Information and Communication Technology for an Empowered Society

Jose W. Fernandez
Assistant Secretary, Bureau of Economic, Energy and Business Affairs
Global Forum: Shaping the Future 2010, George Washington University
Washington, DC
November 8, 2010

Good morning, and thank you very much, Ambassador Gross. I am delighted to be here today, and I am also delighted to welcome the Global Forum and its distinguished group of participants to the United States and Washington, DC.

The subtitle for this year’s forum, “ICT for an Empowered Society,” captures in a few words the enormous dynamism and the energy of this critical sector. What all of you do in the information and communication technology sector is of vital importance both at home and around the world. That’s why it’s critical that we take advantage of every opportunity we get to examine the current growth in ICT and its expected future growth.

If we weren’t sure of the importance of this topic, recent data in this regard are staggering. They suggest that global ICT market spending will surpass four trillion dollars this year. That figure accounts for over six percent of total global GDP and for twenty percent of all global trade. And there’s more. Global spending in the it sector is likely to approach five trillion dollars by the year 2013.

Research conducted by the International Telecommunication Union has shown that a 10% increase in fixed telephone lines seems to increase GDP by around 0.5%. The same increase in mobile phone lines increases GDP by some 0.7 percentage points. And a 10% increase in broadband penetration can boost GDP by an average of 1.3%

What this says, clearly, for the United States and for every other country the world over, is that growth in the ICT sector equals economic growth writ large. But you know this.

For us in the United States, promoting the IT sector means creating domestic jobs and bolstering our economy. For the United States and for the rest of the world, promoting the IT sector has the added benefit of advancing economic growth and prosperity overseas as well. This creates a win-win situation for all of the economies of the world.

In my Bureau, the Bureau of Economic and Business Affairs, we are striving for this win-win situation in three main ways, which I would like to outline briefly today: first, by promoting innovation and development through incentive funds; second, by advancing IT policy and protecting the free flow of information; and third, by leveraging ICT support to other sectors, notably to the energy sector.

Promoting Innovation & Development
First, we work to spur innovation and development overseas with the Business Facilitation Incentive Fund (BFIF). These monies finance training, information technology improvements, capacity building, and regional trade and investment promotion to foster development and better business environment for U.S. companies overseas. We increased these amounts by 50% last year.

Let me give you an inspiring example. We have ongoing work to support reconstruction in post-earthquake Haiti. Conatel, the Haitian telecommunications regulator, needed help and advice on assessing current spectrum use and planning for future spectrum management needs. We at State, through Ambassador Phil Verveer’s leadership, were able to fund a visit by Federal Communications Commission experts to Haiti to perform this needed assessment. With appropriate spectrum management in place to aid in the deployment of more wireless technology and services, Haiti can take a significant step forward toward reconstruction, economic development, and growth.

Advancing IT Policy
The State Department plays a proactive role in leading U.S. information technology policy to advance the expansion of broadband connectivity. One recent success story in this regard is the completion of the 9-year undersea fiber optic cable project that includes the Federated States of Micronesia and the Republic of the Marshall Islands.

But despite these successes, many emerging markets are facing strong domestic pressures to create protectionist industry policies, despite the ability of ICT deployment and open markets to jumpstart their economies.

For example, on July 28, India issued a series of regulations regarding telecommunication equipment. The regulations stipulated that companies importing telecoms equipment -- meaning more than 75% of the Indian market -- would have to hand over their technology to an Indian manufacturer within three years. The regs also stipulated that importing companies would have to hand over their source code to be placed into a central “escrow” account. According to the Indian Government, these regulations were geared toward addressing legitimate national security concerns. Yet it is evident India was taking a meat cleaver, instead of a laser beam approach to address its security concerns, therefore adopting measures that raised the specter of protectionism.

Instead of such a stark approach, we would like to see nations fully embrace ICT and the global trading system for deploying technologies, developing competitive markets, and ensuring that ICTs can benefit their people. We know that there are many legitimate concerns, such as national security, and we are committed to working with industry representatives to find the least trade-restrictive way of addressing their concerns.

Leveraging ICT Support to Other Sectors
A third way we get involved is in leveraging ICT to support other industries. One of the themes of this conference is that ICT is not a stand-alone sector. Rather, it can be the critical underlying technology to support other sectors, including that of energy.

As an example: A robust, reliable, and smart electric grid plays a key role in reducing greenhouse gas emissions. It is ICTs which enable this grid to manage electricity demand; integrate growing supplies of renewable energy systems; accommodate an increasing number of electric and plug-in hybrid electric vehicles; improve operational efficiency; and apply energy-efficient technologies to their fullest potential.

A smart grid also enables better use of existing electricity generation resources. This obviates the need to rely on additional new, long-lived, high-emissions fossil fuel plants. This is low-hanging fruit in the climate change debate: a recent U.S. Department of Energy report suggests that 100% penetration of smart grid technology in the U.S. would lead to an 18% reduction in annual CO2 emissions by 2030.

So these are some of the ways we are looking to ICT as a driver of economic growth. I hope that I have successfully set the scene for our panel. I look forward to hearing from our other panelists and having a further exchange of ideas.

Thank you.