1. INFORMATION ECONOMY REPORT 2009 Trends and Outlook in Turbulent Times
Torbjörn Fredriksson
Manchester, 23 October 2009

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

3. Fixed telephony stagnant or declining
Fixed telephone lines per 100 inhabitants, , by country group

4. Mobile growth continues Worldwide subscriptions surpassed 4 billion in 2008
Mobile subscriptions per 100 inhabitants, , by country group

5. The top 20 most dynamic economies by increased levels of mobile penetration 2003-2008
UK : 122
(up from 89 in 2003) *

6. Implications of the Economic Crisis Mobile telecoms resilient
Continued growth in emerging economies
India: almost 100 million new subscribers Jan-July 2009
Mobile has become the most preferred ICT tool
Africa: 20 times more mobile subs. than fixed lines
New mobile applications emerging
Investors in North and South see growth prospects
Strong interest in expanding mobile broadband
ITU’s forecast for 2009: 4.6 billion subscriptions
Outlook remains positive

7. Internet users keep expanding Now 1
Internet users keep expanding Now 1.4 billion users; highest growth in the South
Internet users per 100 inhabitants, , by country group

8. The top 20 most dynamic economies by increased levels of Internet penetration 2003-2008
UK : 56
(up from 45 in 2007) *

9. 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!

10. The top 20 most dynamic economies in terms of increased broadband penetration 2003-2008
UK no 11 *

11. ICT diffusion is improving in LDCs Tenfold increase in mobile subscriptions, 2003-2008
Subscriptions or users per 100 inhabitants,
Logarithmic scale

12. 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.

13. …and has the least international bandwidth
Bits per capita, 2008
Source: UNCTAD, based on World Bank and national data

14. Limited broadband access hampers development
Sufficient national and international bandwidth needed for many applications that promote development
Telehealth
Distance learning
Disaster management
E-government applications
E-commerce
Exports of IT and ICT-enabled services

15. Implications of the Economic Crisis ICT goods badly affected
Some network upgrades have been postponed
General decline in ICT spending
Semiconductors and consumer electronics in particular
Smart phones the main bright spot
Sharp declines in ICT goods trade
Medium to long term prospects: companies will continue to upgrade their ICT systems, as this is essential for their competitiveness.

16. China shows biggest recovery
Sharp declines in ICT goods trade Monthly ICT goods exports by top 6 exporters (Aug-07: 100)
China shows biggest recovery

17. Further increase in Asia’s role as a result
Further increase in Asia’s role as a result? Largest gains/losses in market shares of ICT goods exports, 1998–2007
Developing Asia’s share up from 35% to 54%
China’s: 3% to 20%
US’ share: 16.6% to 9.5%
Europe’s: 31% to 25%
UK share: 5.9% to 2.2%
Missing trader fraud
New EU members: 1.2% to 3.7%

18. Exports of IT and ICT-enabled services More resilient in crisis
Offshoring of services a way for firms to reduce costs and enhance competitiveness
Short-term decline in offshoring by financial institutions
Others will offshore new and more services
Medium to long term prospects: as global economy recovers, offshoring of services set to widen geographically, sectorally and across business functions
Room for more countries to develop sizeable export-oriented services industries

19. Top exporters of IT and ICT-enabled services 2007, US$ billions
UK also among top gainers in exports of IT and ICT-enabled services
Source: UNCTAD, based on IMF BOP data.

20. Greater geographical diversification
Share of market for business process offshoring, 2004–2008
Source: UNCTAD, based on data from the Everest Research Institute.

21. India dominates market for ITO
Share of market for information technology offshoring, 2008
Source: UNCTAD, based on data from the Everest Research Institute.

22. Policy Implications ICTs important part of economic stimulus packages
Create enabling environment for ICT use
More efforts needed to narrow remaining gaps
Urban-rural; large-small firms; by industries; by language
Bridging the broadband divide
Consider both fixed and mobile solutions
Infrastructure sharing
Exposing operators to competition
Universal access service funds
Promote public Internet access points or telecentres

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