sunfarstar
12th November 2004, 12:03
Opening
The world is experiencing a major technological revolution, centered around information and communication technologies and genetic engineering. Internet is at the same time the epitome and the most powerful medium of this revolution. Under the impulse of new technologies and flexible forms of organization and management we are witnessing the formation of a new economy, characterized by rising productivity growth and global competition. During the late 1990s most of the world has experienced reasonable rates of economic growth, in spite of the Asian crisis of 1997-98. The perspectives are for a continuation of this economic dynamism in core economies,as well as in selected areas of the developing world. United Nations’ Human Development Reports indicate some improvement in living conditions (education enrollment, life expectancy, infant mortality) around most of the world, when data are considered in a historical perspective. Besides, in the last decade we have witnessed an extension of political democracy in the planet, the beginning of globalization of human rights, the opening up of horizontal communication channels via the Internet. Overall, people have more say today on public affairs than in any prior time in history. Furthermore, there is a major cultural revolution, as women’s consciousness has risen in the last three decades, and as women’s emancipation seems to be an irreversible trend. Yet, at the same time, people around the world fear threatened by globalisation and by new technologies, and a widespread social backlash against the new techno-economic system is emerging, under different forms, from reactive movements to alternative projects enacted by proactive movements. This is not, as some would think, a matter of misunderstanding or an expression of ideological irrationality. General Secretary Kofi Annan’s report to the Millennium Assembly of the United Nation provides a good empirical basis to understand many of these concerns. In my own interpretation, they arise from a multiplicity of reasons: similar fears have taken place in all rapid social transition periods; there are fears of uncontrolled uses of technology (eg. in genetic engineering), and in my view, these fears are founded. There are also growing environmental concerns about the consequences of our development model, precisely because we know more about these consequences,thanks to advancement in science and technology. Governments seem to be facing a major crisis of legitimacy: The UN/Gallup survey of public opinion in 2000 and the global Gallup Survey for the World Economic Forum in 2002 ndicate that: 2/3 of respondents of a global sample of citizens around the world do not think that their country is governed by the will of the people. Reasons? In my view, some of this distrust is linked to widespread corruption and lack of accountability. But the main reason, I believe, is that governments are the in fact the main globalizers.So, if globalization is perceived as a threat, governments are not reliable in the eyes of many citizens, because they are responding to global interests rather than serving their local constituencies – at least in people’s perception. .Furthermore, people’s lack of trust also arises from the correct perception of the gap in opportunities and from the fact that rather than living in a world divided between rich and poor (an old feature of human societies) we are entering a new world characterized by a cleavage between those who are “in” and those who are “out” of the new system of wealth and power. I shall try to explain this process, then I will elaborate on the policy implications of this analysis.
1. Internet, the New economy, and global development.
There is a new economy, expanding throughout the world, unleashing productivity, and creating prosperity, but in a very uneven pattern. This economy is chacterized by 3 inter-related features.
· Informational:productivity and competitiveness are based on knowledge and information, powered by information technology. This translates, essentially in the need for a technological infrastructure, and the crucial role of highly educated human resources.
· Networking. The new economy ensures productivity and flexibility on the basis of information-powered networks. Networks within firms and among firms, networks between regions, and decentralized networking around nodes. An important example of dynamic node in developing countries is Bangalore, India, a major software and electronics area, linked to the major technological centers of the world, particularly to Silicon Valley. The new global architecture is built around flows between dynamic nodes. The negative aspect of this dynamics is that the system allows for the switching on and off of regions and even countries according to their contribution to the value chain structured around these global networks.
· The new economy is a global economy. A global economy is a new kind of economy. It is the economy whose core activities have the capacity to work as a unit in real time on a planetary scale. This capacity is technological, based on telecommunications, fast transportation, and information systems. It is institutional, based on deregulation, liberalization, and privatization. And it is organizational, based on the networking of business firms, and on flexible forms of management and work. The key dimension of globalization is financial globalization – financial markets are now globally interdependent and electronically enacted in real time, bypassing government controls, and determining the fate of economies ( for instance, in 2000, on average, currency markets exchanged about 2 trillion US dollars per day). But also, the core of production of goods and services is globalalized, organized around multinational corporations and their ancillary networks, accounting for about 30% of global GDP. International trade is also an important dimension of globalization, but the expansion of trade is mainly a function of the internationalization of production, as multinational corporations and their networks account for about 2/3 of international trade, including about 40% of trade that takes place within a given firm and its networks. Science, and technology, and highly skilled labor are also organized on a global scale. And migration of unskilled labor is increasing everywhere. The global economy is highly segmented: not everybody is included, but everybody is affected.
This new economy has new rules.
· It is powered by Internet – the equivalent of the electrical engine, of the the Industrial Age, making possible the operation of the network enterprise, the historical equivalent of the industrial factory. Information technology – including information based transportation systems are the basis of connectivity and knowledge-based production.
· New rules for labor. Highly skilled labor is critical. – flexible, adaptable, self-programmable, able to innovate by working in flexible enterprises.
· New rules for capital: financial markets are the core of realization of value. Growth of value of stocks substitutes for profits as the determinant of the new economy, since it is the main criterion to attract investment. Market valuation is led by information –of wich profit is one of the elements, but not the only one. In the long term, yes, profits (expressing productivity) have to be there for growth to be economically sustainable. But profits may come as result of investment in labor and production, and this investment is attracted by stock valuation mechanisms that are driven by information turbulences in financial markets.As Paul Volcker wrote in a book we co-authored: “Flows of funds and their valuation in free financial markets are influenced as much by perceptions as by objective reality –or, perhaps more precisely, the perception is the reality” (Volcker, 2000: 78). This is not speculation –since this process generates value out of investment. In goods, in services, increasingly in inmaterial production (software, entertainment, consulting, research etc.) In this sense there is no financial bubble, because we have entered a period of systemic financial volatility. Rather than waiting in vain for the bubble to burst, so that we can return to a state of market equilibrium, we must learn to live in sparkling water. Growth of value of stocks is determined by expectations and trust, and their right combination: in emerging markets, there are high expectations but low trust, so capital always ready to go in and out – as it is the case,in advanced economies, in day trading and dot.com companies. In this new, brave financial world, stocks have become currency, as companies use their stocks to acquire other stocks, and to pay with their stock options their most valuable employees and consultants. The immaterial economy is the real economy. The performance of firms in this information-based, information-driven,and information-valued economy determines the fate of people and countries.
2. Consequences for development:
· The networking logic of the new global system makes possible to integrate in a network everything that is valuable, while siwtching off from the network everything that has no value or is devalued, according to dominant criteria in the global networks of capital, information, and power. So, the world is not divided any longer between North and South but between areas and people who are switched on/off from these networks. This trends raises the key issue of how to diffuse dynamism from the Southern nodes of global networks into the South at large.
· Global connectivity and information technology infrastructure are necessary, albeit not sufficient conditions for development. However, in an underdeveloped, impoverished country, why to invest in expensive infrastructure if there is no use for it? This becomes a vicious circle, perpetuating underdevelopment.
· Human resources are critical, in fact, this is the essential infrastructure, without which technology means nothing. The new economy is a people-based economy. This means education. But education is not the samething than the warehousing of children. The key issues are the training of teachers, and the reform of the school system into a new pedagogy adapted to the Information Age. The university system plays a pivotal role in the new development strategy, both in training and in research. Furhtermore, beyond the school system, there is a growing need for a multifacetted process of social learning over the life time.
· Global financial markets ensure access to capital sources from everywhere,but also leave countries vulnerable so suddern reversals of financial flows. Trust has to be built along with expectations.
· Trade alone will not work as a development tool. It is trade as expression of an international production system, so the critical matter for a country or region is its integration in this international production system. Development means in fact the ability to enhance the value produced in each node, increasing competitiveness on the basis of higher productivity. For instance, the percentage of international trade over GDP in Sub-Saharan Africa is lower than in OECD countries. But what Africa exports is increasingly devalued vis a vis the value of advanced servicies and high technology goods. The upward spiral of competitiveness works through higher productivity. The downward spiral works by cutting costs, particularly labor and environmental costs. There is a virtuous circle of expanding demand and productivity for everybody,through informational development. And there is a vicious circle of striving to be cheaper than other competitors, so most countries end up being poorer, while only the dominant economies benefit from this pattern of international competition. Productivity in the new economy requires a strong technological basis, of which Internet is the most direct expression. So, countries do not need to produce Internet or develop an Internet industry. But all countries, to be productive and competitive, need to produce, sell, manage with Internet. Information technology is the electricity of the Information Age, and Internet is the equivalent of the electrical engine, at the root of organizational forms: the factory in the industrial era, the network in the Information Age.
3. The social consequences of uneven informational development: the roots of inequality, poverty and social exclusion in the new global economy.
The UNDP’s Human Development Reports, and other United Nations documents in the last 5 years have provided evidence of increasing inequality in the midst of this extraordinary process of technological innovation and economic dynamism. Poverty is persistent in many countries,and for many people (close to 50% of people in the world survive with less than 2 $ per day; in the United States, 20% of children are in poverty; in the European Union pockets of social exclusion persist, while there has been a substantial increase in inequality, and in child poverty in the 1980s-1990s). In the US, real wages declined until1996, in the EU there was still double-digit unemployment on average until a few months ago. So, at first sight, it seems as if the “trickle down theory” is not working. Overall, in the 1990s, even counting the tens of millions that have benefitted from globalization in China,India, and Latin America, a conservative estimate would put at about 2/3 of people in the world that have either not improved their condition or even have seen their condition deteriorate, particularly in Africa.
Correlation does not necessarily implies causality. But I contend that there is a systemic relationship between the new, knowledged-based, global network economy, and the intensification of inequality, poverty, and social exclusion throught the world. The trend is not related to technology or to globalization per se, but to the institutional conditions under which globalization proceeds and the Information Technology revolution expands. In a summary view the mechanisms connecting the network economy to increasing inequality and social exclusion seem to be the following:
a) Networking and flexibility make possible to connect the valuable and discard the devalued – for people, firms, territories.
b) Extreme underdevelopment of technological infrastructure in most of the world is a major obstacle for development. Diffusion of Internet in 2000 is still at around 3% of world’s population versus over 40% in US and Scandinavia – 25% in the EU. When connections are made in developing countries, they concern very restricted linkages via satellite, extending the global networks but with great differences in tele-density between metropolitan centers and the rest of the country. Internet content providers and the Internet industry are highly concentrated spatially (Zook, 2000). Yet, Internet usage will diffuse (9 million users in 1995, 300 million now, 700 billion by the end of 2001, over 2 billion in 2007). But this generalization of Internet induces a new round of social inequality :
a) First comers shape the uses and the structure of Internet (as it is also happening in biotechnology)
b) Educational ability and cultural capital are unequally distributed and this inequality is amplifed by Internet.
c) Education, technological literacy, and R&D are unevenly distributed in the world. As they become key development resources, countries lacking these resources become locked in their backward conditions.
d) Financial volatitily, induced by global financial integration, leads to recurrent crises with devastating effects in the more vulnerable areas.
e) Governments are often bypassed by flows of capital and technology, and increasingly restrained in their policies by international financial institutions and private lenders – thus suffering a double crisis of functionality and of legitimacy.
f) In the wake of crisis and poverty, the global criminal economy develops, further de-legitimizing governments, and creating a parallel economy that benefits from globalization.
g) As economies and societies come under stress, corruption, ethnic strifes, banditism and civil wars, disintegrate states and societies
h) Massive movements of population follow, accelerating urbanization without conditions to integrate people in cities. Millions of urban dwellers live on the edge of ecological catastrophe. Non-sustainable processes of migration and urbanization contribute to the rise of epidemics of different sorts.
i) Children are the most vulnerable members of our societies,and they are abused more than ever, because of the dynamism and global reach of the exploitative economy, the sex economy, and the criminal economy – and if children are wasted, we are implanting in the minds of our future people the seeds of despair and destruction.
Thus, while we have unleashed extraordinary creativity and technological innovation, the contradictions of the development process are sharper than ever. Yet, there is no fatality in history. Human action, if we react on time and with sufficient knowledge and determination, can reverse current destructive trends – by redefining the problematique of development.
4. A NEW MODEL OF DEVELOPMENT: INFO-DEVELOPMENT.
- Premises: a) Trickle down theory does not work, because even in the unlikely event that it would, over time, the time lag for the diffusion of effects of economic growth throughout the planet would be too long. Long enough that before the sharing of wealth would take place, it is likely that we would witness social and political reactions that would block development.
- b) A world of networked “Silicon Valleys”, isolated from the rest is not viable, morally, politically, ecologically or even economically. It is not viable economically because of the contradictions introduced in the new economy by two gaps. First, the gap between the rate of growth of productivity and the rate of growth of demand, leading to a structural overproduction crisis, particularly in the hight technology sector. Second, the gap between the rate of growth of high technology industries and advanced business services, and the rate of growth of the pool of talent needed to foster productivity: here lies the explanation for the paradox of hundreds of thousands of high paying jobs not being filled for lack of skilled workers, in the midst of a world struck by unemployment.
The Information Technology revolution changes everything. Under the current parameters of international division of labor, poor countries and regions are threatened with structural irrelevance associated with their technological obsolescence. On the other hand, if properly used, the Information Technology revolution could spur a model of informational development that would allow developing countries to leapfrog beyond the industrial stage in their process of development. This leapfrogging strategy is difficult, complex, and still unclear in its actual contours. But it offers the best prospect to overcome structural, global inequality. Indeed, there are already numerous projects and programs around the world implementing development along these lines. We must build on these accomplishments, but for development to be cumulative and synergistic we need to redefine development in a global perspective, and implement a coordinated, global strategy. Let me review the main elements of this new approach to development:
Knowledge and information are the keys to productivity, connectivity is the key to global competitiveness. Knowledge and information can be applied to all activities, both in production and in the delivery of goods and services.. Development today is above all development of the capacity to process efficiently knowledged-based information and apply it to production and to the enhancement of the quality of life. Under the informational paradigm, two key factors of production are necessary: information processing and communicaton infrastructure, and human resources able to use it. Internet is the most direct and fundamental expression of both infrastructure and human resources. The new economy is, in its essence, a mind-based economy.
The building of an Internet infrastructure requires the revamping and extension of the telecommunications system, counting on new technologies based on cellular telephony and satellite communication –the mobile Internet is the new, universal medium. Internet access community centers can be built in neibhorghoods and small towns around the world – and they are being built in some instances. Yes, people need and electrical grid together with Internet, but in a developmental sense rather than in this “obvious” statement of starting first with the basics (starting with electricity) that in fact belies our current technical capatilities. If I may give an anecdotal example, my friend Cliff Barney is a Berkeley net-journalist who lives, together with his wife, an artist and anthropologist, in a Mexican fishing village without electricity. And yet, he regularly publishes his Rewired net-magazine, writing from his village and posting it on the net. He uses satellite transmission, and he powers his computer with a small generator that he shares with the only cantina in the village, so that both beer and net writing are definitely cool…In a more technological sense, in early 2000, Transmeta, an innovative Silicon Valley company, unveiled a new chip with standard processing capacity but using considerably less energy than current chips. The projections are for solar-charged computing devices, using low-energy consuming chips, able to hook up via satellite into the network where memory and processing power are stored. Under these conditions, the “common sense” statement about electricity preceding the Internet is more questionable than it looks. Yet, the important point stands on the relationship between Internet-based development, and the broader range of developmental needs. The key issue is that the provision of public services, and facilities, starting with water, electricity, sewage, transportation, health services, and the like are the concomitant factors of development, not its pre-requisites. The key issue is how to generate economic resources that would allow a country to provide this facilities to its people, not only by building the infrastructure, but being economically and technologically able to maintain it, repair, and upgrade it. So, the issue is not that people shoul choose between eating or using Internet. The policy proposition is that only an Internet-based economy can generate enough value in the new, global economy to enable countries to develop fast enough to provide for themselves without having to resort to international charity on a permanent basis.
The key to using Internet for developmental purposes is people’s capacity to find the appropriate information, to analyze it, and focus it on whatever task they want or need. Which ultimately means, education for everybody. The expansion of education in quantity and quality is thus the real pre-condition for informational development. But how would it be possible to engage in this major educational extension with limited teaching capacity in many countries?. The most important element in improving the quality of primary education is to train the teachers. Based on the innovative Brazilian experience under the Cardoso administration, distant learning,based on Television and Internet in tens of thousands of schools around the country, can considerably helped. Distant learning has to be coupled with face-to-face teaching, conducted by better trained teachers. This requires better pay and working conditions for the teachers. But the process of reforming and improving the education system from bottom up is too slow for the urgent developmental needs, in a world whose dynamic segment is speeding away from the rest of the planet. Thus, leapfrogging is necessary. And distant learning for the teachers is a key element of this leapfrogging. To be sure, a new pedagogy has to be developed together with the technology. Individualized tutoring on line is essential,and tutoring requires qualified tutors. However, the possibility exists of different layers of tutors, where the most qualified are at the top, tutoring tutors,who tutor other tutors,who ultimately tutor the teachers, who teach the students. If the whole process is made interactive, with constant feedbacks and rectification of the pedagogy, it could be a powerful tool of educational development. This could be possible only now because of the possibilities offered by Internet. Furthermore, Universities must develop at the same pace – including first class universities as engines of development. In those areas of the world where research resources are scarce, regional international universities could be created, combining resources, linking them up to sponsoring universities in the main research centers around the world, with joint programs, and on-line training and research cooperation.
Adult education, and on-line vocational training are critical to incorporate the whole population into the new techno-cultural system, to avoid deepening the current age divide. There is an absolute need to upgrade technological literacy in the short term. Short-cuts strategies include: community technology training centers; Information Technology extension programs, both public and private; coordinating and combining existing resources; fostering on-line development programs.
Public services can be dramatically improved in the short term through distant delivery, particularly health services, and information on public services.
The main elements of this strategy are widely known, and many countries are convinced of the need to engage in this new model of info-development. The problem is that this strategy requires a huge, expensive transportation and telecommunications infrastructure. It also requires massive investment in human resources, in upgrading and rationalizing services. The private sector is taking up some of this investment, particularly in telecommunications. But for obvious business imperatives the privately built infrastructure tends to serve advanced business centers and wealthy social groups. Ultimately business-led, informational development links up a few valuable nodes in developing countries to the developed world, but does not incorporate the majority of the population, and does not dynamize economic and human resources at large. Thus, there is a need for non-profit oriented investment in informational infrastracture. If this investment would take place, not only it would provide the basis for future development but in would have an immediate impact in stimulating the economy, in job creation, in training, in learning by doing. This is the public works program of the Information Age. And there is a long tradition in economic policy of using public works both as an economic stimulus and as an improvement of the general conditions of production. The catch here, of course, is where the money would come from. I will examine this essential matter at the end of this lecture.
However, I must first consider and additional obstacle to an informational development strategy. Who manages development? How useful is to provide resources to a wasteful, inefficient, and some times corrupt, administration? How to act upon an economy and a society with a weak institutional basis, with no civil society, in the midst of violence, war, banditism and corruption?. In the first place, in many countries the situation is not as bad, in a close up look. Societies, and institutions have reacted to the devastation of the 1980s and early 1990s. . Mozambique was destroyed by civil war, then suddenly surged and was making substantial progress until the natural disasters set it back – all recoveries will be fragile for a long time, some times natural disasters, some times wars, some times financial crises. This is why a sustained aid policy from the international community has to be there for the harsh moments – taking care of not making the crises worse by misled interventions. Yet, even acknowledging the difficulty of rebuilding societies and economies without solid political institutions, how to break through the vicious circle: poverty leads to clientelism and corruption, which perpetuate poverty. The answer is: in a positive feedback loop strategy, starting from the current state of institutional disorganization, the effort to reorganize, consolidate and rationalize the institutional framework has to be given a goal, a development plan, a perspective. This is not government planning: it should be multifacetted, with NGOs, business, government, international institutions building ad hoc networks for specific projects. But the meaning of all these projects, cannot be simply remedial, but developmental, built on a new development strategy appropriate to the information age. In designing this strategy attention has to be paid to the extraordinary diversity of situations in the so-called developing world. Brazil is not the same than Sierra Leone. The South of Brazil is not the same than the North of Brazil. South Africa is not the same than the rest of Africa. Botswana is not the same than Namibia. So, in some cases a comprehensive, multilateral aid program throughout the country is needed. In most cases, specific projects for specific regions,or aimed at specific dimensions of the developmental infrastructure (education, technological literacy, health services), are more suitable. The key however is the coordination of various projects, and the process of learning from other experiences.
What could be the potential outcome of an informational development strategy? The building of one, two, many Bangalores linked to their hinterland, being intermediaries of shared info-development, rather than subordinated appendages from the first world. The most important outcome would be the diffusion of knowledge and technological capacity throughout economy and society,so that people in all societies decide what to do with it, using their entrepreneurial skills to create new markets and compete in these markets. Or else, to use their informational capacity to build alternative social models, based on different sets of values. Informational capacity is not limited by any means to high technology industries and services. It could be used in sustainable agricultural development. An info-development model is based, in developing countries as everywhere, on on-line work, on-line service delivery,on-line learning, all linked to local economies and local communities. Nodes and networks which grow and incorporate people. Poverty still will be there for a long time, but there will be hope from the poor segments of the population to link up to the dynamic segments of the country and of the world. The historical horizon could then be, an open, global economy, based on the enforcement of social rights,human rights, and environmental rights, in a gradual homogeneization of world’s chances. With development, income growth, growth of markets, and increasing expansion of the development process in formerly poor areas that would provide markets and talent for the informational economy, without confining this economy to the current restrictive networks of capital and information.
However, the main problem to tackle in the implementation of global info-development is how to inject resources in the first place in areas with no hope of yielding returns in the short term. There is a need for a Big Bang, a massive, sudden investment in technology and human resources, in a scale large enough, and in various areas of the world, to prime pump the process of informational development. These resources can only come from where they are, from the rich countries, from the largest corporations, from the centers of innovation and learning, and from the international organizations funded and supported by the wealthiest countries in the world. The new problematique of development requires a new strategy of international aid that would be not remedial but developmental, not bilateral but multilateral, not governmental but multi-facetted on both sides:donors and recipients, governments, at all levels, NGOs, and business, should be involved in a joint the effort. Let us examine this new landscape of international aid.
5. FOR A TECHNOLOGICAL “MARSHALL PLAN” IN THE INFORMATION AGE.
What follows is the expression of some very general, strategic ideas, without pretending to propose any institutional design. Let me just say that any such a strategy of development should be participatory and shared between internationall institutions and governments.; between governments and NGOs; between public and private sectors; between global actors and local civil societies.
The current vicious circle between the lack of conditions for informational development in many countries and regions in the world, and the dynamics of networks, including all sources of value , while excluding those who have no economic or technological value, must be broken by deliberate action. Only a massive, sudden, coordinated injection of resources and know how can reverse the current dynamics, which is fragmenting the planet. To give an image, I label this initiative a Technological Marshall Plan in the framework of new, international Keynesianism. As the Marshall Plan did in Europe, this new Plan would help the reconstruction of the world, while helping companies of the donor countries in their long term business interests. International keynesianism means to stimulate global demand by public works in creating a new infrastructure. – this time in high technology industries. Benefits? For developing countries, obvious, on the condition of developing the appropriate human resources infrastructure to adapt technologies to their own needs, and to their own economic structure, not just building high tech islands in an ocean of underdevelopment. For the North, for the US, for the European Union, for Japan, besides assuming moral responsibility, and taming potential sources of geopolitical unstability, there is a fundamental economic and technological interest. On the one hand to expand demand, and particularly for high technology markets, in various ways: a)the immediate impact of subsidized infrastructure building b) the future expansion of dynamic high tech based economies c) the development of new uses of advanced technology to satisfy needs that are not marketable at this point, for instances in health care on-line expert systems, or distant learning education.
On the other hand, the most important bottleneck for high techology development is the lack of a large enough pool of talent. Without Indian or Chinese engineers, Silicon Valley could not operate. In Europe, leaders of leading technology companies are desperate on the matter. The development of a new technological system is so fast that requires the mobilization of human resources all over the planet. The argument about educating people in each country rather than resorting to disruptive migration patterns, may be correct in the long run, but it takes time, and not everybody wants to work in technology. Besides, broadening the potential labor market (including on-line) increases flexbility and adaptability of labor. Is this global mobility of talent impoverishing poor countries, inducing a massive brain drain? Well, not exactly. It is first about putting minds to use, minds that otherwise would be wasted, and it is about giving these educated people the opportunity to do something with their education, where they can be useful and productive: if engineers they leave India it is because they can do better somewhere else. But the most important point to be made is that the traditional brain drain debate is obsolete. Today’s reality is one of networks of high skilled workers and entrepreneurs, moving back and forth between different nodes of production and innovation. Many people who come to Slicion Valley from Bangalore go back to Bangalore, and to India, set up companies, and live between California and India. Same process is happening between the United States and Taiwan, Singapore, Israel, Mexico, China, and lately,Russia. The key here is to expand the networks and increase the size and quality of the nodes throughout the developing world, bringing in more talent from the whole planet to these networks, so that ultimately innovation works back and forth regardless of country boundaries. Utopian? Well, it really depends on immigration policy, and on companies policy. Transnationalism from below is the reality for millions of immigrants that bridge economies and societies between countries – for the benefit of their families, of their companies, and of their countries.
CONCLUSION
This new development policy based on technological innovation and diffusion seems to be the appropriate tool for development ion the Information Age. All this sounds like techno-fantasy, when the pressing problems are hunger, sanitation, epidemics, basic stuff. In fact, it is through technology-led development that we can leapfrog stages of the development process to provide efficiently for human needs, because only productivity, competitiveness, educated labor, and efficient management, can overcome, in a stable pattern of economic growth, the obstacles that exist today for countries to engage in a sustainable development process.
In this context, it is comforting to see, I would say for the first time in a significant and coherent way, the new strategy for development proposed by General Secretary Kofi Annan in his report to the Millennium General Assembly. A Global Compact agreement, with the support of governments, corporations, non profit foundations, NGOs, specific programs based on the development of Internet and new technologies, transferring human resources via a Netcorps of volunteers… All these are critical initiatives that may signal a transformation of development strategies. I hope this will be seriously considered by the General Assembly, and that there will be action upon it. I also hope that other international institutions,and particularly the World Bank, can cooperate in the matter.
A global development strategy for information technology and diffusion could be devised, specified by regions, countries, and issues, then transformed into projects that would receive funding, technical support and human resources from participating partners in the Global Compact agreement, such as proposed by the Secretary General of the United Nations. I know many corporations are ready to take up the challenge. I know tax payers in many countries would be ready to foot the bill if they are assured that their money will actually remedy poverty and spur development, rather than financing bureaucracy and corruption. I know there are thousands of dedicated professionals ready to trade their stock options for their life options. And I know , throughout the developing world, of hundreds of projects that are using/diffusing technology at the service of human needs. These projects, often conducted in heroic conditions, have already provided the experimentation on which we can build, so we could already embark in a large scale program of technology-led development in many areas of the world. Many problems remain to be solved, particularly in terms of ensuring political accountability and superseding bureaucracy. Yet, if there is political will, resources and ideas are there.
This may sound utterly unrrealistic. In my view, the most unrealistic view is that we can proceed with our current pattern of development, destroying our environment, and excluding the majority of humankind from the benefits of the most extraordinary technological revolution in history, without suffering a devastating backlash from society and from nature.
***
Manuel Castells is, in 2004, Chair Professor of Communication Technology and Society at the University of Southern California, Los Angeles:
Professor Emeritus of Sociology at the University of California, Berkeley;
Research Professor of Information Society, Open University of Catalonia, Barcelona; and Distinguished Visiting Professor of Technology and Society, Massachussets Institute of Technology (M.I.T.) He is the author o “The Information Age: Economy, Society and Culture. Volume 1: The Rise of the Network Society; Volume 2: The Power of Identity; Volume 3: End of Millennium”, Oxford: Blackwell, 1996/2003. (translated in Chinese)
The world is experiencing a major technological revolution, centered around information and communication technologies and genetic engineering. Internet is at the same time the epitome and the most powerful medium of this revolution. Under the impulse of new technologies and flexible forms of organization and management we are witnessing the formation of a new economy, characterized by rising productivity growth and global competition. During the late 1990s most of the world has experienced reasonable rates of economic growth, in spite of the Asian crisis of 1997-98. The perspectives are for a continuation of this economic dynamism in core economies,as well as in selected areas of the developing world. United Nations’ Human Development Reports indicate some improvement in living conditions (education enrollment, life expectancy, infant mortality) around most of the world, when data are considered in a historical perspective. Besides, in the last decade we have witnessed an extension of political democracy in the planet, the beginning of globalization of human rights, the opening up of horizontal communication channels via the Internet. Overall, people have more say today on public affairs than in any prior time in history. Furthermore, there is a major cultural revolution, as women’s consciousness has risen in the last three decades, and as women’s emancipation seems to be an irreversible trend. Yet, at the same time, people around the world fear threatened by globalisation and by new technologies, and a widespread social backlash against the new techno-economic system is emerging, under different forms, from reactive movements to alternative projects enacted by proactive movements. This is not, as some would think, a matter of misunderstanding or an expression of ideological irrationality. General Secretary Kofi Annan’s report to the Millennium Assembly of the United Nation provides a good empirical basis to understand many of these concerns. In my own interpretation, they arise from a multiplicity of reasons: similar fears have taken place in all rapid social transition periods; there are fears of uncontrolled uses of technology (eg. in genetic engineering), and in my view, these fears are founded. There are also growing environmental concerns about the consequences of our development model, precisely because we know more about these consequences,thanks to advancement in science and technology. Governments seem to be facing a major crisis of legitimacy: The UN/Gallup survey of public opinion in 2000 and the global Gallup Survey for the World Economic Forum in 2002 ndicate that: 2/3 of respondents of a global sample of citizens around the world do not think that their country is governed by the will of the people. Reasons? In my view, some of this distrust is linked to widespread corruption and lack of accountability. But the main reason, I believe, is that governments are the in fact the main globalizers.So, if globalization is perceived as a threat, governments are not reliable in the eyes of many citizens, because they are responding to global interests rather than serving their local constituencies – at least in people’s perception. .Furthermore, people’s lack of trust also arises from the correct perception of the gap in opportunities and from the fact that rather than living in a world divided between rich and poor (an old feature of human societies) we are entering a new world characterized by a cleavage between those who are “in” and those who are “out” of the new system of wealth and power. I shall try to explain this process, then I will elaborate on the policy implications of this analysis.
1. Internet, the New economy, and global development.
There is a new economy, expanding throughout the world, unleashing productivity, and creating prosperity, but in a very uneven pattern. This economy is chacterized by 3 inter-related features.
· Informational:productivity and competitiveness are based on knowledge and information, powered by information technology. This translates, essentially in the need for a technological infrastructure, and the crucial role of highly educated human resources.
· Networking. The new economy ensures productivity and flexibility on the basis of information-powered networks. Networks within firms and among firms, networks between regions, and decentralized networking around nodes. An important example of dynamic node in developing countries is Bangalore, India, a major software and electronics area, linked to the major technological centers of the world, particularly to Silicon Valley. The new global architecture is built around flows between dynamic nodes. The negative aspect of this dynamics is that the system allows for the switching on and off of regions and even countries according to their contribution to the value chain structured around these global networks.
· The new economy is a global economy. A global economy is a new kind of economy. It is the economy whose core activities have the capacity to work as a unit in real time on a planetary scale. This capacity is technological, based on telecommunications, fast transportation, and information systems. It is institutional, based on deregulation, liberalization, and privatization. And it is organizational, based on the networking of business firms, and on flexible forms of management and work. The key dimension of globalization is financial globalization – financial markets are now globally interdependent and electronically enacted in real time, bypassing government controls, and determining the fate of economies ( for instance, in 2000, on average, currency markets exchanged about 2 trillion US dollars per day). But also, the core of production of goods and services is globalalized, organized around multinational corporations and their ancillary networks, accounting for about 30% of global GDP. International trade is also an important dimension of globalization, but the expansion of trade is mainly a function of the internationalization of production, as multinational corporations and their networks account for about 2/3 of international trade, including about 40% of trade that takes place within a given firm and its networks. Science, and technology, and highly skilled labor are also organized on a global scale. And migration of unskilled labor is increasing everywhere. The global economy is highly segmented: not everybody is included, but everybody is affected.
This new economy has new rules.
· It is powered by Internet – the equivalent of the electrical engine, of the the Industrial Age, making possible the operation of the network enterprise, the historical equivalent of the industrial factory. Information technology – including information based transportation systems are the basis of connectivity and knowledge-based production.
· New rules for labor. Highly skilled labor is critical. – flexible, adaptable, self-programmable, able to innovate by working in flexible enterprises.
· New rules for capital: financial markets are the core of realization of value. Growth of value of stocks substitutes for profits as the determinant of the new economy, since it is the main criterion to attract investment. Market valuation is led by information –of wich profit is one of the elements, but not the only one. In the long term, yes, profits (expressing productivity) have to be there for growth to be economically sustainable. But profits may come as result of investment in labor and production, and this investment is attracted by stock valuation mechanisms that are driven by information turbulences in financial markets.As Paul Volcker wrote in a book we co-authored: “Flows of funds and their valuation in free financial markets are influenced as much by perceptions as by objective reality –or, perhaps more precisely, the perception is the reality” (Volcker, 2000: 78). This is not speculation –since this process generates value out of investment. In goods, in services, increasingly in inmaterial production (software, entertainment, consulting, research etc.) In this sense there is no financial bubble, because we have entered a period of systemic financial volatility. Rather than waiting in vain for the bubble to burst, so that we can return to a state of market equilibrium, we must learn to live in sparkling water. Growth of value of stocks is determined by expectations and trust, and their right combination: in emerging markets, there are high expectations but low trust, so capital always ready to go in and out – as it is the case,in advanced economies, in day trading and dot.com companies. In this new, brave financial world, stocks have become currency, as companies use their stocks to acquire other stocks, and to pay with their stock options their most valuable employees and consultants. The immaterial economy is the real economy. The performance of firms in this information-based, information-driven,and information-valued economy determines the fate of people and countries.
2. Consequences for development:
· The networking logic of the new global system makes possible to integrate in a network everything that is valuable, while siwtching off from the network everything that has no value or is devalued, according to dominant criteria in the global networks of capital, information, and power. So, the world is not divided any longer between North and South but between areas and people who are switched on/off from these networks. This trends raises the key issue of how to diffuse dynamism from the Southern nodes of global networks into the South at large.
· Global connectivity and information technology infrastructure are necessary, albeit not sufficient conditions for development. However, in an underdeveloped, impoverished country, why to invest in expensive infrastructure if there is no use for it? This becomes a vicious circle, perpetuating underdevelopment.
· Human resources are critical, in fact, this is the essential infrastructure, without which technology means nothing. The new economy is a people-based economy. This means education. But education is not the samething than the warehousing of children. The key issues are the training of teachers, and the reform of the school system into a new pedagogy adapted to the Information Age. The university system plays a pivotal role in the new development strategy, both in training and in research. Furhtermore, beyond the school system, there is a growing need for a multifacetted process of social learning over the life time.
· Global financial markets ensure access to capital sources from everywhere,but also leave countries vulnerable so suddern reversals of financial flows. Trust has to be built along with expectations.
· Trade alone will not work as a development tool. It is trade as expression of an international production system, so the critical matter for a country or region is its integration in this international production system. Development means in fact the ability to enhance the value produced in each node, increasing competitiveness on the basis of higher productivity. For instance, the percentage of international trade over GDP in Sub-Saharan Africa is lower than in OECD countries. But what Africa exports is increasingly devalued vis a vis the value of advanced servicies and high technology goods. The upward spiral of competitiveness works through higher productivity. The downward spiral works by cutting costs, particularly labor and environmental costs. There is a virtuous circle of expanding demand and productivity for everybody,through informational development. And there is a vicious circle of striving to be cheaper than other competitors, so most countries end up being poorer, while only the dominant economies benefit from this pattern of international competition. Productivity in the new economy requires a strong technological basis, of which Internet is the most direct expression. So, countries do not need to produce Internet or develop an Internet industry. But all countries, to be productive and competitive, need to produce, sell, manage with Internet. Information technology is the electricity of the Information Age, and Internet is the equivalent of the electrical engine, at the root of organizational forms: the factory in the industrial era, the network in the Information Age.
3. The social consequences of uneven informational development: the roots of inequality, poverty and social exclusion in the new global economy.
The UNDP’s Human Development Reports, and other United Nations documents in the last 5 years have provided evidence of increasing inequality in the midst of this extraordinary process of technological innovation and economic dynamism. Poverty is persistent in many countries,and for many people (close to 50% of people in the world survive with less than 2 $ per day; in the United States, 20% of children are in poverty; in the European Union pockets of social exclusion persist, while there has been a substantial increase in inequality, and in child poverty in the 1980s-1990s). In the US, real wages declined until1996, in the EU there was still double-digit unemployment on average until a few months ago. So, at first sight, it seems as if the “trickle down theory” is not working. Overall, in the 1990s, even counting the tens of millions that have benefitted from globalization in China,India, and Latin America, a conservative estimate would put at about 2/3 of people in the world that have either not improved their condition or even have seen their condition deteriorate, particularly in Africa.
Correlation does not necessarily implies causality. But I contend that there is a systemic relationship between the new, knowledged-based, global network economy, and the intensification of inequality, poverty, and social exclusion throught the world. The trend is not related to technology or to globalization per se, but to the institutional conditions under which globalization proceeds and the Information Technology revolution expands. In a summary view the mechanisms connecting the network economy to increasing inequality and social exclusion seem to be the following:
a) Networking and flexibility make possible to connect the valuable and discard the devalued – for people, firms, territories.
b) Extreme underdevelopment of technological infrastructure in most of the world is a major obstacle for development. Diffusion of Internet in 2000 is still at around 3% of world’s population versus over 40% in US and Scandinavia – 25% in the EU. When connections are made in developing countries, they concern very restricted linkages via satellite, extending the global networks but with great differences in tele-density between metropolitan centers and the rest of the country. Internet content providers and the Internet industry are highly concentrated spatially (Zook, 2000). Yet, Internet usage will diffuse (9 million users in 1995, 300 million now, 700 billion by the end of 2001, over 2 billion in 2007). But this generalization of Internet induces a new round of social inequality :
a) First comers shape the uses and the structure of Internet (as it is also happening in biotechnology)
b) Educational ability and cultural capital are unequally distributed and this inequality is amplifed by Internet.
c) Education, technological literacy, and R&D are unevenly distributed in the world. As they become key development resources, countries lacking these resources become locked in their backward conditions.
d) Financial volatitily, induced by global financial integration, leads to recurrent crises with devastating effects in the more vulnerable areas.
e) Governments are often bypassed by flows of capital and technology, and increasingly restrained in their policies by international financial institutions and private lenders – thus suffering a double crisis of functionality and of legitimacy.
f) In the wake of crisis and poverty, the global criminal economy develops, further de-legitimizing governments, and creating a parallel economy that benefits from globalization.
g) As economies and societies come under stress, corruption, ethnic strifes, banditism and civil wars, disintegrate states and societies
h) Massive movements of population follow, accelerating urbanization without conditions to integrate people in cities. Millions of urban dwellers live on the edge of ecological catastrophe. Non-sustainable processes of migration and urbanization contribute to the rise of epidemics of different sorts.
i) Children are the most vulnerable members of our societies,and they are abused more than ever, because of the dynamism and global reach of the exploitative economy, the sex economy, and the criminal economy – and if children are wasted, we are implanting in the minds of our future people the seeds of despair and destruction.
Thus, while we have unleashed extraordinary creativity and technological innovation, the contradictions of the development process are sharper than ever. Yet, there is no fatality in history. Human action, if we react on time and with sufficient knowledge and determination, can reverse current destructive trends – by redefining the problematique of development.
4. A NEW MODEL OF DEVELOPMENT: INFO-DEVELOPMENT.
- Premises: a) Trickle down theory does not work, because even in the unlikely event that it would, over time, the time lag for the diffusion of effects of economic growth throughout the planet would be too long. Long enough that before the sharing of wealth would take place, it is likely that we would witness social and political reactions that would block development.
- b) A world of networked “Silicon Valleys”, isolated from the rest is not viable, morally, politically, ecologically or even economically. It is not viable economically because of the contradictions introduced in the new economy by two gaps. First, the gap between the rate of growth of productivity and the rate of growth of demand, leading to a structural overproduction crisis, particularly in the hight technology sector. Second, the gap between the rate of growth of high technology industries and advanced business services, and the rate of growth of the pool of talent needed to foster productivity: here lies the explanation for the paradox of hundreds of thousands of high paying jobs not being filled for lack of skilled workers, in the midst of a world struck by unemployment.
The Information Technology revolution changes everything. Under the current parameters of international division of labor, poor countries and regions are threatened with structural irrelevance associated with their technological obsolescence. On the other hand, if properly used, the Information Technology revolution could spur a model of informational development that would allow developing countries to leapfrog beyond the industrial stage in their process of development. This leapfrogging strategy is difficult, complex, and still unclear in its actual contours. But it offers the best prospect to overcome structural, global inequality. Indeed, there are already numerous projects and programs around the world implementing development along these lines. We must build on these accomplishments, but for development to be cumulative and synergistic we need to redefine development in a global perspective, and implement a coordinated, global strategy. Let me review the main elements of this new approach to development:
Knowledge and information are the keys to productivity, connectivity is the key to global competitiveness. Knowledge and information can be applied to all activities, both in production and in the delivery of goods and services.. Development today is above all development of the capacity to process efficiently knowledged-based information and apply it to production and to the enhancement of the quality of life. Under the informational paradigm, two key factors of production are necessary: information processing and communicaton infrastructure, and human resources able to use it. Internet is the most direct and fundamental expression of both infrastructure and human resources. The new economy is, in its essence, a mind-based economy.
The building of an Internet infrastructure requires the revamping and extension of the telecommunications system, counting on new technologies based on cellular telephony and satellite communication –the mobile Internet is the new, universal medium. Internet access community centers can be built in neibhorghoods and small towns around the world – and they are being built in some instances. Yes, people need and electrical grid together with Internet, but in a developmental sense rather than in this “obvious” statement of starting first with the basics (starting with electricity) that in fact belies our current technical capatilities. If I may give an anecdotal example, my friend Cliff Barney is a Berkeley net-journalist who lives, together with his wife, an artist and anthropologist, in a Mexican fishing village without electricity. And yet, he regularly publishes his Rewired net-magazine, writing from his village and posting it on the net. He uses satellite transmission, and he powers his computer with a small generator that he shares with the only cantina in the village, so that both beer and net writing are definitely cool…In a more technological sense, in early 2000, Transmeta, an innovative Silicon Valley company, unveiled a new chip with standard processing capacity but using considerably less energy than current chips. The projections are for solar-charged computing devices, using low-energy consuming chips, able to hook up via satellite into the network where memory and processing power are stored. Under these conditions, the “common sense” statement about electricity preceding the Internet is more questionable than it looks. Yet, the important point stands on the relationship between Internet-based development, and the broader range of developmental needs. The key issue is that the provision of public services, and facilities, starting with water, electricity, sewage, transportation, health services, and the like are the concomitant factors of development, not its pre-requisites. The key issue is how to generate economic resources that would allow a country to provide this facilities to its people, not only by building the infrastructure, but being economically and technologically able to maintain it, repair, and upgrade it. So, the issue is not that people shoul choose between eating or using Internet. The policy proposition is that only an Internet-based economy can generate enough value in the new, global economy to enable countries to develop fast enough to provide for themselves without having to resort to international charity on a permanent basis.
The key to using Internet for developmental purposes is people’s capacity to find the appropriate information, to analyze it, and focus it on whatever task they want or need. Which ultimately means, education for everybody. The expansion of education in quantity and quality is thus the real pre-condition for informational development. But how would it be possible to engage in this major educational extension with limited teaching capacity in many countries?. The most important element in improving the quality of primary education is to train the teachers. Based on the innovative Brazilian experience under the Cardoso administration, distant learning,based on Television and Internet in tens of thousands of schools around the country, can considerably helped. Distant learning has to be coupled with face-to-face teaching, conducted by better trained teachers. This requires better pay and working conditions for the teachers. But the process of reforming and improving the education system from bottom up is too slow for the urgent developmental needs, in a world whose dynamic segment is speeding away from the rest of the planet. Thus, leapfrogging is necessary. And distant learning for the teachers is a key element of this leapfrogging. To be sure, a new pedagogy has to be developed together with the technology. Individualized tutoring on line is essential,and tutoring requires qualified tutors. However, the possibility exists of different layers of tutors, where the most qualified are at the top, tutoring tutors,who tutor other tutors,who ultimately tutor the teachers, who teach the students. If the whole process is made interactive, with constant feedbacks and rectification of the pedagogy, it could be a powerful tool of educational development. This could be possible only now because of the possibilities offered by Internet. Furthermore, Universities must develop at the same pace – including first class universities as engines of development. In those areas of the world where research resources are scarce, regional international universities could be created, combining resources, linking them up to sponsoring universities in the main research centers around the world, with joint programs, and on-line training and research cooperation.
Adult education, and on-line vocational training are critical to incorporate the whole population into the new techno-cultural system, to avoid deepening the current age divide. There is an absolute need to upgrade technological literacy in the short term. Short-cuts strategies include: community technology training centers; Information Technology extension programs, both public and private; coordinating and combining existing resources; fostering on-line development programs.
Public services can be dramatically improved in the short term through distant delivery, particularly health services, and information on public services.
The main elements of this strategy are widely known, and many countries are convinced of the need to engage in this new model of info-development. The problem is that this strategy requires a huge, expensive transportation and telecommunications infrastructure. It also requires massive investment in human resources, in upgrading and rationalizing services. The private sector is taking up some of this investment, particularly in telecommunications. But for obvious business imperatives the privately built infrastructure tends to serve advanced business centers and wealthy social groups. Ultimately business-led, informational development links up a few valuable nodes in developing countries to the developed world, but does not incorporate the majority of the population, and does not dynamize economic and human resources at large. Thus, there is a need for non-profit oriented investment in informational infrastracture. If this investment would take place, not only it would provide the basis for future development but in would have an immediate impact in stimulating the economy, in job creation, in training, in learning by doing. This is the public works program of the Information Age. And there is a long tradition in economic policy of using public works both as an economic stimulus and as an improvement of the general conditions of production. The catch here, of course, is where the money would come from. I will examine this essential matter at the end of this lecture.
However, I must first consider and additional obstacle to an informational development strategy. Who manages development? How useful is to provide resources to a wasteful, inefficient, and some times corrupt, administration? How to act upon an economy and a society with a weak institutional basis, with no civil society, in the midst of violence, war, banditism and corruption?. In the first place, in many countries the situation is not as bad, in a close up look. Societies, and institutions have reacted to the devastation of the 1980s and early 1990s. . Mozambique was destroyed by civil war, then suddenly surged and was making substantial progress until the natural disasters set it back – all recoveries will be fragile for a long time, some times natural disasters, some times wars, some times financial crises. This is why a sustained aid policy from the international community has to be there for the harsh moments – taking care of not making the crises worse by misled interventions. Yet, even acknowledging the difficulty of rebuilding societies and economies without solid political institutions, how to break through the vicious circle: poverty leads to clientelism and corruption, which perpetuate poverty. The answer is: in a positive feedback loop strategy, starting from the current state of institutional disorganization, the effort to reorganize, consolidate and rationalize the institutional framework has to be given a goal, a development plan, a perspective. This is not government planning: it should be multifacetted, with NGOs, business, government, international institutions building ad hoc networks for specific projects. But the meaning of all these projects, cannot be simply remedial, but developmental, built on a new development strategy appropriate to the information age. In designing this strategy attention has to be paid to the extraordinary diversity of situations in the so-called developing world. Brazil is not the same than Sierra Leone. The South of Brazil is not the same than the North of Brazil. South Africa is not the same than the rest of Africa. Botswana is not the same than Namibia. So, in some cases a comprehensive, multilateral aid program throughout the country is needed. In most cases, specific projects for specific regions,or aimed at specific dimensions of the developmental infrastructure (education, technological literacy, health services), are more suitable. The key however is the coordination of various projects, and the process of learning from other experiences.
What could be the potential outcome of an informational development strategy? The building of one, two, many Bangalores linked to their hinterland, being intermediaries of shared info-development, rather than subordinated appendages from the first world. The most important outcome would be the diffusion of knowledge and technological capacity throughout economy and society,so that people in all societies decide what to do with it, using their entrepreneurial skills to create new markets and compete in these markets. Or else, to use their informational capacity to build alternative social models, based on different sets of values. Informational capacity is not limited by any means to high technology industries and services. It could be used in sustainable agricultural development. An info-development model is based, in developing countries as everywhere, on on-line work, on-line service delivery,on-line learning, all linked to local economies and local communities. Nodes and networks which grow and incorporate people. Poverty still will be there for a long time, but there will be hope from the poor segments of the population to link up to the dynamic segments of the country and of the world. The historical horizon could then be, an open, global economy, based on the enforcement of social rights,human rights, and environmental rights, in a gradual homogeneization of world’s chances. With development, income growth, growth of markets, and increasing expansion of the development process in formerly poor areas that would provide markets and talent for the informational economy, without confining this economy to the current restrictive networks of capital and information.
However, the main problem to tackle in the implementation of global info-development is how to inject resources in the first place in areas with no hope of yielding returns in the short term. There is a need for a Big Bang, a massive, sudden investment in technology and human resources, in a scale large enough, and in various areas of the world, to prime pump the process of informational development. These resources can only come from where they are, from the rich countries, from the largest corporations, from the centers of innovation and learning, and from the international organizations funded and supported by the wealthiest countries in the world. The new problematique of development requires a new strategy of international aid that would be not remedial but developmental, not bilateral but multilateral, not governmental but multi-facetted on both sides:donors and recipients, governments, at all levels, NGOs, and business, should be involved in a joint the effort. Let us examine this new landscape of international aid.
5. FOR A TECHNOLOGICAL “MARSHALL PLAN” IN THE INFORMATION AGE.
What follows is the expression of some very general, strategic ideas, without pretending to propose any institutional design. Let me just say that any such a strategy of development should be participatory and shared between internationall institutions and governments.; between governments and NGOs; between public and private sectors; between global actors and local civil societies.
The current vicious circle between the lack of conditions for informational development in many countries and regions in the world, and the dynamics of networks, including all sources of value , while excluding those who have no economic or technological value, must be broken by deliberate action. Only a massive, sudden, coordinated injection of resources and know how can reverse the current dynamics, which is fragmenting the planet. To give an image, I label this initiative a Technological Marshall Plan in the framework of new, international Keynesianism. As the Marshall Plan did in Europe, this new Plan would help the reconstruction of the world, while helping companies of the donor countries in their long term business interests. International keynesianism means to stimulate global demand by public works in creating a new infrastructure. – this time in high technology industries. Benefits? For developing countries, obvious, on the condition of developing the appropriate human resources infrastructure to adapt technologies to their own needs, and to their own economic structure, not just building high tech islands in an ocean of underdevelopment. For the North, for the US, for the European Union, for Japan, besides assuming moral responsibility, and taming potential sources of geopolitical unstability, there is a fundamental economic and technological interest. On the one hand to expand demand, and particularly for high technology markets, in various ways: a)the immediate impact of subsidized infrastructure building b) the future expansion of dynamic high tech based economies c) the development of new uses of advanced technology to satisfy needs that are not marketable at this point, for instances in health care on-line expert systems, or distant learning education.
On the other hand, the most important bottleneck for high techology development is the lack of a large enough pool of talent. Without Indian or Chinese engineers, Silicon Valley could not operate. In Europe, leaders of leading technology companies are desperate on the matter. The development of a new technological system is so fast that requires the mobilization of human resources all over the planet. The argument about educating people in each country rather than resorting to disruptive migration patterns, may be correct in the long run, but it takes time, and not everybody wants to work in technology. Besides, broadening the potential labor market (including on-line) increases flexbility and adaptability of labor. Is this global mobility of talent impoverishing poor countries, inducing a massive brain drain? Well, not exactly. It is first about putting minds to use, minds that otherwise would be wasted, and it is about giving these educated people the opportunity to do something with their education, where they can be useful and productive: if engineers they leave India it is because they can do better somewhere else. But the most important point to be made is that the traditional brain drain debate is obsolete. Today’s reality is one of networks of high skilled workers and entrepreneurs, moving back and forth between different nodes of production and innovation. Many people who come to Slicion Valley from Bangalore go back to Bangalore, and to India, set up companies, and live between California and India. Same process is happening between the United States and Taiwan, Singapore, Israel, Mexico, China, and lately,Russia. The key here is to expand the networks and increase the size and quality of the nodes throughout the developing world, bringing in more talent from the whole planet to these networks, so that ultimately innovation works back and forth regardless of country boundaries. Utopian? Well, it really depends on immigration policy, and on companies policy. Transnationalism from below is the reality for millions of immigrants that bridge economies and societies between countries – for the benefit of their families, of their companies, and of their countries.
CONCLUSION
This new development policy based on technological innovation and diffusion seems to be the appropriate tool for development ion the Information Age. All this sounds like techno-fantasy, when the pressing problems are hunger, sanitation, epidemics, basic stuff. In fact, it is through technology-led development that we can leapfrog stages of the development process to provide efficiently for human needs, because only productivity, competitiveness, educated labor, and efficient management, can overcome, in a stable pattern of economic growth, the obstacles that exist today for countries to engage in a sustainable development process.
In this context, it is comforting to see, I would say for the first time in a significant and coherent way, the new strategy for development proposed by General Secretary Kofi Annan in his report to the Millennium General Assembly. A Global Compact agreement, with the support of governments, corporations, non profit foundations, NGOs, specific programs based on the development of Internet and new technologies, transferring human resources via a Netcorps of volunteers… All these are critical initiatives that may signal a transformation of development strategies. I hope this will be seriously considered by the General Assembly, and that there will be action upon it. I also hope that other international institutions,and particularly the World Bank, can cooperate in the matter.
A global development strategy for information technology and diffusion could be devised, specified by regions, countries, and issues, then transformed into projects that would receive funding, technical support and human resources from participating partners in the Global Compact agreement, such as proposed by the Secretary General of the United Nations. I know many corporations are ready to take up the challenge. I know tax payers in many countries would be ready to foot the bill if they are assured that their money will actually remedy poverty and spur development, rather than financing bureaucracy and corruption. I know there are thousands of dedicated professionals ready to trade their stock options for their life options. And I know , throughout the developing world, of hundreds of projects that are using/diffusing technology at the service of human needs. These projects, often conducted in heroic conditions, have already provided the experimentation on which we can build, so we could already embark in a large scale program of technology-led development in many areas of the world. Many problems remain to be solved, particularly in terms of ensuring political accountability and superseding bureaucracy. Yet, if there is political will, resources and ideas are there.
This may sound utterly unrrealistic. In my view, the most unrealistic view is that we can proceed with our current pattern of development, destroying our environment, and excluding the majority of humankind from the benefits of the most extraordinary technological revolution in history, without suffering a devastating backlash from society and from nature.
***
Manuel Castells is, in 2004, Chair Professor of Communication Technology and Society at the University of Southern California, Los Angeles:
Professor Emeritus of Sociology at the University of California, Berkeley;
Research Professor of Information Society, Open University of Catalonia, Barcelona; and Distinguished Visiting Professor of Technology and Society, Massachussets Institute of Technology (M.I.T.) He is the author o “The Information Age: Economy, Society and Culture. Volume 1: The Rise of the Network Society; Volume 2: The Power of Identity; Volume 3: End of Millennium”, Oxford: Blackwell, 1996/2003. (translated in Chinese)