Governments must invest in ICT innovation – an economic driver for jobs and growth.

The digital economy is growing three times faster than the global economy. Investment in information and communications technology (ICT) is a very serious policy instrument that governments can use to positively develop their respective economies. If governments want their societies to benefit from future ICT innovations then they will have to financially invest more into the research, innovation and science sectors as well as into broader digital economy activities.

The pace of change within the world of ICT is both breathtaking and indeed challenging. Breathtaking because it is hard at times to come to grasp and comprehend the sheer level of disruptive innovation that is due to hit the marketplace in the very near future. Challenging because novel innovative products and services will need to be properly monetized and in many cases will require compliance within new and evolving regulatory frameworks.

The World Economic Forum (WEF) has some interesting findings that further expand upon these points. According to the WEF, 10% of all cars in the USA by 2025 will be driverless. Autonomous vehicles will of course transform how the global car manufacturing industry operates. But it also will have very real implications and in a disruptive way for the future of the legal, insurance and real estate sectors too. We should re-call that 90% of car accidents are caused by human error. In the future, driverless cars will drop their passengers off at their desired location and then go find parking in a more suitable place. At the moment, in some cities around the world, 25% of all traffic congestion is caused by drivers looking for parking spaces. The WEF also predicts that the first 3D printed car will be produced by 2025.

By 2025, 10% of the global population will have sensors in their clothes that will be connected to the internet. Fifty percent of appliances and devices will be connected to the internet. Robotic pharmacists will be operating within the marketplace. Some corporate audits will be carried out by robots as well. An artificial intelligent machine will be a member of a board of directors of a publicly quoted company.

But what is driving these changes? There are many factors, including advances in cloud computing, big data analytics, the advent of artificial intelligence, virtual reality and the evolution of the Internet of Things. But one factor that is common to many of these new innovations is the pace of connectivity. 5G will be the telecommunications standard for the next generation of mobile networks and within the next few years 5G will begin to be rolled out across the world.

So what is a key difference between 5G and 4G? In simple terms, 5G will introduce new products or services that cannot be delivered on a 4G platform. Another way of putting it is that 5G will substantially improve the quality of products or services currently being supported by 4G. 5G will transmit information 100 times faster than 4G. In other words, as we enter the 5G era, driverless cars will be supported. Stronger and better drones will be developed. The global drone industry alone will be worth 11 billion US dollars by 2020. Drones will be able to combat air pollution and fight forest fires more efficiently, better tackle traffic congestion, improve both agricultural production and waste management services.      

By 2020, three quarters of all global mobile data traffic will be video content. Video is not just about providing entertainment. It is about providing communications and providing video for the enhanced delivery of broadband activity. Extensive research is being carried out so as to ensure that video platforms can cater for both ultra high definition TV (known as 8K) and for new innovations in the field of virtual reality.

The above are just some examples of where ICT innovation is going to change how society evolves and develops over time. But governments need to invest financially into the digital economy sector if they are going to reap maximum benefits from new ICT innovations. China is set to invest 2.5% of GDP into supporting the research sector by 2020. A recent review of research, innovation and science sectors in Europe that was carried out by the former head of the WTO Pascal Lamy recommends a 30% increase in financial support for these EU programmes post 2020.

More and more intergovernmental organisations recognise the importance of the ICT sector as an economic driver for jobs and growth. The OECD recently published a very in depth and analytical report on how telecom industries can be further developed in Latin America. APEC is due shortly to publish a report on how the digital economy can improve the economies of the Asian and Pacific regions. The African Development Bank operates business units to advise governments on how to implement best practices in the field of ICT so as to further economic and social progress. Research, innovation and science policy makers from the Arab League are due to hold a key conference in Sudan to address how ICT innovation can support government economic planning.    

More and more governments around the world are prioritising and increasing budgetary support for ICT because it is helping to transform and modernise a whole range of industry verticals, including the health, education, agriculture, social services and environmental sectors. But governments must learn from one another so that best practices in the field of ICT can be implemented in a more widespread and uniform manner across the length and breadth of the world.