Effects of ICT Development on Economic Growth in Emerging Asian Countries

Abstract

One of the prominent characteristics of well-performing developing economies is the large-scale economy-wide diffusion of information and communication technologies (ICT). ICT diffusion, through increased Internet and mobile cellular phone subscriptions, can positively affect economic growth (Sassi & Goaied, 2013; Khayyat et al., 2014; Shahiduzzaman & Alam, 2014) in three different ways. First, it can assist economy-wide technology diffusion and innovation. Second, it can improve the quality of decision making by economic agents. And finally, it can raise the output level by creating demand for goods and services and by lowering costs of production (Vu, 2011). Waverman et al. (2005) argued that an average of 10 additional mobile phones per 100 people would increase per capita GDP growth by approximately 0.59 percent in the low income countries. Although the development of ICT infrastructure has been a major challenge, there is a considerable rise in the number of Internet and mobile users in many developing countries in Asia. The number of mobile subscriptions in most of these countries has gone up from a mere 0 to 50 per 100 inhabitants from 2000 to 2012. In few cases such as China, India and Sri Lanka, these numbers are as high as 80.76, 69.92 and 91.63, respectively (ITU, 2014). Interestingly, the number of mobile subscriptions in many Asian countries such as Indonesia, Korea, Malaysia, Philippines, Singapore and Thailand exceeds their respective total population.¹