WinWin Issue 43
Driving development: the impact of ICT investments on the digital economy
--Driving development: the impact of ICT investments on the digital economy is a white paper supported by GSMA Intelligence and Huawei, and produced by EI Studios, a custom division of Economist Impact. This paper explores the impact of information and communications technology (ICT) investments on the global digital economy.
For well over two decades, studies have been produced that highlight the linkages between ICT investments and a number of key indicators, such as economic growth, employment, productivity, and even social indicators such as income levels. An illustrative example is the Mobile technology: two decades driving economic growth report by GSMA Intelligence, which shows that the adoption of mobile technology — and its advances — directly result in GDP growth.
The white paper draws on a global survey of 500 individuals, conducted in December 2022, of which 400 are company executives, 50 are policy makers and another 50 are institutional investors. Also included are insights gleaned from indepth interviews and desk research.
Investment in ICT infrastructure and resulting digitalization will drive the fourth industrial revolution.
Much as steam power and the mechanization of production drove the industrial revolution three centuries ago, ICT infrastructure will drive the fourth industrial revolution through gains from digitalization. A 10% increase in mobile adoption, for example, can result in a GDP increase of 1%, while 5G alone is expected to result in an additional global GDP value-add of US$960 billion, or about 0.7% of global GDP. Investment in ICT infrastructure must be a priority for all governments for the socioeconomic development of their peoples
Telcos are at a tipping point.
Telcos have a pivotal role to play as enablers of the digital economy. They have been instrumental in providing necessary connectivity infrastructure and improvements in connectivity. So far, they’ve borne the burden of ICT infrastructure investment — partly in keeping with their role as public utilities. However, this is not sustainable, given the pace at which infrastructure requirements are changing and the ultimately limited resources telcos have. If ICT infrastructure is a “public good”, others in the ecosystem — such as other enterprises and the public sector — must play a bigger role in financing ICT infrastructure development.
Advanced 5G connectivity is the undercurrent enabling technology adoption and its benefits.
There is a sharp focus on technology adoption and implementation, such as the greater use of AI, machine learning, and cloud and edge computing. However, the base requirement for all of this is the availability of and advancements in high-speed, reliable 5G network connectivity to 5.5G and eventually 6G. Without investment in networks, the gains from technological developments will be stunted.
Public and private sector collaboration are “crucial levers for growth”. ;
Policy makers and governments play an important role in facilitating investment in ICT infrastructure and in facilitating the digital economy. Doing this effectively requires collaboration and dialogue with the private sector to put in place supportive regulatory frameworks and incentivize innovation in ICT, both of which are essential to boost the digital economy of the future.
Much as steam power and the mechanisation of productiondrove the industrial revolution three centuries ago, ICT infrastructure will drive the fourth industrial revolution through gains from digitalisation.
Investment in ICT unlocks value for the planet and communities.
New and emerging ICT technologies are proving to be instrumental in energy use management, reduction in carbon emissions, improvements in SDG benchmarks, and contributing to community resilience. Traditional Investment in ICT mainly focuses on connectivity and computing. Green technologies will be the third new dimension to maintain long-term vitality of the whole digital economy, improving sustainability and resilience, while unlocking value for communities and the planet.