Contemporary Communication Technologies Impact on Economic Development - Report Example

CCT 109, ial Section 0501, Fall Contemporary Communication Technologies Impact on Economic Development 29/11 Tian Meng Email: naidiao_19940803@yahoo.cn Student Number: 999577729 Introduction Science and technology has highly affected the economic development of nations in different ways. Advancement in contemporary communication technologies has changed the way people interact and run businesses worldwide. This development has highly been used to leap frog the social and economic development of developing nations such as Kenya. Kenya is developing country located in East Africa, and its economy has always been on the increase since the economic reforms of 1993.Although not a very fast growing nation like India and china, the economy of Kenya has been growing steadily at the rate 4-5 % annually which has led to immense improvement in the living standards of the people. By the year 2009, the GDP of Kenya was reported to be at 2398.27 billion Kenyan Shilling which is equivalent to 28 billion US dollars (Trading economics, 2012). Currently, development of technology has enabled people to access information freely, which is due to facilities such as the Internet. In previous years, looking for particular information would have meant going to the library or through papers. Access to information and ease of communication has easily availed information to people base on their search at any time, and this has an impact on their economy and social development (Venkatesh, Thong & Xu, 2012). Businesses have taken advantage of this and are using the avenue to launch and market their products. Among the most used contemporary communication media is the social media, which are websites that allow people to communicate with each other instantly. Organizations have been using the communication avenues to build strong brands for their products, seeking to target millions of social media users. Contemporary communication technologies utilization leads to social and economic development in developing countries. This paper will analyze the impact of Internet in the development of the economy and socialization in Kenya. Economy of Kenya According to IMF projection, the GDP of Kenya is estimated to grow to 4667.11 billion Kenyan Shilling which is equivalent to 54 billion US dollars by the year 2015 (Trading economics, 2012). This is an evidence of the continuous growth is the economy and the expected further growth. To attain these projections, the development of the technology and industries plays a major role. Most of this constant growth has been facilitated by the application of contemporary communication technologies, which has enabled faster communication, smooth business operations and creation of employment. Science and technology use to benefit the Kenyan economy The development of science and technology has enabled businesses to use facilities such as the internet in the country to enable the growth of the GDP through generation of personal income. Currently, Kenya has been observing a rise in the business process outsourcing (BPO) industry(SOFTKENYA, 2011).These are businesses run through the internet, where a major company can outsource a whole or part of its department, such as marketing and call center in a different country. This form of business is most common in India, but has currently become a common scenario in Kenya (Doitinkenya, 2011). This has provided employment opportunities to Kenyans through the jobs. In 2010 – 2011 the sector created 4000 direct jobs against a target of 2200 (SOFTKENYA, 2011).The income attained raises the purchasing power of the people and contributed to the growth in the economy. The level of increase in income can be gauged by the fact that Kenya has a per capita income of only $ 1700 per annum (Jamhurimagazine.com, 2013) whereas an employee working in the BPO sector earns a starting salary of about $ 3000 per annum ( International Monetary Fund, 2010).This means that their purchasing power of a BPO employee in Kenya is almost 75% more than the average Kenyan. In the absence of ITES industry , the English speaking and educated Kenyans have limited employment opportunities and tend to leave the country and migrate to Western countries.BPO industry is thus immensely beneficial to the government as it provides extra revenue and also for the employees who earn a decent income staying in their own country. The Kenyan government in its vision 2030 has declared that Business process outsourcing will be one of the facet of the economic pillar of the vision. Emulating the success of countries like India and Philippines, Kenya hopes to generate at least 7500 jobs directly and many others indirectly. It also hopes that by 2030 outsourcing will contribute about 7.5% to the GDP of Kenya (SOFTKENYA, 2011).The government has been setting up a major BPO park called as the Konza Technology city in order to attract ITES industry to Kenya (Vision2030, 2013).Apart from this Kenya is also undertaking work on 3 high speed undersea fiber optical cables which will lead to a boom in ITES industry by providing better communication services(Vision2030, 2013).Thus not only is communication technology providing direct jobs but the upgradation of infrastructure like the settingup of a BPO park and laying of fibre optical cables also provides jobs to construction workers , contractors and many others.These jobs can also be said to be a direct consequence of the BPO industry in Kenya. Science and technology development has enabled the free flow of information across the globe. It makes it possible for companies to borrow ideas from different areas of the world. It has also enabled the movement of ideas and technology from one place to another within a considerably short time. This has enabled innovation and creation of different business models that did not exist before. The businesses have created source of livelihood to the owners and employment to others. To the government, it is a new source of revenue through taxation, enabling the growth of government income. Free flow of information has allowed Kenya to access technologies in manufacturing and agriculture from nations which have made progress in this regard. As Kenya is predominantly still an agricultural country , it has benefitted a lot by learning new agricultural innovations from countries like India. Earlier these innovations had to be learnt by going to the country or inviting scientists from the country. However ICT allows these innovations to be learnt through techniques like video conferencing. Kenya is one of the countries which will benefit from the Pan African e-network project that has been launched by India in 2007 (MEA, 2012).This helps in saving precious economic resources and provides immense benefit to the country by providing constant links between scientists and research centers of various countries. Science and technology advancement has been essential to e learning in Kenya (Kinuthia, 2009).It has enabled people to take online courses and graduate from international universities. Students access lecture materials, assignments, tests and take their final exams using computers and internet. This has highly improved the nation education level as more people are taking higher education courses and graduating to be beneficial to the nation. It also helps to broaden the social status of the people as they learn how to interact with others. The Vision 2030 of the Kenyan government focuses on leveraging science, technology and innovation in order to fuel the growth of the economy (Vision2030, 2013). Kenya is trying to leapfrog from being primarily an agricultural nation to a mixture of industrial and knowledge economy. The vision document mentions that government aims to create new job opportunities in manufacturing, financial services and IT enabled services (Vision2030, 2013). However these three services require a highly educated workforce and increase in the number of graduates. Kenya aims to do it by increasing school enrollment o a level of 95 %(Kinuthia, 2009). Increased school enrollment will lead to increased number of college graduates which is a prerequisite for a knowledge economy.ICT can be used by the government in a big way to realize this aim. In recognition of the benefits of ICT in education the Kenyan government has set up the KNET which stands for Kenya Education Network. KNET aims to promote use of ICT in teaching , learning and higher educational institutions by interconnecting universities , tertiary and research institutions( (KNET, 2011).In the ICT field Kenya needs to compete with countries like India which are producing 70 times more graduates than Kenya (Elder, 2005).Kenya does not has the time to take the traditional route for increasing the education of it’s people , it needs to progress quickly ad ICT can be an important tool for this quick educational improvement.ICT can be the tool to give employment to the people of Kenya and ICT itself can become a tool to equip the people with qualifications needed for economic beneficial use of ICT. Communication technology advancement has enabled the companies to easily monitor or link up with the supplies and the distributors. This has reduced the time spent in making orders or tracking the company distribution channels. Through electronic mail supply and distribution, orders are processed as companies can exchange documents and sign them. Payment proof is also sent through the mail and the delivery organized by the distributors.ICT will play a very important role even in the development of the manufacturing sector of Kenya.ICT can be used by the manufacturers right from the first stage of acquiring material to selling finished products. It can lead to a reduction in costs and better integration.ICT allows the manufacturers better flexibility , better management and control of the whole supply chain (Oteri Omae, 2011).If the Kenyan manufacturers have proper information technology systems in place , they can hope to benefit from another round of outsourcing from which China has immensely benefited. Outsourcing of manufacturing to China from developed countries requires modern ERP system which will enable the companies in West to be confident of the quality of product being made. Thus ICT is not only beneficial in creating BPO jobs but can also lead to an increased job creation in manufacturing. The ITES sector or the BPO sector is capital intensive and creates only a limited number of jobs but manufacturing outsourcing can create large number of jobs which can change the face of Kenyan economy. Organizations have also taken advantage and started using the internet to launch and to sell their products. Among the most used avenues is the social media, such as Facebook, LinkedIn, Myspace and Twitter (Lipsman, Mud, Rich, & Bruich, 2012). Companies have created profiles, where they post information about their products and respond to any customer complaints. They also start discussions about the products and engage people allowing them to comment, making the products popular. This has highly contributed to the growth of companies in the countries, and created employment and revenue to the government. The future of social media marketing in Kenya can be gauged by a report of National Research Club of Kenya competition which states that college students spend at least 6 hours daily on social networking sites such as Facebook and twitter (Pamojamedia.com, 2011).The college students of today are the consumers of tomorrow and what better way to target them than social media where the spend a large amount of their free time. Many companies have come up in Kenya which is dedicated to marketing on social networking sites. One such company is Blue print social marketing. This company has worked with many clients in order to do a social media audit, find out the target audience, set up fan pages and create sales through social media. Social media marketing levels the playing field for small companies and local business. They can easily compete with the multinationals without shelling out large sums of money for TV advertisements. The growth of local business leads to employment generation and is beneficial for the economy. Internet marketing, product launching and feedback enable companies to increase their market share and sales. Companies have been using their websites as a way of reaching out to their customers and prospects with information concerning products (Dehkordi et al., 2012). The websites are also an avenue for communication between the companies and the customer. This has enabled growth of businesses and speed in response to customer issues. Companies have also used the internet to get orders from customer and provide highly specialized products as per the customer’s specifications. E-commerce in Kenya is still in the nascent stages. It has still not penetrated a large section of the population. Companies in Kenya are mainly focusing on the urban middle class and the youth for e-commerce. They find it difficult to target the aged or the rural population. However with the increasing penetration of internet more and more people will be comfortable in ordering things online .This will lead to an e-commerce boom. Companies which have already made a head start now will benefit a lot from this boom. A sector which has been revolutionized with the help of ICT is the tourism industry in Kenya. With increasing internet speeds and greater awareness of online resources available for the people, online travel companies in Kenya have generated massive sales. According to a study by East African Region’s tourism industry Association about 7 of the 10 travel plans made to Kenya are done online. At present due to limited presence of Kenyan travel agents online, this market is being dominated by foreign companies (Charlie Fripp, 2013).However the tourism industry can create immense revenue and employment if it decides to move online. It is also not difficult to fight online as companies need to be creative and do not need to spend a large amount of money. One example of online success is the Uganda Wildlife Authority’s plan to place the countries mountain gorillas on Facebook with a program called as Friend a Gorilla (Charlie Fripp, 2013).This program was cheap, rightly targeted and generated enormous sales. Kenyan companies along with help from the Kenyan government can also replicate this success by using ICT in the tourism industry. The first phase of online targeting should be towards customers of Europe and USA. Once the market is tapped and Kenyan companies gain confidence , they can also target the local population. The reason for targeting the western populations is because they are already comfortable with using internet for travel related things. Kenyan companies are also making partnerships with international giants like Thomas Cook in order to increase their sales and boost tourism in the country. Another interesting use of ICT in Kenya has been the development of Pasha Centers or the Digital villages. (Ist-africa.org, 2010) These centers are run by village entrepreneurs on the basis of soft loans given by government to them. The Pasha centers provide access to e-mail , net banking , e-governance and other services to the village people. Although on the face of it the Pasha Centers look like a social initiative by the government to spread use of technology but these centers will have long term beneficial effect for the economy. With technology at their doorstep, farmers do no need to waste time to go the physical branch of banks which are limited and far off. They can also get information about increasing farm productivity right in their village which improves the economy. E-Governance and access to it through Pasha centers makes the government more accountable , less corrupt and efficient. Efficient governance makes more for a higher growth rate and good use of resources (Ist-africa.org, 2010). Thus ICT is making inroads even into the humble villages of Kenya and providing better lives to the Kenyan people. No discussion of the impact of ICT on Kenyan economy will be complete without mentioning the e-government initiative in Kenya. Although e-governance is now a worldwide phenomenon but it has special impact on the economy of countries like Kenya. Countries like Kenya do not have the time or the resources to provide physical infrastructure in all parts of the country. There are places where the nearest police station is miles away from the population, people travel to the city to get the simplest of work done by the government machinery. This puts extra pressure on the economy and leads to wastage of man-hours and precious resources. E-governance makes physical presence redundant and brings the government right into the villages. Coupled with the Pasha centers, e-government makes the government forms and permissions within the reach of the population. It also increases the writ of the government without the need for additional manpower or infrastructure. The money saved on this front can be utilized for development of skilled manpower and infrastructure projects like roads and ports which will be a boost for the economy. Kenya is the first country in sub-Saharan Africa to have started an open data government portal which has resulted in citizen empowerment and economic benefits (Ist-africa.org, 2010). Alternative viewpoint Though the development in contemporary communication technology has led to a development in the economy, it also presents a challenge to companies in the country. Among the challenges is the speed with which the technology changes. This is a challenge to most companies as it calls for awareness in the constant changing trends (Simon & Slay, 2011). For companies to retain a competitive edge against others, it has to keep investing in innovations. It is very expensive for companies to keep changing systems to accommodate new changes. However, failure to do this might subject a company to a failure to meet customer needs, hence creating a dilemma for the organization leaders. This challenge is all the more serious for ITES or Business process outsourcing industries of Kenya. As these industries normally serve clients in USA or Europe , inability to upgrade technology will lead to loss of clients. An up gradation of technology means importing new technology in the country which can lead to loss of precious foreign exchange and can be difficult for Kenya. Apart from this initiatives like e-government and Pasha Centers also require continuous hardware and software upgrading without which the whole exercise will be futile. Perhaps the most challenging aspect of technological changes is the human aspect. Government as well as private companies need to train their manpower in order to enable them to use the technological innovations. People are always reluctant to learn something new even if they are capable of learning. Training of manpower along with motivating them to embrace the new technology is the biggest hurdle in ICT. The private industries can still overcome this hurdle by hiring young and new employees but governments cannot fire people due to numerous political compulsions. Training of government employees proves to be the biggest obstacle in proper use of ICT. With the advancement in communication technologies, people have been able to steal the identity of others. Through the internet, criminal create webpages that resemble different online banking websites. Their aim is to target customer when they are entering their security information (Wall, 2008). They record the information and use it to access the real account of the customer. This presented a major challenge to people as internet users may require education on how to use internet safely, without giving up their personal information. Apart from attack on personal information of individuals , there have been numerous attacks on government sites in order to access confidential information of the nation. In January 2012 , 103 websites of Government of Kenya were hacked and confidential information stolen from the websites(Cio.co.ke, 2012).The government of kenya is in the process of developing a cyber law in order to deal with hacking , online theft , phising and various other cyber crimes.However the challenging part here will be the implementation fo the law and preparing the police force.Police personnel are not equipped to handle cyber crimes in Kenya.Many police stations are functioning without computer so you can forget proper implementation of the law. These loopholes need to be fixed in order to ensure that Kenya is able to protect itself against cyber criminals (Murungi, 2011). Development in contemporary communication has made it easy for individuals to access information. This has posed a competition challenge to most companies. It has now become easier than before for competitors to copy a company’s products due to the ease of information access. In some cases, information vital to a company might leak, leading to a compromise in the company production of selling of products. There have been cases, where a company launches a product, which another company was intending to launch in the future. Easy information access is now the reality of our times. It will be very difficult for companies to keep their innovation a secret. In order to protect the copyright of innovations proper copyright and patent laws need to be enacted by Kenya. Copyright violations should be taken as seriously as theft of jewels is taken , in fact it is even a more serious matter. Theft inside a house affects only 1 family whereas copyright violations affect the future of an entire company putting thousands of livelihoods on the line. Even with proper laws and patents , it is difficult to withhold information in this cyber age. So companies need to adapt quickly. The time between innovation and product launch needs to be reduced. Product differentiation only on the basis of product qualities is a thing of the past. Innovative ways of marketing , better customer care and other intangibles which cannot be copied easily are the way forward for companies. Communication and information access has been a source of criminal activities. Cybercrime and other forms of online misconduct have been on the increase. In a country like Kenya, where there are no specific departments dealing with cybercrime or identity theft, criminals have used other people’s names to conduct their activities (Magutu, Ondimu & Ipu, 2011). This has left many people in trouble with the law or defamed as criminal disguise them and performs their criminal activities using stolen personal information. Conclusion Science and technology development has been a major cause of the Kenyan economic development. Through technology, Tourism in Kenya has been able to grow by marketing and other forms of businesses have thrived. Right from ITES which has been declared as pillar of economic growth to the humble Pasha Centers in villages – ICT is making its marks in every aspect of life in Kenya. It is not only providing economic benefits but also empowering citizens through e-government initiatives.ICT in Kenya is bound to make a strong impact on the economic progress of Kenya in al spheres , be it agriculture manufacturing or services. It will help Kenya to overcome the shortages of physical infrastructure and jump onto the development train. However, the development of contemporary communication technologies has its advantages and disadvantages. The technology has made it possible for people to access information and for business to share information, leading to better products. It has also led to development of online businesses that have created sources of revenue to different people and organization. The companies ability to launch products online, and market through the social media has enabled a reduction in the cost of marketing, which translates to low cost of products. This benefit the customers as that are easily able to attain information regarding the products and acquire them at lower costs than before. Kenya has highly benefited from the communication technology advancement in different ways. People from Kenya have been able to communicate with friends and relatives in different places, hence reducing the cost of communication and time. Creation of employment through the business process outsourcing industry has highly increased income for individuals. This translates into an increase in their purchasing power and a further development in the economy of the developing countries. References Ist-africa.org (2010). IST-Africa. [online] Retrieved from: http://www.ist-africa.org/home/default.asp?page=doc-by-id&docid=5181 [Accessed: 20 Mar 2013]. Cio.co.ke (2012). 103 Government of Kenya websites hacked overnight - CIO East Africa. [online] Retrieved from: http://www.cio.co.ke/news/main-stories/103-Government-of-Kenya-websites-hacked-overnight [Accessed: 20 Mar 2013]. Dehkordi, G., Rezvani, S., Salehi, M., Eghtebasi, S., & HasanAbadi, A. (2012). A CONCEPTUAL ANALYSIS OF THE KEY SUCCESS OF BUSINESS IN TERMS OF INTERNET MARKETING. Interdisciplinary Journal Of Contemporary Research In Business, 4(1), 811-816. Doitinkenya (2011). Kenyas BPO/ITES Society. [online] Retrieved from: http://www.doitinkenya.co.ke/index.php?option=com_k2&view=item&layout=item&id=1571&Itemid=600 [Accessed: 19 Mar 2013]. Ebam Etta, F. and Elder, L. (2005). At the Crossroads: ICT Policy Making in East Africa. Nairobi: IDRC. Fripp, C. (2013). Kenya tourism urged to embrace ICT. [online] Retrieved from:http://www.itnewsafrica.com/2010/08/kenya-tourism-urged-to-embrace-ict/ [Accessed: 19 Mar 2013]. International Monetary Fund (2010). Kenya: Poverty Reduction Strategy Paper. Staff Country Reports. [report] Washington D.C.: International Monetary Fund, pp.78 - 96. Jamhurimagazine.com (2013). Jamhuri Magazine - Kenya 154 out of 183 World Countries with $1,700 Per Capita Income.. [online] Retrieved from: http://jamhurimagazine.com/index.php/opinion/3262-kenya-154-out-of-183-world-countries-with-1-700-per-capita-income.html [Accessed: 19 Mar 2013]. Kenet.or.ke (2011). Welcome to KENET. [online] Retrieved from: http://kenet.or.ke/new/ [Accessed: 19 Mar 2013]. Kinuthia, W. (2009). Educational Development in Kenya and the Role of Information and Communication Technology. International Journal of Education and Development using ICT, 5 (2), Retrieved from: http://ijedict.dec.uwi.edu/viewarticle.php?id=740&layout=html [Accessed: 19th March 2013]. Lipsman, A., Mud, G., Rich, M., & Bruich, S. (2012). The Power of "Like": How Brands Reach (and Influence) Fans Through Social-Media Marketing. Journal Of Advertising Research, 52(1), 40-52. doi:10.2501/JAR-52-1-040-052 Magutu, P., Ondimu, G., & Ipu, C. (2011). Effects of Cybercrime on State Security: Types, Impact and Mitigations with the Fiber Optic Deployment in Kenya. Journal Of Information Assurance & Cybersecurity, 20111-20. doi:10.5171/2011.618585 Omae, O. and Ateya, . (2011). Use of ICT in Manufacturing to Achieve Vision 2030. Sustainable Research and Innovation Proceedings, 3 Retrieved from: http://elearning.jkuat.ac.ke/journals/ojs/index.php/sri/article/view/32/24 [Accessed: 19th March 2013]. Pamojamedia.com (2011). Kenya’s Internet marketing future bright, thanks to students | Pamoja Media | African Internet marketing agency | African brands | advertising in Africa. [online] Retrieved from: http://pamojamedia.com/2011/10/kenyas-internet-marketing-future-bright-thanks-to-students/ [Accessed: 19 Mar 2013]. MEA (2012). India - Kenya Relations. [online] Retrieved from: http://www.mea.gov.in/Portal/ForeignRelation/KenyaWebsiteBrief_Dec_2012-font.pdf [Accessed: 20 Mar 2013]. Murungi, M. (2011). Cyber Law in Kenya. Nairobi: Kluwer Law International. Simon, M., & Slay, J. (2011). Investigating Modern Communication Technologies: The effect of Internet-based Communication Technologies on the Investigation Process. Journal of Digital Forensics, Security & Law, 6(4), 35-62. SOFT KENYA - All about Kenya (2010). Kenya Vision 2030 economic pillar – Business Process Outsourcing BPO and IT enabled services. [online] Retrieved from: http://softkenya.com/vision-2030/kenya-vision-2030-economic-pillar-business-process-outsourcing-bpo-and-it-enabled-services/ [Accessed: 19 Mar 2013]. Trading economics (2012). Kenya GDP at current prices. TRADING ECONOMICS | 300.000 INDICATORS FROM 196 COUNTRIES. Retrieved November 20, 2012, from http://www.tradingeconomics.com/kenya/gdp-at-current-prices-imf-data.html Venkatesh, V., L. Thong, J. Y., & Xu, X. (2012). CONSUMER ACCEPTANCE AND USE OF INFORMATION TECHNOLOGY: EXTENDING THE UNIFIED THEORY OF ACCEPTANCE AND USE OF TECHNOLOGY. MIS Quarterly, 36(1), 157-178. Vision2030 (2013). Vision 2030 | Economic. [online] Retrieved from: http://www.vision2030.go.ke/index.php/pillars/project/Economic/40 [Accessed: 19 Mar 2013]. Wall, D. S. (2008). Cybercrime, media and insecurity: The shaping of public perceptions of cybercrime. International Review Of Law, Computers & Technology, 22(1/2), 45-63. doi:10.1080/13600860801924907 Read More