Term Paper on "Impact of Global Technological Advancements on the Jamaican Economy"

Term Paper 23 pages (6670 words) Sources: 0

[EXCERPT] . . . .

Global Technological Advancements on the Jamaican Economy

Advances in information communication technology (ICT) have led to changes in the economies of developing nations that are forcing them to conduct business in the global marketplace. ICT development has led to an integrated marketplace that means businesses that never had access to the international marketplace now can engage in business on a global level. However, in order to receive the benefits that this new technology has to offer developing nations must have the infrastructure and social structures in place to allow their population to take advantage.

Manufacturing is a growing sector, but resource-based production remains the mainstay of the economy. As resource-based economic pursuits are dwindling, the Jamaican economy must undergo some drastic changes if it wishes to compete. The development and acceptance of ICT in the business and general population is an important step in this process.

Moving from a resource economy to an information economy if filled with challenges. There are many issues that need to be resolved in order for the transition to take place successfully. There are economic considerations, social considerations, and policy considerations. All of these elements must flow together in order to allow the transition to take place smoothly. This research will explore each of the major areas and the data available in order to devise a set of recommendations for the continued development of ICT in Jamaica. It will focus on the participation of small and medium businesses, as these types of entities are the driving force of the Jamaican economy.

CHAPTER 1 - INTRODUCTION

The arrival of new technologies such as broadband providing fast communication, the ease of access to computers and the internet, together with changes in the collection and management of information, have broken down geographic, social and economic barriers. This sets the stage for countries to operate in a global environment. Jamaica, as a developing country, has no choice but to participate in this global economy. These changes in the international environment will continue to reorient the economy to becoming knowledge based and as such, major policy initiatives have to be designed in order to take advantage of the opportunities within the context of this global village. According to one E-Readiness report prepared for Jamaica's Central Information Technology Office,

The principal strategy for achieving growth and employment is the investment in the Information Communication Technology (ICT) sector, which has been designated the principal industry for achieving and generating thousands of jobs over the next three years. It is considered the route to improving productivity and efficiency, better targeting and delivery of services and benefits of development programs to citizens' island-wide." (NEEDS COMPLETE CITATION)

Jamaica has been experiencing economic difficulties for several years. The country is faced with balance of payment problems; coupled with high public debt, relatively high interest rates, a declining local currency and a high inflation rate.

The (ICT) industry is targeted as the principal engine for growth and is expected to generate a significant number of new jobs. The major policy initiatives are geared towards a stable economic environment. To realize the benefits of these initiatives, there needs to be a careful assessment of the global competitive environment and the state of ICT readiness in the country. The readiness to embrace ICT is contingent upon a number of factors. It is imperative that there is competition within the sector, adequate policy and regulatory framework in place, investment facilitation initiatives, macro-economic and social stability and the fostering of an entrepreneurial culture, among other factors.

It must be made abundantly clear that technology by itself will not bring about development. Technology should instead be viewed as an enabler to development.

In a knowledge economy, the material good, as well as the mind is important for benefit realization. It is the embrace and proper application of knowledge to the material world with worthwhile objectives that will lead to social advancement and economic development. Initiatives such as the introduction of the smartcard in the transportation system, introduction of new 'toll' roads, electronic meter reading and the electronic voting system are likely to improve productivity. These, coupled with the pending rollout of additional broadband services along with the plans for all public sector companies to begin accepting payments by way of E-commerce (called E-Government) will certainly represent a leap into improved productivity.

The benefits of Science and Technology are translated into quantitative and qualitative variables and indicators such as social and economic condition, access to ICT, and the extent of organizational learning among other things. The status of the ICT environment as well as the social and economic dynamics will determine the success or failure of the new initiatives.

CHAPTER 2 - HYPOTHESIS and RESEARCH OJECTIVES

The financing and promotion of the ICT industry or lack thereof is critical to Jamaica's growth. Indications are that Jamaica's financial system has increasingly become an inefficient intermediary of funds. This is obviously creating problems for the financing of the ICT industry. It is in this area that venture capital financing could play a huge part and as such, policymakers ought to examine the legal framework to see how a true venture capital market can be encouraged. The government should examine new models for creating innovation within the ICT sector, and ways in which it can generate a more vibrant venture capital funding industry. Arrangements should be examined between local banks, the various development banks, Export/Import Bank and other funding agencies to design financial instruments, venture capital and small business loans that will stimulate innovation in the sector.

So far, most of the funding in the sector has either come from government or large foreign owned telecoms companies. However, greater participation of local private companies is urgently required to maximize economic benefits. The purpose of this exercise was therefore to access the current state of technological readiness in Jamaica and establish the initiatives that the country has to undertake to benefit from new technological trends. It will support the hypothesis that in order for the use of ICT to grow in Jamaica sufficiently to boost the economy, education and infrastructure would be the primary challenges that need to be addressed.

The research will not only support the stimulation of venture capital financing, but will assess the various resources available. It will examine the infrastructure, as well as social, economic, political, and current resources available to do so. The objective of the research will be to asses the current status and needs of ICT usage in Jamaica. It will address ways to fill in the gaps so that the use of ICT will continue to grow. The ultimate objective is to provide solutions to the problems associated with ICT growth and its role in boosting the Jamaican economy.

CHAPTER 3 - LITERATURE: OVERVIEW

The impact of advancing technology and ICT in particular, is a subject that currently occupies the minds of many scholars. Government entities on a local, national, and global basis realize the impact of ICT on the ability to participate in the global economy. Much of the information that is currently available stems from government agencies involved in the ICT initiative.

From as far back as 1996, UNESCO in the document entitled "UNESCO and an Information Society," made the point that ICTs have the potential to dramatically reshape the ways people organize their lives and interact with each other. These technologies form the basis for a shift from industrial definitions of developments to a new paradigm based on the model of information societies.

Much has been written about the positive impact of ICT and the World Economic Forum is one body that has consistently written on the subject. They posit that the more successful countries are those in which governments, business and civil society determine ways to give high priority to boosting education and training. They also believe that the central element of this is the ability to harness the potential of ICT to leverage the development process.

According to 'The Economist Intelligence Unit', governments make a difference. In their 2005 e-readiness ranking, they indicated that focused government ICT policies helped to propel Mexico to a four-notch rise in the ranking. It suggested that the government's e-Mexico project which opened 3,200 community centres with public Internet access kiosks played a vital role in this regard.

The World Economic Forum indicates that countries such as India have transformed their economies, largely due to the benefits of the ICT revolution. Other countries, such as Ireland and Israel, have also emerged and have benefited from the contribution of ICT, and have emerged as centers of software development.

M. Desai, S. Fukuda et al., wrote an important paper "Measuring Technology Achievement of Nations and the Capacity to participate in the Network Age." They put forward the view that not all countries need to be on the cutting edge of global technological advance. However, they felt that every country needs the capacity to understand and adapt global technologies for local needs. They felt it often mistakenly assumed that technology… READ MORE

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