The Information Economy and Information and Communication Technology Mohsen Gerami Abstract—Information is a key strategic asset and Information assets are perhaps the most important type of asset in the knowledge-based economy. The Information economy mainly defined by the extension of information and communication technologies.The rapid growth of telecommunications and information technologies in the past decade is shifting the global market from a technology-based economy to an information-based economy. Countries with highly developed telecommunications infrastructure can adjust to this rapid change and take advantage of the enormous new opportunities. This paper describes some of the impacts of the information and communication technologies on the information economy. Index Terms—Information economy, ICT, Policy, Infrastructure, Connectivity;

1 INTRODUCTION

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HIS next decade will truly redefine what we have come to know as the information economy. It is an economy defined by the value of intellectual property, the value of customer information, the value of ideas— the value of information. What makes information so powerful today is how easily it’s replicated or duplicated and moved from one place to another, and how quickly it can be distributed. However, the very things that make it so powerful also threaten its value [1]. The contribution of the information economy to overall economic growth and performance is related to the amount of resources devoted to new information technologies, whether in terms of consumption, investment or innovative efforts. Human capital is a key policy area in the information economy, as it is required for innovation and growth. The measurement of stocks and flows of human resources for the information economy and of skills, their distribution among different economic activities and the economic effects of the acquisition or absence of certain skills are of significant concern for policy makers. Human resources and, in particular, skills for the information economy are difficult to measure [2]. The information and communication technology is changing the way trade operates in several. The paper further discusses economic impact of ICT and policy for information economy.

2 INFORMATION INFRASTRUCTURE According to Melody [3,4],The foundation for the information economy and advanced information and communication services will be a transformed and upgraded telecom network that will provide the information infra————————————————

• Dr. Mohsen Gerami, Assistant Professor of Information and communication Technology, Faculty of Applied Science of Post and Communications, Tehran, Iran.

structure over which the new electronic services will be supplied. Broadband telecom network connections will be needed in the workplace, home, schools and all other centers of activity, just as the telephone is needed now. The new information infrastructure will be the most important public utility of the 21st century economy. Almost all countries are in the process of developing and/or implementing policies relating to the establishment of new national broadband information infrastructures. These developments require a considered reassessment of public policy relating to the supply of public utility services in the new economy, comparable to that developed for telephone, electricity, gas and transport for the industrial economy. What is the best institutional structure for ensuring an efficient universal provision of information infrastructure services under conditions that are accessible by all those who desire it is a fundamental policy now being debated in many countries. Those without access to basic information infrastructure services will be denied access to information and the ability to act on the content conveyed, whether it relates to economic, social, cultural or political activity. There is already concern about a “digital divide” in access within the US and other wealthy countries, and also between the rich and poor countries. Recognizing that the majority of the world’s population has never had access to a telephone, it is apparent that the problem of information infrastructure access will deny them access to the information economy until there is a major global policy commitment to extend the advanced telecom network dramatically. The primary forces driving the transformation of national, regional and global economies are dramatic changes in technologies, policies and markets - the combination of the development and increasingly pervasive applications of ICTS on the one hand, and the worldwide movement to market liberalization and deregulation on the other. The conversion of telecommunication (telecom) networks and all forms of communication and information content to digital standards is creating an electronic network

foundation that facilitates exchanges and transactions of all kinds. Electronic commerce and the next generation Internet represent the next step in this process. Together with liberalized markets and reduced barriers to trade, this will ensure the 21st century information economy is primarily an international or even global economy. [5]. Melody also refers, the most important elements of the new information economy that require examination are, 1) the increased generation and use of information as both an economic resource and a product exchanged in markets; 2) the development and use of advanced high speed telecom networks – the information infrastructure – for electronic commerce and related next generation Internet activities; 3) a much greater emphasis on the role of human capital as the principal producer, repository and disseminator of information; 4) continued major market deregulation at both national and international levels. Many of the new products, services, business processes and applications we currently enjoy are enabled by ICT, and innovations that increase productivity and creativity are continually being developed. More and more, inanimate objects will be embedded with “smarts”. At the heart of this activity is the internet which, according to the Organisation for Economic Co-operation and Development (OECD), will “more than ever, be a catalyst for globalisation and innovation”. The internet allows us to transform the way we use resources, travel, communicate with one another, learn and earn a living. Access to the internet is critical, dependent on the availability and uptake of high-speed broadband appropriate to users’ needs. Connection to one another and the world, and using new and emerging digital technologies, are crucially important to our success. In an environment characterised by rapid change, geographic location is no longer a barrier to success. Governments around the world are encouraging greater participation in the information economy for the benefit of their local economies and citizens. The State’s future therefore depends on our response to the impacts of globalisation on our local economy. To keep pace, we need: • Connectivity - affordable broadband infrastructure • Capability - businesses, individuals and government ready and willing to grasp opportunities • Content - compelling online materials that support our social, education and business lives These are the three C’s driving information economy. We will measure our success by increased creativity, a globally competitive economic base, connected communities and citizen wellbeing. All three C’s are interrelated and necessary to maximise participation in the information economy. With a greater diffusion of content and increased capability comes higher demand and in turn a powerful aggregated capacity that can make our State more competitive within Australia and globally. Connectivity is the foundation of an information economy, while building a confident, digitally skilled population, online security and support for our local creative content and

ICT industry are the keys to a productive innovative economy and connected communities [6].

3 A CONCEPTUAL FRAMEWORK FOR THE MEASUREMENT OF THE INFORMATION ECONOMY The ever-increasing capacity of Information and Communication Technologies (ICT) is further empowered by the rapid growth of a global network of computer networks and the Internet. These multiple convergences have transformed the way in which business is conducted, revolutionized learning and knowledge sharing, generated global information flows and empowered citizens and communities in new ways that have redefined governance. This has in turn led to the creation of significant wealth and economic growth resulting in a global information economy [7]. In many developing economies, ICT policies and strategies have been set up to foster access to, and use of, ICTs by individuals and organizations, and to integrate national markets into the global information economy. However, in developing economies, the availability of ICT indicators is still scarce, even though Governments, civil society and the business sector explicitly recognize the urgent need for such information. Many developing economies are preparing ICT related policies and strategies without the guidance of statistical evidence. Reliable and timely indicators on ICT are needed to maximize its potential to facilitate a range of economic and social developments, including poverty reduction, increases in health and education standards, generation of new industries and employment opportunities, and improvements in competitiveness. A distinctive characteristic of the information economy is the intensive use by businesses of ICT for the collection, storage, processing and transmission of information. Business data from some industrialized countries show that improvements in productivity can be explained, at least partly, by use of ICT. The information economy can be defined and measured, based on the ‘building blocks’ of supply and demand.

Fig 1. The building blocks of the information economy Source: adapted from OECD (2005).

Statistical operations can separately investigate the supply of and demand for ICT, as well as ICT infrastructure and trade. From the supply side, statistics are collected about the ICT sector, that is, ICT manufacturing and services industries that supply ICT infrastructure, goods and services. The output of the ICT sector in terms of goods can be classified using the World Customs Organization’s (WCO) Harmonized System (HS) and equivalent national classifications. ICT services are mainly estimated using the International Monetary Fund’s (IMF) Balance of Payments (BOP) classification which is rather broad and only captures transactions between residents and nonresidents. The ICT sector is defined in terms of the UN’s International Standard Industrial Classification of All Economic Activities (ISIC) and equivalent national classifications. Measurement from the demand side addresses access to, and use of, ICT by businesses, households and government organizations (though this Manual provides methodological advice on demand side measures of the business sector only). Evaluations of the impact of ICT on an economy may be studied through the compilation of ICT satellite accounts. Such an account is a national accounting tool and represents a statistical framework for organizing and presenting information about ICT products and ICT-related activity. It is based on the System of National Accounts (SNA) concepts, definitions and methods. Satellite accounts enable the calculation of the direct contribution of ICT to the main national accounting aggregates, such as gross fixed capital formation and gross domestic product (GDP). Few countries have to date made use of this approach. It integrates statistics related to the supply of ICT products (production, imports), and to the demand and use (intermediate consumption, final use, exports, capital formation, etc.) and can be considered as a major milestone in the statistical work on ICT. A pre-requisite for the preparation of satellite accounts is to establish classifications on industries and products used in all ICT-related surveys. It helps also to identify areas where deficiencies may exist in the collection of ICT statistics [8].

4 POLICY FOR AN INFORMATION ECONOMY In the information economy, the possession and safeguarding of ideas are of paramount importance. Ideas themselves are commodities in the information economy. Ideas also provide their owners the competitive edge in the information age. Therefore, it is necessary that a legal regime for the protection of ideas be put in place. The lack of such a legal system will not only stunt growth but also hinder prosperity in the information economy [9]. The late 20th century saw the birth of the Information Economy and the rise of laws and regulations pertaining to it. However, most of the focus in policy circles, the popular press, and in the general public was on issues pertaining to technological innovations - the World Wide Web, the Internet, mobile phones, personal digital assistants - and on channels of transmission - the Telecommunications Act of 1996, the Cable Act of 1992, convergence, international alliances - while precious little attention was

given to the content – the information flowing through the Information Superhighway. At the beginning of the 21st century, however, there is a renewed focus on the collection, storage, and use of raw data and other forms of information. The digitalization of ever-more information, combined with the increasingly easy ability to access and manipulate data from myriad sources has drawn attention to the tremendous opportunities for information driven economic efficiencies. Information is the true heart of the 21st century “Information Revolution” just as electricity was the true heart of the 20th century’s technological revolution. Information is both a commodity - to be bought and sold on the open market – and an asset — bestowing enormous competitive advantages on those with early or more complete access to it. As with any revolution, however, there can be concerns about negative consequences about the completely unregulated or irresponsible use of even the most beneficial new innovation. Despite public concern about privacy and a surveillance society, data will continue to flow. Given the radically changed environment resulting from technological changes and the ongoing tension resulting from the contending interests of economic efficiency and personal privacy - the resulting body of laws and regulations must be more carefully drawn than heretofore [10]. As society gradually shifted to an “information economy,” the need for access to information increased. Gradually, gatekeepers have had to give way to newer, more collaborative work models as knowledge workers have become increasingly important to the enterprise. However, until recently, they continued to labor under the handicap of restricted access to the very systems they needed to do their jobs. In today’s information economy, knowledge and intellectual property residing in an enterprise network are truly “information assets” that must be managed and leveraged just like physical and human assets. Ensuring that knowledge workers have full and unfettered access to these information assets should be a top priority for managers at all levels of the enterprise [11]. The governments should recognize the important role that ICT plays in the innovation process and in achieving economic growth. ICT trends increase access to information and improve overall productivity. As the information economy becomes embedded across the wider economy, the importance of ICT in the innovation process is becoming more evident.

5 CONCLUSION The Information and communication technology is the key to a successful information economy and highly developed telecommunications infrastructure supports the growth of the information economy. There is a need to have a holistic approach to ICTs, to make an important contribution to governments’ efforts to improve ICT policy, connectivity and technical innovation, and investment.The governments have significant role of building an enabling environments for administration and private

sector participation in the information economy in developing‘s countries.

REFERENCES [1]

Enrique Salem- Symantec Corporation, 2010, Unlocking the Value of the Information Economy, Harvard Business School Publishing [2] OECD, 2002, Measuring the Information Economy [3] Melody, W.H. 2002. Designing Regulation for 21st Century Markets, in The Institutionalist Approach to Public Utility Regulation. Miller, E. and Samuels,W. (ed) East Lansing, MI:Michigan State University Press. [4] W. H. Melody; 2003, Institutional Analysis and Economic Policy; ed. M. Tool, P. Bush; 2003 - 'Policy Implications of the New Information Economy' - pp. 411-432 [5] Sheehan, P. and Tegart G. (eds). 1998. Working for the Future: Technology and Employment, in the Global Knowledge Economy. Melbourne: Victoria University Press. [6] Information Economy Directorate, Government of South Australia, 2009, Information Economy Agenda 2009-2014, Delivering our digital future, Published by: Government of South Australia [7] Ministry of Information Technology and Telecommunications Republic of Mauritius, 2007, National ICT Policy 2007 [8] United Nations, 2009, Manual for the Production of Statistics on the Information Economy [9] Rodolfo Noel S. Quimbo, 2003, Legal and Regulatory Issues in the Information Economy, e-ASEAN Task Force [10] The Information Policy Institute, 2010, http://www.the-ipi.org, IPI.pdf. [11] Susan Feldman and Chris Sherman (IDC), 2010, The High Cost of Not Finding Information