How is Information Technology Shaping the Economy and Society?

Abstract

Advances in information technology reinforce the economic and social changes that are transforming business and society. A new kind of economy – the information economy – is emerging where trade and investment are global and firms compete with knowledge, networking and agility on a global basis. A corresponding new society is also emerging with pervasive information capabilities that make it substantially different from an industrial society: more competitive, more democratic, less centralized, less stable, better able to address individual needs, and friendlier to the environment. These changes dictate, for all countries, a major adjustment to harness information for economic and social development. This adjustment requires urgent new policies, regulatory and institutional reforms, and investments. Through this adjustment, countries must achieve macro-economics balance, political stability, and growth amidst global information flows, competition, trade and investment. Advanced countries are rapidly adjusting. Developing countries in Africa must also adjust or risk exclusion from the global economy and severe competitive disadvantage for their goods and services. Fortunately, the information revolution creates both the challenge and the means for countries to adjust to new ways of doing business and to put in place the needed infrastructure of telecommunication and information systems. The information revolution also creates extraordinary new opportunities to attack vexing problems of poverty, inequality, and environmental degradation.