Is ICT4D Dooming Poor People to Greater Income Inequality?

July 17, 2015 Editor 0

I firmly believe in Kentaro Toyama’s maxim that technology magnifies human intent (read his book Geek Heresy?), and since I am an optimist, I therefore believe that information and communication technology can improve the lives of people at the base of the pyramid.

Yet, my utopia is questioned by a World Bank working paper that found global income inequality has fallen steadily from a Gini coefficient of 72.2 in 1988 to 70.5 in 2008 but that the decrease in global income inequality masks increases in income inequality within individual countries.

An further analysis by the International Monetary Fund found that income inequality rose in most of the 51 countries analyzed, and that technological progress had a greater statistically significant impact on inequality than financial globalization. This seems to confirm Kentaro’s suggestion that, “If Adam Smith’s invisible hand spurs economic growth, it also pickpockets from the commons.”

Are we actually increasing income inequality with ICT4D?

Robert Pepper and John Garrity of Cisco examine this issue in their “ICTs, Income Inequality, and Ensuring Inclusive Growth” chapter of the Global Information Technology Report and they found four main mechanisms that dictate the process by which ICTs contribute to macroeconomic growth by affecting inputs to GDP growth:

1. ICTs contribute to GDP directly through the production of ICT goods and services as well as well through continuous advances in ICT-producing sectors,
2. ICTs contribute to total factor productivity growth through the reorganization of the ways goods and services are created and distributed,
3. ICT industries generate positive employment effects, and
4. increasing applications of ICTs (capital deepening) leads to rising labor productivity.

Now how can we get those four contributions working on behalf of the poor? Robert and John wisely say we need to close the disparity in ICT usage and they offer us five policy actions to increase the positive benefits of ICTs to those at the base of the economic pyramid:

1. Focus public resources and incentives for building broadband Internet access out to rural and underserved communities.
2. Connect schools and libraries to broadband Internet service and ensure widespread connectivity within schools.
3. Remove excess taxation on devices and access, and consider targeted subsidies for certain populations.
4. Develop robust ICT training curricula and programs.
5. Focus on closing the gender gap in ICTs.

Looking at this list, I’m sure you can think of programs that do each of these recommendations, but do you know of any programs that do all five? And at scale? Or is Kentaro right with his epic screed from Geek Hersey on our current belief in technology-driven development solutions?

“Novel, measurable, large-scale, turbo-charged, value-free, market-oriented packaged interventions for freedom-drunk, goal-driven, meritocratic individualists dominate our notions of social change. This creed has been terrific so far for those of us who have benefited. But the world’s persistent challenges and imminent crises suggest that what got us here won’t take us further. For a more enduring humanity, we need a better narrative of progress.

I am sure that if you’ve read this far, you have an opinion. So click here and tell us what it is in the post comments.

Go to SourceReprinted from ICTWorks

Categories: ICT

Tags: ICT4D, income inequality