Harnessing Ict for Fdi and Development

There is a growing recognition of the enabling role that information and communication technology (ICT) plays in promoting development, especially where it can “improve the performance of businesses and the efficiency of markets, empower citizens and communities, increase their access to knowledge, and help to strengthen and redefine governance at all institutional levels.” 1 This paper aims to examine a specific aspect of the relationship between ICT and development via its impact on foreign direct investment (FDI), looking specifically at how ICT can be leveraged to promote the more development-enhancing aspects of such investment. 1. The Global Ascendancy of ICT and FDI The ascendancy of information and communication technologies (ICT), 2 especially the Internet and Internet-based technologies and services, has been an important development shaping international production over the past decade. As of December 2007, Internet usage was over 1.3 billion people (Figure 1), compared with 360 million people in 2000. However, this tremendous growth masks the fact that only 20 percent of the world‟s population is currently using the Internet. Internet penetration varies considerably across regions, ranging from 5 percent in Africa to 71 percent in North America. Asia leads in terms of number of Internet users, followed by Europe and North America. 3 In China alone, the China Internet Network Information Center reports 162 million users as of June 2007, an Internet penetration of 12.3 percent. The Middle East, followed by Africa and Latin America and the Caribbean, leads the way in terms of Internet growth. 4 1 UN Global Alliance for ICT and Development (2006). 2 ICT is an umbrella term that includes devices and technologies, such as radio, television, cellular phones, desktop and laptop computers, software, peripherals and connections to the Internet, as well as services and applications associated with them, all intended to fulfill information processing and communications functions. 3 www.internetworldstats.com.