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UNCTAD's videoconference presentation of the Information Economy Report (IER) 2009 sparked great interest among the Uruguayan government, business representatives, journalists, professors, and students.

The conference between the Vi and its Uruguayan core member, University of the Republic (UDELAR), on 28 November featured presentations by UNCTAD's Scarlett Fondeur Gil and Marcel Vaillant, Vi member coordinator and currently a Vi fellow. While stressing that the digital divide between developed and developing countries remains, the presenters explicated the significance of mobile telephony, Internet, and broadband Internet access as development tools, taking into account the particular circumstances in Latin America and Uruguay.

The videoconference, moderated by Daniela Alfaro, Professor of Economics at UDELAR in Montevideo, attracted a mixed audience interested in the flagship report, which investigates how countries adapt new technologies and how these facilitate the countries' integration into the world economy.

Scarlett Fondeur Gil, Economic Affairs Officer at UNCTAD's Division on Technology and Logistics, began her presentation by describing the three technologies analyzed in the report: mobile phones, Internet, and broadband Internet. She said that the digital divide, while remaining in existence, was reducing, especially in the sector of mobile phones. With 105 new mobile subscriptions per 100 inhabitants in 2008, Uruguay is among the 20 most dynamic economies in terms of increased mobile penetration. The International Telecommunication Union (ITU) expects global mobile subscriptions to reach 4.9 billion by the end of the year 2009, providing development opportunities for developing countries and economies in transition.

The importance of broadband Internet
According to Fondeur Gil, broadband Internet is an important development tool in the information economy. Broadband is defined by ITU as to have a download speed equal to or greater than 256 Kbit/s. It is therefore more powerful, allowing users to view images and videos, implement interactive applications, and enabling governments and the business sector to provide online services. According to the IER 2009, the biggest challenge with respect to internet access is the "widening gap between high-income and low-income countries in the area of broadband connectivity."

With respect to Internet access, Fondeur Gil said that while access is increasing in all groups, the gap between developed and developing countries remains constant. Argentina was the only Latin American country found among the 20 most dynamic economies in terms of increased internet penetration from 2003 to 2008. Concerning broadband internet access, the list of most dynamic economies contains exclusively developed economies. This is particularly problematic, as broadband internet access enables users to save time and money; it facilitates commercial transactions, and fos-ters the development of an Information and Communication Technology (ICT) service sector, she said.

Looking at the regional perspective, she stated that Latin America is better off than other developing regions of the world with 25 percent of the population having access to the Internet, 50 percent of these connections being broadband Internet connections. The low spread of broadband connections has different reasons, including high costs and poor infrastructure in developing countries, especially in remote areas. Governments and/or donors should therefore concentrate on the development of infrastructure, possibly by supporting providers by creating an enabling environment or facilitating financing, for example.

In view of the current economic crisis, she reported that some aspects of the information economy have been relatively crisis-proof, with the mobile telephony industry still growing independently. There has been a geographical redistribution of the ICT market that is currently benefitting China, the largest exporter of ICT goods, but could also offer opportunities for other emerging economies. However, increased participation in the ICT market faces a number of challenges relating to cost, quality, human resources, market regulation, intellectual property rights, etc.

Marcel Vaillant, who teaches International Trade at UDELAR, concentrated on the market for services. He stated that economic activities have changed significantly in the last 30 years, leading to a substantial increase in commercial services, which has been fostered by the utilization of ICT. However, the economic development of these sectors is difficult to measure as the national statistics are often inaccurate.

The presentations were followed by an interactive discussion with the first question focusing on policy options to enhance internet and mobile phone access. Fondeur Gil described three steps that a government could undertake to stimulate the use of ICT: strengthening of a competitive environment; creating a regulatory framework that supports e-commerce; and ensuring universal access through the promotion of ICTs in rural areas and for certain groups of society. She illustrated her point by describing the "one laptop per child" (OLPC) initiative that aims at improving the education of children in developing countries.

The second question dealt with infrastructure and improving the coverage of broadband Internet access. Fondeur Gil presented the case of Korea, where the government has invested substantially and with great success in the improvement of the infrastructure. At the same time the government has encouraged the development of new applications and provided financial support to Small and Medium Enterprises (SMEs) to help them create their own websites.

The last question focused on the further evolvement of fixed line telephony and open source software (OSS). According to Fondeur Gil, fixed line networks will not disappear, but the divide between fixed line and mobile telephony will widen. In her opinion, open source software is one means to stimulate the development of applications and to further the access to ICTs. As this is an important aspect of new modes of livelihood, the next IER may include the issue of OSS.

With respect to the increase in mobile phones, Vaillant said that the current tendencies to converge television, Internet, and telephone services should be supported by governments with a view to taking advantage of the opportunities offered by new technologies. This trend is currently more evident in developed countries.

The videoconference ended with the presenters thanking the Uruguayan audience for their interest and Daniela Alfaro thanking the presenters for sharing their results and experiences.

For more information:

Presentation by Scarlett Fondeur Gil (in Spanish)
Presentation by Marcel Vaillant (in Spanish)
E-Commerce and Development Report 2003 (in English)
Information Economy Report 2009 (in English)