Module 1: Introduction to Internet Use for Business Development

II. A brief history of why we are where we are

Before going into the main subject of this Module, i.e., the use of the Internet for Business Development, particularly by SMEs, it would be useful to consider and revisit the trends and factors that converged to make the ICT sector the critical driver of the global economy that it, undeniably, is today.

The global ICT sector has been, and continues to be, shaped by a number of powerful interrelated forces. Chief among these forces are:

• Technological developments;

• Convergence of telecommunications, broadcasting and multimedia;

• Globalization and internationalization of markets; and

• Emergence of broadband services.

(a) Technology: The key technological development which has occurred is the emergence of the digital packet switched network architecture, which effectively replaced traditional circuit switched networks. This dramatically reduced cost, improved quality and enabled the development of a wide range of innovative applications.

The establishment of the Internet Protocol (IP) as the global open network service standard, in particular, facilitated the blending of different services (e.g., telephony, data, interactive video) via one infrastructure.

The delivery of services over IP is now a leading driver of change and innovation, the result of which is that new participants in the ICT sector now exclusively build IP networks.

(b) Convergence: The deployment of digital packet switched technology also fuelled the convergence of telecommunications, broadcasting and multimedia. Previously, each sector was treated as distinct, and therefore regulated separately.

As digital technology emerged with increasingly open interfaces between different applications, the distinctions between each sector have rapidly eroded. Cable companies can now provide internet telephony while telecommunications companies can provide internet services. Newspapers can now also be read online.

In the digital world, the “network” is not confined to specific applications. The digital network is a ubiquitous platform, capable of transporting all digital data with equal ease. The network is “blind” to distinctions between voice, computer data, video, or transactional data. All are simply digital data.

The Internet is virtually substitutable for all forms of existing media and is a competitive threat to every provider of telecommunications, broadcasting, operating software and data communications. As a result of convergence, different content services (voice, radio, television, etc.) can now be delivered by practically anyone to anyone anywhere in the world.

(c) Globalization: Globalization is the process in which the world is treated as one market without regard to national boundaries. Over the last decade, globalization and ICT have gone hand in hand – the rapid spread of the use of ICT is both a result and a driver of globalization.

ICT is a key enabler of globalization. The specialization of production through advances in manufacturing techniques has lowered costs and shortened economic distances. In addition, the systematic rationalization of procedures and documentation and the wider and easier dissemination of market information have broken down the factors that have made markets distinct.

At the same time, globalization has fuelled the demand for ICT. As new markets open up, buyers and sellers have turned to ICT for new financial instruments and services and faster and cheaper ways to facilitate cross-border transactions.

(d) Broadband: The emergence of the Internet has also seen the emergence of new, high-bandwidth networks and new network paradigms that are rapidly displacing the traditional, narrowband public switched telephone network (PSTN) model. Broadband services enable high-capacity communications services characterized by both high data transmission speeds and high volumes of data.

Broadband services offer significantly faster data rates and “always on” connection to the Internet.

The growth of high-speed broadband infrastructure, either wired or wireless, coupled with technological advancement in equipment, by the global proliferation of small mobile devices and other intelligent terminals that can be used to communicate and gather converged data, voice and video information and services anywhere anytime, make the lives of people more convenient. These forces have resulted in spectacular developments in nearly all fields of human endeavour, creating opportunities for countries, corporations and individuals to be creative, to flourish, and to lead even more meaningful and productive lives.

What opportunities would arise from the introduction or use of ICT for:

• Your government?

• A small company in your country?

• An ordinary citizen?

• A student?

A. ICT 4 What?

While ICTs are not a panacea for all development problems, they offer enormous opportunities to narrow social and economic inequalities, and thus help achieve broader development goals, such as the Millennium Development Goals set by the United Nations.

ICTs effectively contribute to the achievement of the goals, particularly those related to income, poverty reduction, education, health, environment and gender equity by:

• Creating economic opportunities and contributing to poverty reduction;

• Managing the processes of providing basic services (for example, health care and education) at lower cost and with greater coverage;

• Facilitating access to information and the involvement of stakeholders through greater transparency and support for networking at every stage;

• Enhancing the capacity to measure, monitor and report progress on the goals and to strategize.

Policymaking related to ICTs will vary depending on the needs, goals and socio-political and economic context that a country finds itself in.

The view of industrialized countries is that ICTs can enable the economy and all sectors of human activity.

• The United States of America for example, is a prime example of how the adoption of ICT can lead to increases in efficiency that, in turn, translate into increased rates of economic growth and GDP.

• Canada has an ambitious plan called “Connecting Canadians” which envisions and plans to make Canada the most connected country in the world and to make Canada a world leader in developing and using an advanced information infrastructure to achieve its social and economic goals in the knowledge economy.

Newly industrialized countries of the Asia Pacific have found that ICTs are a key to an economy’s competitiveness, people’s standards of living and a country’s ability to fully participate in the global economy.

• Malaysia, for example, is committed to using ICTs to achieve its development objectives. It plans to invest more than US$2 billion over the next decade to become the multimedia hub of Southeast Asia.

• China is also moving to e-enable the country by connecting all major centres with fibre optic cabling.

• India has emerged as a powerhouse in the e-services sector.

From the point of view of small island developing states, ICT deployment is focused more on overcoming isolation, small population sizes, small markets and vast distances that separate these countries from each other and the rest of the world.

• It should be noted, too, that to some extent, rural and unserved communities in many, if not most, developing countries, share these disadvantages. Lessons and best practices can thus be shared between and among them.

• Facilitating voice communications at low costs (Voice of Internet Protocol, VoIP), or even simple email, are therefore particularly useful.

• Community-based networking initiatives designed to increase awareness and use of ICTs, and to encourage their use by local populations and in schools are increasing. For example, community radio is also a useful application in Kothmale, Sri Lanka, where community radio and Internet connectivity have been brought together to help the radio station meet the information needs of its listeners.