Does Technology Adoption Matter for Economic Development?

Abstract

The spread of new Information and Communication Technologies (ICTs) has been recognized worldwide. ICTs are broadly perceived as tools facilitating economic growth and development, especially in backward countries. They are easy and cheap to adopt, require minimum skills for effective use, and bring opportunities for disadvantaged societies. They enable education, knowledge dissemination and sharing, and processing and storing of all kinds of information. The existence of causal relationships between technology diffusion and general economy performance is highly probable. This chapter seeks empirical evidence in existing quantitative links between the process of Information and Communication Technologies (ICTs) adoption and dynamics of economic growth and development in Latin American countries. The authors consider ICTs diffusion patterns in Latin American countries, approximating the diffusion process by S-shaped curves. Afterwards, they aim to detect if there is any quantitative relationship between ICTs adoption dynamics and economic growth and development, and they estimate to what extend ICTs contribute to economic growth and development. The authors hypothesize on existing statistically significant and strong links between the two. They use panel data for Latin American economies from the years 1990-2011. All necessary data are derived from World Telecommunication/ICT Indicators Database 2012 (16th edition) and World Development Indicators 2012.