Governments Worldwide Failing to Fully Benefit from Connectivity

A new global ICT study finds that regardless of their economic status, both governments and private businesses could do far more with their communications and computing infrastructure to derive the full economic and social benefits.

by / February 25, 2008
Imagine flying in an airplane with the pilot using just about 50 percent of the aircraft's radar system. Not a comforting thought. And while perhaps not be quite as dangerous, nevertheless governments around the world are doing something quite similar -- not using the Information and Communication Technology (ICT) infrastructure they have spent billions on, to its optimal extent.

That is what a groundbreaking new global ICT study called The Connectivity Scorecard, released last month, said after it ran a global research on how "usefully connected" countries are. It added that regardless of their economic status not only governments but businesses too are not making best use of their communications and computing infrastructure to derive the full economic and social benefits of ICT.

The Connectivity Scorecard, commissioned by Nokia Siemens Networks and produced by Leonard Waverman, a professor of economics at London Business School with the help of research conducted by economic consulting firm LECG, ranked countries on approximately 30 indicators of connectivity. These included broadband, fixed-line, mobile and computing technologies -- things that contribute to the enhancement of a country's social and economic prosperity. It also examined the contribution of connectivity to economic growth and positive social outcomes and used these to draw conclusions on how individual countries ranked on the Index.

According to the study, even the world's best connected countries are not exploiting communications technologies to their fullest potential and in many cases, policy and regulatory activities designed to promote connectivity are not having the impact intended.
United States, for instance, although ranking first in a group of 16 innovation driven economies [as defined by the World Economic Forum], only scores 6.97 out of a possible 10.0 . A 10.0 is what any developed country should score, says Leonard Waverman.

United States scored first in the study mainly because of the good performances on usage by businesses rather than government. On the other hand, Korea, which is considered to be one of the most highly connected countries in the world, only gets a rating of just 4.78 and ranks 10th on the list. Sweden and Japan are close behind the US, with Japan being rewarded for high use of mobility solutions by businesses in particular.

"The most startling revelation of the report is that the average score of the most developed economies is 5. A developed country, any developed country should get 10," says Waverman. "This means that the world at large is using just about half of the ICT infrastructure that is already in place."

The other interesting revelation of the report is that in the list of efficiency driven economies (again a term borrowed from the World Economic Forum), India, which is popularly known as the emerging tech-power, thanks primarily to its globally acclaimed IT industry, languishes right at the end of the second list that covers 9 countries. In that list Malaysia and Russia do well in the emerging segment as they have high literacy rates and usage scores, comparable in some cases to Innovation driven economies.

Considering the fact that governments around the world -- even in a poor country like Nigeria -- spend billions of dollars on creating ICT infrastructure, it is indeed striking that how low almost all governments score. Although a perfect score of 10 is a possibility, if and only if a country topped all of the components, says Waverman "the wide dispersion of scores and the failure of any country to score even 7 out of 10 shows that there is not one country that is uniformly strong on all dimensions of connectivity."

Connectivity of course, according to this study, is not just copper wires, fibre-optic cables, networked computers and mobile phones. Rather, according to the experts who have conducted the study, connectivity is a broader concept that embraces not only infrastructure and hardware, but also and extends to include assets and skills -- embodied in

people, governments and businesses -- that determine just how productively the hardware and infrastructure are used.

So why have governments across the world been inefficient users of ICT so far? One big reason is that the governments have been unable to reorganize their operation. According to Ilkka Lakaniemi, head of global political dialogues and initiatives at Nokia Siemens Networks -- the company that commissioned the study -- most government suffer from the problems of bureaucracy and inefficient flow of information which leads to a situation where "most policy makers and business leaders fail to deploy the ICT infrastructure to be used to its maximum potential," says Lakaniemi.

The issue of labor relation is the other big problem. "Remember efficient use of ICT also means more efficiency and hence less manpower. That raises the sensitive issue of retrenchment, compensations, and similar issues," says Waverman, and this is not an issue a government department can tackle as easily as a business, for instance.

"But the primary reasons," says Waverman, "is that there isn't a CIO (Chief Information officer at the federal (or central) level." While it is a fact that there are CIOs abound in the agency or state levels in almost all governments, "no government has a centralized strategy for ICT," says Lakaniemi. "There are indeed sectoral strategies for ICT, but when it comes to centralized decision making from the government side, it is rarely seen. And this is true across all types of economies; whether it is a developing economy or a developed one."

However, getting a CIO in charge of all ICT functions may only be the first step. Such CIOs must also have the support of the federal governments and have enough powers to be an effective implementer of a state's ICT initiatives. Lakaniemi cites the example of his own country Finland, which has a CIO at the federal level, "but the process has not started bearing fruit yet because full support from the federal level is yet to come," says Lakaniemi.

Equally important, there a governance structure needs to be put in place so that the activities and functions of all the agencies and government departments can be effectively coordinated.

Still, there's perhaps an upside to lack of full utilization of ICT infrastructure across the globe. "A lot has been talked about how ICT has transformed governance across the sectors. But you ain't seen nothing yet," says Lakaniemi. "A low score means that there's a huge opportunity, based solely on the present infrastructure, to usher in in some radical transformations without additional investments."

For example, a well-known study in the United States (by Crandall and Jackson) had put the long-term benefits to the U.S. of increased broadband penetration at $500 billion. According to the report, holistic improvements in performance could yield long-term economic gains that are multiples of the figure obtained by Crandall and Jackson.

And the truth is that much untapped potential lies in even the most advanced markets. Countries that one normally thinks of as highly connected still score poorly on this scorecard. For example, Korea has relatively low spending on certain business telephony measures, suggesting that there is considerable room for growth, given the size and wealth of the country and the quality of some of the supporting infrastructure. Likewise, there is still potential for extensive new infrastructure deployments and far more intensive usage of technology in the United States, the country that ranks first on the Scorecard. The United States did not rank first in any of the three components -- business, consumer and government -- but did well enough on all three to be first overall.

There's good news for the telecom operators too. The Connectivity Scorecard shows that few markets are truly "saturated," and instead of pumping money and resources to devise newer ways of spurring growth, they might look at the specific strengths and weaknesses of each country to assess where there is potential for expansion.

Indrajit Basu is the international correspondent for Government Technology's Digital Communities.