Information and Communication Technology (ICT) gives a major contribution to economic growth. The ICT sector has enabled efficient interaction and conduction of businesses via the digital world. The services offered by ICT are used widely by small to medium to large businesses. With the growing IT sector and production of ICT, remarkable economic growth has been observed.
ICT includes software, networks, hardware, media collection, processing, storage, presentation, and transmission of data. Mobile, fixed, and internet networks are part of its infrastructure. ICT has reduced the cost of financial institutions, banks, etc. It helps in expanding the businesses. Banks are more flexible now and are providing better services. The development of the ICT sector is making financial institutions and banks more operational. They work more securely. Mobile banking is one of the best examples. ICT helps with better information collection, which is required for detecting the credit score of the customer. The financial integration of countries is improving due to the ICT sector.
The IT sector has digitalized everything. People can quickly and easily access the required details and information in no time. Businesses are exploring new markets and making better communication with customers due to the ICT. The efficiency of financial markets has been improved due to the reduction in regional discrepancies in productivity and incomes. Internet access is promoting the sustainable development of businesses by minimizing the difficulties of financing.
ICT sector for Economic Development
The three channels for economic growth through ICT can be:
Encouraging TFP growth in the ICT sector
By incorporating technologies in the production of ICT services and goods, it can contribute to rapid MFP (multifactor productivity) growth.
ICT sector can contribute to overall capital deepening. This will help in raising labor productivity.
Reorganization and using ICT for TFP growth
The high percentage of ICT usage will help firms in increasing their overall efficiency. It will lower the transaction costs and will bring rapid innovation. This will improve the MFP as well.
IT sector is contributing to advanced as well as developing economies. Technology, science, and innovations are major factors. They are changing the economic structure of the countries. The strength of economic competitiveness of a country depends on how productive is its ICT sector or IT sector. Financial markets are operating globally because of the internet. If they are competing with other businesses globally, it is because of the IT sector. The banking system is providing its services online because of ICT. Mobile banking has completely changed the user experience of customers.
The centralized banking system and mobile banking applications are functional due to the ICT sector. The services like money transfers, payments, etc., have become more accessible with the internet given by the IT sector. A number of ICT developments and projects are going on in Arab countries. UAE and Saudi Arabia are exploiting as many online services as possible to improve their banking services and stand out globally. Infrastructure plays an important role in the financial progress. Smart card technology is promoting online banking.
The countries depend on ICT due to the benefits of the internet in financial institutions and banking systems. ICT is an important sector where the purpose of all financial and economic activities is towards sustainable economic development. ICT gives significant reliable productivity. A number of financial transactions and communication are taking place via the internet. So, it is important to maintain a strong security system. Electronic commerce is now a major business term. It is increasing the use of ICT to simplify financial work processes. The ICT sector is also important because it is reducing the cost at various levels of financial services.
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