Technology, Sustainable Economic Development, ICT in Africa.


The innovation technology can serve sustainable development but the complex challenge is that, the concepts ofboth innovation and sustainable development covers several aspects.Thetechnology role in improving the lives ofpeople cannot be underestimated, most people are buying goods and services online, sending messages across the globe, sending emails to donor agencies for supporting (Ebeling, 2003). The network technology had been one of the main problems that affect development in Africa since 1960, and the connectivity and networking are some of the fundamental setbacks that thedeveloping companies in Africa are facing since the Internet boom of the early 1990s (Moodley, 2002 & 2005).

This paperexamines how technology has affected in promoting sustainable economic development and particularly in Africa. This is an initial exploratory study that is accomplished through a critical literature review.The method is the theoretical approach, based on the discussion of current literature particularly studies on innovation and sustainable development.

This paper is divided into sixparts;Part one presents the concept of Sustainable Economic Development and the Sustainable Economic Development Strategies.Part two discusses existing technologies in sustainable development.Part three shows the role of technology in sustainable development.Part four presents the information and communication technology to promote economic development in Africa.Part five provides the econometric model to measure the impact of ICT on the Economic growth in Africa, then part six presentsconclusion.

Part One: The Concept of Sustainable Economic Development and the Sustainable Economic Development Strategies

The Global Urban Development (GUD) has formulated a systematic approach to Sustainable Economic Development Strategies, for assisting communities and counties to enhance progress toward a sustainable economy. According to the GUD perspective, there are three basic forms of Sustainability: Environmental Protection, Climate Action, and Sustainable Economic Development.

Sustainable Economic Development, combines two ideas intoa new concept, it connects the environment climate crisis with the opportunity for large-scale economic prosperity, to assert that the imperative to address the environment climatecrisis offers great opportunity for economic in the 21st Century (Nixon & Weiss, 2011).

The Strategies of Sustainable Economic Development accelerate economic and employment growth and create sustainable business and community development through demonstrating oninnovation, efficiency, conservation in use and reuse of natural and human resources which are the way towards more jobs, incomes, productivity, and competitiveness. Also the Strategies of Sustainable Economic Development are considered cost-effective tool to promotethe renewable energy and clean technologies to protect the environment and prevent harmful effects from climate change (Nixon & Weiss, 2011).

The four Core Objectives of Sustainable Economic Development

The GUD has developed the Strategic Frameworkof the Sustainable Economic Development to assist in designing and implementationbyfocusing on 4 core objectives, called the Four Greens:

  • Green Savings: encourage businesses, families, communities, and governments to reduce costsand provide money throughthe renewable resources and reusethe waste.
  • Green Opportunities: increaseclean technology companies, jobs, and incomes by businessdevelopment and expand markets for goods and services whichprotect resources andreduce pollution.
  • Green Talent: invest in essential assets of education, researches, innovation technology, and entrepreneurial and workforce skills, because people are themost fundamentalresource of the green economy.
  • Green Places: promote Eco-Smart Development whichpresents low-impact, mixed-use,resource-efficient design and benefits multi transportation, sustainable infrastructure, andgreen energy to conserve the natural to create communitiesand regions which are more attractive, productive, and healthy.

The Green Savings deals with the demand side of markets for green goods and services, while the GreenOpportunities addresses the supply side of green markets. The Green Talent concentrates on the humanresources at the green markets, and Green Places focuses on the geography ofgreen markets,all of them are related to the demand side and the supply side (Nixon & Weiss, 2011).

The Sustainable Economic Development Strategy should not only increase costs, but also should provide the receipts and funds to implement the strategy.So governments can use partof the licensefees anddifferent forms of taxes or other revenues, to implementthe Strategy of Sustainable Economic Development, as a tool for paying for its costs. Also, the Strategyof sustainableEconomic Development seeks for other potential financial resources to support the government expenses(Wilson, 2009).

Part Two: The Existing Technologies in Sustainable Development

Thetechnology is “knowledge ofhow to achieve the human purposes in a specifiable and reproducible way”. The term “innovation” means not only the processes that invent new technologies, but also the processes that inventions gets narrowed down for further development, production, adaptation, transition into sustainable use, then become more suitable for end-user needs or retirefor another technology. Theinnovation systems must do more than improving inventionto promote sustainable development, and the technologies must be also accessible and well-adapted, especially for usingthe poor, then they must integrate into local contexts which will vary economically, politically and culturally (Harindranath&Sein, 2007).

Although the benefits induced by technological innovation but there is a pattern of uneven and insufficient innovation which is happened as a result ofsome dynamics as follows:First, many technologies enhance positive externalities which is out offirms control,soit is subject to free-rider problems and leads to under-production by both markets and national systems of innovation. Second, in comparison withdeveloped countries, the developing countries seek to introduce less market incentives for private inventors and have weak national systems of innovation to enhance the domestic invention, that lead to adapt poor technologies. Third, the systemof innovation incentive can reward inventors, but the end user pay the cost, for example, high prices for inventions can prevent access for the people whomneed the new technologies, as case of medicines, devices of water purification (Harindranath&Sein, 2007).

Solving these problems needs effective institutional arrangements at local, national and global levels. The challenges of using innovation technology for achieving sustainable development have been addressed by some interventions in the global system of innovation, as for example the financial arrangements, scientific researchers networks, measures for facilitating sustainable use and access to technology, international aid and trade agreements. These interventions have changed the rules, norms, resources whichforms the behavior of main actors, such as governments, companies, researchers and end-users (Harindranath&Sein, 2007)

Information and communication technology tools help individuals and decision makers to promote their capacity to ‘think globally’ and to communicate with different groups for finding the possible solutions for the sustainable development (Kestemont&Hecq, 1996).

The challenges of sustainable development for innovation policies

Sustainable development represents many challenges for collective monitoring systems and incentives to innovate:

  • Fillmarket gaps is considered as a link between technologiesandsustainable development; through usingmany schemes to reduce the gap between the private return and the return to society, also between the current and future generations.
  • Supportdissemination of clean technologies;by reducingresources consumption, andfavoring the information and knowledge dissemination.
  • Promotetechnological diversity, to prevent getting locked into technologies that may present risks on the long run.
  • Reinforce the long run innovation capacity throughfavoring the development of skills and strategic prospecting.
  • Lay down procedures to enhance coherence of many agents, forencouragingtechnologies appropriation by users and by society.
  • Encourageparticipation of citizensin promoting effective scenarios for a social-economic assessment of technological choices(Patris, et al. 2001).

Part Three: The Role of Technology in Sustainable Development

Sustainable development policies try to modify nature of the economic growth rather than limit it that could help us to find new sources and alternatives to achieve our goals, after technology enable us to use and reuse what we have left in an efficient manner. The tools of sustainable developmentare seeking to achieve technological changes such as recycling, minimizing waste, materials substitution, changing process of production, controlling pollution and betterefficient resources use(Beder, 1994).

Promoting information technology is a way to develop the process of decision making for making its result better reliable and less risky. More communication capacity lead to more potential ofsustainable development humanity. The Information technology provides powerful tools for sustainable development(Kestemont&Hecq, 1996).

The Policies to encourage technological innovation to achieve sustainable development must take into considerationthe environmental constraints and the strategies diversity. The innovation policies can play an integrated role with industrial policies and environmental policies; also they can affect urban planning, employment and vocational training policies. In addition to the innovation, it is able toenhance anticipation of future technologies.However there are some factors thatis considered weaklinks in the chain of the innovation process that conducive to sustainable development such as human resource and skill management, especially the development of skills, and the mobility of R&D personnel and the capacity to communicate (Patris, et al. 2001).

Conceptualizing ICT in the Development Context

The framework developed by Harindranath and Sein (2007), presents three different conceptualizations of ICT: its use, how it is viewed and how it impacts development (see Figure 1).

Figure 1: Integrative framework of ICT in development(Harindranath&Sein, 2007)

The model shows that new technologies affect society through three effects: theprimary effect (i.e., simple substitution of old technology by the new), thesecondary effect (i.e., an increase in the phenomenon enabled by the technology) and the tertiary effect (i.e., the generation of new technology related tobusinesses and societal change)(Harindranath&Sein, 2007).

Firstly, the patternthat ICT is viewed shows a hierarchy in the tool and computational views, so we move from the tool and computational view to the ensemble then the proxy view, where the proxy view is defined by the knowledge creation. Secondly, the patternthat ICT is used represents how different types of ICT-related development initiatives can be implemented to impact on development. Thirdly, however the effect concept has a hierarchy by definition (i.e., the tertiary effect of a new technology has a greater impact on society than the secondary effect), the primary and secondary effects are necessary conditions for development, but not sufficient. So we see the tertiary effects to understand ICT impact on national development that is defined as human developmentin the model (Harindranath&Sein, 2007).

The next figure shows the ICT impact relationships between different sectors (Economy, Society, and Environment).

Figure 2: ICT impact relationships (CSTD, 2014)

Finally the digital economy now affects many aspects of the world economy, has an impact on various sectors such as banking, retail, energy, transportation, education, publishing, media and health. Information and Communication Technologies are transforming the ways social interactions and personal relationships are conducted, with fixed, mobile and broadcast networks converging (OECD,2015).

Global trade for ICT manufacturing and particularly ICT services continues to increase. Business Enterprise Expenditures on R&D and the recent grow in ICT‑related patents reveal the main role played by the ICT sector in innovation. Broadband markets are growing, with an expandin wireless broadband subscriptionsoffsetting areduce in fixed telephony. The communication networksperformance is promoting with the deployment of fiber and 4G, while prices are decreasing, especially for mobile services (OECD, 2015).

Part Four:The Information and Communication Technology to Promote Economic Development in Africa.

Many of people have telephone lines and wireless personal communication services like cellular phones, laptop computers that can easily be connected to the Internet, all of these are presented in most African countries, but the cost of purchasing and maintaining them is a lot more expensive when compared with the advanced countries(Langmia, 2005).

It could be better for achieving the economic development through creatingtelecenters for Africa’s goods and services, to use the Internet for selling Africa’s productswhich can increase turnover rates. Most buyers who love certain items in Africa but lives in Europe can buy them online and get them delivered right home within a short period of time. The only problem lies with transportation and security (Langmia, 2005).

Faux (2005)outlined that there is no need for Africa to go through the industrial stages which Europe went through to be economically self-sufficient. Because Africais enable to make a leap into the superhighway technology and gain the economic growth.

Africa’s cultural, economic and social worth shouldbe considering as vital for achieving the development. Melkote (2000) introduced a model for development through communication that could be implemented in Africa. He showed that communication provide a bilateral interchange of knowledge for the decision making process between the experts and the beneficiariesof development projects.

Conradie and Jacobs (2003) have statedsome of challenges which Africa faces. The first one is making a balance between technology and the need for local development. MostAfrican countries face the challenge of providing ICT in the rural areas, so there is a need to satisfy the locals request and in the same time develop and promote other sectors of the economy.They also presented that technology is coming from outside, so it isn’t addressing the local problems, one of these local problems involve literacy in technology. The number of Internet illiteracy in Africa is alarming,now there is another new education Internet communication and eLearning is coming to the fore front, so governments should provide the infrastructure within the rural setting itself to educate the people on how to use the technology.

Lovink and Riemens (1996) focusedon one of the many hurdles that Africa faces, which shows the importance of integrating as America done through NAFTA linked with the South American continents; Japan integrated with the ‘greatAsian Commonwealth while the European Union moved away from the Atlantics. Africa will then be left alone to face itsown destiny. So technology must help Africa to be connected and integrated with the rest of world.

The other challenge that Africa faces according to Conradie and Jacobs (2003) is some of rural areas in Africa isn’t part of the national electricity grid. So Africa must first ensure that the rural areas are electrified before it invests on dialup Internet technology.

Canessa, Postogna and Radicella (1999) presented another difficulty that the bandwidth for the limited telecommunication lines is causing congestion and making reception and transmission very slow, so there is a need for optimizing of the limited bandwidthuse to solve the problem.

The study of Ebaidalla (2014) showed that mobile subscriptions have a negative and significant effect on youth unemployment in SSA countries, the impact of internet is found to be negative but it is not significant, confirming the weakness of internet infrastructure in SSA.

Kamel (2004) suggested that Africa needs to solvesomemain problems firstly,whichassociated with connectivity in the continent in general. These problems are as the issue of the local languagesintegration into the system, vary and update the contents of materials on the websites.

One of the ways to make Africans benefiting from the new technology is creating telecenters, as indicated by Benjamin(2000). Because the telecenters make people meet together in a special areas to communicate with others at home and abroad. Senegal is considered the leading country in Africa that implemented this initiative. These telecenters are found both in urban and rural areas. This initiative by Senegal can be interpreted as a tool for promoting democracy in the society.

De Beer (2001) showed a positive effect by making a social change using the Internet in Africa. The government subsidized the Personal Information Terminal (PIT) introduced by the ministry of Communication and promoted the setting up of the media development and diversity agency (MDDA) charged with training expertise with new technological skills, to help for educating the grassroot population. The MDDA supports these projects which enable media to promote democratic and socioeconomic rights through their operations and/or content, so the public andcommunities are encouraged to participate in the development process.

One of more important issue that interests Africa is the software and hardware imports and exports which can effectively run the ICT systems. According to Benner (2003), Globalization has bring a burden on the local industries to abide by what obtains in the entire world without taking cognizance of the fact which there are uniqueness that has to be addressed with respect to individual nations and continents. Africa is embracing globalization; it has to sacrifice internal growth. The growing rate of imports of western goods is damaging the rapid expansion of local produce.

Benner (2003) presented that instead of depending on the West for software and hardware manufacture, South Africa can promotetheindustry of manufacture with the support of the West and in that case, the rest of Africa can import cheaper software and hardware from South Africa by a free market system which enables free movements of goods and services. The policies of telecommunication in South Africa have been liberalized,so that exports of communication services are encouraged and promoted. Then South Africa’s MTN phone company has expended its services to some African countries including Cameroon. With this respect, Hodge (2000) showed hope in the horizon,and indicated that all network operators are expanding into African markets, with MTN the most significant player. So the telecommunication markets in African wouldn’t be dependent on the West.

Hodge(2000) also introduced another significant factor about the policy of telecommunication in South Africa which had signed the telecommunication agreement with WTO on commitment to market liberalization; this had implications oncreating job and efficient productivity for South Africa and African countries.

According to the study of De Beers (2001),the study explored the important role which Internet plays in changing lives and pushing the society forward in South Africa through the MMDA. This media agencytrains grassroots personnel as experts who should teach the grass root members how to use the Internet. This is the key to introduce the Internet to the people who are stillusingthe western style technology.

Aker and Mbiti (2010), they presented that Mobile phone usage in sub-Saharan Africa has increased significantly over the past decade and covered 60% of the population. Theyillustrated that mobile phones canincreasethe welfare of consumer and producer, and perhaps broader economic development. One of the most direct economic impacts of mobile phones in Africa is creating the jobs. As a result of increasing the number of mobile phone operators and in mobile phone coverage, labor demand in these sectors has increased. So that the employment of formal sector in the private transport and communications sectors in Kenya grow by 130% between 2003 and 2007, this means that mobile phones have contributed to job creation. Finally, improving communications among members of a social network can have an impact on social learning, which can influence on the technology adoption rates.

The study of Dahlman (2007) indicated that innovation system in most African countries is very weak, fragmented and poorly developed. The strongest and most developed system is in South Africa, because of its relatively higher per capita income.

The next figure shows the most important indicators about ICT in Africa at the period 2005 – 2015.

Figure 3: ICT indicators in Africa

Source: by author using data of ITU World Telecommunication/ICT Indicators database.

Part Five: The Econometric Model to Measure the Impact of ICT on the Economic Growth in Africa

The data used in this paper includes 54 African countries and the study period is from 2000 to 2014, using data on IT that measures the stock of telecommunications infrastructure as telecommunications investment.The GDP series represents annual real GDP in the prices of 2000. Annual series for IT and GDP were collected from the World Development Indicators of the World Bankdatabase in 2015.

Empirical results

To test the nature of the relation between the two variables while avoiding any spurious correlation, use the methodology of (Chakraborty and Nandi 2003). We begin by test the non-stationarity in the two variables of GDP and IT,through the existence of unit roots in the time series, and thenwe test for a long run co-integrated relation between the two variables by Johansen co-integration test, then test for causality by Granger causality test.

Test of unit roots

ADF Test the statistical value is less than the tabulated value so we reject the null hypothesis and accepted the alternative hypothesis that GDP and IT are stationary.

Augmented Dickey-Fuller Test Equation
Dependent Variable: D(LOG(GDP))
ADF Test Statistic -1.320690 1% Critical Value* -4.0681
5% Critical Value -3.1222
10% Critical Value -2.7042
Dependent Variable: D(LOG(IT))
ADF Test Statistic -1.750565 1% Critical Value* -4.0681
5% Critical Value -3.1222
10% Critical Value -2.7042

Test for Co-integration

In the second step of estimation, using the Johansen co-integration test for a long run relationship between GDP and IT,the statistics for all different model specifications suggest rejection of the null at 1% level. We, therefore, conclude that the two unit root variables IT and GDP are co-integrated in the long run.

Using the Granger causality testwith a null of no causality, the precise direction of Granger Causality can be detected by using the F test to determine how significantly the coefficients for the above referred parameters differ from zero.We rejected the null log(IT) does not Granger Cause log(GDP), log(GDP) does not Granger Cause log(IT), and accepted the alternative hypothesis that log (GDP) cause log (IT) and log (IT) cause log (GDP).

Using Ordinary Least SquaresMethod OLS, the estimated equations as follows:-

Equation 1: LOG(GDP)=C(1)+C(2)*LOG(IT)
Coefficient Std. Error t-Statistic Prob.
C(1) 9.391278 6.135159 1.530731 0.0498
C(2) 0.804057 0.270615 2.971218 0.0108
R-squared 0.804438
Adjusted R-squared 0.646507

Figure 4: Residual and actual value for equation 1

Equation 2:LOG(IT)=C(1)+C(2)*LOG(GDP)
Coefficient Std. Error t-Statistic Prob.
C(1) 8.775969 4.676148 1.876752 0.0832
C(2) 0.502997 0.169290 2.971218 0.0108
R-squared 0.804438
Adjusted R-squared 0.647120

Figure 5:Residual and actual value for equation 2

The results have major implications. Firstly, the access to telecommunications services contributes towards economic growth. Secondly, an appropriate regulatory environment is necessary to realize the potential growth in telecommunications demand generated by increased income.

This result is compatible with the study of Katz and Koutroumois(2012), which used data about Senegal at the period 2004-2011 to measure the impact of wireless and broadband on the economic growth and the results showed that mobile phones have a measurable impact on economic growth.

Part Five:Conclusion

The Technological improvements don’t mean neglecting the necessity of the vital social change and a shift in priorities. It takes more than the existence of appropriate or clean technologies to ensure their widespread adoption.

In the past, innovation has been fostered through public and private mechanisms, such as patent laws, grants of public research, subsidies for end-users, and research networks, primarily operating at the national level in a handful of industrialized countries and a few international organizations. Such efforts have had widely different levels of success in terms of meeting global sustainability needs, but have proven inadequate overall for the purpose of advancing sustainable development.

African governments have to face the challenges and opportunities opened up by the emergence of the IT industry, and no growth can be achieved without a favorable environment being put in place by government. This includes the formulation of a coherent national policy on information; establish regulations, which allow for competing and investing, and lasting political stability.African governments are faced with the challenge of creatingthis environment before they can take advantage of the opportunities and benefits offered by access to the Internet, e-mail, and other applications of the new technologies.