3 rd SG13 Regional Workshop for Africa on “ITU-T Standardization Challenges for Developing Countries Working for a Connected Africa” (Livingstone, Zambia, February 2015) Zambia Standardization: The Road Ahead Shuller Habeenzu, Director, ITMConsult,

Presentation Outline Introduction Objectives Standardisation & Innovation What is demand side innovation What does it mean for standards State of Play in Zambia Zambia - The Road Ahead Challenges & Opportunities Q & A

Background Growing global consensus that ICTs have a positive and significant impact on productivity, economic growth and social well-being [Mansell, 2014] Empirical evidence suggests that a 10% increase in ICT investment translates into a higher productivity growth of 0.5 to 0.6% on average [Waverman et al, 2006] ICT productivity and growth effect is not only significant and positive, but also increasing over time [Kazt and Koutroumpis, 2014] ICTs also have to be embedded in complementary organisational investments [Kretschmer, 2012

Problem Statement ICTs’ contribution to economic growth is significantly smaller for countries with low penetration (or low income countries) than for countries with high penetration. Low ICT diffusion has “a high economic cost” in terms of unrealised economic growth which is the higher the lower the penetration rate due to lack of telecommunications infrastructure compared to a high income country [Gruber and Koutroumpis, 2010] ICT diffusion must achieve critical threshold levels of diffusion which can then trigger off additional benefits (World Bank ICT Strategy, 2012)

The Challenge How to identify key policy instruments and leverage feedback mechanisms to accelerate the penetration and adoption of ICTs to achieve the critical thresholds. StandardisationStandardsInnovation Hypothesis Demand side innovations policy and standardisation key driving factors for accelerated diffusion and adoption of ICTs.

Innovation and Productivity Innovation is widely recognized as one of the essential drivers of successful business and a key contributor to a nation’s productivity and economic and social development. Finding ways of fostering innovation is a central concern for both forward-thinking companies and governments.

Definition : Innovation Schumpeter: the introduction of a new good; new method of production; the opening up of a new market; the use if a new source of supply of raw materials or new ways of organising industries Rogers: an idea, practice, or object that is perceived to be new by the an individual or other unit of adoption Dosi: the search for, and the discovery, experimentation, development, imitation, and adoption of new products, new production processes and new organizational set-ups

Demand-side innovation Demand-side policies can be defined as: “all public measures to induce innovations and/or speed up diffusion of innovation through increasing the demand for innovations, defining new functional requirements for products and services or better articulating demand” 2 Definition – Demand Side Innovation “a set of public measures to increase the demand for innovations, to improve the conditions for the uptake of innovations or to improve the articulation of demand in order to spur innovations and allow their diffusion (Edler, 2007)”. Demand-side innovation policies aim at addressing barriers affecting the market introduction of innovations (responsive demand) and at the ability to define and signal new functional needs to producers (triggering demand)

Demand, Innovation and standards Demand is a major potential source of innovation, yet the critical role of demand as a key driver of innovation has still to be recognised in government policy Innovation SOCIAL POLICY Increase market Reduce production cost Public safety Standards Recursive interdependence between innovation and standardisation Objective: raising awareness of the benefits of standardisation in the innovation process;

Innovation promoting functions of standards in public procurement Reduction in costs Interoperability with existing infrastructure and transition to new technologies Pushing completion intensity and hence innovative pressure Reduction of risk of lock-in Innovation diffusion through implementation of new standards referenced in tenders Spill-over of innovation to the private sector

ICT, Innovation and Standardisation ICT promotes innovation and can trigger fundamental economic transformation Potential for use of ICT for innovation across the economy and promote the growth of IT-Based services Promotion of demand driven innovation strategies and policies, but little focus on standardisation as a tool to accelerate speed and breadth of diffusion of innovation technologies, especially in social sector

Objective: stimulate delivery of ICT goods and services by using demand side innovation Use public policy to foster demand through: Public procurement Regulatory framework: better enforcement (of standards) Standardisation awareness in the public sector Complimentary measures: clusters, etc

Zambia Competitiveness Index Weaknesses in its innovation system low share of its population that graduates from secondary education (139th) Low capacity to fully leverage ICTs to boost innovation (93rd) Low population’s online participation (112 th) despite its fairly robust political and regulatory environment Source: World Economic Competiveness Report

Zambia ICT e-readiness Networked ReadinessE-readiness Source: World Economic Competiveness Report

Challenges Factor (extraction)-based economy where penetration of ICTs is slow Dual economy in which SMEs hold the perception that standards are more relevant to large enterprises/big business mostly foreign companies and not relevant to local ICT business Very small SMME sector – demand for knowledge is weak (standards) Meeting standards requirements can be a constraint for business to innovate Lack of human (technical) and financial resources to fully exploit standards among SMEs High taxation hampering increased usage and sector growth

Level of commitment in standardisation ProprietaryFollowerContributor Leader Demand side innovation in public sector

The Road Ahead Need for a paradigm shift leading to demand-side innovation policies to support: Innovation-sympathetic regulatory framework and procedures Accelerated ICT diffusion and widespread usage through education and health programs Use standards for ICT performance measurement as well as specifications ITU to assist member states to integrate innovation in regulatory policies

Q & A Shuller Habeenzu, Director, ITMConsult,