Internet and Economic Growth

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As part of the so-called “Internet Freedom” agenda which is being pushed by several Western Democracies, we can also find a complementary economic development agenda that highlights the potential growth and job creation benefits of the Internet.

The recent G-8 meeting in Paris had a two day e-G8 forum (see http://www.eg8forum.com/en/) which mainly focused on growth acceleration but was not limited to this. Other stuff such as open data, open government, new media, etc. was also tackled in special working groups, etc.

The question for both UNDP and developing countries have to do with the relevance of this view vis-a-vis internationally agreed development goals (IADGs) and national development priorities. The evidence that the Internet does generate growth in developing countries, especially the poorest, is weak at best. Never mind human development.

At any rate, the risk here is that we might end up introducing a new “development ” priority  -yet another, which might put additional strains in the already full agendas of  LDCs and LICs. There is thus need to explore this further and clearly spell out the links between the Internet and the enhancement of human development.

It is also surprising that the explosive growth of mobile technologies and its perhaps more clear links to economic growth were not considered (and still are not being considered) in more detail. Go figure.

The global consultancy company McKinsey has just issued a report on Internet and economic growth with a very positive spin  -not surprisingly. The report provides tools to measure the contribution of the Internet to GDP,  an econometric model to correlate Internet and economic growth, and a microeconomic approach to assess the relevance of SMEs in the process.

The report is here: http://www.mckinsey.com/mgi/publications/internet_matters/index.asp

Cheers, Raúl

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