Role of ICTs and Telecommunications Technologies in Economic Development

This sub-section first seeks to analyse how telecommunications technologies contribute toward economic development. The focus is then shifted to an empirical assessment of the contribution of telecommunications in economic development.

According to Nandi (2002) the primary means by which telecommunication services can promote economic development is by serving as a medium that facilitates the acquisition and transportation of information in cost effective ways while minimizing the obstacle of distance and time. Barnett, Jacobson, Young and Sun-Miller (1997), state that telecommunication is a space-adjusting technology that links various countries together through interconnectivity, making the world a global village. From these brief explanations of the role of telecommunications in economic development, by the above-mentioned authors, we can identify various mechanisms by which telecommunication influences the efficiency of different economic activities at the micro, macro and global level.

Information plays an important role in business and economic development by being the source of knowledge, education and human capital. Availability of better information helps to improve education, health services and provides knowledge, ideas and opportunities and thus contributes to national productivity. The efficiency of household activities increases with telecommunications by allowing easy access to services like health care, education and financial services. However, this easy access to telecommunications services should be affordable to many ordinary people. This affordability of telecommunications services is a challenge in LDCs as most people are unemployed so access to ICTs for the unemployed is a problem. Telecommunications service providers have a duty to make access to ICTs a practical experience, not just a policy of universal access written in government policies, statutory documents and companies' annual reports. Universal access means that telecommunications and ICT services should be available (and affordable) to most people in a society at a reasonable distance to where these people live.

In business and in academic institutions especially those in distance education where academics write and produce electronic reading material for their learners (tele-education and/or electronic learning/e-learning), the introduction of ICTs, telecommunications and/or information technology leads to higher productivity growth through greater specialization and in many other ways. Nandi (2002) states that at the firm level, it results in significant economies of scope which are achieved through more centralized coordination of production units. During the last two decades, modern telephone networks and highly advanced telephone equipment have significantly increased the speed at which the information could be transported and exchanged. A few areas are stated below that explain how telecommunications as an efficient medium for transporting information is contributing towards higher economic development through its direct and indirect means.