Telecommunications

Direct Effects of Telecommunications on Economic Development Diffusion of New Ideas and Knowledge The flow of information plays an essential role in the diffusion of new technology and ideas at the level of individual enterprises, the industrial sector and the national economy. The importance of the new knowledge and new ideas as key elements for stimulating growth rate has long been recognized by economists but is receiving more attention in recent years among new growth theorists. The source of knowledge and new ideas can be domestic or global. If knowledge is local, telecommunications technology can be used to globalise that local knowledge and this process is known as localisation, making a local idea global. In the case where information or an idea is made known in various countries (and usually adopted in those countries), this process is known as globalisation. ICTs then make both localization and globalisation possible. Modern telecommunications provide a cost effective and time efficient medium for accessing rapid development of computer and communication technology.

Reduction of Regional Infrastructure and Development Gap One of the reasons for the persistent gap between rural and urban areas in any country is the telecommunications infrastructure gap, which results in the information gap between rural and urban areas. Rural areas have little or no telecommunications infrastructure (e.g. in terms of telephones, facsimile/fax, computers, printers and the Internet, except in telecentres or community phone shops where available), when compared with the urban areas. This difference in telecommunications infrastructure is called the digital divide. Telecommunications infrastructure should then be developed in rural areas in order to reduce this digital divide, as Mbarika (2002) stated earlier in this study unit. If rural people obtain more information about agricultural prices, markets and economic opportunities beyond their geographical horizon they will be able to increase their productivity. Availability of telecommunication services can help to improve information flow between rural and urban regions and help reduce the gap of economic development between developed and developing countries but here other factors such as cultural, social and institutional factors can play important roles. Information between rural and urban areas can only be transmitted if there are communication technology links between these areas. Governments and other financially able parties, such as in the private sector, should establish communication technology links to facilitate information transmission.