Meeting Arab Socio-economic development through ICT

1. Meeting Arab Socio-economic development through ICT “Can……………..Growth Can…..Waste” UN-SC Prof Fouad Mrad, American University of Beirut - Lebanon

2. CONTENTS • Introduction: ICT and Development • Arab Adopted Regional Needs • Ranked ICT Solutions Characteristics • Adequate ICT Solutions for Region • Assessment of Suitable ICT Solutions • Selected Suitable ICT Solutions’ Models • Model A: Software Development Industry • Model B: e-Services • Model C: Electronics Mfg & Integration Prof Fouad Mrad, American University of Beirut - Lebanon

3. ICT and Development • Technological change is both: a cause and a consequence of economic & social development • Some effects are non-measurable: convenience • Turnkey acquisition of technology systems: • technological and economic dependency, • limiting employment opportunities, • raising the cost of that acquired technology solutions. • ICT double edge: Selective adoption of ICT tools, products viewed as loss-minimizing strategy Prof Fouad Mrad, American University of Beirut - Lebanon

4. Regional Adopted Needs [UN 02-05] • Productive/Integrated Resources Mgmt for Sustainable Development • Integrated Policies for Social Development • Economic Analysis and Forecasting for Regional Development • Regional Integration and Adapting to Globalization • ICT for Regional Development • Comparable Statistics for Improved Planning and Policy Decisions Prof Fouad Mrad, American University of Beirut - Lebanon

5. Regional Status of ICT Prof Fouad Mrad, American University of Beirut - Lebanon

6. Process for Selecting ICT Priorities Quality Function Deployment (QFD) process • Start with Region Socio-economic Needs • Derive and Rank ICT solutions characteristics • Propose, assess, and Rank ICT solutions • Evaluate Solutions (country reference): • suggest Very Suitable and Suitable Arab Countries • QFD team: various levels of expertise in ICT infrastructure, contents, enablers, industrialization, and management. Prof Fouad Mrad, American University of Beirut - Lebanon

7. Region Adequate ICT Solutions Ranked Characteristics Prof Fouad Mrad, American University of Beirut - Lebanon

8. Ranked ICT Solutions Characteristics • Higher information exchange rate • Increases real-time reliable access and management of information • Facilitates data networking for social development • Increases awareness and knowledge of ICT tools • Facilitates national/regional integration of statistical data • Increases transparency and availability of information • Offers opportunities for regional integration into the knowledge society • Affordable & user friendly • Supports monitoring of comparable economic indicators • Enhances measurements and analysis/forecasting tools for economic performance • Enhances economic performance • Facilitates dissemination of Arabic information • Facilitates partnerships among development stakeholders • Facilitates standards adoption Prof Fouad Mrad, American University of Beirut - Lebanon

9. Ranked ICT Solutions Characteristics • Supports quality and coverage of education • Higher workforce utilization of youth and women • Facilitates awareness and enforcement of women empowerment policies • Offers new opportunities for industrialization • Supports initiatives to create productive employment • Offers investments opportunities • Supports Resources Management • Enhances harmonization and standardization of trade procedures • Helps regulation and facilitation of capital flow • Increases export capabilities • Increases environmental monitoring capabilities • Facilitates accessibility and awareness of social and cultural values • Facilitates and simplifies procedures for regional travel • Enhances trust and lower risk of Foreign and Domestic Investments • Can be exported Prof Fouad Mrad, American University of Beirut - Lebanon

10. Assessment of Suitable ICT Solutions Prof Fouad Mrad, American University of Beirut - Lebanon

11. 1 Arabized Software Development 1 Digitized Language Intensive Industry & Services 1 ICT Based Education &Training Institutions 1 Digital Publishing 2 ISP / Hosting / Data centers 3 Community Telecenters 4 Digital Public Transactions Processing 5 e-banking Transactions 5 Virtual Shopping Centers 5 B2B e-Transactions 6 Broadband Infrastructure 7 Smart Public ID Card 8 System Design & Integration 9 Computer Peripherals Mfg 9 Manufacturing of Fiber-optics 9 Printed Circuit Boards (PCB) Fabrication 9 Telecom Equipment Switches Mfg 9 Telecom Equipment Units Mfg 9 Telecom PABX Manufacturing 9 Industrial Process Equipment Design & Assembly 10 Customized Software Subcontracting 11 Call/Contact Centers Assessment of Suitable ICT Solutions (22) Prof Fouad Mrad, American University of Beirut - Lebanon

12. Model A: Software Development New players differentiable capabilities Attractive especially for developing countries: • High growth: industrial turnover, output, employment • Low entry barriers: financial and capital requirements • Opportunity to participate in knowledge based industry • Facilitating role for other parts of the economy • Opportunities for exports and foreign investments • Offers the full range of skill demand Prof Fouad Mrad, American University of Beirut - Lebanon

13. Model A: Software Development Industry The software marketplace categories are: • Tools (databases, application tools) • Packaged (accounting, healthcare, shipping) • Tailored applications (government, manufacturing, e-commerce, etc) • Multi-media and Localization (Arabization, CDs, education, tourism, etc) Prof Fouad Mrad, American University of Beirut - Lebanon

14. Arabization & Arabic Contents for ICT Solutions Arabic users forced to choose: foreign language, or poor Arabic support Web pages contents (estimate) • Korean 4.4% (pop 45 Millions) • Arabic 0.1% (pop 300 Millions) POTENIAL APPLICATIONS • Arabic educational contents for e-learning • Arabic multimedia, web applications • Arabic games • Arabic financial software • Arabic voice, language, and character recognition • Arabic interface for existing international packages Prof Fouad Mrad, American University of Beirut - Lebanon

15. Supporting items Low telecom cost (domestic) Low telecom cost (inter) Telecom infrastructure Low employment cost Technically skilled labor Multilingual labor R&D capability and support University graduates Arabic literacy Proxy variables Local rate (USD per 3 min.) Call from US (USD per min.) Percent digitalized exchanges Average industrial wage (USD) Prop of natural science major Average score of TOEFL R&D expenditure as % of GDP Gross ratio tertiary education Daily newspaper circulation per 1000 Arabization & Arabic contents for ICT Prof Fouad Mrad, American University of Beirut - Lebanon

16. Arabization and Arabic ICT Content Development: Selection Prof Fouad Mrad, American University of Beirut - Lebanon

17. VERY SUITABLE TECHNOLOGIES Jordan Kuwait Egypt Syria Tunisia Bahrain SUITABLE TECHNOLOGIES Lebanon United Arab Emirates Algeria Morocco Ref Country: Japan Arabized Software DevelopmentDigitized Language Intensive Industry & ServicesICT Based Education &Training InstitutionsDigital Publishing Prof Fouad Mrad, American University of Beirut - Lebanon

18. Model B: e-Services • Developed countries experiences cannot be mapped directly to the region: social, economic, cultural, infrastructural,legal business practices. • NO benefit from globalization of outsourcing • Inter-Arab trade is so low (6% of Arab trade) • Need access to the increasingly ICT-dependent strong markets of developed-countries. • Inadequate infrastructure, relatively expensive ICT tools and access, services requiring foreign languages, almost inexistent local contents, and unsuitable legislations. Prof Fouad Mrad, American University of Beirut - Lebanon

19. Suitable e-services Solutions ISP / Hosting / Data centers Community Tele-centers Digital Public Transactions Processing e-banking Transactions Virtual Shopping Centers B2B e-Transactions Smart Public ID Card Call/Contact Center Prof Fouad Mrad, American University of Beirut - Lebanon

20. Supporting items Low telecom cost (domestic) Telecom infrastructure Accessibility to internet Domestic market size Regional market size Broadband infrastructure IT literacy Proxy variables Local rate (USD per 3 min.) Percent digitalized exchanges User per 10,000 inhabitants Domestic population Regional population Availability of ADSL Number of PCs per 1000 inhabitants ISP / Hosting / Data Centers Prof Fouad Mrad, American University of Beirut - Lebanon

21. ISP/Hosting/Data Centers: Evaluation Prof Fouad Mrad, American University of Beirut - Lebanon

22. VERY SUITABLE TECHNOLOGIES Saudi Arabia Kuwait United Arab Emirates SUITABLE TECHNOLOGIES Bahrain Qatar Ref Country: Iceland ISP / Hosting / Data Centers Prof Fouad Mrad, American University of Beirut - Lebanon

23. Supporting items Low telecom cost (domestic) Low telecom cost (inter) Telecom infrastructure Low employment cost Availability of skilled labor Multilingual labor Domestic Market size Regional Market size Proxy variables Local rate (USD per 3 min.) Call from US (USD per min.) Main Phone lines per 100 Average industrial wage (USD) Mean years of schooling Average score of TOEFL Domestic Population Regional Population Contact / Call Centers Prof Fouad Mrad, American University of Beirut - Lebanon

24. Contact/Call Centers: Evaluation Prof Fouad Mrad, American University of Beirut - Lebanon

25. VERY SUITABLE TECHNOLOGIES Egypt Jordan Saudi Arabia Syria Algeria SUITABLE TECHNOLOGIES United Arab Emirates Kuwait Lebanon Bahrain Tunisia Morocco Ref Country: Ireland Contact / Call Centers Prof Fouad Mrad, American University of Beirut - Lebanon

26. Model C: Electronics Mfg & Integration • Foundation of knowledge-economy • Fast economic growth • High value added • Multiplier effect • High employment (spectrum of skills) • Contributes to the competitiveness and productivity of other economic sectors. • ICT is the first sector of electronics. Prof Fouad Mrad, American University of Beirut - Lebanon

27. Arab Electronics Industry Arab Electronics Industry is small, service oriented, branches of MNC with very little local assembly activities Meets 17% of total electronic Arab market Little yearly export of $ 150 millions: • Tunis $ 55 millions • Morocco $ 50 millions Prof Fouad Mrad, American University of Beirut - Lebanon

28. Principles for Arab Electronics • Not competing with established giants of expertise (like Japan and Singapore), or ocean of labor and material (like China). • Focus on the niches that capture local resources (multi-lingual workforce, petroleum based material, creative human resources, etc), • Size of the market • Local R&D support capability for sustainable growth • Selective products that cannot be imported • Strategic needs for basic national industries • Strategic defense needs • Strategic diversification of economies • Job creation • Belonging to the knowledge society Prof Fouad Mrad, American University of Beirut - Lebanon

29. Suitable Electronics Industries System Design & Integration Computer Peripherals Manufacturing Manufacturing of Fiber-optics Printed Circuit Boards (PCB) Fabrication Telecom Equipment Switches Manufacturing Telecom Equipment Units Manufacturing Telecom PABX Manufacturing Industrial Process Eqpt Design & Assembly Prof Fouad Mrad, American University of Beirut - Lebanon

30. Supporting items Low employment cost Technically skilled labor R&D capability and support Domestic market size Regional market size Plastic processing industry Casting/Molding Packaging/Labeling Multilingual labor Telecom infrastructure Global network of emigrants Professional population Proxy variables Average industrial wage Proportion of natural science major R&D expenditure in Eng./Basic Science Domestic population Regional population Number of plastic processing firms Number of molding shops Number of paper/printing firms Average score of TOEFL Main phone line per 100 inhabitants Number of emigrants Number of engineers/scientists Electronics System Mfg and Integration Prof Fouad Mrad, American University of Beirut - Lebanon

31. Electronics Mfg & Integration The more relevant indicators are not available for most of the Arab countries. From existing studies, comparative and competitive advantages, electronics design and manufacturing more suitable • Tunis • Morocco • Egypt • Saudi Arabia Prof Fouad Mrad, American University of Beirut - Lebanon

32. Summary of ICT Initiatives for Regional Development Needs • Each country is unique • Differences create a suitable environment for productive complementary strategy • Team Process results suggest: • ICT Infrastructure Upgrading • Arabization and Arabic ICT contents development • e-Services localization • Electronics design, manufacturing, and integration Prof Fouad Mrad, American University of Beirut - Lebanon

33. Conclusion • ICT support activities and decision-making for economic and social development • ICT as industrial sector for sustainable development • True ICT impact on development indicators are not universal and sometimes not measurable • Is not the answer to all needs and problems • Misleading ICT statistics yields wrong perception • More than 50% of ICT traffic unproductive -USA Prof Fouad Mrad, American University of Beirut - Lebanon

34. Conclusion (cont) • Suitability selection results and rankings were biased by team members, and UN_ESCWA defined regional needs. • Only guide before any investment and policy making • Choice of the supporting items and corresponding equally weighted proxy variables affected the process results • Unknown ICT plans and activities in the Arab countries. • Validity of findings conditioned by the documented data Business opportunities in answering the regional needs with ICT services and industry $$$$ USA-Arab Development Partnerships • OIL for Development • Peace on Earth “IN SAME GOD WE TRUST” Prof Fouad Mrad, American University of Beirut - Lebanon

35. FOLLOW UP RECOMMENDATIONS - STAKEHOLDERS Prof Fouad Mrad, American University of Beirut - Lebanon

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