members earn more?
• Ethnicity: do whites earn more?
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Source: EU report
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• Greater participation in the labor market
– more women in the labor market
• Increasing part-time work in low-wage
industries and occupations?
– 1 out of every X workers lives in poverty
– almost 1 out of Y children lives in poverty
– poverty in the South is significantly higher
• Unemployment remains high
– significantly higher in the South and Island
– especially for young and women
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to: bridge the digital divide and knowledge gap
with EU and US increasing access and
education by:
 providing a proper legal and regulatory
environment
 improving infrastructure, infostructure and
trust
 enhancing human resources and know-how
through education and training
 reforming social security, labour market and
taxes
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Thank you very much
for
your time and attention
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• How is the structures of our economy changing?
•
Using ICT to increase pro-poor quality of growth?
• Do the socio-economic systems and families meet
the challenges of the new economy?
• Are benefits of economic growth widely shared?
• Which ‘indicators’ adequately
development and poverty trends?
describe
the
• Are we investing enough in poverty and selfsufficiency?
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• Can we keep up with the changing nature of
trade and competition?
• In this more globally competitive world, is
economic growth widening inequality?
• Is the digital divide growing or shrinking?
• Revolution in knowledge: are gaps widening?
• Transformation of jobs and lives: working and
living longer in the new economy ?
• Which consequences on poverty and exclusion?
• Which implications for public policies?
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• ICT can be used to organise knowledge,
information and education to reduce
poverty.
• Reforming institutions supporting socioeconomic security and career develop.
• Investing in education, health care, child
care, housing, transportation
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