ICT research project

ICT in Emerging Markets

Technical Change in Emerging Markets: The Factors Driving Diffusion of ICT and the Implications for Productivity
This project is concerned with the issues governing ICT adoption and the factors driving wider diffusion in emerging markets. Such factors include those specific to the organisation of the firm, to the availability of communications infrastructure and its pricing and to the presence of public policy interventions, including decisions having an impact on the factor mix and adjustment costs. The principal focus of the research will be to understand the factors at the level of the firm that guide adoption, the implications for working and commercial practices and for the level and structure of employment and wages.

Research Team:
Rakesh Basant and Sumukhi Shukla (Indian Institute of Management, Ahmedabad), Simon Commander, Rupert Harrison (University College London and IFS), Naercio Menezes-Filho (Sao Paulo University)

Using the questionnaire approach, we expect to get a better sense of what firms – controlling for size, sector and other attributes – tend to adopt or not adopt and the organisational implications as well as, ultimately, the resulting performance implications.
The research will also look closely at the implications of ICT adoption for the level and structure of employment, as well as of wages. Such implications are likely to be a major factor, particularly in developing economies that are perceived to be labour surplus and where factor substitution is a major political issue. Thus, where workers can easily be substituted by machines and where policy distortions may reduce the incentive to hire – as in India – any growth in wages may accelerate a process of technological upgrading and lower the demand for labour. Where, on the other hand, workers are complementary inputs to capital, technological innovations may actually increase the demand for labour, albeit for particular types of labour.

Duration of the project: April 2003 - June 2005