Pál Gáspár. Factors and Impacts in the Information Society: Analysis of the New Member States and Associated Candidate Countries
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1 ICEG European E Center Factors and Impacts in the Information Society: Analysis of the New Member States and Associated Candidate Countries Pál Gáspár Presentation at XIVth Economic Forum, Krynica,, 11 September, 24
2 Structure of Presentation NMS and ACC-3 countries: Comparative Review of Lisbon Indicators IST Level of Development ICT Level of Development Factors Affecting IST and ICT Developments Open Issues
3 I. NMS and ACC-3 countries: Comparative Review of Lisbon Indicators
4 Structural Indicators: GDP per capita GDP per capita, 23, PPS, EU-15= TR RO BG LV PL LT ACC- 13 EE SK NMS HU CZ MT SI CY EU- 15
5 Structural Indicators: Labour Productivity Labour Productivity, 23, EU-15= BG RO TR LV LT EE PL ACC-13 NMS SK CZ HU SI CY MT EU-15
6 Structural Indicators: Employment Rates Employment rates, % TR PL BG MT HU RO SK ACC- 13 NMS LV LT EE SI EU-15 CZ CY
7 Structural Indicators: Spending on Human Resources Spending on Human Resources/GDP RO TR SI BG CZ HU SK A CC- 13 MT EU- 15 PL NMS CY LV LT EE
8 Structural Indicators: R+D Expenditures R+D expenditures (in % of GDP) 2,5 2 1,5 1,5 CY RO LV BG PL EE TR LT SK ACC-13 HU CZ SI EU-15
9 II. IST Level of Development
10 IST Level of Development: ICT Market Value ICT Market value in Euro, 23 RO TR BG LT PL LV SK EE HU CZ M A SL EU-15 Significant gap between NMS and older Member States, Levels linked to level of economic development, Differences in the or in GDP based ranking are significant among NMS (income and price convergence, PPS measurement) Recently changes in ranking as fast growth rates and real increase of the ICT market values in some countries (Poland, Slovakia), while slight decline in others
11 IST Level of Development: Access Path and Fixed Lines Access rates and fixed lines Access rates Fixed lines Smaller gaps between NMS and EU-15 Structural factors explaining part of the differences Different trends in mobile and fixed penetration rates in individual NMS and ACC-3 countries Significant gaps among the NMS and ACC-3 in stock and especially flow figures RO LV BG PL ACC13 LT SK EE HU MT SI CZ EU15
12 IST Level of Development: PC availability Number of PCs per 1 of population BG TR RO ACC13 HU PL LT LV SK CZ EE MA CY SL EU15 Gaps in PC use high and have been recently growing Strong correlation with income levels and three country groups Besides incomes prices and affordability, policies and supply of IS services are the major explanatory factors Dynamic picture differs strongly between NMS and ACC-3 with increasing gaps
13 IST Level of Development: Households online Households online (%) RO TR SK BG LT LV PL HU EE CZ CY M T SI Low levels except Malta and Slovenia, and surprisingly low in NMS, Income differences, access prices are important Strong correlation between percentage of households online and the relative level of development Strong correlation between the number of households online and the level of fixed line penetration rates
14 IST Level of Development: Access Costs Dial up and PC costs in % of monthly household income BG PL SK RO LT LV HU ACC 13 EE CZ TR SL MT CY hours peak dial-up costs PC Cyprus, Malta and Slovenia are the leading countries as the relative costs of Internet access, PC purchase in PPS adjusted level and relative to households income is the lowest, Regulation, market structure, income differences, income growth explain mainly the differences, There is also a fairly strong correlation between Internet penetration rates and price of access.
15 IST Level of Development: Broadband penetration Broadband penetration (%) LI PO RO SK BG CZ LA HU SLO EE EU-15 Much lower shares in NMS and ACC-3 in broadband Broadband technology outdated Government policy, private sector spending, public funding, technological constraints, price levels explain the gaps between NMS and EU-15 Recent recognition of gaps and accelerated developments, national broadband strategies
16 IST Level of Development: Digital Divide Index Digital Divide Index Higher but not significantly worse index for NMS and ACC-3 than for the EU-15 Gender gap is less, but income and education gaps are more important determinants of the Index Digital divide in these countries comes also with bigger social and regional divides EU-15 EE CZ PO SK SLO LI HU LA BG RO
17 IST Level of Development: Conclusions Considerable and indicator specific gaps between NMS and ACC- 3 and the EU-15 in IS indicators Gaps in most cases widening, sometimes fast: PC use, broadband access, ICT market value and households online show it most, Major areas of concern: low level of PC use in households, high access prices, the low share of broadband access, Quantitative differences hide also qualitative ones between NMS and ACC-3 and the EU-15, Significant differences exist in use of information and communication technologies by the business, household and public sectors
18 IST Level of Development: Conclusions As expected close links between the indicators: e.g. access prices, and PC purchase positively correlated with Internet penetration rates While stock figures reflect significant and sometimes widening gaps, recent flow data are more favourable in NMS and ACC-3, There are significant differences between the individual NMS and ACC-3 countries
19 ICT Level of Development
20 ICT Level of Development: ICT Sector in Production ICT sector in GDP LA PL SK RO LI CZ EU.15 HU BG SLO EE M A Contribution to GDP between 1,3% and 22,5%, Malta, Slovenia, Hungary are the leading producers, Three types of ICT sectors depending on the destination of sales and domestic market size
21 ICT Level of Development: ICT Sector in Employment ICT sector in employment PL LI RO BG SK M A EE CZ HU LA SLO EU-15 Contribution varies between,3% and 5 % of the total labour force, Low level of ICT output and high productivity explain the levels below production
22 ICT Level of Development: ICT Sector in Exports ICT sectors in exports LA BG RO SK PL LI CZ SLO EE HU MA Very high differences due to different market size and openness level, Re-exporting and assembling with gradually increasing value added content Vulnerability to shocks, re-deployment and cost competition.
23 ICT Level of Development: ICT Sector Trade Balance ICT trade balance/gdp SK LV CY RO LT BG SL PL TR HU CZ EE MA Deficits prevail with the exception of Malta and Estonia Different reasons: either temporary due to product cycle or permanent due to low domestic production and growing consumption
24 ICT Level of Development: Conclusions Bigger polarisation in ICT indicators than IST indicators among the NMS and ACC-3 countries The value and the market share of ICT sector in NMS and ACC-3 is lower than in EU countries and EU-15 ICT output in total is below EU levels except for some countries with a strong FDI penetration and production in these sectors ICT related spending and consumption is lower both at households and enterprises level than in the older Member States The future of ICT sector is very country-dependent
25 IV. Factors Affecting IST and ICT Developments
26 Factors Affecting IS Developments I. Economic Growth and Real Convergence Income level and its growth strongly influence the nature and speed of the spread of information society ICT spending and economic growth closely linked, Affecting disposable incomes and private investments, II. Changing pattern of household consumption: Significant increase in real private consumption Consumption dynamics driven besides income by composition effects Changes in real private consumption considering price developments,
27 Factors Affecting IS Developments III. Sustainability of public finances and public sector reform Lack of public funding of IS developments, Fiscal imbalances constrain IS funding, Lack of public finance reform and bad composition of public expenditures, IV. Economic, social and regional disparities Widening regional disparities, Social divides: income distribution, long-term unemployment, employment levels, Differences in access to IS services and goods,
28 Factors Affecting ICT Developments Restructuring: expanding service sector and reindustrialisation with remaining structural legacies FDI and the economic openness of the countries Financial sector development and its financing capacity for the ICT sector Privatisation and regulation Educational levels and supply of human capital
29 V. Open Issues
30 Open Issues Raised by the Research ICT, productivity and competitiveness Policy bottlenecks in developing a well functioning information society ICT and IST Developments and the Lisbon Indicators ICT and Use of Structural Funds in the NMS
31 THANK YOU FOR YOUR ATTENTION PÁL GÁSPÁR Director 14 Korompai Street H-1124 Budapest Tel: Fax: Web site :
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