The ICT industry—including telecommunications operators, computer and software producers, electronic equipment manufacturers—is playing an increasingly important role in the global economy. It created approximately 5 percent of total GDP growth between 2003 and 2008, and it represented 5.4 percent of world’s GDP in 2008.That share is expected to reach 8.7 percent by 2020.1 Because of its size and the nature of its products, the industry has a notable role to play in encouraging economic growth and contributing to other social goods, including improving education and healthcare access and services.
Furthermore, recent McKinsey research shows that the ICT industry can potentially contribute to reducing worldwide CO2 emissions by 15 percent in 2020—an enormous contribution—but we will focus here on the economic and social contributions of the industry.2 ICT enables economic growth by broadening the reach of technologies such as high-speed Internet, mobile broadband, and computing; expanding these technologies itself creates growth, and the fact that technologies make it easier for people to interact and make workers more productive creates additional benefits.
McKinsey estimates, for instance, that just one action—bringing mobile broadband levels in emerging markets up to those of more mature markets—could add between US$300 and US$420 billion to the world’s GDP and 10 to 14 million direct and indirect jobs in areas such as equipment manufacturing and outsourcing/offshoring services (see Figure 1). ICT’s role in enabling economic growth has become more significant as governments are investing to stem the effects of the global financial crisis.
As US President Barack Obama noted in January 2009, “Increased broadband spending, electronic medical records, green energy investments, and new computers for schools and libraries are all smart ways to keep America competitive while also creating new jobs and spending.”3 And UK Prime Minister Gordon Brown has likened his government’s efforts to extend the country’s digital infrastructure to “the roads and the bridges and the railways that were built in previous times to stimulate the economy.”4 They are far from alone—Korea, Rep. (Korea) has long been a leader in broadband investment, and today countries from Greece to Malaysia have committed large amounts of money to develop their ICT sectors.
Beyond economic benefits, the ICT industry is uniquely positioned to help build a more socially sustainable future. McKinsey’s most recent consumer survey shows that the ICT industry is perceived to be among the top four industries in terms of its potential contribution to society behind only healthcare, agriculture, and utilities (Figure 2).The importance of ICT increased more than any other sector since 2006,5 showing that consumers place growing importance on the industry as social contributor.
In fact, investing in ICT can help countries increase their annual GDP growth by 0.6–0.7 percent on average, on an annual basis, for each increase of 10 percent in household penetration, as several studies have shown (Figure 4).8 This impact is created by a combination of direct and indirect effects on the economy. Direct effects come from investments in infrastructure (by government and operators), increased availability and penetration of services, and increased employment in the ICT sector.
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A good example of direct effects is seen in Korea, where growth in the ICT sector was 43 percent between 1999 and 2003; in the same period, it was negative in Japan, less than 1 percent in Malaysia, and 5 percent in Singapore.9 Korea drove this growth by pushing forward a national vision to develop its ICT sector; this required a concerted effort between public and private parties and large subsidies from the state.
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