Broadband use in the business sector Torbjörn Fredriksson 23 November 2009 Side-event workshop at ICT for All (Tunis + 4) jointly organized by World Bank, infoDev and the UN Commission on Science and Technology for Development El Medina, Hammamet, Tunisia

2 Content of the Report  Chapter I: Monitoring Connectivity for Development oDigital divide continues to narrow except in the case of braodband  Chapter II: Making Use of ICTs in the Business Sector oHuge gaps in ICT use, both between and within countries  Chapter III: Evolving Patterns in ICT Trade oICT goods exports fall sharply in crisis while ICT services are resilient

3 Widening divide in broadband connectivity 400 million fixed broadband subscribers Broadband subscriptions per 100 inhabitants, , by country group 8 times higher penetration in developed than in developing economies… … >200 times higher than in LDCs! Source: UNCTAD, based on ITU and national data.

4 The top 20 most dynamic economies in terms of increased broadband penetration * Source: UNCTAD, based on ITU and national data.

5 ICT diffusion is improving in LDCs But broadband penetration is still very low, Subscriptions or users per 100 inhabitants, Logarithmic scale Source: UNCTAD, based on ITU and national data.

6 Africa lags behind in broadband connectivity High concentration: five African countries account for 90% of all broadband subscriptions. Slow: broadband speeds often low in existing networks. Costly: 14 of the world’s 20 highest access fees in Sub-Saharan Africa. Source: UNCTAD, based on ITU and national data.

7 Limited broadband access hampers development  Sufficient national and international bandwidth needed for many applications that promote development oTelehealth oDistance learning oDisaster management oE-government applications oE-commerce oExports of IT and ICT-enabled services

8 Effects of Broadband Use by Companies  Evidence mainly from developed countries oUS: broadband user more likely to make purchases online oSweden: broadband led to more productive use of Internet  Stronger productivity effects in countries with relatively high levels of ICT use…  …but recent WB research suggests broadband effect on growth to be higher in developing than in developed countries.  Finland: broadband access – basic right… Source: studies by OECD 2008, Statistics Sweden 2008, LECG, 2009, Qiang, 2009.

9 Broadband most used by larger enterprises (selected economies, latest year, % of enterprises) Source: UNCTAD Information Economy Database.

10 The urban-rural broadband divide (selected economies, latest year, % of enterprises) Source: UNCTAD Information Economy Database.

11 Internet use by companies (selected economies, latest year, % of enterprises) Source: UNCTAD Information Economy Database. Finland, 2006

12 Broadband connectivity important to boost exports of IT and ICT-enabled services  Infrastructure aspects considered by companies oExtent of down time and Costs? oIs there redundancy? oAre there multiple suppliers of services?  Requirements vary by type of service, e.g. oVoice-based customer services – fibre-optic connections normally required to avoid latency problems oData traffic – may allow for some more flexibility  Infrastructure not enough oSkills and regulations other key factors

13 More geographical diversification of offshoring Africa emerging as host location  Top destinations: India and Philippines  Share of Latin America and Central and Eastern Europe on the increase.  Top destinations in Africa: Egypt, Mauritius, Morocco, South Africa and Tunisia  Better international connectivity thanks to SEACOM and TEAMS may facilitate exports from more countries

14 The Information Economy Report 2009 can be downloaded free of charge at Thank You!