UN highlights importance of ICT sector in creating opportunities for the poor

Sunday, 17 October 2010 23:41 - - {{hitsCtrl.values.hits}}

Services and goods associated with information and communications technologies (ICTs) are creating opportunities for the poor, but those sources of income are unevenly distributed and not always sustainable, the United Nations Conference on Trade and Development (UNCTAD) said last week in a new report.

In Kenya, for example, there are now more than 18,000 agents for the M-PESA mobile telephone-based money transfer service, and Bangladesh has some 350,000 “village phone ladies,” UNCTAD said in the publication, entitled “Information Economy Report 2010: ICTs, Enterprises and Poverty Alleviation.”

To strengthen the emerging ICT-based services, the agency urges policymakers in developing countries to make the ICT sector a more important component in their poverty-reduction strategies. It says that more benefits can be secured for the grassroots creation of small-scale enterprises if enlightened government support is added.

The manufacture of ICT equipment presents a more mixed picture – only a few low-income countries are extensively involved in such industries, according to the report, which calls for more studies on the effects of manufacturing mobile phones, computers and related equipment where it occurs, to assess the benefits and drawbacks for the poor.

The report notes that extensive “offshoring” of services such as programming, and clerical tasks and processes, which are jobs based on global ICT networks, is still limited to a few developing countries, and tends to employ relatively highly skilled workers.

However, several socially conscious enterprises have recently had some success in expanding ICT services work to rural communities, for example in India, resulting in new income-earning opportunities for some poor people in rural areas. The report recommends that governments consider policies that could encourage this trend.

ICT-related micro-enterprises are spreading rapidly in many low-income countries and can offer jobs to populations with little education and scant resources, according to the report. Such employment opportunities include selling airtime on the streets, refurbishing mobile phones, repairing personal computers, and running Internet cafés.

“Such commercial undertakings have relatively low barriers to entry; the costs and the skills required are often modest, and the poor are taking advantage of this,” the report notes. In Gambia, former street beggars have been hired as sales representatives for Gamcel, one of the country’s major mobile telecom operators.

Other examples cited in the report are the selling of airtime in Bangladesh, Ghana, and Uganda; the running of cyber centres in Nigeria and Venezuela; and the creation of ICT-based enterprises in the slums of Mumbai, India.

However, UNCTAD also stresses that ICT micro-enterprises typically operate in a volatile and risky sector, and that returns on investment are often low. The report notes that the opportunities for ICT micro-enterprises to survive and grow are greater in urban settings, where it is easier to establish essential relationships with other enterprises, both formal and informal. The scope for creating long-term jobs around such activities in rural areas appears to be more limited.