Benefits of ICT for the Economy

This report discusses the benefits of ICT for the economy, including its role in increasing productivity and creating opportunities for people. It also covers the impact of ICT on the education sector and the growth of each economic sector. The report concludes that ICT has a significant impact on the economy, enabling millions of transactions to occur in fast and easy methods.

Running head: BENEFITS OF ICT
BENEFITS OF ICT
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1BENEFITS OF ICT
Table of Contents
Introduction....................................................................................................................2
Discussion......................................................................................................................2
Importance of ICT in economy..................................................................................3
Conclusion......................................................................................................................6
References......................................................................................................................8

2BENEFITS OF ICT
Introduction
This report aims to discuss the topic Benefits of ICT to the economy. A brief
discussion of ICT is provided in this report. The benefits that are provided by ICT to the
economy of a country is briefly discussed in this report. Lastly, this report concludes with an
appropriate conclusion for this report.
ICT or Information and Communications Technology refers to the technology that is
used for handling broadcast media, telecommunications, audiovisual processing, intelligent
building management systems, and monitoring functions and the network based control
(Bilbao-Osorio, Dutta & Lanvin, 2013). Recently, the field of ICT has been used for
describing the integration of various technologies and the utilisation of mutual transmission
lines that are transmitting dissimilar data and the types of communication and formats.
Discussion
The field of ICT is the extension of information technology that focusses on the role
of the combined communications and the integration of telecommunications, computers and
the necessary software, storage, systems of audio and video, and middleware that enables the
users to store, access, manipulate, and transmit information. Integrating the technologies that
can be used for exemplifying ICT includes the convergence of telephone, audio-visual and
the networks of computer using a mutual cabling system (Vaishnavi & Kuechler, 2015).
Phone, television services, and Internet is commonly provided by the ISPs (Internet Service
Providers) to the businesses and homes via single optical cable. By eliminating the networks
of telephone has offered huge economic benefits for implementing the integration that
eliminates several costs linked with the servicing, maintenance costs, signal distribution,
cabling, and user installation.

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Importance of ICT in economy
Technology, innovation and science has grown to become crucial factors that
contributes to the growth of an economies of both developing and advanced. In knowledge
economy, the information flows at international level via trade in the services and goods,
direct investment, the association of people, and the flow of technology (Bloom et al., 2014).
The technology ICT has been in the centre of all the changes in economy for a significant
amount of time. The sector of ICT plays a key role by contributing to the swift progress of
the technologies and the growth of productivity. This led to the increase in the shift by the
multinational companies towards globalisation. The implementation of these innovative
technologies in the creative accomplishments are altering the structure of economy and it is
also contributing in the growth of productivity of a nation. The competitiveness of the
economies depends on the level of productivity and in a knowledge economy, the sectors of
ICT determines the level of productivity (Ritzhaupt et al., 2013). It has been observed that the
power of the competitiveness of economy of a nation relies on the revenue that is generated
by the sector of ICT. The two common ways of improving the TFP of an ICT and for
improving the competitiveness power. First, if all the problems of inefficiency of the nations
are solved by the reallocation of resources, then the TFP of the sector of ICT can be improved
and this will lead to the increased competitiveness. Second, the improvement of technology
in such countries presents an anticipation about increasing the TFP of the sector of ICT in the
future.
Networking and digital computers have altered the economy by eliminating all the
boundaries in space and time due to the introduction of ICT. It introduces several advantages
for the development of economy and enabling millions of transactions to occur in fast and
easy methods (Andrade & Doolin, 2016). The sector of ICT is one the crucial structure for
the development of economy for gaining national competitive advantage. The quality of

4BENEFITS OF ICT
human life can be improved with the introduction of ICT in the economy of a country as it
can be extensively utilised for education and learning for masses, the media of mass
communication for campaigning and promoting important and practical issues like the sector
of society and health (Lindberg et al., 2013). Wider knowledge is gained by ICT and it can
provide opportunities in accessing and gaining information.
ICT is an integral part of the masses in the recent times. ICT is utilised in the
education sector as it adds value in learning and teaching, by improving the effectiveness of
learning, or by accumulating a dimension of learning that has never existed before. ICT can
be an important factor of motivation in the learning of students and it can back the
engagement of student with adding collaborative learning (Lee et al., 2016). ICT is
fundamentally the effort of society in teaching the emerging and the current citizens some
valuable skills and knowledge around the devices of communications and computation,
software that are used for operating the systems, applications that are executed on the systems
and the systems that are created with them.
In the present times, the progress in the ICT have created changes in many of the
structures of economy of a nation like the reorganisation of globalisation, economics and the
extension of trade that leads to the flow of capital and enhances the availability of
information. Additionally, ICT impacts the growth of each economic sector, specifically
during the process of liberalisation (Holtgrewe, 2014). The growth of economy is directly
connected to the investment in the ICT of a nation. The investment in the ICT of a nation is
necessary in the present times and several firms and companies investing in the technology
for gaining benefits. Several firms implemented the facility of Internet and introduced
computers in their business models for economic reasons, like providing the consumers with
an increased customised and diverse products, enhancing the quality of product, and selling
services and goods. Wireless technology and the infrastructure of ICT development is

5BENEFITS OF ICT
essential for the small business development and the entrepreneurship. In several emerging
economies, the major challenge is to obtain access to the information of market and capital
(Keller & Heiko, 2014). The developing nations particularly do not possess the infrastructure
of functioning or abundant financial resources.
In the empirical analysis of the economic growth, the three effects of ICT and
particularly renowned (Stahl, Eden & Jirotka, 2013). First, the investment in the ICT donates
in deepening of capital and hence can assist in raising the productivity of labour. Second, the
rapid progress of the technology in the production of the goods of ICT can supports the
growth of efficiency of the labour and capital or MFP (Multifactor productivity), in sectors of
ICT-producing. Third, higher the use of the ICT all over the economy creates the
opportunities for the firms to increase the total efficiency, and therefore raise the MFP
(Roztocki & Weistroffer, 2015). Additionally, increased use of the ICT can support in the
effects of network, like decrease in the costs of transaction and more swift innovation, which
can contribute in enhancing the MFP. The impacts can be understood at the various levels of
the analysis such as the with macro-economic data, with the data of industry or with the data
of the individual organisations or firms. The evidence at the industry level and aggregate
presents essential insights of the ICT impact on the productivity, but it also generates new
questions, like the conditions on which the investment on ICT grows to be effective in
improving the productivity. However, the complete evidence directs to the very constrained
impact on the productivity of ICT in several countries, despite the considerable investment in
the ICT.
The role of ICT capital can be understood by several studies that have been conducted
on the impact of ICT on an economy at the macroeconomic level and the results prove that
the area of investing in ICT is a success factor of the companies in a country. The role of
sector of ICT producers is particularly considered as the priority in several countries as this

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sector produces huge productivity growth rates, offering a significant contribution to the
complete performance. Several researches in the interest of ICT is connected to potential
economic benefits that arises from the use of ICT in the process of production (Wildevuur &
Simonse, 2015).
The efficient use of ICT can help the firms in expanding the range of products,
customisation of the offered services and response better to the demands of the clients, which
will ultimately lead to the innovation of the company. However, ICT can assist in reducing
the inefficiency of capital use and labour, which means the decrease in the inventories. The
integration of ICT can have significant impacts on the establishment of the networks of ICT,
that produces huge benefits for the customers or firms that are connected to the network.
Conclusion
Therefore, it can be concluded that the impact of ICT on the economy is significant as
it helps in increasing the productivity of the nation and create several opportunities for the
people. ICT or Information and Communications Technology refers to the technology that is
used for handling broadcast media, telecommunications, audio-visual processing, intelligent
building management systems, and monitoring functions and the network based control.
Integrating the technologies that can be used for exemplifying ICT includes the convergence
of telephone, audio-visual and the networks of computer using a mutual cabling system.
Technology, innovation and science has grown to become crucial factors that contributes to
the growth of an economies of both developing and advanced. In knowledge economy, the
information flows at international level via trade in the services and goods, direct investment,
the association of people, and the flow of technology. Networking and digital computers have
altered the economy by eliminating all the boundaries in space and time due to the

7BENEFITS OF ICT
introduction of ICT. It introduces several advantages for the development of economy and
enabling millions of transactions to occur in fast and easy methods.

8BENEFITS OF ICT
References
Andrade, A. D., & Doolin, B. (2016). Information and communication technology and the
social inclusion of refugees. Mis Quarterly, 40(2), 405-416.
Bilbao-Osorio, B., Dutta, S., & Lanvin, B. (2013, April). The global information technology
report 2013. In World Economic Forum (pp. 1-383).
Bloom, N., Garicano, L., Sadun, R., & Van Reenen, J. (2014). The distinct effects of
information technology and communication technology on firm
organization. Management Science, 60(12), 2859-2885.
Holtgrewe, U. (2014). New new technologies: the future and the present of work in
information and communication technology. New technology, work and
employment, 29(1), 9-24.
Keller, J., & Heiko, A. (2014). The influence of information and communication technology
(ICT) on future foresight processes—Results from a Delphi survey. Technological
Forecasting and Social Change, 85, 81-92.
Lee, A. R., Son, S. M., & Kim, K. K. (2016). Information and communication technology
overload and social networking service fatigue: A stress perspective. Computers in
Human Behavior, 55, 51-61.
Lindberg, B., Nilsson, C., Zotterman, D., Söderberg, S., & Skär, L. (2013). Using information
and communication technology in home care for communication between patients,
family members, and healthcare professionals: a systematic review. International
journal of telemedicine and applications, 2013.
Ritzhaupt, A. D., Liu, F., Dawson, K., & Barron, A. E. (2013). Differences in student
information and communication technology literacy based on socio-economic status,

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ethnicity, and gender: Evidence of a digital divide in Florida schools. Journal of
Research on Technology in Education, 45(4), 291-307.
Roztocki, N., & Weistroffer, H. R. (2015). Information and communication technology in
transition economies: an assessment of research trends. Information Technology for
Development, 21(3), 330-364.
Stahl, B. C., Eden, G., & Jirotka, M. (2013). Responsible research and innovation in
information and communication technology: Identifying and engaging with the ethical
implications of ICTs. Responsible innovation, 199-218.
Vaishnavi, V. K., & Kuechler, W. (2015). Design science research methods and patterns:
innovating information and communication technology. Crc Press.
Wildevuur, S. E., & Simonse, L. W. (2015). Information and communication technology–
enabled person-centered care for the “big five” chronic conditions: scoping
review. Journal of medical Internet research, 17(3).