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DFID research: An update from infoDev

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

An update from infoDev.

The Information for Development Program (infoDev) is a global partnership program in the Financial and Private Sector Development arm of the World Bank Group of international development agencies. It helps donors and developing countries use innovation and information and communication technologies (ICTs) to achieve economic growth, sustainable development and poverty reduction.

Its main areas of focus are:

  • Innovation, entrepreneurship and growth
  • Enabling access to ICTS for all
  • Mainstreaming ICT as tools of development and poverty reduction

The latest publications from infoDev include:

Transforming the East African ICT Sector by Creating a Business Engine for SMEs
The ICT sector has driven up to 40% of economic growth in East Africa in the past 10 years. Most of that growth has been in large companies; the next phase can be led by SMEs, as long as the necessary and targeted policy interventions are made:

  • Develop a fully connected SME network
  • Fill the skills gap in advanced business and technical knowledge
  • Provide start-up and early stage funding for companies
  • Enable job creation for knowledge workers, and
  • Upgrade the business environment

These policy interventions can address the system-wide challenges that ICT-related SMEs in East Africa face, and allow SMEs to create more of the quality jobs East Africa needs.

Converting the Virtual Economy into Development Potential. Phase 1: Knowledge Map of the Virtual Economy
The role of developing countries in the digital economy has been mostly limited to users and consumers of technology. Creating new digital services and technologies for the global market requires advanced skills and infrastructure, and continues to be out of reach for most entrepreneurs in developing countries. In contrast, entrepreneurial opportunities in the virtual economy of digital scarcities have sometimes been successfully exploited, even with limited skills and infrastructure. Like traditional labor-intensive industries, activities in the virtual economy are organized into value chains that include functions such as marketing and quality control besides the manual work itself. The manual work is typically carried out in developing countries, while the customer-facing functions are generally located in developed countries. In the long run, wage competition is likely to limit income development from the manual work. For a sustained development impact, it may be necessary for microwork entrepreneurs in developing countries to find ways to upgrade their positions in the value chain, and to offer a more diverse range of services, with higher value-added. The gaming services industry successfully underwent such a transition during the last decade. All aspects of the third-party gaming services value chain - from production to marketing - can now apparently be carried out from countries such as China and the Philippines. As a result, the industry may employ as many as tens of thousands of skilled customer service and management staff in these locations. Planned donor or NGO-led interventions could enhance the development impact of the virtual economy. Interventions should focus on segments based on natural instead of artificial scarcities in order to ensure that their net social contribution is positive.

Climate Innovation Centres: A New Way to Foster Climate Technologies in the Developing World
Accelerating innovation in emerging technologies is essential to help reduce the current and long-term impacts of climate change. However developing countries, which are most immediately threatened by these impacts, lag in their capacity to transfer, develop and deploy innovative climate technologies. This capacity lag results from barriers to technical and business innovation that are greater in the developing world than in industrialized countries. These barriers are compounded by additional pressures on developing countries such as high poverty rates, large infrastructure gaps, and the urgent need for economic development and job creation. This research report examines Climate Investment Centres as ways to address the barriers that impede developing countries from the transfer, development and deployment of advanced climate technologies for both domestic use and export. It finds that CICs, if customized and designed to meet local needs, can help locally appropriate climate innovation in developing countries.