1. E-Development: Impact and Opportunities
Nagy Hanna
Senior Advisor, ISGVP
Chair, e-Development Services TG

2. What is e-Development
E-Development is about transition to knowledge economy by leveraging its driving force - Information and Communication Technologies (ICT) for competitiveness and equity.
E-Development is not only about technical change but also complementary changes to induce development that is effective, and empowering.

3. Promises and Opportunities
Knowledge Economy
Information society
Innovation-driven economy
Learning economy
Networked, mobile, fast economy
Productivity revolution
Brought about by unprecedented technological change

4. ICT Roles, Options and Objectives
Options for Development
Objectives of e-Development
Accelerating Growth
Accessing information & knowledge
Participating in ICT-enabled industries & software services
ICT & knowledge industries
Diffusing ICT in industries & services
Accelerating transactions & reducing costs
GPT for modernization
Reducing Poverty
Improving delivery of health, education, & other public services
Networking, empowering
Infrastructure for networking and delivery
Promoting participation, public accountability & social learning

5. Benefits of e-Development
ICTs’ potential impact:
Growth & competitiveness
Poverty Reduction & Human Development
Public sector Performance

6. Growth & Competitiveness
ICT as a major sector with one of the highest growth/export potential:
Software export (India, Ireland, Israel)
Services and business process outsourcing (India, Philippines, Caribbean)
Hardware export (Costa Rica, China, Taiwan, Malaysia)
Service and logistics hub (Malaysia, Singapore, Ireland)
ICT as enabler for competitiveness:
Reduce barriers to entry; increase competition
Lower transaction costs; optimize global supply chains
Promote innovation; share knowledge. E-Administration (Singapore, India, US, Canada)
 Competitive markets through e-commerce. Efficiency of business operations.
Example 1. India
India now exports US$ 5.7 billion in software products per year, and the sector may account for almost 25% of the country’s economic growth.
Example 2. Israel
In Israel, software exports grew from US$110 million in 1991 to US$2.6 billion in 2000-the ICT sector in Israel employs 8% of the service sector labor force and contributes 19% to the GDP (2003)
Example 3. USA
In general, overall cost savings through B2B e-commerce vary from 5% to 35% depending on industry (US).
E.g., General Electric operates the “Trade Process Network,” which links its suppliers and allows them to place electronic bids for component contracts. The system has cut procurement cycles in half, processing costs by a third and the cost of goods purchased by 5-50%.
Example 4. Ireland
Example of economic success partly stemming from IT investment strategy. Policy of “industrialization by invitation” – selective targeting of foreign investment in high-tech industries using financial and tax-based incentives.
 Science and Technology Parks
Kulim High-Technology Industrial Park in Malaysia
Hsinchu Industry and Science Park in Taiwan

7. Macro Impact on Productivity
Ireland, Finland, Korea: close to 1% of labor productivity growth ( ) due to productivity growth in ICT manufacture.
US: TFP rate almost doubling (95-02) due to ICT and complementary investments (Brynjolfsson)
ICT accounts for much of Europe’s lag behind US in recent growth performance (EIU).
Due to differences in effectiveness of ICT use, not ICT investment levels.

8. Poverty Reduction & Human Development
Connecting the rural poor to critical information
Portals for rural information, collaboration, learning, participation
Empowering SMEs and micro-enterprises
Empowering Communities
Improving access and quality of service in remote areas; CDD
Education
Lifelong learning through distance education and open universities
Distribution of uptodate educational material
Health & Social security
Access to info and services; remote consultations.
Transforming social security systems: Russia, CIS, LCR
Across a range of educational applications, ICT is being harnessed to improve the efficiency, accessibility and quality of the learning process in developing countries. Global, collaborative R&D approach.
Education:
 Distance education has been a particularly successful model in developing countries where affordability and geography have been real barriers to access.
Example 1. Taiwan’s National Open University
One study found that the distance-based National Open University (NOU) was able to reach 30% more students than the National Taiwan University while spending less than 1/3 of the NOU’s budget.
 ICT found to significantly enhance learning process through more collaborative and interactive learning techniques.
Example 2. Chile’s Enlaces project
In Chile, for example, the Enlaces Project wired 50 percent of the primary schools, enabling teachers within the schools to improve the quality of the curriculum and allowing students from different schools to conduct collaborative projects.
Example 3. Brazil’s Future Stations project
Future Stations project in Brazil has used Internet cafes in slums of Rio de Janeiro to provide classes to young people who drop out of school – resulting in over 60,000 local youth completing their elementary and high school diplomas.
Health:
Example 1. Mali’s “Keneya Blown” (Health Gateway) – a telemedicine pilot project (by U. of Geneva, ITU)
Started in 2000, the telemedicine project with Mali – “Keneya Blown” (health gateway) – has been used to diagnose dozens of complicated cases in the country. The network, which is expected to expand to 12 West African nations by end of 2005, also uses videoconferencing, and the internet to provide continuing medical education for hundreds of doctors across Mali. (Expected to have a large impact on rural areas, where medical care and facilities often non-existent due to a lack of infrastructure and training.)
Example 2. Africa (Satellife project in Uganda, Ghana, and Kenya)
Handheld PDA helped health workers gather vital epidemiological data and disseminate health information on diseases like Malaria, TB, etc.
Example 3. Preventing TB in South Africa
Using mobile phone applications (SMS), reminders are sent to TB patients
Community Empowerment:
Example 1. Mexico City
In Mexico City, the NGO ‘Women to Women’ used connections with women’s groups in California to obtain information on the business practices, profit structures, and ownership information of a textile company that had announced plans to build a new plant in their community. As a result, they were better prepared for their meetings with plant officials and management and local government.
Example 2. India’s Foundation for Occupational Development (FOD)
The FOD created an inner-city marketing network for women that provided them with business training and cell phones to facilitate communication b/w production and marketing groups and b/w groups of customers. As a result, women were able to increase their profit margins by decreasing the commissions paid to middlemen, ranging from 18–20% at the start of the project, decreased to 0% in a year.
Example 3. Philippines (by UNESCO, Danish International Development Agency, Philippine Government)
Partnership program providing local radio equipment and training to remote villages, with content originating within the communities. The project not only increased local business and agricultural productivity, but also resulted in more constructive dialogue with local officials.

9. Public Sector Performance
Increasing efficiency of government operations
E-Procurement (Brazil, Chile, Mexico, Romania)
IFMS; decentralization; M&E LCR)
E-Admin. (Singapore, India, Canada)
Improving quality of public services and reducing transaction costs
Example: India, land records, extension, registry, forms.
Improving business and investment climate
Customs, trade net, port (Singapore).
Websites for FDI: Vietnam
Increased transparency and accountability
Example: Seoul’s OPEN for applications; Argen. Cristal for budget
1. Increasing efficiency in government operations:
 Cost savings, coordination and inclusiveness, process acceleration and automation.
Various countries reported savings of 5%-10% using e-procurement systems. Other studies indicate that on average, typical e-procurement system can reap 10-20% in savings in operational expenses, provide significant savings on material acquisition costs.
2. Improving quality of service and reducing transaction costs for businesses and citizens.
3. Improving business environment and investment climate:
 Reducing corruption and red tape. Building trust. Business facilitation. SME promotion.
4. Increased transparency and accountability.
Example Romania’s Public e-Procurement System
Provided reductions up to 51.2% of the acquisition costs, with average of 27% compared to same transactions done in traditional way year before.
Example Brazil’s Online Reverse Auction System
During first 2 years of using online reverse auction system, Brazil’s Federal Gov’t estimates cost savings of $1.5 billion
Example Chile’s E-Procurement System
Estimated to provide the government with efficiency gains of US$200 million per year, a total of 1.38 percent of government expenditure
Example Mexico’s Government Procurement System
By routing nearly 80% of all gov’t procurement thru online system, Mexico’s Federal Gov’t estimates that cost of items procured reduced by 20%
Example Singapore’s Motor Vehicle Registration System
Reduction in transactional cost for vehicle tax payment from S$2.40 to S$0.50; i.e., cost savings of 79%
Reduction in processing cost of searching for vehicle records from S$11.20 to S$0.05, i.e., 99%
Reduction in transactional cost for requests for duplicate vehicle tax renewal notice from S$3.78 to S$1.70, i.e., 55%
Example Singapore’s Licensing and Administration, and Customs and Excise Department
E-Gov savings: Incorporating a new company: from S$1,200-35,000 and 2 days to S$300 and 2 hours. Submitting building plans: from manual document dispatching to 12 agencies to online submitting with $450 savings. Obtaining an entertainment license: from 8 weeks to 2 weeks. Processing imports and exports electronically costs 70% less than paper-based systems.
Example 2.1. Land Records (Bhoomi) in Karnataka, India
Land record computerization has delivered land certificates in 15 minutes, instead of days, and reduced transaction costs and corruption, created a viable land market, enhanced the creditworthiness of farmers, and improved the life of the common man.
Example 3.1. Vietnam’s “Tale of Two Cities”
Hanoi and Ho Chi Minh City each launched Web development projects for business service agencies in The two websites are designed to serve as the first point of contact for potential investors, especially foreign investors.
Example 4.1. The OPEN system of Seoul Municipality
Exemplifies impact on corruption by making decision making processes and actions of individual civil servants transparent. System enables online tracking of individual applications for a variety of municipal licenses. Extensive municipal regulations had created new opportunities for corruption. In first 13 months of OPEN, civil applications published by each city department totaled 28,000, and number of visits to OPEN site reached 2 million by EOY Results from a survey of 1,245 citizens showed that 84.3% believed that OPEN led to greater transparency.
Example 4.2. Argentina’s Cristal project
The Cristal project is to disseminate online, and in an easily understood format, all information concerning use of public funds in Argentina.

10. Why an e-Development Strategy?
Beyond pilots: increase sustainability, scalability, impact
Beyond sectoral components: overcome systemic problems
Beyond ministerial silos: create e-Gov frameworks, common infrastructures, databases, standards
Beyond technology: promote cross-sector, holistic approach with synergies between policy, Information Infrastructure, Human Resources, e-Gov, e-Commerce, telecenters, content and software services

11. Why an e-Development Strategy?
Need for enlightened leadership to drive policy reforms and institutional change- cannot afford a ‘wait and see’ attitude
Need for focusing scarce resources; sequencing and phasing of complementary investments
Need for partnerships: Public-Private-NGOs
Need to integrate into country development strategy, PRSP, competitive strategy
Framework for donor coordination in ICT- exploitation of network effects
Framework to enable pilots, bottom-up initiatives, shared learning and scaling up
Link to Millennium Development Goal: outcome M&E.

12. e-Dev Strategy Framework
E-government & e-society
e- Leadership,
Policies &
Institutions
Information Infrastructure
Human Resources
E-business & ICT industry

13. Sri Lanka Case Study

14. The e-Lanka Story USAID-funded ICT cluster study
PM asks for Bank support at highest levels.
Bank works with stakeholders to clarify vision
Linking e-dev to “Regaining Sri Lanka”, PRSP
Highest-level government support nurtured
Developing e-leadership at several levels
Passing ICT bill and enabling laws
Piloting, demonstrating, learning
Designing comprehensive multi-year program

15. I. ICT Policy, Leadership and Institutional Development
Nurturing leadership: ICT Agency, CIOs, Cabinet committee, Admin Reform Committee
Balancing top down leadership and bottom up learning and innovation: NGOs. local governments.
Partnering with private sector: India, Armenia.
Enabling e-laws & telecom reforms.
building capabilities for NGOs, communities
Program management, M & E, piloting and learning
Singapore, India, Turkey, Romania, Russia, Armenia

16. I. ICT Policy, Leadership and Institutional Development
Some Anticipated Outcomes
Effective policy and institutional environment for ICT use in public and private sectors
Effective ICT leadership among top government officials, business and civil society leaders
Effective multi-stakeholder partnership framework
Effective national coordination of ICT programs and projects, particularly for e-government.
Enhanced country brand of ICT capabilities
Augment resources & coherent investment (FDI, donors)

17. II. ICT Education and Industry Promotion
ICT Capacity Building Fund (ICBF): competitive grants, fee-based contracting for
Innovative ICT training
Promotion of FDI in ICT and enabled services
Diffusion of ICT in SMEs
Domestic software industry promotion
Some Anticipated Outcomes:
increased employment in software & ICT industry
increased software exports
improved competitiveness of local industry, SMEs

18. III. Information Infrastructure
Rural Connectivity
Smart subsidy scheme to extend access in rural areas, encourage private participation
Poorest regions to be targeted: rural areas in the South; post-conflict regions of North and East
Telecenter Program
Implementation partnerships: Public-Private, NGOs
Competitive recruitment for telecenter operators; associated with Telecenter Support Institutions
Community outreach to enable distance learning, computer training, academic curriculum support

19. Telecenters: Roles and Responsibilities
Sectoral Institutions as content providers
Telecenter Support
Institutions
Rural Telecom
Operators
Build Local Capacity: NGOs, Universities, Private companies
Telecenter Operators
Subsidy scheme to guarantee affordable connectivity
Local entrepreneurs to run telecenters; Allow several viable models
Community
Community-Based Approach; Inclusion of vulnerable groups

20. III. Information Infrastructure
Some Anticipated Outcomes:
Improved affordability & availability of services
Reduced transaction costs: citizens, businesses
Increased private sector investment in information infrastructure
Enabled e-commerce and services leading to higher employment and entrepreneurship in rural areas
Mobilization and sharing of local knowledge
Empowerment of target groups through community driven development

21. IV. Re- Engineering Government
Establish vision, policy, strategy
Pilot and phase strategic applications
Human and business processes: restructuring, information sharing, KM, community of practice
Identify needs of government clients and underlying common information infrastructure:
Leadership: E-Parliament, E-Cabinet
E-citizen services
Public financial management: taxes, customs, budget
E-procurement; project MIS
Key infrastructure: portal; government-wide network; population registry; land info; national smart card
Common technology standards for information sharing

22. IV. Re- Engineering Government
Some Anticipated Outcomes:
transparency in government operations
client-focused processes
government accountability for service level standards
electronic sharing of data across agencies
separation of service delivery from transaction processing
always-on, user-friendly, distance-neutral information and service facilities to citizens and businesses
selective unbundling and privatization in provision of public services

23. E-Government: Evolution or Revolution?
Transformation
All stages of transactions electronic. New models of service delivery with public-private partnerships
Transactions
Electronic delivery of services automated, e.g., renewal of licenses
Delivering Value To Citizens
Limited Interactions
contact, access to online databases & downloadable forms via intranets
Web Presence
information on rules and procedures
Complexity of Implementation and Technology

24. Roard map and Journey How to accelerate evolution to transformation?
How to orchestrate various elements of e-development to support e-government?
The role of leaders, change agents and administrative reform processes.
Developing processes and tools: CIO council, technology architecture, IT budget, etc.
Developing roadmap/plan: multi-year prioritized investments in common platforms and infra.
Promoting learning; sharing of best practice.

25. V. e-Society
E-Society Fund: competitive grants to local community organizations, NGOs, private companies
Grants to focus on innovative, socially relevant ICT pilot projects; possibility of increasing scale and scope
Some Anticipated Outcomes:
increased awareness of ICT among rural and urban poor
improved community capacity for utilizing ICT to meet local needs
increased economic opportunity and equity through wide use of ICT in agriculture, health, education
Empowerment of women and youth

26. Lessons Learned ICT pervasive impact, not an isolated pillar
Need to integrate ICT into core development strategy. Not ICT vs. education, but ICT to enable all sectors & meet basic needs better. From development vision to e-Development.
Need to adopt a strategic approach. Balance top direction and bottom initiative. Set vision, priorities, standards, sequence of investments

27. Lessons Learned (cont’d)
Quick wins - high-priority e-services that are relatively simple, have a high transaction volume, and involve a large group of clients. Pilots integral to strategy implementation.
Partnership between government, private sector, civil society donors, and diaspora.
Avoid technology focus: ensure complementary investment. Skills, organizational innovation, and incentives are crucial to make technology work.
No “one-size-fix-all" strategies.
Operationalize WSIS ?