• ICT – Innovation Endpoint or Innovation Enabler

    Recently, Innovonomis was given the opportunity to present a thought-paper on the role played by ICTs in national innovative systems. We have removed the client-specific information from the note below, but are sharing it further as a continuation of the discussion of the critical role of ICTs in innovation worldwide.

    In your observations, are you seeing your government, employer, supplier or partner acting consistent with the view of ICT as an end-point or ICT as an innovation catalyst?

    As always, your thoughts are welcome.

    ICTs and Innovation:

    The centrality and criticality of technology and innovation to national economic development has been well documented by a number of scholars. In fact, Drucker had famously argued that any development that has taken place over the past few decades is largely attributable to technology development.

    One of the most profound changes that has happened within the last two decades has been the rapid rise in the emergence and adoption of Information and Communication Technologies (ICTs). They have changed the way we work, interact, communicate, entertain and even socialize. The effects of technology have been largely positive, on aggregate output as well as productivity, despite the concerns famously expressed by Solow, that ‘‘the computer age is everywhere but in the productivity statistics’’. What, specifically, have been the effects of this widespread adoption of technology globally, and what are the effects specifically on relatively underdeveloped parts of the world.

    Quite significant it seems. Researchers have established a strong link between technology innovation and economic development. Brynjolfsson and Yang, in a through review of existing literature of the topic, researched and catalogued studies that associate ICT with productivity growth. They refuted the productivity paradox, and showed that the mixed results obtained so far had largely been driven by data quality issues. More recently, a study of 120 nations between 1980 and 2006 by Christine Qiang has reported a strong link, and has estimated that each 10 percentage point increase in broadband penetration results in an additional 1.3 percent to a high income country’s gross domestic product (and 1.21 percent for low to middle-income nations). There is a broad recognition that digital technologies have the power to create new economies of scale, and efficiencies, driving virtuous cycles of economic growth.

    In preparing for such growth, however countries are faced with two distinct potential areas for growth. They can either focus on harnessing these digital technologies to transform their existing productive sectors, driving efficiency and productive within these sectors and making these sectors more economically viable and internationally competitive. Another strategy has been to look at the new opportunities created by the emergence of information and communication technology industry and to seek to become a producer of information and communication technology products and services.

    It must be pointed out that these two strategies are not mutually exclusive, but we do see countries (or regions) seeking to strategically focus on one or the other. The development of India as a business processing outsourcing center is an example of an intentional focus on the second strategy; the adoption of technology by Iceland to improve the efficiency and productivity of its fishing industry is an example of the first strategy.

    How then should one think of the role of ICTs. When it comes to innovation systems, given the criticality of communication, collaboration and connection between the various players in an innovation system, it can be argued that the biggest value-add from ICTs is in the possibilities it creates for multiple players to interact and collaborate, in real-time, transcending the boundaries of time and space. This role of ICTs is critical because it is cross-cutting, working across sectoral boundaries; it allows a climate change lab in Lagos to collaborate on research with an agricultural innovation lab in Benin, while also working with an infrastructure development project in Kano. It enables universities and researchers spread geographically to collaborate in real-time. It can be argued therefore that the role that ICTs play in this scenario are more catalytic in nature, as their presence serves to magnify the potential impact and outcomes of all the players, if they had been working individually. It is this catalytic nature of ICT that distinguishes it from other inputs and technologies.

    The question then, however, is whether this broader, central and catalytic role of ICT in enabling innovation systems (and consequently innovation-driven-growth) is understood by all players in the innovation systems, including the governments, universities and private sector. If this is the case, we can expect to see a focus from government and universities to (1) emphasize ICT deployments as a strategic asset, (2) deploy ICT widely and broadly internally to see a broad level of collaboration emerging, (3) efforts to deploy digital technologies to connect various innovation system players like universities and research centers, and (4) efforts to integrate the utilization of technology across various disciplines and courses of study.

    Conversely, if the role of ICT is seen at best as a production sector and employment generator (i.e. treating technology as an end in itself), we are likely to see (1) the study of ICT in a silo-ed environment with computer science seen primarily as a subject in itself, (2) incentives for local creation of ICT rather than broad-scale deployment, (3) incentives to create a local ICT industry, focused on the creation of ICT products and services for an export market, and (4) limited penetration of ICT deployment and usage within non-ICT sectors of the economy.

    Similarly, if the private sector players within the ICT sector also take a narrow definition of the role of ICT, then it is likely that their efforts, besides the profit-maximizing strategy of seeking deployments within larger corporate customers, is likely to be one of supporting the development of many technology-creation ventures whose primary focus is to create and sell technology products and services to customers outside of the country.

    The remainder of the discussion paper had client-specific info so has been removed.