Randy and Michael Spence

Posted on September 19, 2004  /  0 Comments

Dr. Randy Spence spoke of his experiences in Somalia, where there isn’t much government to speak of. But people are using ICTs.

However, he emphasized that ICTs must drop in cost for the investments of the 1990s to bear fruit. “I’m involved in nanotech and biotech, and fairly rapid diffusion of this technology will be very important.”

Although mobile and wireless access are expanding, fixed line and Internet access lag – and the differences are largely due to regulation.

The future may be wireless broadband, but for the foreseable future the policy is fixed line.

Dr. Michael Spence

Dr. Spence began by telling his economic perspective on the importance of good governance. “There’s a lot of talk about how all you need is a market system and that’s just nonsense. Anyone who’s studied information flows in an economy knows that good governance is the foundation of the market system. As an example, a country that doesn’t have a central bank that can control interest rates, etc is a country that’s in trouble. Everyone knows the consequences of a weak central bank, what we need to do is let people know that there are consequences to having instability in the ICT sector.

On What’s Important

On data: A reasonably accurate portrait of the portrait of the state in these dimensions is useful. If you look at the Chinese data, you can debate if the growth is exaggerated, but the data is there and it’s clear.

Foriegn Investment: Creating appropriate conditions for. Competition is the best way since it assures that pricing is appropriate.

Internet: I would not like to see the Internet set aside in favor of ‘plumbing’. I would like to see LIRNEasia get Internet and the www talked about and worked on. I didn’t realize this until I was in Cambodia at an cafe, and then’s when I realized that the Internet wasn’t ‘real’ at that speed. The right answer seems to be high speed connections to hubs where the Internet is real.

We do this in part to reduce volatility and encourage investment. We need to do stuff that is unpopular. The regulator also serves as someone the politicians can point to and say ‘it’s not my fault’.

Finally, let me just say that the network based information technology we’re now seeing develop is in economic terms lowering transaction costs all over the place

  • 1. Creating millions of market
    2. Decreasing geographic boundries
    3. Intergrating growing markets
    4. Increasing value of human capital (making more accessible)
    5. Changing relative prices and growth dynamics.
  • It’s absolutely crucial that we not end up in a situation where those powerful forces are at play in one part of the world and not the other.

    It’s impossible to not get discouraged about success, but there’s no other way to do it. (This is said with a smile. It was encouraging)

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