23 October 2009
BEIRUT: The global value of Information and Communication Technology (ICT) goods exports has stalled since 2000, after enjoying a brief period of exponential growth.
The value of the sector rose from $813 billion to $1.73 trillion between 1998 and 2007. In 2000 ITC goods exports constituted 17.7 percent of all merchandise trade; by 2007 this had fallen to just 13.2 percent, said the director of ICT division at United Nations Economic and Social Commission for Western Asia (ESCWA) Youssef Nusseir on Thursday.
“While [ICT] goods belonged to the most dynamic areas of the world trade until 2000, they have subsequently expanded less rapidly than global trade as a whole,” said Nusseir.
His remarks came during a conference held at the ESCWA headquarters in Beirut to launch the Information Economy Report 2009 – released by the United Nations Conference on Trade and Development (UNCTAD) – about the implications of the global economic crisis on the ICT sector in the world.
Citing the outcome of the report, Nusseir said that the economic crisis would impact negatively on the positive trends in ICT distribution and the investment needed to ensure universal access to ICTs.
“The crisis is expected to influence developed and developing countries and various regions within developing countries differently,” he said, adding that governments have identified enhanced ICT use as a strategy to quicken recovery.
On the other hand, Rami Zaatari, an IT expert in the ICT division at ESCWA, said that the production of various ICT goods has been seriously affected by the global recession.
“The volatile semiconductor industry has been among the worst hit. Revenue growth also turned negative for the largest makers of such IT equipment as computers and consumer electronic services. The same is true of the top manufacturers of communication equipment,” he said.
However, he added, over the medium to long term, companies will continue to upgrade their ICT systems, as this is essential for their competitiveness.
While ICT goods are among those products that have been the most affected by the recession, IT and ICT related services appear to be more resilient, according to the report.
Nusseir said that mobile and internet usage continued to expand rapidly in most countries and regions, while fixed telephone subscriptions are now in slight decline.
“At the end of 2008, the number of fixed telecommunications subscriptions in the world was around 1.2 billion and the number of mobile subscriptions reached 4 billion,” he said. Nusseir added that there were an estimated 1.4 billion Internet users globally at the end of 2008 and an estimated 400 million fixed-broadband subscribers.
According to market analysts, the global market for the “offshoring” of IT and ICT-enabled services was estimated to be worth around $90 billion in 2008, of which IT services accounted for 60 percent, said the report.
It states that exporters of IT and ICT-enabled services have generally weathered the global economic crisis much better than ICT goods exporters. On the other hand, it added, services exports may decline in the short term due to the general slowdown in economic activity. This applies especially to services offshored by the financial industry, as some banks and other financial institutions may disappear altogether according to the report.
Zaatari said that in many developed, developing and transition economies, mobile penetration now exceeds 100 subscriptions per 100 inhabitants.
“The penetration level in developing countries is now eight times higher than what it was at the turn of the century. The least developed countries raised their mobile penetration from two per 100 inhabitants in 2003 to 20, in 2008,” he said.
According to the report, between 2003 and 2008, the most dynamic economies in terms of increased mobile penetration were Montenegro, Qatar, Bahrain and the Maldives.
On the other hand, Nusseir noted that there is a widening gap between high-income and low-income countries in the area of broadband activity. The report explained this gap by mentioning Australia: a country with 21 million inhabitants and more broadband subscribers than the whole Africa. The broadband divide is aggravated by smaller bandwidths and higher costs in developing economies.
The report included recommendations for governments to narrow the broadband divide. UNCTAD suggested that operators should be encouraged to share backbone infrastructure to avoid duplicative and fragmented low-bandwidth networks. It added that governments also need to ensure that operators are face competition to ensure good supply at reasonable prices.
Copyright The Daily Star 2009.
