ICTs AND THE ECONOMIC CRISIS
BROADBAND FOR A BETTER FUTURE
(This speech was delivered on behalf of Dr Hamadoun I. Touré by Luiz Fernando Ferreira Da Silva, Head of External Affairs & Corporate Communications)
Ladies and gentlemen,
It is a great pleasure for me to be here in Jeddah this evening, and to be able to take part in the opening inaugural panel of the 2010 Jeddah Economic Forum.
I would like to say a few words this evening about the role of ICTs in the economic crisis, and about ITU’s vision of the transformational role of broadband networks in delivering social and economic progress.
Last October, at ITU Telecom World 2009, we launched a report entitled ‘Confronting the Crisis: ICT Stimulus Plans for Economic Growth’.
Perhaps the most interesting finding of the report was that the financial crisis failed to make a major dent in demand for ICT services.
This is backed up, of course, by the evidence all around us.
Do you know anyone who has stopped using their phone recently? Have you heard of anyone switching off their internet connection?
Once people have access to modern communications, they are very reluctant indeed to give it up – even during constrained economic times.
It is therefore no surprise to us at ITU that this year, 2010, will see the number of mobile cellular subscriptions worldwide surpass the five billion mark – having reached the first billion in 2002, the second in 2005, the third in early 2007 and the fourth in late 2008.
And within the next year there will be over two billion people using the internet.
Ladies and gentlemen,
This is astonishing progress, and at ITU we firmly believe that investments in ICT – and broadband networks in particular – have a major role to play in any stimulus plan. They often promise stronger marginal returns on supply, and greater productivity gains, than other forms of infrastructure.
There is an growing body of research which shows that investment in ICTs has a direct positive effect on GDP growth. And interestingly, higher-end technology seems to deliver the greatest benefits.
A 10% increase in fixed line teledensity seems to increase GDP by around 0.5%. The same increase in mobile teledensity increases GDP by some 0.7 percentage points. And a 10% increase in broadband penetration can boost GDP by an average of 1.3%.
I think it is therefore clear that ICTs will continue to play a pivotal role as we emerge from the financial crisis, and will be key in fuelling fresh economic growth.
I emphasize broadband, in particular, as broadband access – and the ability to deliver community services over broadband networks – will underpin social and economic development in every country on earth during the 21st century.
Indeed, I believe it is no exaggeration to say that high-speed internet will be as transformational in this century as the advent of transport, power or water networks were in past centuries.
Embracing broadband development will help drive growth and deliver benefits right across society and right across every industry sector.
This is important, because it means that broadband needs to move off the telecoms agenda and onto the national agenda.
National broadband networks deliver efficiencies across huge swathes of the economy and deliver benefits to governments and their citizens alike.
Without broadband networks, however, governments won’t be able to solve the problems of getting health care to ageing or isolated populations. They won’t be able to support tomorrow’s pressing educational needs. They won’t be able to streamline traffic networks, deliver efficient government services or use and control energy supplies to their best advantage. And they won’t be able to accelerate progress towards the Millennium Development Goals.
This is a challenge we must address urgently. This decade must be the decade of broadband. And we must ensure that access to broadband networks is equitable and affordable. For all people – wherever they live and whatever their circumstances.
So how can we drive investment in broadband networks and facilitate wider and fairer access to them?
The key is in recognizing that broadband networks deliver benefits across the whole of society. This makes them incredibly cost-effective – especially when you look at the benefits across multiple sectors.
Increasingly, this is being recognized at the highest political levels, and it is becoming clear that broadband network rollout can effectively be financed by innovation and cost-savings in sectors such as health, education, energy and transport.
Recent estimates show that in some countries, cost savings of just 0.5% to 1.5% over ten years, in these four key sectors, could justify the cost of building national point-to-point, fibre optic networks.
If we recognize that broadband networks deliver benefits at a national level, then we must also recognize that strong national policies will be needed to get other sectors involved in planning – and paying for – broadband infrastructure rollout.
This vision needs to be driven by leaders at the very highest level – presidents and prime ministers for example – who have the national interests at heart and don’t work within any individual sector.
This applies just as much to developing countries as it does to developed ones – with a clear need for: national broadband strategies and policies; meaningful broadband targets and goals; and putting in place the necessary incentives to achieve rapid broadband deployment.
We know this works.
At the turn of the millennium, the Republic of Korea had a broadband penetration of just 1%. To drive take-up, the government launched Cyber Korea 21, a programme offering affordable IT education to marginalized groups like housewives, the elderly, and the disabled.
Complementing this, Korea embarked on a wide-ranging e-government programme, investing US$24 billion in a national fibre backbone that provides more than 28,000 government departments and agencies with fast broadband access.
Today, Korea is one of the world’s most advanced broadband markets – demonstrating the power of political will in bringing broadband to the people.
Ladies and gentlemen,
I am an optimist, and I firmly believe that we will see extraordinary success stories around the world during this decade – the decade of broadband.
We will see successes in rich countries and poor, in developed and developing nations.
And we will see successes wherever we find human ingenuity and the will to build a better world.
A world built on broadband.