Strategy Consultations 2011 CONNECT INNOVATE TRANSFORM Communication Technologies Information & World Bank Group

ICT Objective The World Bank Group is developing a new ICT Sector strategy. We seek views from stakeholders on where and how to focus our financial and advisory services 2

Phone Smart Grids Green Technology Video on Internet Social Networking Mobile Banking 3

ICT Going Forward Climate Change Education & Health Governance & Social Develop. Urban Finance Rural Social Protection Infrastructure Largest Ever Delivery Platform: > 3 Billion Mobile Phones in Developing Countries 4

2001 ICT Sector Strategy

ICT 2001 Strategy Preliminary Assessment 6 Sector Reform Access to ICT ICT Applications Human Capacity Clear positive outcomesPromising pilots but unrealized potential

ICT Sector Reform & Access to ICT: Clear Positive Outcomes Sector reforms in > 100 countries (including >60 IDA countries) Outcomes: Large impact on economic growth US$ 30 billion private sector investment ( , IDA countries) Sector reforms in > 100 countries (including >60 IDA countries) Outcomes: Large impact on economic growth US$ 30 billion private sector investment ( , IDA countries) US$ 3.2 billion for 203 projects (US$1.8 billion in 32 IDA countries) Mobilized another US$ 1 billion 225 million new mobile subscribers US$ 3.2 billion for 203 projects (US$1.8 billion in 32 IDA countries) Mobilized another US$ 1 billion 225 million new mobile subscribers Recognized tools for telecom regulators and policy makers in other sectors eg ICT in Education Global network of business incubators innovative SMEs and job creation Recognized tools for telecom regulators and policy makers in other sectors eg ICT in Education Global network of business incubators innovative SMEs and job creation 38 Guarantees ~ US$ 1.3 billion for 21 projects (12 in Africa) Contributed to ~ US$6 billion FDI 38 Guarantees ~ US$ 1.3 billion for 21 projects (12 in Africa) Contributed to ~ US$6 billion FDI 7

ICT Applications: Unrealized Potential but Promising Pilots Examples of Promising Pilots IFC: – Mobile banking in South Africa – Mobile health in Rwanda Bank: – Ghana: e-Customs PPP – Afghanistan: Use of geo-referenced photos for verification of project outputs – Sri Lanka: Satellite imagery for fisherman communities – Tunisia & Ethiopia: Access to Internet for disabled Unrealized Potential QAG Assessment: Low quality of ICT components ICT inputs insufficient in most cases Focus on automation, recent focus on transformation More than half of WB projects include active ICT components (US$ 7.7 billion, FY07) 8

ICT ICT Human Capacity: Promising Pilots, but not at scale Examples of promising projects and initiatives – infoDev’s incubator network: 300 incubators supporting 20,000 + micro-enterprises and SMEs in over 80 countries – WBI courses for policy makers – infoDev’s ICT in education toolkit – E-Development thematic group: 1,600 external members and > 300 internal members – IFC: ~ 57,000 IT jobs created in 54 companies – World Bank: New Economy Skills for Africa Program in 8 African countries (especially Kenya, Nigeria and Ghana) – World Bank: South-South knowledge exchange on IT industry development However, not at scale and models not fully mature 9

ICT WBG in ICT Sector: Sector Reform / Access to ICT ICT Applications Human Capacity and Innovation Sector reform: Bank active in 105 countries in last 10 years, infoDev’s regulatory toolkit and Open Access research PPPs for backbone infrastructure: IFC-led EASSy Project (22 countries, 30 operators, 4 other DFIs) in Africa – Bank-led Regional Communications Infrastructure Program (RCIP) Wireless: IFC financing have so far contributed to 225 million mobile subs Infrastructure: IFC financing for Shared towers (Turkey and Brazil); Bank support for rural infrastructure (India, Sri Lanka); New broadband solutions: WiMax (Ukraine, Uruguay), Cameroon / Central Africa (Pipeline), West Africa (Electricity Transmission), Broadband wireless (Afghanistan) Sector reform: Bank active in 105 countries in last 10 years, infoDev’s regulatory toolkit and Open Access research PPPs for backbone infrastructure: IFC-led EASSy Project (22 countries, 30 operators, 4 other DFIs) in Africa – Bank-led Regional Communications Infrastructure Program (RCIP) Wireless: IFC financing have so far contributed to 225 million mobile subs Infrastructure: IFC financing for Shared towers (Turkey and Brazil); Bank support for rural infrastructure (India, Sri Lanka); New broadband solutions: WiMax (Ukraine, Uruguay), Cameroon / Central Africa (Pipeline), West Africa (Electricity Transmission), Broadband wireless (Afghanistan) Banking the unbanked: IFC support to m-banking - WIZZIT (South Africa), Digicel in Caribbean, Millicom; infoDev’s m-banking knowledge map and research e-Government: Bank support in Vietnam, Ghana, Mongolia, Kenya; IFC support to Sonda (Chile), IBS (Russia), Meteksan (Turkey), Chinasoft; infoDev’s egovernment toolkit e-Health: Investing in cellular-based health systems, Voxiva (Africa – LAC), health data management Education: IFC support to Socket Works (Nigeria), new Bank-led ICT Skills development Initiative, infoDev’s ICT in education toolkit in partnership with UNESCO Partnerships and Knowledge: M-Banking Conference (GSM Assoc., DfID, CGAP), Industry Partnerships, Government Transformation Initiative Banking the unbanked: IFC support to m-banking - WIZZIT (South Africa), Digicel in Caribbean, Millicom; infoDev’s m-banking knowledge map and research e-Government: Bank support in Vietnam, Ghana, Mongolia, Kenya; IFC support to Sonda (Chile), IBS (Russia), Meteksan (Turkey), Chinasoft; infoDev’s egovernment toolkit e-Health: Investing in cellular-based health systems, Voxiva (Africa – LAC), health data management Education: IFC support to Socket Works (Nigeria), new Bank-led ICT Skills development Initiative, infoDev’s ICT in education toolkit in partnership with UNESCO Partnerships and Knowledge: M-Banking Conference (GSM Assoc., DfID, CGAP), Industry Partnerships, Government Transformation Initiative Supporting the growth of IT/IT enabled service industry: Bank’s support in Ghana, Mexico, Kenya, Sri Lanka; infoDev’s research on ITES industry and IT parks Cellular Distribution Facility: IFC- financed working capital facility program offering local banks creditline to cellular distributors to buy bulk airtime aimed for retail market Supporting the development of an ICT-Enabled innovation network: Leveraging infoDev’s business incubator initiative, which provides financing and TA to over 300 incubators for 20,000 MSME businesses in over 80 countries Supporting the development of holistic ICT policy frameworks: Increasingly developing countries are recognizing the linkage between innovation and economic development and GICT is working with several countries Creating systems of innovations: DFID Low Carbon Innovation Centers, clean energy innovation centers Supporting the growth of IT/IT enabled service industry: Bank’s support in Ghana, Mexico, Kenya, Sri Lanka; infoDev’s research on ITES industry and IT parks Cellular Distribution Facility: IFC- financed working capital facility program offering local banks creditline to cellular distributors to buy bulk airtime aimed for retail market Supporting the development of an ICT-Enabled innovation network: Leveraging infoDev’s business incubator initiative, which provides financing and TA to over 300 incubators for 20,000 MSME businesses in over 80 countries Supporting the development of holistic ICT policy frameworks: Increasingly developing countries are recognizing the linkage between innovation and economic development and GICT is working with several countries Creating systems of innovations: DFID Low Carbon Innovation Centers, clean energy innovation centers 10

The ICT Sector in 2010

ICT Trends in ICT Sector Growing role of high-speed internet in developing countries Information and content available at high-speeds on phones Mobile phones as the single largest service delivery platform in the world IT-enabled services industry an engine of growth and employment generation Convergence causing disruptions in government policies and business models 12

ICT Market Gaps in ICT Sector IN COVERAGE India: Rural versus urban teledensity Rural Urban Access to the Internet remains a challenge IN SERVICES IN COST % of global revenues 2007 (total market - US$89 billion) US & Canada 61% Middle East 1% Latin America 2% Asia 8% Europe 28% Africa 0% Market for business information IN CONTENT $0 $200 $400 $600 Low Income Low- Mid Income Up-Mid Income High Income Average Monthly Lease Cost for a High Speed Internet Connection (2Mbps) 10x More Total Telephone Lines To be Connected: 1.8 bn Developing Countries: 2.9 bn Developed Countries: 1.3 bn 13

ICT Lessons Learned The role of private sector continues to be paramount The level of connectivity in client countries varies and requires a differentiated approach to ICT sector development in client countries Skills are a binding constraint in developing local IT-enabled service industries and supporting ICT applications ICT applications present high-risk, high-reward opportunities, and require selectivity and greater checks and balances IT coordination across sectors of government can help lower costs and create operational efficiencies Deliberate policies are needed to promote social inclusion and gender equality IT-enabled service industries are capable of creating opportunities for youth and women 14

Proposed ICT Sector Strategy

ICT Transform Innovate Connect Emerging Directions for the New Strategy Sector Reform Access to ICT Human Capacity ICT Applications 2001 StrategyEmerging Directions CONNECT – Maintain a focus on the connectivity agenda with an emphasis on high-speed Internet INNOVATE - Increase support for the use of ICT to unleash innovation across the economy and for the growth of local ICT industries TRANSFORM – Scale up support to client countries to use ICT to transform all areas of the economy 16

Connect: Maintain Focus with an Emphasis on High-Speed Internet ICT and Growth 10% point increase in high-speed Internet connections accounts for 15-25% of a country’s growth Significant gaps remain in High- Speed Internet Only 250 million subscribers in developing countries Private sector investments lagging behind policy objectives Areas of WBG Interventions Continue reform agenda for more private sector investment Need for public-private partnerships Public sector financing interventions ramping up across country segments. Examples: Finland, Australia, Germany, USA, Russia, Brazil, Uganda, Ghana, Rwanda, etc. Policy and Regulation (WB, infoDev) Private sector investments (IFC) Guarantees (MIGA) Catalytic public sector investments (WB) 17

Policy and Regulation Infrastructure R&D and Skills Ecosystem for Innovation and ICT Industry Development Start-upGrowthEstablishedVenture Capital Public Equity Markets Credit (Debt) Markets Stages of Enterprise Development Finance Policy, Infrastructure and Skills 300 incubators of ICT-enabled enterprises in over 80 developing countries supported by infoDev 20,000+ enterprises creating over 220,000 jobs INNOVATION AT THE GRASS ROOTS Innovation at the Micro- Enterprise and SME level Innovate: Promote innovation across the economy and grow local ICT industries 18 SME Development & Job Creation Young firms contribute to over 60% of job creation Over 80% of incubated SMEs stay in local communities 50 jobs created by an incubator client generate 25 in community

Transform: Increase Support to Leverage ICT Across All Sectors Cross-Sector AgendaStrategic Template Sector / Theme Outcomes Climate Change Infra- structure Human Develop- ment Gover- nance Mobile and Other e-Services Government Private Sector & NGOs Back-end Applications (MIS, FMS, Procurement, etc.) Back-end Applications (MIS, FMS, Procurement, etc.) Enabling Environment: Regulatory framework (sector-specific) Policies and standards Shared infrastructure Interoperability framework Cyber security Enabling Environment: Regulatory framework (sector-specific) Policies and standards Shared infrastructure Interoperability framework Cyber security Foundations Environment & Climate Change Education & Health Governance & Social Develop. Urban Finance Rural Social Protection Infrastructure Largest Ever Delivery Platform: > 3 Billion Mobile Phones In Developing Countries Need for Sector/Theme Specific Strategies (Annexes) – for Sector-Led Implementation 19

20 Working with partners: The eTransform Initiative COMPONENTS Fast-track implementation Provide access to expertise Spark interest Project Development Facility Leaders Network/P2P Community of Practice Knowledge Repository Global Forum Showcase best in class projects/initiatives

Consultations

ICT Consultations & Strategy Preparation Internal and External Consultations for Strategy Preparation November 2010 – February 2011 Internal and External Consultations for Strategy Preparation November 2010 – February 2011 Analytical Work Broadband policy ICT and Climate Change Mobile applications for development ICT for Innovation, ICT in Agric AFR ICT-enabled Transformation, AFR ICT in Health Analytical Work Broadband policy ICT and Climate Change Mobile applications for development ICT for Innovation, ICT in Agric AFR ICT-enabled Transformation, AFR ICT in Health Global Consultations on Full Draft Strategy July 2011 Global Consultations on Full Draft Strategy July 2011 Internal Management Reviews Preliminary Board review June 2011 Internal Management Reviews Preliminary Board review June 2011 Board Discussion September 2011 Board Discussion September 2011 Strategy drafting November 2010 – May 2011 Strategy drafting November 2010 – May

ICT Consultation Questions Q6 SELECTIVITY Which activities—lending, equity investments, guarantees, technical assistance, capacity building, research and other analytical work, and the provision of public goods—are the most effective in supporting countries and what is the optimal mix of the activities? Q1 WBG ROLE in Where do you think the help of the World Bank Group in the ICT sector in developing countries is most needed? Q2 NEEDS OF COUNTRIES Do the proposed priority issues – connect, innovate and transform – adequately address and balance the needs of countries? Q3 CONNECT What is the role of public sector financing and the World Bank Group in advancing the connect agenda and overcoming the gap in high-speed internet connectivity? Q4 INNOVATE Should the World Bank Group be active in the innovation space (ICT skills Development, SME job creation, IT-enabled industry development) and how? Q5 TRANSFORM How could the World Bank Group adequately support countries planning to use ICT to transform their economies and the way governments deliver services to citizens and businesses? 23