KUALA LUMPUR: Investing in ICT (information and communications technology) infrastructure will be a worthwhile step for countries pulling through the global economic downturn, said a technology expert.

Robert Atkinson said investing in ICT can generate better long-run gains, such as more jobs, increased productivity and spurred innovation.

President of a Washington DC-based technology policy think tank — Information Technology and Innovation Foundation — he believes that increased investment in ICT makes sense because the world is in a digital economy.

“(Investing in) ICT was responsible for increased productivity between 1996 and 2002 in the United States,” he said in his keynote address at the Stimulating Economies through Information Infrastructure forum in Kuala Lumpur recently.

Taking the ICT situation in the United States as an example, he said that in a pre-ICT economy, productivity lowered during recessions but shot up in the days of the ICT revolution in 1996.

He said that because of the use of ICT, the US economy is now worth US$1.9 trillion (RM6.8 trillion) instead of a mere US$11.5mil (RM41mil).

To see the benefits of ICT investments, governments need only look how the technology helped South Korea pull through the Asian financial crisis in the mid 90s.

Experts have lauded the Seoul Government’s move to encourage the use of ICT by delivering broadband through fibreoptic cable, leasing computers to low income families, and providing free computers to schools during the crisis.

Today, South Korea has the highest broadband penetration in the world and a thriving digital content industry.

Atkinson said ICT can also improve other sectors, such as education and health.

“Satellite technology, for example, has enabled 10,000 school children to be educated in rural classes in Brazil while in India, Internet kiosks have been installed in villages to give the people better access to education,” he said.

Besides creating and improving industries, investments in ICT will also lead to more jobs, Atkinson said.

Citing a 2005 study conducted by the World Bank, he pointed out that companies in low- and mid-income countries that use ICT enjoy faster sales and job growth, as well as higher productivity levels.

“This isn’t the Great Depression, just a bad recession and ICT investments can help countries out of this rut,” he said.

Encouraging adoption

With all these benefits that ICT brings, it’s only wise for a country’s stimulus package to include ICT and broadband investments, Atkinson said.

He advises countries that are looking into increasing broadband and PC penetration to look at both ends of the issue — the demand and supply of broadband — simultaneously.

Atkinson said countries cannot say that there is not enough knowledge content online to justify building infrastructure for broadband. “That argument doesn’t hold water now because Web 2.0 has allowed a whole amount of knowledge to be available online, such as videos and encyclopaedias,” he said.

One way countries can push widespread demand for ICT and broadband is to lower or eliminate tariffs on ICT equipment. “Research has shown that for every US$1 (RM3.60) you gain in tarriffs, you lose US$1.20 (RM4.30) in economic activity,” he said.

Atkinson cited India as an example of a country that has high hopes of establishing its own IT hub by taxing imported IT equipment. “India only made IT more expensive and available only to the few who could afford it,” he said.

He said the ideal situation would involve the elimination of tax on ICT equipment altogether. “ICT is a general purpose technology now that has spillover effects that are quite significant but we know that tax laws are hard to change,” he said.

Quick route

John Davis, general manager of the Intel World Ahead programme, said reducing tariffs on ICT equipment will get the people to embrace IT faster.

He has seen this happen in Sweden, which shared the same PC penetration rate as the United States in 1996.

“After Sweden allowed its citizens to deduct the cost from their income tax, PC adoption in Sweden soared 10 points higher than that in the United States in two years,” he said.

He said this sort of change would have taken at least five years if the Swedish Government continued to levy tariffs on ICT equipment.

Learning from this, several other countries, China included, are also considering not implementing tariffs on computers in order to develop their ICT industries, Davis said.

Companies and governments can work together on a campaign to raise ICT awareness among the people.

Davis said many governments have campaigns to drive the use of ICT among their peoples but the way some of these campaigns are being carried out are rather forgettable.

“The private sector can help to better drive these campaigns because they have the experience of getting the message across more effectively,” he said.

It is also vital that the message include how ICT can add value to people’s daily lives, he added.