Publication Type

Working Paper

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Many commentators have extolled the virtues of new information and communication technologies (ICTs) in reducing poverty and improving the quality of life. While such arguments have been used before in relation to many predecessor technologies, including other earlier communications technologies, the promise has often floundered. This paper attempts to provide a more balanced analysis of the question, by exploring the linkages between the new ICTs and poverty reduction. It examines the linkages in two ways: the potential for direct impacts of ICTs on various areas of poverty and development, and the indirect impacts of ICTs on economic growth, exports and other macro variables in the economy. It also examines direct employment prospects in the ICT industries, particularly in the context of India, which appears to have made some breakthroughs in the software development business. The paper reviews a number of "case stories" to illustrate the potential direct impacts of ICTs in the areas of livelihood, employment, education, health, governance and empowerment of the poor. The limitations in some of the more detailed "stories" are also evaluated. For instance, many projects highlighted by the case stories are still at a demonstration phase and require a broader evaluation framework. Further, in many application areas, ICTs have clear trade-offs against other development priorities, while being complementary in others. Governance and education are two areas where ICTs can be significant complements to traditional systems. The paper also undertakes cross-country statistical analysis of socioeconomic factors influencing the adoption or usage of ICTs. The principle determinants are found to be income and investments in human resources particularly in secondary and tertiary education and physical infrastructure. These findings have strong implications for policies. While conventional development thinking emphasizes primary education as a critical ingredient of economic development, the present analysis suggests that taking advantage of the economic opportunities afforded by new ICT industries requires much more beyond primary education. However, many other standard development prescriptions remain valid. These include the importance of a well-developed infrastructure, a strong educational system and fewer government regulations. The paper's overall conclusion is, however, somewhat circumspect. While there are many direct benefits to ICTs, it is not often clear whether they are more efficient or cost effective than traditional means. It is also not often clear whether the poor have the financial and educational wherewithal to take advantage of the economic opportunities provided by new ICTs.


Asian Studies | Growth and Development | Technology and Innovation

Research Areas

Strategy and Organisation



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Asian Development Bank Institute

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