nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2023‒02‒13
ten papers chosen by
Marek Giebel
Universität Dortmund

  1. Does highspeed internet boost exporting? By Lynda Sanderson; Garrick Wright-McNaughton; Naomitsu Yashiro
  2. The Transition to the Service Economy and Development Strategies for Regional Service Industries By Kim, C.K.; Choi, Eun Hee
  3. Enhancing health information infrastructures in Asia: an economic impact study By Johansen, Elias
  4. The Anatomy of Banks’ IT Investments: Drivers and Implications By Mr. Maria Soledad Martinez Peria; Mr. Yannick Timmer; Mr. Nicola Pierri; Kosha Modi
  5. The Direction and Implications of the Content Industry in the Metaverse Era By Park, Ji Hye
  6. Growth of the Vietnamese Fintech Industry and its Implications By Jung, Sunin
  7. Identifying artificial intelligence actors using online data By Hélène Dernis; Flavio Calvino; Laurent Moussiegt; Daisuke Nawa; Lea Samek; Mariagrazia Squicciarini
  8. The Rise of Digital Companies and Strategies: Case Studies in the U.S. and Korea By Cho, Jaehan; Frederick, Stacy; Jung, Sunin; Kim, Hanhin
  9. Youth Transitions and Transformations through ICT-enabled Education for Climate Change and Sustainable Development By Holland, Charlotte; Dagher, Leila; Mansouri, Noura; Bennett, Dinah; Ni, Huan
  10. Why Employment Has Yet to Fall By Song, Youngjin

  1. By: Lynda Sanderson (Productivity Commission); Garrick Wright-McNaughton (FNZ Group); Naomitsu Yashiro (International Monetary Fund)
    Abstract: This paper examines the links between uptake of high-speed internet and entry into exporting among New Zealand firms. The analysis draws on rich, longitudinal information about firms' use of ICT captured in Stats NZ's Business Operations Survey to both identify firms which shifted to UFB and infer differences across firms in their capability to exploit the faster internet connections. It shows that firms that shifted to fibre broadband in the early years of New Zealand's Ultra-Fast Broadband rollout were subsequently more likely than otherwise similar firms to start exporting, and that the strength of this relationship depends upon both the industry in which firms operate and their pre-existing use of the internet for core business activities. To explore the causality lying behind this relationship, the paper makes use of a policy choice to prioritise schools in the rollout of the new fibre broadband infrastructure as an instrument for early uptake. While the results are consistent with a positive effect of UFB uptake on export entry, the instruments are not strong enough to draw firm conclusions on causality.
    Keywords: high-speed internet, UFB, export propensity, digital capability
    JEL: F14 O33 H54
    Date: 2022–12
  2. By: Kim, C.K. (Korea Institute for Industrial Economics and Trade); Choi, Eun Hee (Korea Institute for Industrial Economics and Trade)
    Abstract: The transition to the service economy, which shows the expanding influence of the service industry on the economy in terms of employment and of value-added, highlights the importance of the service industry in the national economy. In addition, increased income levels (due to economic growth), the development of information and communication technology (ICT) and the changes in the population structure — such as lower birth rates and an increase in the number of elderly people — have created and expanded demand for new and existing services. The service industry is expected to account for a larger portion of the national economy in the coming years. Accordingly, there have been many calls for boosting the overall vitality of the economy and domestic demand by securing new economic growth engines through discovery and development of high value-added services. Recognizing the important role of service industries, the Korean government has promulgated various policies aimed at the service industry, including Measures to Advance the Service Industry (2008-2009), Measures to Stimulate Investment in Promising Service Industries (2014), Development Strategies for the Service Economy (2016), and Service R&D Implementation Strategies (2018), among others. Like the central government, local governments have also recognized the importance of fostering service industries in each region. However, there are several problems in that the local and central governments’ service industry development strategies are not systematic and are being carried out individually. The central government’s policy to develop the service industry is industry-oriented, with a slight lack of consideration for regional characteristics.
    Keywords: service industry; value-added; value-added services
    JEL: L80
    Date: 2023–01–08
  3. By: Johansen, Elias
    Abstract: Throughout Asia, low- and middle-income countries are experiencing a rapid growth of health information systems. Interoperability is being made a priority and steps are being taken to reduce fragmentation and ensure interoperability. There are several approaches to determining economic well being based on the use of a master facility list. This represents a standard list of health facilities that are associated with economic well being. Considering the many socioeconomic complexities that exist within our society today, the development and deployment of such an initiative represents a formidable issue. Information infrastructure theory gives guidance on how to approach complex, large-scale, and distributed information systems from a theoretical point of view. An integral part of the process of integrating health information technology into primary care can be found in the use of a variety of electronic methods for managing information regarding people's health and health care, both individually and in group settings. These methods include the use of a variety of electronic methods for managing patient information. Health information technology can significantly reduce the cost of providing health care as well as ensure that the quality of the care is maintained. Through the use of health information technology, the quality of healthcare can be improved.
    Keywords: Economic development and health infrastructure, economic impact and health issues, asian health infrastructure, economic fragmentation and health infrastructure
    JEL: I1 I11 I12 I14 I15 I18 K32 P36
    Date: 2021–06–15
  4. By: Mr. Maria Soledad Martinez Peria; Mr. Yannick Timmer; Mr. Nicola Pierri; Kosha Modi
    Abstract: This paper relies on administrative data to study determinants and implications of US banks’ Information Technology (IT) investments, which have increased six-fold over two decades. Large and small banks had similar IT expenses a decade ago. Since then, large banks sharply increased their spending, especially those which were more exposed to competition from fintech lenders. Other local-level and bank-level factors, such as county income and bank income sources, also contribute to explain the heterogeneity in IT investments. Analysis of the mortgage market reveals that fintechs’ lending behavior is more similar to that of non-bank financial intermediaries rather than IT-savvy banks, suggesting that factors other than technology are responsible for the differences between banks and other lenders. However, both IT-savvy banks and fintech lend to lower income borrowers, pointing towards benefits for financial inclusion from higher IT adoption. Banks’ IT investments are also shown to matter for the responsiveness of bank lending to monetary policy.
    Keywords: IT Adoption; Fintech Competition; Financial Inclusion; Monetary Policy; banks' IT investment; IT-savvy bank; tech spend; IT bank; Fintech; Mortgages; Loans; Income; Bank credit; Global
    Date: 2022–12–09
  5. By: Park, Ji Hye (Korea Institute for Industrial Economics and Trade)
    Abstract: As the demand for non-face-to-face services has increased due to the COVID-19 pandemic, the conversion of offline services into online services has accelerated. Along with these changes in service provision and consumption behavior, people’s desire to have online experience that are similar to offline experiences online has also increased. The metaverse is currently attracting attention as a new technology that can satisfy this. The metaverse is a portmanteau of meta, which means transcendence and virtuality, and universe and refers to a virtual world that transcends reality. The metaverse has been mentioned as a next-generation service to succeed the Internet, and global companies such as Meta, Apple, and Microsoft are launching related technologies and services. In addition, as 5G services and metaverse-related technologies have been improved, an environment has been established to experience services similar to reality in virtual space. Currently, the metaverse is spreading mainly in content industries such as games, performances, Fortnite, and ZEPETO. Concerts and fan meetings, which were once only possible offline, are also being held on metaverse platforms. Users can create and sell content themselves, and in the metaverse individuals are able to actually engage in economic activities in combination with blockchain technology. This paper describes the salient features of metaverse technologies, the current status of the metaverse at home and abroad, and the direction of the next-generation content industry in the era of the metaverse.
    Keywords: metaverse; online services; technology; Korea; content industry; Meta; online games; Fortnite; cultural content
    JEL: L63 L83 O14 O33
    Date: 2023–01–10
  6. By: Jung, Sunin (Korea Institute for Industrial Economics and Trade)
    Abstract: Among the Internet economy, e-commerce has recently emerged as the most dynamic sector. E-commerce GMV in Southeast Asia more than quadrupled from 5.5 billion USD in 2015 to 23 billion USD in 2018 with an annual growth rate of 62 percent over the period. Vietnam, along with Indonesia, is considered the fastest growing country in the e-commerce. The size of the Vietnamese e-commerce market sharply increased from 400 million in 2015 to 2.8 billion USD in 2018 and is expected to reach 15 billion USD in 2025. Besides e-commerce, the online media, online travel and online transportation and food delivery markets are promising, projected to expand significantly from 2.2 billion USD, 3.5 billion USD, and 500 million USD in 2018 to six billion USD, nine billion USD and two billion USD by 2025, respectively. The growth of the Internet economy including e-commerce is closely related to the demand for fintech. For example, digital payments are essential to the growth of the Internet economy. In Vietnam, only one in four e-commerce customers is shown to use digital payments because cash is traditionally favored and cash on delivery is widely accepted on major e-commerce platforms. However, this type of cash payment in e-commerce markets could cause friction between providers and consumers and incur additional costs. To this end, digital payment solutions are on the rise. In additional to digital payments, demand for various fintech solutions is expected to rise further, allowing for new types of transactions and investments as new business models based on the Internet and mobile have emerged.
    Keywords: Vietnam; fintech; financial services; e-commerce
    JEL: E42 G18 G23 G28 L84
    Date: 2023–01–08
  7. By: Hélène Dernis; Flavio Calvino; Laurent Moussiegt; Daisuke Nawa; Lea Samek; Mariagrazia Squicciarini
    Abstract: This paper uses information collected and provided by GlassAI to analyse the characteristics and activities of companies and universities in Canada, Germany, the United Kingdom and the United States that mention keywords related to Artificial Intelligence (AI) on their websites. The analysis finds that those companies tend to be young and small, mainly operate in the information and communication sector, have AI at the core of their business, and aim to provide customer solutions. It is noteworthy that the types of AI-related activities reported by them vary across sectors. Additionally, although universities are concentrated in and around large cities, this is not necessarily reflected in the intensity of AI-related activities. Taken together, this novel and timely evidence informs the debate on the most recent stages of digital transformation of the economy.
    Date: 2023–02–03
  8. By: Cho, Jaehan (Korea Institute for Industrial Economics and Trade); Frederick, Stacy (Duke University - Center on Globalization, Governance, & Competitiveness); Jung, Sunin (Korea Institute for Industrial Economics and Trade); Kim, Hanhin (Korea Institute for Industrial Economics and Trade)
    Abstract: Although Korea is home to globally competitive multinational enterprises (MNEs), it is hard to say there is a globally competitive digital enterprise from Korea. While large and well-known Korean MNEs such as Samsung Electronics, LG Electronics, and SK Hynix are globally known in the area of IT devices and components, when it comes to the digital sectors, including internet platforms, digital solutions providers, digital content platforms and e-commerce more broadly, it is hard to identify one as a truly global player. According to UNCTAD (2017), digital companies’ overseas sales accounted for 70 percent of their total global market value and about 50 percent of their global assets. Presumably, these firms’ businesses are largely globalized. However, while Korean IT companies have a higher ratio of overseas sales compared to other top 100 global companies, among these firms there are no large digital enterprises operating in overseas markets. The impact of digital companies is not limited to those firms’ industries or domestic markets; they also play a key role in expanding to global markets and creating new businesses or sectors. Investments in digital sectors will have a significant influence on productivity and employment both directly and indirectly across industries in the era of the fourth industrial revolution. As the recent expansion of digital companies continues across all industries in addition to the incumbent sector, an in-depth understanding and analysis of these trends is required. And in Korea especially, given its relatively small domestic market, it is necessary to enter and compete in global markets in the face of constant industrial change. While Korea’s historical development centered on large corporations, understanding the new dynamics in GVCs brought about by the digital sector will be essential to ensure the country’s continued participation in those very same value chains. Due to a lack of well-organized data, few studies on digital companies have been conducted in Korea. This also stems from the fact that digital companies are a relatively new concept. Basic concepts and tools to evaluate the status of digital companies objectively are needed, given the recent rise of those companies in the global economy. This paper is designed to provide a foundation and starting point to understand digital companies, to aid in the conduct of follow-up research and to frame future policies for digital industries.
    Keywords: digital enterprise; digital industry; digital sector
    JEL: L25 O33
    Date: 2023–01–08
  9. By: Holland, Charlotte; Dagher, Leila; Mansouri, Noura; Bennett, Dinah; Ni, Huan
    Abstract: We are living in a dynamic and changing world, one that requires youth and young people to be critically informed and prepared to respond ethically and speedily to real-world, complex sustainability challenges. Youth-led initiatives on climate change and sustainability are gaining momentum and have firmly positioned the issue of sustainable development at the core of political agendas at local, national and global levels. Through its first two recommendations, this policy brief proposal seeks to increase youth voice and agency at local and national levels, and in doing so, empower and support youth-led transformative actions for climate change and sustainable development. The third policy recommendation aims to progress youth education for sustainable development and to enhance intergenerational equity, through the (re-)formation of national policies and strategies to accelerate the integration of ICT-enabled education for climate change and sustainable development across the G20 partnership.
    Keywords: sustainable development; youth empowerment; SDG; ESD for 2030
    JEL: I2 O19
    Date: 2021–09
  10. By: Song, Youngjin (Korea Institute for Industrial Economics and Trade)
    Abstract: Historically, total employment in South Korea has continued to grow in the long run despite dips in the recessionary periods. From 1963 to 2018, the total number of employees has increased by 35, 000 per year on average. However recent trends are casting doubt on continued growth. Job creation is one of the most important policy objectives and a primary concern for the government, as employment directly affects the income and the economic well-being of the individual households. Acknowledging the significance of employment, South Korean government aims to add 150, 000 new jobs this year. And yet, there are growing concerns over the falling employment in the near future, as technical substitution of labor reduces demand for workers even as shifting demographics decrease the labor supply. The adoption of automation technologies and progress in ICT has provoked fears of job destruction as people feel threatened that their jobs are at stake. Cashier-less grocery stores and driverless cars suggest that labor is quickly becoming obsolete. Population aging is another challenge, and as the ratio of the elderly to working-age adults increases, a shrinking work force will inevitably lead to labor shortages. However, the impact of technological progress and a lower population on employment may not be as dire as the widespread concerns. I analyze the recent structural changes taking place in the labor market, and provide descriptive evidence that employment growth may slow down or stall but is unlikely to plummet over the next couple of decades. This paper observes that employment levels may not fall drastically in the near future, and examines the possible channels through which the negative effects of technological and demographic changes may be counterbalanced, stalling declines in employment. First, I look at the impact of technological progress on labor by highlighting the relationship between automation and the labor demand, and examining the pattern of job polarization and structural changes in labor markets across countries in comparison to South Korea. Second, I show that lower population growth does not necessarily imply lower employment by scrutinizing the recent growth in Japanese employment. It illustrates how changes in important labor market parameters such as labor force participation and employment rates across age and gender groups can differentially affect employment.
    Keywords: employment; employment growth; job polarization; job creatoin; employment rates
    JEL: J20 J23 J24
    Date: 2023–01–08

This nep-ict issue is ©2023 by Marek Giebel. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.