Internet economy

ICT Access now Widespread but Laggard Users Risk New Digital Divide, Warns OECD

 

14/12/2004 - Companies in OECD countries still mainly use the Internet for information search and provision, with only around one in five enabling clients to purchase their products online, according to the latest edition of the OECD’s Information Technology Outlook.

Although the volume of electronic business transactions is rising steadily, notably in the area of business-to-consumer e-commerce where small firms are increasingly active, gaps are visible in other sophisticated uses of Information and Communications Technologies (ICTs), the OECD publication notes.

According to a recent survey, the 2004 edition of the OECD’s Information Technology Outlook notes, 24% of businesses in Japan used ICTs in production, but this ratio was only 20% in Canada, 17% in the U.S., and Korea and 14% in Germany and Ireland. Firms in Mexico, the U.S., Australia and the U.K. have benefited particularly from increased productivity resulting from the use of ICTs in services industries; by contrast, rates of productivity growth have weakened in Italy, Germany and Japan.

At a time when the gap between small and large firms in terms of technology adoption has narrowed, the main challenge facing policy makers and managers is “to ensure more generally the effective and productive integration of ICTs into business processes,” the OECD Information Technology Outlook states.

Among other topics, the OECD publication looks at:

The globalisation of the ICT sector

  • Despite declines from levels of the late 1990s, cross-border ICT M&A activity grew in 2003 and 2004 and is now higher than in the mid 1990s.
  • China’s imports and exports of information and communications technology goods have grown seven times as fast as imports and exports of ICT goods by the OECD countries in recent years. China’s trade in ICT goods in 2002 was equivalent to 12.3% of total OECD trade in ICT goods, while Japan accounted for 11.8% and the United States 25% of the OECD total.
  • ICT-intensive activities are more likely to be affected by offshoring, as the search for ICT skills is a driver of this process. Rather than adopting protectionist responses to jobs lost at home, governments should invest in education and training in order to help companies and their employees manage the adjustment process and find new jobs.

How people are using ICTs across OECD countries

  • While it took several decades to reach a situation where most people in OECD countries have computers in their homes, Internet use has spread much faster and broadband technology is following at a similar pace.
  • The likelihood of people to access the Internet at home increases with the level of education of the person leading the household.

Services being accessed over the Internet, from downloading music to health services

  • In 2003, peer-to-peer networks had almost 10 million simultaneous users in OECD countries, with trading in audio files being overtaken by trading in video and other files for the first time.
  • The Internet is increasingly used in the categories computer-and-Internet, adult, news, entertainment, and shopping.  More than 35% of all shopping visits on the Internet in Britain and the U.S. are to eBay and Amazon, and personal banking web sites are also very popular.

ICT skills and Internet recruitment

  • ICT professionals account for 5% of employed people in OECD countries, while around 20% more use ICTs intensively in their jobs.  Higher shares of ICT users are associated with higher levels of productivity.
  • People and firms are increasingly using the Internet to find jobs or recruit through online job boards and Internet recruitment firms.

Emerging technologies, from nanotechnology and grid computing to RFID, WiFi and anti-spam defences

  • The U.S., Western European countries and Japan spent nearly $2.4 billion in 2003 on nanotechnology research and development.
  • Radio frequency identification (RFID), first developed in the 1960s, is only now becoming practical for applications in industry, transport, security and consumer goods and services.

The OECD’s Information Technology Outlook also makes recommendations for policies to promote the use of ICTs, including:

  • The integration of ICT policies with economic policies and strengthened links between economic development and technology agencies to mainstream ICT contributions to growth and employment.
  • On the supply side, a focus on innovation, particularly R&D programmes.
  • On the demand side, increased attention to developing professional/managerial ICT skills and diffusion of these skills to businesses, individuals and households. Providing government services online can have a positive demonstration effect.
  • Continued emphasis on broadband deployment and high-speed services; and fostering rapidly growing interest in digital content development and delivery, and exploiting public sector content.
  • Action to enhance trust, particularly for system and information security, and to combat spam.

Journalists can download the text of the Information Technology Outlook from the OECD’s password-protected web site (www.oecd.org/media/protectedsite) or can request a copy in PDF or printed format by contacting the Media Relations team.

Further information can be found at www.oecd.org/sti/ito

 

 

 

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