Ict policy for Networked Society - GCC Dec 2013

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CAPITALS

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ICT POLICY FOR THE NETWORKED SOCIETY

RENE SUMMER

Formulating and Implementing National Broadband & Digital Economy Plans in GCC

mailto:[email protected]

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text in the footer area ICT POLICY FOR THE NETWORKED SOCIETY | Public | © Ericsson AB 2013 | 2013-12-06 | Page 2

The Networked society

How are public governance objectives linked to technological progress and how can societies benefit from ICT led transformations?

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Economic impact of broadband (BB) & ICT

+ 1000 BB USERS > + 80 Jobs

+ 10% POINTS BB PENETRATION

> + 1% POINT GDP

+ 2 x BB SPEED > + 0.3% increase in GDP

+1% POINT increase in BB Penetration

> 3,5% INCREASE IN new business registration

Sources: Chalmers Institute of Technology, Arthur D Little,

Stockholm School of Economics

ICT TRANSFORMING BASIC

VALUE CREATING

CONDITIONS

› BUILDING KNOWLEDGE

SOCIETY (IMPROVING

QUALITY OF LABOUR)

› NEW JOB CREATION

› WEALTH CREATION

› PRODUCTIVITY

› EFFICIENCY

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Sources: Chalmers Institute of Technology, Arthur D Little,

OECD Broadband and the Economy, Future of Internet 2008

Economic Significance of BB & IT (ICT)

Increased global market reach

expanding trade but also

intensified competition,

General increase in economic

efficiency and labor productivity,

Increased pace of knowledge

diffusion and increased positive

spill-over effects,

Revised view of the role of

innovation (innovation-led

growth).

Economic Impact of ICT Changing Economic Thinking > ICT

Source: Jati Sengupta, Understanding Economic Growth, Springer 2011

DIRECT INDIRECT INDUCED

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Transformational power of technology: ICT

Competitiveness of Nations Impact from ICT

Source: World Economic Forum, Global Competitiveness Report 2010-11

INNOVATION & SOPHISTICATION

• Business sophistication

• Innovation

EFFICIENCY ENHANCERS

• Higher education and training

• Goods market efficiency

• Labor market efficiency

• Financial market development

• Technological readiness

• Market size

BASIC REQUIREMENTS

• Institutions

• Infrastructure

• Macroeconomic environment

• Health and primary education

Characteristics of

a factor-driven

economy

Characteristics of a

efficiency-driven

economy

Characteristics of an

Innovation

-driven

economy

DIRECT IMPACT

Availability and quality of ICT Infrastructure

Digital Rreadiness

INDIRECT IMPACT FROM ICT

Improving development of human capital, e-

education

Increased access to knowledge

Increasinge market efficieny/ reach

Increase efficiency in existing processes/value

chains

INDUCED IMPACT ICT

Decreasing barriers to creating of new

knolwedge (inventions)

Decreasing barriers to innovation in new

products, services, processes, and markets

Source: Jati Sengupta, Understanding Economic Growth, Springer 2011, OECD Broadband and the

Economy, Future of Internet 2008; Lipsey, Richard; Kenneth I. Carlaw & Clifford T. Bekhar, Oxford Press

2005; Brynjolfsson, Erik, and Adam Saunders (2010) MIT Press and Ericsson Analysis

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TOWARDS THE NETWORKED SOCIETY

FUNDAMENTAL TECHNOLOGY DRIVERS

MOBILITY BROADBAND CLOUD DIGITIZATION

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KEY Networked Society TRENDS

Instant CULTURE

Digital Values

Demographical

changes Scarce

resources

Urbanization

Production

Networks & Peer

Production

Orchestration Economy

Mosaic Lifestyle

Power of US

Dematerialization

Knowledge

Society/Economy

Global

Markets &

Competition

Non-Market

Transactions

Everyone

Everything

Everywhere

Connected

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Networked society transforming sectors of the economy

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Networked society driving long term growth

Collective mind shift >

changed end user, business and public

sector behaviors and practices

EMPOWER

INDIVIDUALS

+ +

TRANSFORM

BUSINESS &

PUBLIC SERVICE

CHANGE

GOVERNANCE

reshaping basic VALUE Creating conditions

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key components of a technology-led change

INVENTION INNOVATION DIFFUSION &

ADOPTION

Economic performance Growth Change

Incremental, Radical and Disruptive Innovations

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Key public policy issues

What are the most important universal public policy challenges linked to the rise of the Networked Society?

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Mastering transformations a strategic societal capability

CHANGE UNTAPPED OPPORTUNITIES

Source: Manuel Castells, The Rise of the Network Society,

Second Edition, 2010 . TIME

INSTITUTIONS

(GOVERNANCE)

MARKET

TECHNOLOGY

Growth

Opportunities

Reform

Opportunities

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› Not every one or even most

› Benefits from ICT are not

automatic

› Build it they might not come

› Don’t forget demand side

policies

› Private vs. public benefits…

Every transformation also comes with governance challenges

SOURCE: Race Against The Machine, Brynjolfsson and McAfee 2011,

Economic Transformations, GPT and Long Term Economic Growth,

Lipsey,Carlaw & Bekar, Oxford 2005 and Ericsson Analysis.

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› Stage of development of

economic theory

› Technology advancement

is taken for granted

› Weakness of growth

› Dilemma of growth

public policy challenges (I) Why do we underestimate the power of technology-led long-term growth?

TEMPORAL ASYMMETRY IN COST AND BENEFIT DISTRIBUTION

SOURCE: Economic Transformations, Lipsey et al. 2005 and Ericsson Analysis.

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Key public policy Challenges (II) Why do we sacrifice benefits of technology-led long-term growth?

A self-interested contemporary driven

incumbent interest will be against

transformational changes when private

short term or long term gains are at stake

regardless of the size of the long term

private and/or socio-economic benefit

SUNK COSTS, RISK AVERSION OR LACK OF ORGANIZATIONAL INCENTIVES LIMIT THE

INCUMBENT TO APPROPRIATE PRIVATE NET BENEFIT FROM A TRANSFORMATIONAL

CHANGE

HOW ABOUT

INSTITUTIONS &

PUBLIC AGENCIES ?

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Mastering a structural change in the most advantageous societal direction includes addressing:

- Market Failures

- Government/Regulatory Failures

- Systemic failures

Key public policy Challenges (III) WHAT needs to be fixed to benefit FROM technology-led long-term growth?

NECESSARY BUT NOT SUFFICIENT PRECONDITIONS

STRATEGIC GOVERNANCE CAPABILITY:

ADEQUATE AND EFFECTIVE SOLUTIONS TO ADDRESS FAILURES IDENTIFIED ABOVE

SOURCE: Industrial Policy After the Crises (Bianchi & Labory) and Ericsson Analysis.

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› to enable transformations e.g. new productive shifts in economies associated with the rise of the networked society

› mastering this change in the most advantageous societal direction should be at the center stage of a progressive policy agenda

policy makers’ fundamental Role in the transformation of the society

act as socio-economic accelerators

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Key Ict policy issues

What are the most important ICT specific public policies issues relevant to the rise of the Networked Society?

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Key ICT policy issues overview

3. Spectrum

Management

5. Media & Content

Regulation

New consumer expectations,

value-chain shifts and new

business models

1. National

Broadband Plans

4. Industrial Internet

/Internet of things

ICT empowerment for increased

innovation and efficiency in

industrial sectors

2. Network Regulation

8. Trade Policies

ICT

supply

side

7. Internet

governance

6. Data Protection

9. IPR

ICT

demand

side

Horizontal

frameworks

Impacting ICT

D/S

Roll-out of ICT infrastructure

Scares resource

management Market Efficiency

Market access, Digital

Services, Cross Border Data

Flows,

Meta Regulation

Privacy Protection

Investment Incentives,

Licensing,

Diffusion

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Key ICT policy issues Ericsson’s Key Messages

3. Spectrum

Management

5. Media & Content

Regulation

Stimulate increased

availability of

lawful digital content

1. National

Broadband Plans

4. Industrial Internet

/Internet of things

Stimulate digitization of sectors

with increased choice, efficiency

and new value propositions

2. Network Regulation

8. Trade Policies

ICT

supply

side

7. Internet

governance

6. Data Protection

9. IPR

ICT

demand

side

Horizontal

frameworks

Impacting ICT

D/S

Private and/or Public

Technology Neutral

Supply and Demand

More harmonized and

licensed spectrum to

efficiently meet data

demand

Promote: efficient, innovative

and investment friendly

markets

Promote open and liberal

global markets

Multi-stakeholder model

fueling continued

innovation

Accountable companies

with freedom to transfer

data

SEP licensing and FRAND

Key to global mobile voice and

data success

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maximizing impact by connecting supply and demand side policies

Connecting Supply & demand side policies to increase economic impact

› Economic impact is realized

with broad adoption

› ..increases and endures

longer with broad diffusion

across many sectors of

economy

› ...is sustained and reinforced

when it leads to changes or

new innovations in process,

product and service

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Cohesive reform strategy

OBJECTIVES

NATIONAL DIGITAL ECONOMY PLAN

Source: Copenhagen

Economics, Booz&Co,

Ericsson Analysis

› ICT Supply side REFORMS › Spectrum

› Broadband plan

› Network regulation

› ICT Demand Side REFORMS › Digital Readiness/affordability

› Media & Content

› Digital SERVICES & e-commerce

› E-health, -EDUCATION, -Work, -energy.

› SMART CITY

› E-GOVERNMENT

FIRM AND DURABLE POLICY COMMITMENT

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How to do it?

How to best address key ICT policy issues?

ADVANCING A TRANSFORMATIONAL ICT POLICY FRAMEWORK

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policy OBJECTIVES for an transformational Ict policy

› Sustained economic long term growth

› Increase competitiveness of nations and industries

› Create new jobs/business

› Minimize exclusion and poverty, Increase equality

› Increase public sector efficiency

› Address climate change, environment and ageing population

› Manage scare resources more efficiently

› Cope with increasing level of urbanization

This is not a destination but a continuous journey

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Creating an ICT reform AGENDA PLAN Illustrative

Telecom Broadcast Internet Broadcast Content Commerce Advertising Education Transport Health Public

Services

Etc. Etc.

Align objectives in trade policy and competition law

Align innovation & industry policy objectives

Align converging sector specific framework objectives

Utility &

Energy

POLICY OBJECTIVES & OUTCOMES

IMPLEMENTATION PLAN

CONTEXT

Economic

Maturity

Society &

Culture

Institutional

Capability

ICT

Readiness

Competitivne

ss &

innovation

capilities

Align government spending & procurement including innovation procurement

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SWOT: Illustrative ICT-led TRANSFORMATION

STRENGTHS

WEAKNESS

OPPORTUNITIES

THREATS

High: working ethics, educational

system, entrepreneurship, human

capital, access to capital, high

readiness, agile institutions, support by

the pubic, positive attitudes towards

ICT, effective innovation system.

Slow reaction to global/regional

change, inability to reform structures

and operating models,

fragmented/disconnected approach,

reduction in investments, innovations,

entrepreneurship, equality.

Excessive optimism and/or pessimism,

lack of political will, short term

perspective, window dressing, growing

gap between goals, strategy and

results, institutional resistance,

political/budget cycles, silo thinking .

Socio-economic benefits, national

competitiveness, well being, standard

of living long term sustained,

sustainable and re-enforcing growth,

structural reform capability, ability to

create new opportunities as conditions

change & develop.

Source: Ericsson Analysis inspired by, Transforming Government

and Building the Information Society, Hanna 2010.

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Implementation plan illustrative

IMPLEMENTATION PROCESS

MONITORING

MOBILIZE

RESOURCES

NATIONAL

COMPETITIVENESS

STRATEGY

COOPERATION

&

INCLUSION

READINESS

ASSESSMENT

Incl. SWOT

FORMULATE

STRATEGIES

FORMULATE

OBJECTIVES

& IDENTIFY

STAKEHOLDERS

PRIORITIZE

ACTIONS &

PROJECTS

FORMULATE

SECTOR

STRATEGIES

ORGANIZE

PARTNERSHIPS &

ACCOUNTABILITY

ESTABLISH

GOVERNING

MECHANISMS

REVIEW &

UPDATE POLICY

FRAMEWORKS

COORDINATE

& ALIGN

STAKEHOLDERS

STIMULATE

INNOVATION,

ADOPTION &

TRANSFORMATION

Source: Ericsson Analysis inspired by, Transforming Government

and Building the Information Society, Hanna 2010.

The future of ICT POLICY

ICT POLICY FOR THE NETWORKED SOCIETY