Chief, ICT Analysis Section EMBARGO The contents the Report must not be quoted or summarized in the print, broadcast or electronic media before 14 October 2010 17:00 GMT. INFORMATION ECONOMY REPORT 2010 ICTs, Enterprises and Poverty Alleviation Presentation at Manchester's Centre for Development Informatics and Brooks World Poverty Institute 14 October 2010 Torbjörn Fredriksson Chief, ICT Analysis Section UNCTAD

Reducing poverty a major challenge Distribution of poverty, 2005 People living on less than $1.25 (PPP) a day (millions) 1.4 billion people live on less than $1.25 per day Most poor are in Asia Sub-saharan Africa has highest poverty rates MDG1: Eradicate extreme poverty and hunger 17/10: International Day for the Eradication of Poverty Source: UNCTAD, based on data from PovcalNet of the World Bank.

Technology should be better leveraged in meeting the MDGs “ New technology-based solutions that did not exist when the Goals were endorsed can and should be leveraged to allow for rapid scaling up. The most important of these technologies involve use of mobile telephones, broadband Internet, and other information and communications technologies. ” Source: Report of the Secretary-General, 12 February 2010, A/64/665.

Informational dimension of poverty Poor people often lack access to vital information, for example about: market price information income-earning opportunities weather forecasts what pesticides and fertilizers to use health disaster risk reduction Lack of information greater vulnerability

Focus of the IER 2010 Trends in affordable access to different ICTs Direct use of ICTs in enterprises Different industries Subsistence-based and growth-oriented enterprises Value chain stages Direct involvement of the poor in the ICT producing sector As workers or entrepreneurs ICT manufacturing ICT and IT-enabled services Large/medium vs. small/micro enterprises

ICTs, Enterprises and the Poor Focus of the report

Penetration of selected ICTs in Least Developed Countries, 2000-2009 Mobile revolution is reaching the LDCs bringing interactive connectivity for the first time Penetration of selected ICTs in Least Developed Countries, 2000-2009 (per 100 inhabitants) Source: ITU World Telecommunication/ICT Indicators database.

Very rapid improvement in some LDCs… Mobile penetration, selected LDCs, 2005 and 2009 Source: ITU World Telecommunication/ICT Indicators database.

…but not in all Mobile penetration, selected LDCs, 2005 and 2009 Source: ITU World Telecommunication/ICT Indicators database.

Some unfinished business remains Half of rural population in LDCs lack access to mobile signal Source: ITU.

New applications and services emerging Voice-based services helplines, agro-messages SMS services Election monitoring (Ghana) Earthquake relief (Haiti) Mobile money services E.g. M-PESA, M-Paisa, Wizzit, GCash Mobile micro insurance (Kilimo Salama, Kenya) Rural health applications

More mobiles than bank accounts in LDCs Mobile subscriptions and bank accounts per 100 inhabitants, selected LDCs, 2009 Source: Data from ITU and CGAP.

Affordability is key South Asian model attractive to low-income mobile users Average revenue per mobile user, selected LDCs and India, 2009 (U.S. dollars) Attractive features for low-income users: Long period for inactivity Per-second charging Nationwide tariffs Low denomination recharge “Friends and family” Source: Idea, MTN, Orascom, Portugal Telecom and Zain operating reports.

Exploit the diversity of ICTs Mobile telephony Fixed telephony Personal computers Internet Broadband Radio Different features Costs Skills requirements Power needs Functionality Access Each technology has its pros and cons to meet different user needs Opportunities for combined solutions

ICTs in enterprises can help the poor Preliminary evidence across sectors and countries Cases cited in report Dairy farmers in Bhutan Grain traders in Niger Fishermen in India and Ghana Women weavers in Nigeria M-Paisa in Afghanistan Micro-enterprises in Mumbai Handicraft in Viet Nam And more… Most important effects Reduced information search and transactions costs Improved communications within supply chains with benefits for individual enterprises and improvements in overall market efficiency Preference for mobiles Affordable access Easy to use Two-way communication Serve basic needs

The poor and the ICT producing sector Some find new livelihoods in changing ICT landscape Cases cited in report Sellers of airtime in Bangladesh, Ghana, Uganda SIM card sales in the Gambia Mobile entrepreneurs in Venezuela ICT micro-enterprises in urban slum in Mumbai ICT manufacturing in China Social outsourcing in India And more… Key findings Micro-enterprises have large involvement of poor; exposed to risk and volatility ICT manufacturing concentrated; but significant effects in China High skill requirements a barrier in case of outsourcing, but second-order effects “Social outsourcing˝ new development tool? More attention needed to e-waste problem

Knowledge gaps – need to strengthen evidence base Better measurement of ICT use in businesses Communication needs assessments Systematic assessment of ICT and enterprise experience Currently high reliance on micro-studies Need for cross-country comparisons Impact assessments of ICT use by subsistence and growth-oriented enterprises Assessments of the effects of ICT use in government support services Targeted research should be encouraged

Ecosystem for policies to reduce poverty via ICTs and Enterprises Source: UNCTAD and Emdon.

The Policy Challenge How to bring more benefits to the poor from ICTs in enterprises Expand mobile coverage in places with no mobile signal Make services affordable – learn from South Asia Focus more on ICT adoption at low levels of economic activity and sophistication, incl. for subsistence enterprises Make interventions more demand-driven – needs of enterprises differ by size, industry, location and skills Assign greater role to mobile solutions in policy interventions Work in partnership with development partners, private sector and civil society Feature ICT and enterprise policies more prominently in poverty reduction strategies

“ The policy challenge is to take full advantage of the significant improvements in connectivity in ways that bring benefits to the poor. This task is far from complete. ” Source: IER 2010 Preface

Thank you! The Information Economy Report 2010 can be downloaded free of charge at www.unctad.org.