Second Ministerial Conference on the Information Society in

Second Ministerial Conference on the Information Society in Latin America and the Caribbean -- San Salvador, 6 -8 February 2008 The Information Society in Latin America and the Caribbean: Development of Technology and Technologies for Development José Luis Machinea Executive Secretary, ECLAC

Issues I. Digital paradigm: diffusion and impact II. ICT development: hardware, software, telecommunications III. ICTs for development: applications and content IV. Policies for development with ICTs

Paradigm and digital future • ICTs, general-purpose technologies – New technological and production paradigm based on the digitization of operations • Acceleration of the pace of change – As much technological progress will be made between now and 2010 as has been made since the microprocessor was invented in 1973 • Technological development exogenous to the region The speed of technical progress is constantly posing new challenges

Penetration of ICTs in 2002 and 2006 (Percentages)

Penetration of ICTs in 2002 and 2006 (Percentages)

Diffusion of the digital paradigm: The digital divide is a moving target! COMMUNICATION CAPACITY (fixed and mobile telephony and Internet) (Megabytes per second per capita) Source: M. Hilbert, P. López and C. Vázquez, "ICT innovation avenues and the amount of digital information: deepening comprehension of the digital paradigm", Santiago, Chile, ECLAC, 2007, unpublished.

Diffusion of the digital paradigm: Pooled access to advanced services % of penetration in 2006 Source: Observatory for the Information Society in Latin America and the Caribbean (OSILAC), on the basis of International Telecommunication Union (ITU), “World International Indicators Database”, 2007.

The domestic divide • Multiple determinants (gender, ethnic origin, geographical location, sex), but two fundamental factors: income and level of education. • Determinants are closely related but have individual effects.

Domestic demand: Income and education Source: OSILAC, ECLAC, 2008.

Domestic divide: Income and education Source: OSILAC, ECLAC, 2008.

Domestic divide: Income and education Source: OSILAC, ECLAC, 2008.

Domestic divide: Income and education Source: OSILAC, ECLAC, 2008.

Domestic divide: Income and education …more income, more connectivity Source: OSILAC, ECLAC, 2008.

Domestic divide: Income and education …more income, more connectivity Source: OSILAC, ECLAC, 2008.

Domestic divide: Income and education …more income, more connectivity Source: OSILAC, CEPAL, 2008.

Domestic divide: Income and education …more income, more connectivity Source: OSILAC, ECLAC, 2008.

Domestic divide: Income and education …same income but with more education => more connectivity Source: OSILAC, CEPAL, 2008.

Domestic divide: Income and education Source: OSILAC, ECLAC, 2008.

Economic impact • ICTs’ positive impacts on economic growth and productivity – Account for between 10% and 14% of the region’s growth in 1995 -2004. • Major impacts in developed countries – Complementarities with systems of production, innovation, education and institutional development. Expenditure on ICTs and complementary factors must be balanced: skills/training are essential for their efficient adoption.

ICT development • Hardware: tradable goods widely available on the international market. Little local capacity in LAC. • Software and related services: generally tradable activities, but heavily dependent on local features. Capacity in LAC is just beginning to be developed. • Telecommunications: non-tradable services. Promote competition, but regulation is essential.

ICT hardware • Production is concentrated in the region’s larger countries (although with some exceptions) and is based on one of two different models: – Production for the domestic market (Brazil) – Assembly of imported components in export platforms (Mexico and Central America). • Long learning curve and high entry barriers, as well as less and less hardware product innovation. To take advantage of its impacts for the benefit of society as a whole, it is important to use leadingedge hardware. Local production, where possible, is a plus but it is difficult to keep up with the pace of progress at the global level.

Software and related services • Two main types of agents: subsidiaries of transnational corporations and local SMEs. • Production is geared towards demand for standardized export products and related services for the adaptation of ICTs to local requirements. Both have potential, but the second is crucial for efficient domestic application. • Limited supply of skilled workers: 340, 000 technicians (0. 19% of total employment, and many of these technicians are working for exporters) are not enough to strengthen the information society. A basic minimum of domestic capacity is essential because of the influence that local characteristics exert on the efficiency of software use.

The telecommunications market • Two major operators in the region, but national competition is on the rise, especially in new services Market share, by segments, 2007 (Percentages) Who is investing in the modernization and expansion of basic infrastructure (Next Generation Networking – NGN)? Source: ECLAC, 2008.

Telecom regulation • Technological convergence: – Market concentration in infrastructure and competition in service delivery. – Market reorganization (e. g. , new competition between telephony and cable operators and between telecommunications and broadcasting) – Redefinition of jurisdictions and functions of regulator(s) Strengthening regulatory agencies: independence and technical capacity • Narrowing the divide (efficiency and social objectives): – Gaps in the market: Regulation to promote efficient allocation – Gaps in access: Cross or direct subsidies? Alignment of regulatory policies with universalization Setting sectoral priorities Setting universalization mechanisms into motion The importance of investment

ICTs for development: applications and content Education, governance, trade and business, health, and disaster management • Benefits: – Service efficiency: Real time, transparency, interactivity, singlechannel multiple communications. – Service quality: More flexible processes and service mix. – Service coverage: Do away with geographic and time-zone barriers. • Potential problems: – Access, use capacities, security and confidence, privacy

ICTs for development: challenges • Ownership: Professionals in all sectors should take ownership of ICTs so that they can incorporate them properly into their organizational processes and priorities. • Digitization: Progress in front-office (Web page) functions, but unmet (and bigger) challenges in backoffice (database interconnection) environments, including the complexities of interoperability (common standards). • Sharing of experiences: Progress in governance, trade and education. Health services and disaster management have lagged behind in terms of ICT use.

National strategies • Uneven progress: – Countries developing a second-generation agenda – Countries still in the process of developing a firstgeneration agenda • Issues on national agendas: – Most popular issues: Access, infrastructure and e-government – Most neglected issues: Health, administration of justice and disaster management

National strategies Countries with few ICT projects Just beginning to develop a national strategy for policy coordination Have a national strategy for policy coordination => Coordination of disperse initiatives leads to better results Source: Digital Review of Latin America and the Caribbean (2008), Santiago, Chile, Economic Commission for Latin America and the Caribbean (ECLAC)/United Nations Development Programme (UNDP)/International Development Research Centre (IDRC)/ Regional Dialogue on the Information Society (DIRSI), unpublished.

National strategies Countries with large number of ICT projects Source: Digital Review of Latin America and the Caribbean (2008), Santiago, Chile, Economic Commission for Latin America and the Caribbean (ECLAC)/United Nations Development Programme (UNDP)/International Development Research Centre (IDRC)/ Regional Fuente: CEPAL, OSILAC, (DIRSI), unpublished. ICA-IDRC, Digital Review, 2008. Dialogue on the Information Society PNUD, DIRSI,

National strategies Countries with secondgeneration national agendas Source: Digital Review of Latin America and the Caribbean (2008), Santiago, Chile, Economic Commission for Latin America and the Caribbean (ECLAC)/United Nations Development Programme (UNDP)/International Development Research Centre (IDRC)/ Regional Dialogue on the Information Society (DIRSI), unpublished.

Lessons of e. LAC 2007: towards e. LAC 2010 • Results: – Progress has been made towards 15 of the 27 goals being monitored – Most progress: development of access and skill-building. Least progress: development of content and applications. • Policy lessons: (1) Balance the development of access, skills and applications (2) Coordinate action using a public-private meta-platform (3) Monitor progress and identify best practices to facilitate the exchange of experiences (4) Quantifiable goals: Define accurate indicators (5) Qualitative goals: Set up action-oriented mechanisms, to be defined and monitored in conjunction with contributing partners (see annex 2 of draft e. LAC 2010)

Recommendations (1) Build capacities and complementarities to make the potential impact of ICTs a reality. (2) Generate a basic minimum of domestic capacity for the development of software and related services. (3) Strike a balance in ICT regulation to support efficiency, universalization and investment. (4) Coordinate the countries’ budgets and their numerous initiatives. (5) Take advantage of the region’s heterogeneity to enhance intrarregional exchange and cooperation. (6) Motivate ICT users to take ownership of policy leadership. (7) Strengthen institutions in charge of implementing ICT policies and regulation and the tools available to them.

Thank you for your attention Soc. Info@cepal. org http: //www. CEPAL. org/Soc. Info