1. Global Event on Measuring the Information Society, 27-29 May 2008, Palais des Nations, Geneva Session 4: Measurement of ICT Impact ICT and labour productivity, case study of Thailand Diana Korka (UNCTAD)

2. Joint UNCTAD Project with the National Statistical Office of Thailand An UNCTAD capacity-building programme on ICT measurement in the context of the Partnership on Measuring ICT for Development Assist the Thai NSO in applying statistical and econometric techniques in their data analysis Focus on ICT use in business and link to firm level labour productivity One of the first ICT-related economic impact analyses to use official statistical data from a developing country

3. ICT in Thailand - strategy and figures ICT producing sector: strong electronic product assembly sector (2006: US$ 15bn exports of computers & computer parts) and a growing software market including outsourced software Thailand’s National ICT Master Plan (2002-2006) → → 2 nd ICT Master Plan (2007-2011) Consider ICT as an important enabler for national economic and social development and for strengthening competitiveness ICT use measurement – already in 2003 a number of ICT indicators included in the Manufacturing Industry Survey – since 2004 the NSO carries out an annual stand alone ICT Survey of the business sector

4. ICT use by businesses in Thailand The data Part I: 2004, 2005 and 2006 ICT Business Survey – 77’000 manufacturing & services businesses in municipal areas – give descriptive statistics on ICT use by Thai businesses Part II: 2003 Manufacturing Survey – 8’800 manufacturing businesses (municipal and non-municipal) - used to study the relationship between ICT use and labour productivity Focus on: computers, Internet, web presence

5. Part I: ICT use by businesses in Thailand Proportion of businesses using computers, Internet and web in selected Asian economies Source: UNCTAD information economy database, 2007 and 2005 ICT Business Survey in Thailand, firms with more than 10 employees. Year 2005% businesses using computers % businesses with Internet access % businesses with web presence Thailand79.755.426.2 China..67.622.3 Hong Kong, China 90.284.840.5 Singapore92.891.068.3 Rep. of Korea96.695.956.5

6. ICT use by individuals in Thailand Number of mobile subscribers, PCs, Internet users and broadband subscribers in selected Asian economies Source: ITU. Year 2005Mobile subscribers (per 100 people) Personal computers (per 1,000 people) Internet users (per 100 people) Broadband subscribers (per 100 people) Thailand48.558.311.30.2 China29.940.98.42.8 Hong Kong, China 121.4600.950.123.4 Singapore100.8620.957.515.3 Rep. of Korea 79.4643.268.425.2

7. ICT use by businesses in Thailand Computers, Internet and web presence, 2004-2006 Source: 2004, 2005 and 2006 ICT Business Survey in Thailand, businesses with more than 10 employees.

8. ICT use by businesses in Thailand Computers, Internet and web presence by size, 2005 Source: 2005 ICT Business Survey in Thailand, businesses with more than 10 employees.

9. ICT use by businesses in Thailand Computers, Internet and web presence by regions, 2005 Source: 2005 ICT Business Survey in Thailand, businesses with more than 10 employees.

10. ICT use by businesses in Thailand Computers, Internet and web presence by industry, 2005 Source: 2005 ICT Business Survey in Thailand, businesses with more than 10 employees.

11. Part II: Impact of ICT use Results from OECD countries UNCTAD & NSO of Thailand project – Measuring the impact of ICT use in business: the case of manufacturing in Thailand (2008)

12. Key variables for measuring ICT impact on labour productivity Labour productivity ICT variablesComplementary control variables Sales per employee Gross output per employee Value added per employee Binary variables which take on value 1 if firm has access to a specific technology and 0 otherwise. Numerical variables: Spending on specific ICTs ICT capital stock Share of employees using ICTs Number of computers available in the firm Firm age Ownership Affiliation to a multi-unit firm Skill mix (share of employees working directly in production) Level of education Industry sector of activity Geographical region Ordinary capital stock, employment, cost of materials

13. Impact of ICT on labour productivity in OECD countries - at the firm level - Similar technologies impact differently on firms in different markets - a 10% increase in the share of employees using computers results in:  1.8% higher labour productivity in manufacturing and 2.8% in services in Finland (Maliranta & Rouvinen, 2003)  1.3% higher labour productivity in the entire business sector in Sweden (Hagén & Zeed, 2005)  2.1% higher labour productivity in manufacturing and 1.5% in services in UK (Farooqui, 2005)

14. Impact of ICT on labour productivity in OECD countries - at the firm level - The share of employees using Internet (rather than the share of employees using computers) seems to be a better indicator of labour productivity :  Computers →2.8% higher labour productivity; Internet → 2.9% in services in Finland (Maliranta & Rouvinen, 2003)  Computers →2.1% higher labour productivity; Internet → 2.9% in manufacturing in UK (Farooqui, 2005)  Computers →1.3% higher labour productivity; Broadband → 3.6% in Sweden (Hagén & Zeed, 2005)

15. Impact of ICT use on labour productivity in the manufacturing sector, Thailand, 2003 Basic technologies such as computers are important factors in explaining differences in sales per employee between firms in developing countries Manufacturing firms with a 10% higher proportion of employees using computers have on average 3.5% higher labour productivity Businesses using Internet regularly in their work have on average 4 to 6% higher sales per employee Qualitative information from the ICT Survey: the main reasons for using the Internet were “information search” and “e-mail” for 76% of the businesses.

16. Impact of ICT use on labour productivity in the manufacturing sector, Thailand, 2003 A higher share of employees using computers seems to make most difference in terms of sales per employee in:  Large firms (more than 80 employees)  Middle-aged, more experienced firms Internet access seems to make a bigger difference in:  Younger firms  Small firms (11 to 50 employees)  Firms located in Bangkok, its Vicinity and the Central region  Firms from the following industries: computing, electrical & precision instruments (ISIC 30,31,32,33), machinery & equipment (ISIC 29), processed food beverages & tobacco (ISIC 15, 16), fabricated metal products (ISIC 28).

17. Measuring the Impact of ICT Use in Business: the Case of Manufacturing in Thailand Prepared jointly by UNCTAD and the Thailand National Statistical Office

18. Global Event on Measuring the Information Society, 27-29 May 2008 emeasurement@unctad.org www.unctad.org/ecommerce measuring-ict.unctad.org