Innovation and Economic Development

Innovation and Economic Development

The Impact of Information and Communication Technologies in Latin America

Edited by Mario Cimoli, André A. Hofman and Nanno Mulder

Information and communication technologies (ICT) are spreading fast across Latin America and the Caribbean. This trend has brought about important economic and social changes, which have largely gone unmeasured until recently. Here, analysts from the United Nations Economic Commission for Latin America and the Caribbean along with other distinguished scholars in the field of ICT, growth and productivity provide theoretical and empirical insights to the debate on the role of ICT in economic development.

Chapter 6: The Impact of Information and Communication Technologies on Economic Growth in Latin America in Comparative Perspective

Nauro F. Campos

Subjects: development studies, development studies, economics and finance, economics of innovation, innovation and technology, economics of innovation, technology and ict


Nauro F. Campos* INTRODUCTION 1 For the last 20 years or so, the world economy has witnessed spectacular rates of technological change. These rates seem to have been driven by a powerful new ‘general-purpose technology’, namely information and communication technologies (hereafter ICT). The impressive cost reduction in computing power has driven these innovations to spill over from manufacturing and services (where they made their first strides in the 1970s and early 1980s) to consumer goods more generally after that. The advent and fast diffusion of personal computers and mobile phones (which are also personal in a similar sense) have made these technologies ubiquitous and have dramatically changed day-to-day life even in the poorest economies of the world. Many examples have been provided about how useful mobile phones can be in developing countries as the lowering of the cost of information transmission and exchange can help integrate (or enlarge) markets and thus foster economic growth. Traditional (mid-1990s) examples tend to be, for instance, of fishing boats calling different ports to check on current catch prices. Five years or so ago, the strongest examples on the economic importance of mobile phones were of customers using prepaid airtime as a way of transferring money. But now we have ‘cellular banking’: The Economist (28 October 2006, p. 109) reports that ‘about half a million South Africans now use their mobile phones as a bank. Besides sending money to relatives and paying for goods, they can check balances, buy airtime and settle utility bills’. From...

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