Taking stock of a revolution

Published : Jan 30, 2004 00:00 IST

Arun Shourie, Union Minister for Disinvestment, Communications and IT who represented India at the WSIS. - KAMAL NARANG

Arun Shourie, Union Minister for Disinvestment, Communications and IT who represented India at the WSIS. - KAMAL NARANG

The World Summit on the Information Society issues a ringing endorsement of the role of Information Technology in development, but fails to address ground realities.

REFLECTING recently on India's strategy for building on its current status as a powerhouse of the Information Technology (IT) industry, Arun Shourie, Union Minister for Disinvestment, Communications and Information Technology, drew attention to an arresting statistic. Of India's total output in this sector, 85 per cent serves an overseas market. This is in direct contrast to China, where 85 per cent of the IT industry is geared towards domestic demand.

This piece of information is to be placed alongside another one put forward by the Minister: that 600,000 persons working in the Indian IT industry are responsible for the creation of wealth running in the region of $16 billion. Economists often speak of spinoff effects from the growth of one sector through backward and forward linkages. Any industry in its process of growth also pulls along raw material and equipment sources through backward linkages. And if the industry's product serves as an input into other productive sectors, then the forward linkages too would be a strong stimulus to growth.

Shourie's observations provide a basis for understanding how well these linkage-effects from the Indian IT industry have worked. The IT hardware industry is, by Shourie's own admission, rather poorly off. Policy was oriented in the 1980s equally towards hardware and software. But with the decade of liberalisation, the hardware industry has yielded ground completely to a flood of imports. There are some who argue that this is the natural order of things: India should focus on the sector where it has a comparative advantage, leaving hardware manufacture severely alone, since India would be a relatively high-cost producer in this sector.

The official view does not go quite so far. Shourie concedes that there is much weight in the "lament" about India's non-existent hardware manufacturing capabilities. And the Parliamentary Standing Committee attached to the IT Ministry recently devoted a full report to this issue, calling upon the government to initiate urgent measures to restore India's rapidly vanishing manufacturing capability in IT hardware.

The situation with the forward linkages of India's IT boom is scarcely less encouraging. A recent report on Electronic Commerce and Development by the United Nations Conference on Trade and Development (UNCTAD) has reaffirmed the priority role that IT could play in improving productivity levels in agriculture and manufacturing. IT itself cannot feed or clothe the poor and the needy, but it can be a powerful accessory in producing the essentials of life more efficiently. But if 85 per cent of the Indian IT sector output is for overseas markets, it speaks rather poorly of the efficacy with which it is performing this role in a country where the deficit in meeting basic needs still remains enormous.

This provides a reasonably accurate basis for assessing the width and depth to which the Indian IT industry has spread its roots within the economy. It provides the context for understanding how the evolving debate on the role of information and communications technology (ICT) in development has acclimatised itself in India.

The debate moved to central focus at Geneva in December when the first phase of the World Summit on the Information Society was concluded. Though billed as a major milestone to review progress towards the Millennium Development Goals (MDG) agreed at the U.N. General Assembly in September 2000, participation at the summit was disappointing. Few heads of government turned up though many had confirmed their intent to participate. India itself was represented by Shourie, who called upon the global community to go beyond declarations and move on to a concrete plan of action. When the summit convened again at Tunis in two years, Shourie urged, it should have some specific and substantial achievements to applaud.

Among the priority areas listed by Shourie were the abolition of illiteracy, the upgradation of educational institutions by linking the best to the less advantaged, distance diagnosis and prescription for extending the scope and coverage of medical care, enabling the disabled, particularly those with a print disability, to assimilate information through voice stimuli, and codifying traditional knowledge.

The declaration that was crafted at Geneva takes on board all these suggestions and more. It solemnly reaffirms the intent to "harness the potential of information and communication technology to promote the development goals of the Millennium Declaration".

Significantly, the summit occurred against the backdrop of an assessment by the office of the U.N. Secretary-General on the progress that had been recorded towards the MDG, three years after their adoption. Expectedly, the progress report was downbeat in its tone. The concern with terrorism and national security and the economic downturn had distracted attention from the MDG, the Secretary-General concluded. And the collapse of the ICT bubble of the 1990s had a major part in the generalised recessionary conditions that had slowed down global aid flows. These inferences point towards the need to rethink the model of ICT development, since there are ample grounds for scepticism about the stock market driven, speculative investment seen through the 1990s. The massive capacities that were created in the ICT sector may have led to the collapse of the bubble. But they have also subsequently led to the cheapening of many of the services on offer, bringing them within the reach of a clientele that would in other circumstances, have remained deprived.

The question, nevertheless, has been posed whether this model of ICT development can go any further. Investors were wildly wrong in forecasting demand growth in the 1990s. They are unlikely to return to the fray in the near future. But if the developmental imperative were to be factored in, there is a huge unmet demand that will not be served by the logic of markets and profitability.

THIS brings up another quite fundamental question: can the "digital divide" between the rich and the poor be addressed in itself, as a phenomenon distinct from other kinds of differences? Or is it a divide that mirrors and accentuates the wide economic and social disparities that existed even before the digital age? African countries, led by Nigeria and Senegal, made a strong case at the Geneva summit for special funding arrangements - a so-called "Digital Solidarity Fund" - that would help bridge the gaps between the developed and developing countries. Estimates made by participant organisations put the funding required for making a reasonable dent on the problem at $6.3 billion. The Geneva summit chose not to directly address this issue or to lay down any special funding arrangements. It merely reiterated the need for developed countries to meet the overseas development assistance norms that were worked out at the Monterrey Summit on Finance for Development in 2002. Since those targets have already been missed, any future plan to redress the "digital divide" through increased global aid flows could well go the same way.

The summit reaffirmed the orthodoxy that the protection of "intellectual property rights" is "important to encourage innovation and creativity in the Information Society". It also agreed concurrently, that the "sharing and strengthening of global knowledge can be enhanced by removing barriers to equitable access to information and by facilitating access to public domain information".

There is an obvious chasm between these two propositions that needs to be bridged. It is now widely recognised that asymmetries in access to information created or underwritten by intellectual property protection, could limit the potential of ICT for development. Considering the number of powerful industrial lobbies pressing for tighter rules of intellectual property protection in the west - music and entertainment, pharmaceuticals, computer software - there is unlikely to be any major accrual to the public domain in the near future. The summit steered a delicate course around this problem by urging that "awareness" be created about the potential offered by different software models - including proprietary, open source and free software.

The debate on the different software models and their potential is of course now well advanced. And the dangers of excessive reliance on proprietary software models have also been well documented. Inter-operability between different computer systems and standards is a goal that the Geneva summit committed itself to. This goal could be reached through the adoption of a stifling monotony in software standards, or through the development of software that genuinely permits a coexistence of different standards.

Recent events in the U.S., particularly in relation to the Microsoft antitrust litigation, have a major bearing on these questions. And for advocates of the information society, it cannot be a reassuring development that once begun, the effort to curb the Microsoft monopoly was abandoned mid-course, with few restraints on the power of the software giant.

Packages that enable various kinds of applications through the Internet are now the frontier area of the software industry. The Worldwide Web Consortium (W3C) in Boston, a watchdog over Web standards, has in the past repeatedly expressed itself against tightening intellectual property rules for both software and content transacted over the Web. The corporate sector though has been pursuing the opposite course. The Geneva summit was called upon to provide a clear future direction for the governance of the Internet. But it chose only to refer the matter to an expert group to be constituted by the U.N. Secretary-General. The constitution and the deliberations of the group, it has urged, should be transparent and inclusive. Given the stakes involved for U.S. software giants, it remains to be seen how far these exhortations will be heeded.

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