http://cbdd.wsu.

edu/kewlcontent/cdoutput/TR501/

Telecommunications and Socio-

Economic Development
Scope of Module 5

The main focus of this part is to familiarise learners with issues of development in
relation to ICTs. Learners will understand the benefits of telecommunications to
socio-economic development. This section also identifies the constraints of the
ownership and use of ICT for development. It deals with identifying various aspects
of development and locating the roles that ICTs play in these aspects.

Learning Outcomes

By the end of this study unit you should be able to:

 Demonstrate an understanding of the concept of development

 Explain the role of information and communication technologies (ICTs) and
telecommunications in development of rural areas
 Explain the social constraints that act as barriers to the use and ownership of
ICTs, especially in developing countries
 Distinguish between the characteristics of a culturalistic and a technological-
economic, and other perspectives on the impact ICTs have on community
development.

Introduction

This study unit discusses the role of ICTs in development, an issue visited by many
theorists in the area of development communication. The study unit defines relevant
issues in development, including rural and sustainable development, and explains
how ICTs can play a positive role in these processes. Problems of developing
countries that inhibit development are also discussed, as well as strategies that can
be used to overcome these problems, using ICTs as part of the solution. The role of
ICTs and telecommunications in socio-economic development is also discussed in
detail. The social constraints that act as barriers to the use and ownership of ICTs,
especially in developing countries are explained. Finally, conclusions are made on all
the issues raised in the study unit and a brief summary of the discussion is provided
at the end of the study unit. Let us review the role of ICTs and telecommunications
on development.
Learning Activity 7

Identify the social constraints to the deployment and use of ICTs in your country
and provide policy and regulatory suggestions on how to circumvent these
constraints.

The Role of ICTs and Telecommunications in Development

Telecommunication contributes towards the development of various countries that share

information with each other in direct and indirect ways. These ways are discussed in this
study unit. There is much that countries can share with others, including technological
expertise, software development, hardware manufacturing, educational aspects and
projects, cultural artifacts and activities such as art and other exhibitions, television soaps
and conferences for development and tourism issues. For the purposes of this module, it
is important, first, to understand what development is, before discussing the role of
information and communication technologies (ICTs) in development. It is also important
to define rural development as well, because most parts of Africa are rural areas which
need basic development in terms of the development of educational and health facilities,
sanitation and roads, basic housing, creation of employment opportunities and reduction
of poverty.

The Meaning of Development, Sustainable Development and Rural Development

Development generally means the improvement of people's lifestyles through improved

education, incomes, skills development and employment. Development also means that
people should have decent housing, and that they should have security within those
houses. Development means too, that people should be able to read and write, and in
Africa this is a problem as most people are still illiterate, South Africa included. In order
to develop or have better lives, people must get a good education. Because illiterate
people do not develop as much as educated people do, it is therefore important that
people should get themselves a good education, or send their children to school to get that
education. There are various definitions of development, which we look at here. You are
also welcome to use any appropriate definition of development that you find in the study
material. The definitions do explain how communication and ICTs impact on
development.

Development

In any developing country, one of the prime ingredients of development is information.

Furthermore, how that information is disseminated between people is also crucial.
Information is disseminated for various purposes; information about new fertilizers,
agriculture or land development, town planning and community building, public health
(e.g. HIV Aids) and education information campaigns, and so on. The process of
education is basically related to information dissemination and ICTs, because information
educates (or information is education), and ICTs disseminate education or information.
Through communication via ICTs, the world is a global village where people from one
country learn about happenings in many other countries as soon as the news breaks. ICTs
and traditional mass media such as television, newspapers and radio, are therefore some
of the components of the information-transfer system in international communication.

When a country invests in education it is a productive investment, because an educated

labour force is a source of productivity. Castells (1998:5) states that to be educated means
nothing if the educated ones do not enjoy good health, decent housing, psychological
stability, cultural upliftment and cultural fulfilment. One can add that to be educated also
means nothing if that education cannot get one a good job to feed, develop, provide one
with a good health system, buy one a good house, educate one's children and sustain one's
living standard. In other words, development must improve all these aspects of people's
lives, and which Servaes (1999) calls multi-dimensional development. ICTs are used to
share educational information among people and countries for development purposes.

An economist of the World Bank, Joseph Stiglitz (1999:1), views development as "a
transformation of society, a movement from traditional relations, traditional ways of
thinking, traditional methods of production, to more modern ways". Stiglitz (1999)
argues that a characteristic of traditional societies is the acceptance of the world as it is;
the modern perspective recognizes change, it recognises that we, as individuals and
societies, can take actions that, for instance, reduce mortality, increase life spans, and
increase productivity. ICTs influence this change from traditional to modern societies,
through information-transfer explained earlier in this study unit. For example,
telecommunications technologies/ICTs and mass media and their Western content,
influence the lifestyles of people in LDCs (where Western content dominates local
media), according to what they see in the media like television, the Internet and Web TV
where it is available.

Development does not mean the same thing in different countries, or in MDCs and LDCs.
Jussawalla (1992:3) states that there is a difference in the meaning of development
between developed and developing countries; that in MDCs, the provision of
telecommunications or information infrastructure leads to increased economic activity
and innovation, while in LDCs (less developed countries) a lack of the
telecommunications and information infrastructure hampers economic development and
innovation. This, therefore implies that for developing countries to develop more, they
must develop their telecommunications and information infrastructures, as Mbarika
(2002), and Van Dijk (1999) have argued.

ICTs can assist in the development of communications and information infrastructures of

LDCs. ICTs are part of the information society infrastructure in developing nations,
which LDCs should develop in their own regions towards their own economic
development.

Mansell and Wehn (1998:8) state that development in MDCs and LDCs does not mean
the same thing, and that development has been understood since the second World War to
involve economic growth, increases in per capita income, and attainment of a standard of
living equivalent to that of industrialized countries. However, one believes that LDCs,
will not, in the near future, develop to the extent of MDCs, because there are many areas
of development in LDCs that need to be developed, areas which have been in place for
many years in the developed world. These areas, for example, include education, health
systems, technological development or innovation. Each LDC needs to reach its own
consensus on the changing meaning of its own development, and also define the role
ICTs play in that development.

Development should, then, be viewed as a multi-dimensional process involving major

changes in social structures, popular attitudes and a national condition of life from
unsatisfactory to satisfactory (Servaes 1999:77). In this regard, argues Servaes (1999),
satisfactory means materially well to do and spiritually happy or content with what one
(or country with reference to this study unit) has got.

Castells (1998:4) believes that the role of ICT in stimulating development is two-edged:

It allows countries to leapfrog stages of economic growth by being able to modernize

their production systems and increase their competitiveness faster than in the past. The
most noteworthy example is that of the Asian Pacific economies, called the Asian Tigers,
and particularly the case of Hong Kong, Taiwan, Singapore, Malaysia and South Korea.
This is so despite the 1998/9 financial crises in the countries, which is unrelated to
competitive performance and may be related, in fact, to the attractiveness of the booming
Asian economies to global capital flows. In South Africa's new ICT policy, ICTs are
viewed as a means to aid South Africa leapfrog into a developed status (New
Telecommunications Policy Colloquium 2001). South Africa is not the only African
country that hopes to leapfrog to the information society using ICTs, most African
countries intend to use the same leapfrogging strategy for the upliftment of their peoples.

For those economies that are unable to adapt to the new technological systems, their
retardation becomes more pronounced. Furthermore, the ability to move into the
Information Age depends on the capacity of the whole society to be educated, and to be
able to assimilate and process complex information. This starts with the education
system, from the bottom up, from the primary school level to the university. And it
relates, as well, to the overall process of cultural development, including the level of
functional literacy, the localization of content of the media (instead of the globalisation of
the media content), and the diffusion of information within the population as a whole. In
this regard, what should happen in developing countries is that regions and firms should
concentrate on the most advanced production and management systems that will attract
talent (and foreign investment into their countries) from around the world. While
attracting skills and expertise from afar, local people should not be left unskilled and
uneducated, and countries should invest in the human resources development of their
own people.

Countries should build ICT and telecommunications infrastructures as these

infrastructures contribute towards socio-economic development. Nadir (1998) states that
in the global information society we now live in, there is a direct correlation between
access to telecommunications and socio-economic development, and that
telecommunications is no longer the consequence of development, rather it is a necessary
precondition for development. This view is shared by various other telecommunications
and development theorists and experts, including Hudson (1997), Nulens & Van
Audenhove (1999), Castells (1998), Van Dijk (1999). An improved teledensity of a
country, and the use of international communication by that country will both improve a
country's development and economic status. However, Van Dijk (1999:220) cautions that
new media technologies are not the whole substance of society. Van Dijk believes that it
is an exaggeration to suggest that new media technologies are the whole substance of
society.

New media technologies are part of the necessities for development, but the main
ingredients of development are the people themselves who should state their development
goals for their own communities, and how these development goals will be achieved. The
technologies can be part of these strategic tools to be used towards the achievement of the
development goals, together with other types of media, for example, community leaders,
oral and printed media, international and local soap operas, and so on.

Soap operas, for example, have been successfully used in various countries for
development goals and they have been successful in countries including Zimbabwe, the
Philippines, Tanzania, Zambia, India and Mexico. Sherry (1997:75-101) provides a
discussion of how soap operas in all these countries were used successfully for
development projects. For example, Sherry (1997:76) argues that a Mexican television
producer, Miguel Sabido, created six prosocial television soap operas between 1975 and
1981. Sabido' s soap operas focused on development themes of adult literacy, family
planning, adolescent sexual education, women's equality and responsible parenthood. The
Zimbabwe Male Motivation Project was aimed at teaching men to participate more in
family planning and be active family planners, while the famous Tanzanian soap opera
Twende Wakati, was an entertainment-education soap opera on Tanzanian radio, aimed
at teaching Tanzanians about family planning and HIV prevention.

In the Philippines, puppet shows and local theatre (called Zarzuelas) have also been very
useful for development projects including health education and entertainment-education.
According to Valbuena (1986:2) folk media are instrumental for development in many
Third World countries that still have problems affording ICT. Valbuena argues that
including the traditional and modern systems of communications, labour-intensive and
appropriate technology, self-reliance, user-oriented strategies, and popular participation
in development planning and implementation are still important requirements for
successful development in Third World countries. This sentiment is shared by Boeren
and Epskamp (1992) who support the importance of traditional and popular media, in
support of new media technologies, in the pursuance of development of developing or
growing countries. More African countries can use these different media for national and
international communication and development purposes because they are more cost
effective to use than ICTs.
In addition to understanding the meaning of the concept development, you should also
understand what is meant by sustainable development.

Sustainable Development

Sustainable development is defined as "development that meets the needs of the present
generation without compromising the ability of future generations to meet their own
needs" (Sharhan 2000:44). ICTs, with their huge capacities to produce, transmit and store
information within countries and across national borders, also have the capacity to allow
people and organisations to share this wealth of knowledge in the pursuance of
development goals. For example, we produce information on our computers when we
conduct research and type that information. We transmit the information to people in the
same city or in cities located in other countries of the world via electronic mail (e-mail).
We also store the information on our computers when we save it into files, for future
reference and usage.

Sharhan (2000) states that one of the most important preconditions for the full and
comprehensive implementation of sustainable development is the need for a sustainable
information society. ICTs, therefore, make it possible for those people who have access
to this technology, to share information to create a sustainable information society. To
this end, developing countries have to establish, develop or upgrade their information and
communications infrastructure for the obvious important linkages and relationship with
the concept of sustainable development. ICTs provide a platform for information -
sharing and information - storage towards this sustainable development. Information
societies are those societies which have well developed ICTs to share information for
development and innovation information. Information societies have both relevant and
useful information for development, and are also innovators in many areas or spheres of
development, for example they are leaders in software development and new technology
manufacturing. These countries are mostly developed or more developed countries
(MDCs), like the United States (US), Japan and Europe and are called the information
haves or information-rich. Countries which are not information societies do not have
well-developed communications and telecommunications infrastructures, and, therefore,
do not manufacture and share enough information for their own development. These
countries are predominantly the developing and/or less developed countries (LDCs) and
are mostly found in Africa, Asia-Pacific and Latin America.

Mbarika (2002) states that the digital divide between the West and Africa seems to be
drawing closer for many northern and southern African countries in terms of ICT,
because these countries are experiencing tremendous growth in the use of computers,
Internet connectivity, wireless communications and other related technologies. Mbarika
further argues that the same cannot be said of Africa's least developed countries that still
lag behind in terms of the level of basic telecommunications infrastructure such as
teledensity (the number of main telephone lines for every one hundred inhabitants in a
country). The latter countries may not reap the benefits offered by the Internet and
Mbarika (2002:10) suggests the following development strategies that can be adopted by
these countries, so that they can improve their telecommunications infrastructure and
provide the Internet for their local people.

The suggested strategies suggest that Africa's LDCs should, amongst other things:

 Privatise the telecommunications sector and allow for free enterprise and
competition between ICT and telecommunications service providers.
 Minimize foreign dependency to run and maintain Africa's LDCs
telecommunications resources.
 Encourage "do-wellers" (private sector) investors in order to generate financing of
telecommunications projects aimed at the growth of teledensity.
 Encourage growth in wireless communications and establish community-based
telecentres.

Telecentres provide ICTs including telephone services (both fixed line and mobile),
facsimiles (fax), printing services, Internet where available, electronic mail where
available, photocopy services, library services, scanning and other shared-ICT services
for community development. African countries such as Senegal, South Africa, Uganda,
and Mali have telecentres that are used in rural areas, mainly for rural-urban connectivity
and computer services. Let us now look at the concept of rural development.

Rural Development

According to the South African Rural Development Framework/SARDF (1997:9), rural

development can be defined as:

Helping rural people set the priorities in their own communities through effective and
democratic bodies, by providing the local capacity; investment in basic infrastructure
and social services. Justice, equity and security; dealing with the injustices of the past
and ensuring safety and security of the rural population, especially that of women.

The SARDF, developed by the Department of Land Affairs, is a South African

government initiative aimed at addressing rural poverty. It aims to involve the
community in finding solutions to their problems. The SARDF document seeks ways to:

 Involve rural people in decisions that affect their lives through participation in
rural local government
 Increase employment and economic growth in rural areas
 Provide affordable infrastructure
 Ensure social sustainability in rural areas.

What is a Rural Area?

The SARDF document defines it as

a sparsely populated area in which people farm or depend on natural resources, including
the villages and small towns that are dispersed through these areas, also includes large
settlements in the former homelands, created by apartheid removals (SARDF 1997:9).

Rural areas are plagued by poverty, with the most vulnerable sectors of the population
being women, children and the elderly. The South African Government, through the
Reconstruction and Development Program (RDP) and the Growth Economic
Advancement and Reconstruction (GEAR) strategy would like to address:

 social development in areas such as education and health

 local democracy and development: to ensure service delivery
 the role of national and provincial governments in defining the needs of the local
rural people
 local economic development and rural livelihoods
 social sustainability by highlighting people's constitutional rights
 rural development in partnership with NGOs
 safety, security, welfare and legal issues and highlighting the rights of children.

In recent (2000 and beyond) South African government documents, privatisation of states
assets (including the listing of the state-owned telecommunications operator Telkom on
the Johannesburg Securities Exchange/JSE and New York Stock Exchange/NYSE on
March 3, 2003), and the use of ICTs for development are actvely promoted, mainly for
economic development, job-creation, rural development and poverty-alleviation. South
Africa's Minister for Public Enterprises Jeff Radebe (2001) believed strongly that
telecommunications competition in South Africa, including Telkom's listing, will lead to
lower business costs, and that those who want to do business in South Africa will find it
cheaper to so, including local and foreign investors in the South African liberalised
telecommunications sector. The new South African telecommunications environment
also promotes the participation of women in investment in the sector, whether the women
conduct research, own telecentres, or find more work in the ICT sector.

Telecommunications, Gender and Development

The role of women in international communication and development continues to be of

importance. Women in development (WID) has been promoted in international
communication in various countries, and international agencies like the World Bank have
supported international communication and development projects promoted by women.
Women have also spearheaded most developmental projects in developing countries. For
example, most of the telecentre managers in South African telecentres are women, though
there are a considerable number of men-telecentre-managers. Wilkins (1997) argues that
though WID has evolved over the years into GAD (Gender and Development promoting
the role of both men and women and families in households settings, in development),
women are still prominent in development projects internationally. The underlying
framework of Wilkins's research assumes that development operates as an institutional
discourse that articulates knowledge about women and power through intervention.
Women continue to play key roles in development and in international communication,
and governments need to promote this role of women for the development of their
societies and countries.

Information Communication Technologies (ICTs) and Development

ICTs contribute to positive economic, social and cultural development. However, it is

also possible that ICTs have a negative contribution to a society's development
objectives. For example, if the restructuring, and especially privatisation of state assets
(such as Telkom, South Africa's telecommunications parastatal, and Eskom which is
South Africa's electricity parastatal), result in loss of jobs, this is a negative contribution
to a country's development because people need jobs for economic security, crime-
prevention and poverty-alleviation. However, if the restructuring of state assets does not
necessarily lead to job losses and creates new jobs in the sectors being restructured, then
this results in positive development of a country as more jobs contribute positively to a
country's economy and reduce poverty.

According to Nandi & Ahn (2002), recent growth theory states that the efficient transfer
of information is the key driving force for high economic growth. ICTs play a significant
role in this respect. In today's information age, the access to ICTs is not only a major
factor to socio-economic development, but absence of it could become an even greater
constraint on national development than in the past. An example of countries that use
ICTs for their social and economic development is that of the Asian Pacific economies,
particularly the case of Hong Kong, Taiwan, Singapore, Malaysia and South Korea.

Malaysians, for example, use the Multimedia Super Corridor (MSC) to develop the social
lives of people and also for the economic development of their country through
telemedicine, electronic government, technological research and other kinds of
development and also for borderless marketing of Malaysia. The MSC, according to
Jackson and Mosco (1999) has Smart Schools and Multi-User Cards (MPC) that are used
for data processing and storage, file management, performing of national functions such
as those of identity document, driver's licence, immigration, health and electronic cash
functions and later versions of MPCs are expected to include credit card, pension fund,
student card, bill payment and voter registration functions for electronic government.
South Africa is also introducing a Home Affairs Information System (HANIS), which is
aimed at putting all the individual's information on a chip in a smart card. Inside the chip
will be all the individual's information including tax details, driver's licence information,
home and work particulars. One of HANIS's purposes is to deal with crime and reduce
repetition of services by the Department of Home Affairs.

The Social Constraints to the Ownership and Use of Telecommunication

Technology for Development

In developing countries there are various social problems, which create barriers to people
owning and using telecommunications and ICTs. These problems, amongst others,
include illiteracy, cultural barriers, lack of computer skills and technological know-how,
lack of access to computers and computers networks as a result of the digital divide, no
Internet access, lack of significant usage opportunities, background to increasing
information equality and structural information equality. Let us look at these problems
closely.

Illiteracy

In most developing countries there is still a high percentage of uneducated people. South
Africa is no exception as illiteracy rates are very high and people, especially the young
have to go to school and attend institutions of higher learning to get good education. Part
of this education includes acquiring computer literacy and technical skill to operate and
use computers at different levels, i.e. whether to conduct research over the Internet,
upgrade the computer's storage capacity, store information in databases or use the
computer for other functions. Illiteracy will be drastically reduced if technical or
computer skills are imparted to most members of society. People should not just gain
access to computers, but should also learn various computer applications so that they can
be employable which will reduce the high unemployment rate in South Africa. South
Africa's unemployment rate is over 40,0 percent while that of Japan is said to be just 2,0
percent and that of Hong Kong 3,0 percent.

Cultural Barriers

In some developing countries, there are still some people who are barred from using
telecommunications technology due to cultural beliefs. Some have "computer fear" and
Van Dijk (1999:148) states that those who fear computers shrink back because they think
it is too difficult to use them or because their first experience with such devices have been
too unpleasant. It is possible that some do not use computers because of ignorance or may
not be aware of how computers can help them. With regard to the latter, these groups can
then be given access to computers either by the public or private sector organisations and
can be taught how to use computers and shown how computers can help them. Most
literature suggests that young people tend to use computers more than old people, so age
can also be a determining factor about who uses computers and who do not.

Lack of Computer Skills and Technological Know-How

This is another problem in most developing areas, especially rural areas of Africa.
Computer skills are lacking in some people and this problem can be remedied once
telecommunication infrastructures have been established in their areas of residence and in
addition to that they get access to computers and computer skills imparted to them by
those who have this technical know-how.

Lack of Access to Computers and Computers Networks as a Result of the Digital

Divide

The digital divide has created a bridge between rural and urban areas in most parts of the
developing world.
 No Internet Access

The Internet is a good educational tool but can be expensive for poor members of society
to afford in terms of paying for all the monthly connections to the Internet Service
Providers (ISPs). Mbarika (2002) has already stated that most least - developed countries
in Africa do not have access to the Internet, which will add to their slow development and
this is exacerbated by poor telecommunications infrastructures and low teledensities.
Should people have access to the Internet, they can access a wealth of information from
this global service and develop many aspects of their lives. The Internet was started in
1983 in the United States of America as a military project and developed as an academic
and research network. Ivala (2000) states that the most used, liked and commercially
successful form of computer communication is the Internet. The Internet is a global
network of networks linking thousands of computer networks together. These computer
networks are joined together by telephone lines. The Internet was established at the end
of the cold war by the United States military to ensure continued communications
between the military and various branches of government. Now, however, its uses have
far outgrown its creator's intentions (Ivala 2000:24).

As stated earlier, the Internet had its origins as a US military project back in 1969. It was
adopted by the research and academic community; became the tool (or toy) of computer
lovers around the world and then, in the space of a couple of years, it became the engine
that, it is claimed, to propel the world into the information age and the twenty-first
century, or the New Millenium which started in the year 2000.

The use of the Internet by members of the general public and the commercial use of the
Internet is a relatively recent phenomenon. The latter involves service providers, content
providers and software facilities. Computer communication technologies like computers
are used for various purposes including marketing products, education, government and
political communication, research, tele-education and health communication.

The web is a big place, and tens of thousands of people have put hundreds of thousands
of hours into making it enjoyable. The vast majority of them have not made any money
from their work yet, and many did it for the joy of starting something new (Whiteley
2000:161). The Internet is also an interesting phenomenon because nobody owns it. It is
unlike the railway, telegraph or telephone companies of the past that were owned by large
private corporations or state monopolies. It is a pattern of usage of information and
communications technologies (ICTs) that transcends any and all telecommunications
infrastructure providers.

Lack of Significant Usage Opportunities

The fact that rural people, who form a large part of the inhabitants of developing
countries, have no access to telecommunication technologies and other ICTs deny them
the opportunities to interact and familiarise themselves with such devices. This is because
such devices are not readily available to them where they are located. On the other hand,
it is easier for someone residing in a township to get access to a telephone and a fax
machine. South African rural areas with telecentres, such as Ndevana , Flagstaff, Tongo
near the Wild Coast and Middledrift in the Eastern Cape, can have easy access to ICTs
located in the telecentres, if these telecentres are fully functional and without access
problems and network cut-offs.

Background to Increasing Information Equality and Structural Information

Equality

In South Africa there is also the added problem that was created by the apartheid regime
of developing the telecommunication structures in some areas (those where whites used
to live exclusively), and not developing this technology infrastructure in formerly black-
only areas and in former homelands. The present system of government is trying to undo
this state of affairs and speedily develop telecommunication infrastructure in all parts of
South Africa. India is another country where the telephone was regarded as a luxury,
before the 1996 Indian telecommunications policy was enacted. After the enactment of
that policy, and subsequent policies, telecommunications in India is now provided to all
the previously unserved areas. You can read the article by Chibber (2002), on India's new
telecommunications policy, which is aimed at providing a universal service (provide
services to all who need them, rural or urban) to Indian people.

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.

Telecommunications, Developed Countries and Development of Less Developed

Coutries (LDCs)

Developed countries assist in the development of LDCs in various ICT projects and other
development projects. This role should be emphasized here because developed countries
have the financial or economic muscle to provide development aid to LDCs without
compromising their own financial standing or development plans. The International
Telecommunications Union (ITU), with many developed country members, which assist
developing countries with the development of telecommunications infrastructures of
many LDCs, is a notable example. Also, the United Nations Development Programme
(UNDP) develops various ICT projects in African and Asian countries, such as the
development of telecentres. South Africa's President Thabo Mbeki has addressed the G8
countries on numerous occasions (for example in Brussels in 1995 and in Canada in
2002), about the need for the G8 countries to assist developing countries in their
development programmes and activities, and project implementation towards sustainable
development. In Canada, President Mbeki explained to the G8 the importance of the New
Economic Partnership for African Development (NEPAD) for African development and
how the G8 could assist Africa towards the implementation of NEPAD's projects.
NEPAD's objectives amongst other objectives are:

 the development of African countries through the use of ICTs

 the ending of wars in Africa
 the improvement of African economies and job-creation where ICTs are viewed
as key economic enablers in that regard
 the promotion of good governance and democratic principles in some African
countries such as Zimbabwe.
Spearheaded by the heads of state of South Africa, Nigeria and Senegal among other
countries, NEPAD is the first African development programme, which has received
support both from the developed and developing world, aimed at promoting sustainable
African development. This cooperation between developed and developing countries in
NEPAD is an application of the participatory theory of development communication
where development goals and strategies are negotiated between all parties (those being
developed and those who are developing others) involved in the development project.
NEPAD's prime policy is that Africa put its own house in order first, before development
in Africa can be achievable and in turn sustainable, and before other countries can assist
in this sustainable development. The next sub-section discusses telecommunications' role
in economic development.

Direct Effects of Telecommunications on Economic Development

Diffusion of New Ideas and Knowledge

The flow of information plays an essential role in the diffusion of new technology and
ideas at the level of individual enterprises, the industrial sector and the national economy.
The importance of the new knowledge and new ideas as key elements for stimulating
growth rate has long been recognized by economists but is receiving more attention in
recent years among new growth theorists. The source of knowledge and new ideas can be
domestic or global. If knowledge is local, telecommunications technology can be used to
globalise that local knowledge and this process is known as localisation, making a local
idea global. In the case where information or an idea is made known in various countries
(and usually adopted in those countries), this process is known as globalisation. ICTs
then make both localization and globalisation possible. Modern telecommunications
provide a cost effective and time efficient medium for accessing rapid development of
computer and communication technology.

Reduction of Regional Infrastructure and Development Gap

One of the reasons for the persistent gap between rural and urban areas in any country is
the telecommunications infrastructure gap, which results in the information gap between
rural and urban areas. Rural areas have little or no telecommunications infrastructure (e.g.
in terms of telephones, facsimile/fax, computers, printers and the Internet, except in
telecentres or community phone shops where available), when compared with the urban
areas. This difference in telecommunications infrastructure is called the digital divide.
Telecommunications infrastructure should then be developed in rural areas in order to
reduce this digital divide, as Mbarika (2002) stated earlier in this study unit.

If rural people obtain more information about agricultural prices, markets and economic
opportunities beyond their geographical horizon they will be able to increase their
productivity. Availability of telecommunication services can help to improve information
flow between rural and urban regions and help reduce the gap of economic development
between developed and developing countries but here other factors such as cultural,
social and institutional factors can play important roles. Information between rural and
urban areas can only be transmitted if there are communication technology links between
these areas. Governments and other financially able parties, such as in the private sector,
should establish communication technology links to facilitate information transmission.

Telecommunications as an Input to the Economic Production Process

Telecommunication services in any business entity are to some extent a low cost
substitute for information handling labour and has very low substitutability with other
traditional inputs such as capital, production, labour and materials (Nandi 2002).
However, telecommunication services help the industries more by increasing the
productivity of each of these traditional inputs and thus increasing the efficiency of the
entire production process. Telecommunications service is highly complementary with the
use of information technology products. Telecommunications help with the retrieval and
transportation of information, and allow efficient processing and exchange of information
among different computers situated in distant locations.

Market Efficiency Effect

By facilitating information flow and by enhancing the communication between buyers

and sellers, telecommunications increases the efficiency of market operations. Nandi
(2002) mentions that when a telecommunication infrastructure exists, in equilibrium, idle
resources are lower and markets are more efficient than when it does not.
Telecommunications increase arbitrage opportunities in financial markets, which in turn
lower the capital costs of production.

Spill Over and Externality Effects

In addition to its direct contribution to end-users, the telecommunication networks and

their use generate significant spill over effects in other sectors of the economy. Once the
telecommunication infrastructure is built in any nation, it is available to all sectors of the
economy and has good public characteristics. By possessing the characteristics of
infrastructure capital, telecommunication networks generate substantial externalities both
on the supply side and on the demand side. Investments in telecommunication
infrastructure have effects similar to those of improved or increased innovation. Many of
the benefits of telecommunication investments are not appropriated by the telecom sector,
e.g. the lowering of transaction costs, the ability to search widely or the ability to control
a greater pan of production and organizational activities. Telecommunications lower the
fixed and variable costs of information acquisition and an expansion of
telecommunications generates cost saving externalities in other markets (Nandi 2002)

The externalities involve lower search costs, increased arbitrage abilities and more
information on the distribution of prices and services. Because of these spillovers and
externality effects, the social rate of return on telecommunications is expected to be much
higher than its return just on the telecommunications investment itself. Studies done by
the United Nations Economic Commission for Europe, by the ITU, by the World Bank,
recognize the role of telecommunications in stimulating efficiency and growth of other
sectors in the economy.

Coordination of Economic Activity

By allowing easy acquisition and transfer of information among economic units, and by
facilitating rapid two-way communications over distance, telecommunications help in the
coordination of economic activity (Nandi 2002). In business, this mechanism improves
the capability of managers to communicate with each other and helps them to make better
decisions and business plans. Telecommunications help to remove, to a great extent, the
physical constraint on organizational communications in all sectors of the economy.
Recently, telecommunications has become a primary contributing factor towards the
development of increasingly complex large organizations and globalization of different
corporations.

The efficiency of household operations also improves as telecommunications allow better

coordination of their different activities. At the aggregate economy level,
telecommunications helps social planners to coordinate different economic activities at
reduced communications costs. However, it is very difficult to quantify the benefits to
management and coordination activities as they affect the quality of managerial and
administrative decision-making, which in turn improves economic performance.

Global Telecommunication Connections

As is true for domestic telecommunications, global telecommunications can influence the

global economy through similar mechanisms. Telecommunications helps the rapid
movement of information from one country to another and allow optimal utilization of
available technology, products and services around the world, thus helping to improve the
global economy. International telecommunication networks can improve the global
economy in many other ways. The speed of transmission of technological knowledge and
other information depends on the quality of information connecting channels among
different countries and the degree of absorption capacity of different countries.

Modern telecommunication helps the coordination of different countries and increases the
division of labour at the global level. International communications also increase the
opportunities for many small potential traders in different countries and increase the
efficiency of international capital markets. However, the expansion of global
telecommunications can benefit different countries very unevenly due to their differences
in political and economic powers as well as the differences in social and cultural
backgrounds.

Rural and Urban Development

It is an established fact that there is a large gap and income between the most advanced
countries and the developing countries in the world. However, the discrepancy in output,
income and standard of living among different regions is more acute domestically in less
developed countries than between developed and developing countries. In many rural
communities, the middleman plays a key role as sole buyer of products, monopoly
supplier of manufactured goods and credit suppliers to farmers. This middleman, in
superior market information. The free flow of information between rural and urban
markets can inform rural suppliers of the demand and prices of their products and
services in different markets throughout the economy.

This will allow them to adopt an optimal production and pricing plan for their products.
Using telecommunications, rural agents can consult with agronomists and vegetarians in
distant locations to provide necessary information to farmers for improving their crop
yields and livestock productions. All these activities help the rural people to increase their
productivity and income. The availability of telecommunications in rural areas can come
from major urban areas, creating more jobs opportunities and income in rural areas. Thus,
the development of rural telecommunications can help to overcome many obstacles to
rural development.

Indirect Effects of Telecommunications on Economic Development

Telecommunications contributes to economic development indirectly by improving the

coverage of basic services like health, education and environment protection in a country.
Telecommunication facilitates emergency medical assistance, long distance consultation,
and quality assurance to remote locations. In developing countries, there is a growing
consensus that telecommunications can ease the cost of providing medical care
throughout the nation subject to a tight national budget constraint. Telecommunications
also helps to spread education to remote locations. Modern telecommunications services
like voice, data and video services through high bandwidth allow effective distance
learning. Recent development of Inter networks as a layer on telecommunication
networks is making this effort more cost effective.

Telecommunications can help to increase awareness of environmental issues. Using

telecommunications, meteorological departments can send prompt signals to remote
locations that can reduce the damage of natural disasters. More discussion of these
benefits for developing countries like South Africa is in the next section.

Empirical Observations on the Role of Telecomunications on Socio-Economic

Development

Many economists have observed a positive correlation between the level of

telecommunications use and some index of economic well being. Jipp (1963) studied the
relationship between the income of a nation and telephone density, using data for
different countries, and found a positive correlation between the two. Bee and Gilling
(1976) also studied the relationship between telephone facilities and their use and
economic performance using data from 29 countries at different stages of development.
They constructed three indices: a telephone index representing the availability of
telephone facilities and their use, an economic performance index and a development
support index representing other supporting factors needed in economic development.
Their analysis shows a strong positive correlation between the telephone index and the
economic performance index and also explains the role of supporting factors in
enhancing the contribution of telecommunications to economic development. Moss
(1981) and Hardy (1980) also found a strong positive correlation between telephones
facilities and economic development at the macro level" (Nandi 2002:6). All these studies
illustrate that growth theorists who have studied the impact of telecommunications on
economic development have identified a positive impact of the former
(telecommunications) on the latter (economic development).

Furthermore, Nandi (2002) states that Dholakia and Harlem (1994) showed the
relationship between investment in telephone infrastructure and economic development.
They (Dholakia et al) examined the connection among a number of factors such as
education, energy, telephones, other physical infrastructure and economic development.
The results of their multiple regressions suggest that simultaneous investment in
development inputs such as education; telecommunications and other physical
infrastructures are complementary in helping to promote economic growth. Saunders,
Warford and Wellenius (1994) conducted several studies examining the correlation
between the density of telephone lines and economic development (Nandi 2002). The
latter also mention Madden and Savage (1998), who empirically examined the
relationship between gross fixed investment, telecommunication infrastructure
investment and economic growth for a sample of transitional countries of Central and
Eastern Europe. Their (madden & Savage) estimated results suggest a strong relationship
between investment in telecommunications and national economic growth. However,
these studies did not establish a causal relationship. Furthermore, economists have
acquired empirical evidence showing that investment in telecommunications enhances
efficiency of economic activity and at the same time economic growth stimulates the
demand for telecommunications.

Theoretical Approaches to the Role of Telecommunications in Development

In general, two schools of thought explain the relationship between telecommunications

and development. These are the technophilic and the technophobic views of the
relationship between telecommunications and development. Technophiles believe that
telecommunications have a positive effect on development, while technophobes regard
telecommunications as having a negative effect on development and contributing towards
the expansion of the information gap between the rich and the poor, the literate and the
illiterate. The utopian (technophilic) perspective on ICT supports the deployment of ICT
in communities and associates positive developments arising as a result of this
deployment. This perspective argues that in the economy, ICT will expand productivity
and improve employment opportunities, and will upgrade the quality of work in many
occupations. Moreover, ICT will offer many opportunities for small-scale, independent
and decentralized forms of production. Regarding developing countries, technophiles
envision that technology will aid developing countries to leapfrog stages of development
(Castells 1998; Mansell & Wehn 1998; Nulens & Van Audenhove 1999).

On the other hand, though admitting that ICT has profound changes in society, Van Dijk
(1999) believes that ICT applications and their transformative nature have been greatly
exaggerated. ICT may destroy more jobs than they create; the gap between rich and poor
may widen, and the huge capital investments required to strengthen national capabilities
for using ICT could divert resources from other activities that could have greater
development impact (Mansell 1999:36). Furthermore, technophobes argue that ICT
reinforces historical trends towards socio-economic disparities, inequality in political
power and gaps between knowledge elites and the knowledge-disenfranchised. On the
economic level, this perspective forecasts a perpetuation of the capitalist mode of
production, with a further managerial control over the means of production. In most
countries, it foresees massive job displacement and de-skilling.

In politics the expectation is that a pseudo-democracy will emerge as a result of ICT

usage, and this pseudo-democracy will allow people to participate in marginal decisions
only, and that ICT will enable governments to exercise surveillance over their citizens
more effectively than before. Sussman (1999:18) argues that whether the claim comes
from the political left or right, the notion that computers and the Internet represent
`revolutionary change is dangerously misconceived and technocentric. Sussman believes
that virtual communities will not be a substitute for face-to-face, place-based
communities, and that the defence of democracy requires the re-politicisation of
discourse about technology and the preservation of a public culture that fosters
relationships among citizens rather than consumers, meeting in public places in search of
a commonwealth of interests.

Most literature on this subject supports the view that telecommunications has a positive
effect on the development of communities. Modern information and telecommunications
technology can improve living standards in remote and rural areas by providing important
commercial, social and educational benefits (Jussawalla & Lamberton 1982; Share 1993;
Madden, Savage & Simpson 1997). In some parts of the world, information and
communication technologies and services (ICTs) are contributing to revolutionary
changes in business and everyday life. In other parts of the world, the lives of people
have hardly been touched by these innovations. If people in developing countries are
unable to acquire the capabilities for using the new ICT applications, they will be
increasingly disadvantaged or excluded from participating in the global information
society. The social and economic potential of these new technologies for development is
enormous, but so too are the risks of exclusion (Mansell 1999:35). The above-mentioned
technophiles support the availability and accessibility of ICT in developing nations, as
they argue that ICT brings, more knowledge and information for development purposes
to the people in these countries.
Deane and Opoku-Mensah (1997:5) state that enthusiasts claim that telecommunications
in the modern global economy offer a new dawn of economic opportunity for developing
countries. Byron and Gagliardi (1998:2) argue that many are optimistic about the
profound changes that have been brought about by the information society and the impact
of ICT on economic and socio-cultural development during the latter half of the 20th
century. They further state that these changes have contributed to the emergence of a
global society, in which the traditional barriers to communication, time and space, have
been surmounted and new dimensions given to the concept of reality, through the
creation of simulated virtual worlds.

Furthermore, Nulens and Van Audenhove (1999:28) argue that the benefits of ICT are
not regarded as being confined to the West alone, that several observers believe the
widespread use of ICT in developing countries will boost the economic and social
situation of Third World populations as well. The new technologies are seen as having
the potential vastly to improve working conditions and the overall quality of life for
human kind, making possible a more leisure-oriented society. On the other hand, others
view the implications of ICT for the future of human society with considerable
scepticism or pessimism. While they greatly facilitate access to information, they also
have the capacity to create an increasingly isolated, artificial existence for individuals
becoming ever more dependent on technology rather than direct human contact for the
means of communication (Byron et al 1998:2). This quotation illustrates both the positive
and negative effects of ICT on their users. Sussman (1999) and Dick (2000:12) question
the revolutionary changes that are said to be brought about by ICT and digital technology
and Dick cautions that it is always well worth asking, " Who is revolting?"

"Who needs the information society?" asks Dick (2000:3), who also believes that the
global information society will develop a few not many, and that the information society
brings Anew circuits of power. This implies therefore, that not everybody may benefit
from the information society, especially the poor who have no access to ICT. However, it
is the duty of government, in partnership with the private sector, to make sure that the
information society is not a society for a few, but is a society for many, if development
goals of any country are to be achieved.

The United Nations Commission for Science and Technology Development (UNCSTD)
has also conducted research on the effect of the application of ICT on sustainable
development. The commission recently spent three years investigating the benefits and
risks of ICT and found that there are many instances where ICT is making no difference
to the lives of people in developing countries or are even having harmful effects (Mansell
& Wehn 1998:1). Furthermore, emerging studies show that many of the claims that are
being made about the potential of ICT for development are not supported, and point to
the possible counter-productive effects of the use of ICT (Gomez et al 1999:1). It is
important that countries and their government apply ICT to specific development goals, if
that technology is to be efficient in development.
 Theoretical Perspective to the
Internet and Community
Development
In addition to the theories discussed above, Lie (2001) distinguishes between two
perspectives on the Internet in relation to community development. The first, and
most dominant perspective is the technological-economic perspective. The second is
the culturalistic perspective. A summary of these two perspectives is provided in
Figure 4.1. below.

Figure 4.1: Characteristics of a culturalistic and technological-economic

perspective on community development

Characteristics of a technological- Characteristics of a cultural

economic Perspective on
community development
 Close association with political
development, policy and
regulatory reform
 Technological development is a
necessity for economic
development
 The perspective is "from outside
in" and "top down". Human
beings are primarily seen as
economic factors
 The guiding objective is to
media forms and ICTs to bridge
the digital divide and thus close
the information gap between
and within communities
perspective on community
development
 Close association with social
development, processes of
democratisation and human
rights
 Technological development is a
necessity for economic
development and economic
political development should
serve socio-cultural development
 The perspective is "from the
inside out" and "bottom up".
Human beings are seen as socio-
cultural factors
 The guiding objective is to offer
relevant, cultural, and social
sensitive information. The media
is chosen to fit the society. The
perspective is
information/software and social-
cultural centred

Adopted from: Lee, 2001

The approaches in Figure 4.1 above can be used in various development

projects in developing countries that have utopian views of the role of ICTs
in development.

ICTs and Development Support Communication (DSC)

ICTs can be used to achieve the goals of DSC for developing countries in their various
development projects. Several theorists have written about Another Development or
Development Support Communication (DSC), as an approach to development
communication. Obregón and Rivera (2001) state that the 1970s brought the emergence
of the alternative paradigm (alternative to the dominant paradigm), also known as the
pluralist perspective or another development. In a nutshell, advocates of the pluralist
perspective or another development recognised the failure of previous development
models and embraced a number of new approaches to development. Some of these
approaches of DSC are the following:

1. development should be needs-oriented

2. development should be indigenous
3. development should promote participation at all levels
4. development should promote equal access
5. development should promote society's self-reliance; development should take into
consideration local culture, values and norms

Within this theoretical approach to development, the role of communication is described

as development support communication and as supportive of community development.
The main emphasis is placed on two-way interactive and participatory communication, as
a response to top-down, one-way communication proposed by the dominant, expert-
driven project. Another development is people-centred as it supports the idea that all
concerned with development should bring their ideas together and those being developed
must have a say in the ICT projects aimed at their development.

Participatory communication is not new and has been practiced and promoted for many
decades. This approach focuses on human and economic concerns, and places greater
emphasis on the basic needs of people and participation of beneficiaries in development
programmes set up for their benefit. DSC approach assumes a broadening of the
definitions of public interest beyond the simple assessment of pricing services, and
involves an analysis of the potential benefits of access to education and social services to
citizens throughout the country, the impact of geographical as well as income- related
disparities, the potential for economic benefits of affordable access to information for
individual and commercial activities.

DSC is relevant for the development of least developed countries because of its
participatory nature, and because it involves two-way communication between various
stakeholders participating in any development project.
Two-way communication between the developers and those being developed can result in
positive development for any community. Community members can also be creative also
suggest ways of how they can use telecommunications technology for their own
development, based on what technologies they can afford to pay for, in terms of
technology use and available information services.
 Summary and Conclusions

Productivity growth is the key factor for any country's economic development and this is
also one of the significant contributions of telecommunications. The telecommunications
infrastructure contributes towards productivity growth in many ways. The importance of
it has been increasing rapidly in the past two decades as a result of revolutionary growth
in information technology.

Developed countries are already experiencing the benefits through their well-established
telecommunications systems and continuous modernization of their telecommunication
networks. On the other hand, the developing countries have realized the importance of
modern telecommunications and information infrastructure for achieving high growth
rate and economic development. However, the proper adoption and utilization of the
rapidly changing information technology is a major challenge to them. As Mbarika
suggests in the above discussion, it is imperative that developing countries should make
use of the information opportunities provided by ICTs like the Internet. In LDCs where
the Internet and telecommunications technologies are unavailable, it is about time that
governments and the private sector in those countries make such services available to
most people. This accessibility to ICTs will, in the long run, reduce high illiteracy rates,
increase opportunities for employability and reduce poverty. It will also increase
opportunities for distance education for a more informed African society.