Information and communications technology use and income growth: evidence of the multiplier effect in very small island states

ABSTRACT

Very small island states face unique challenges, such as volatile economies, increasing vulnerability to natural disasters, particularly with raising seas, increases their dependence on the world economy. Despite their growing use of ICTs, the results are mixed in terms of the effect of growing ICT usage on income growth. This paper investigates how growth in ICT usage may enable growth in per capita Gross Domestic Product (GDP) in very small island states by analyzing the effects of average ICT usage on GDP growth based on the most recent data available from the World Bank and from the International Telecommunications Union (ITU). Following an analysis of data over four years of 32 very small island states, this paper identifies an ICT multiplier effect that may explain and predict the relationship between average ICT usage and GDP growth. By showing how the ICT multiplier effects may be connected to GDP growth, this paper adds to what we know about the relationship between these two indicators in very small island states. This has implications for how government interventions can enable ICT capacity to bring about GDP growth.

KEYWORDS:

• Information and communication technology (ICT)
• Gross Domestic Product (GDP)
• multiplier effects
• very small island states

Acknowledgements

This project was commissioned by Anthony Ming, Advisor at the Commonwealth Secretariat for the Commonwealth Heads of Government for Small Island States workshop in London. We would like to thank him for his persistence and guidance on the successful completion of this research. We would also like to thank the anonymous reviewers and special issue editors, Arlene Bailey and Kweku-Muata Osei-Bryson, for their comments on many previous versions of this paper. It is because of editors like them that this Journal continues to publish quality research that is relevant to improving the lives of people.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Sajda Qureshi is Professor at the Information Systems Department at the University of Nebraska at Omaha. She is Editor-in-Chief of the Information Technology for Development Journal. She holds a Ph.D. in Information Systems from the London School of Economics and Political Science. Her research involves the assessment of the effects of ICTs on economic and social development. She is also conducting research into the effects of health information technology on patient-centered care. She has over 190 publications in journals such as Group Decision and Negotiation, Information Infrastructure and Policy and Communications of the ACM, books published by Prentice Hall, Springer-Verlag, Chapman and Hall, and North-Holland

Lotfollah Najjar is a Professor in the Department of Information Systems and Quantitative Analysis in the College of Information Science and Technology at the University of Nebraska at Omaha. He holds a Ph.D. in Industrial and Management Systems Engineering with supporting areas in MIS, and Operations Management from university of Nebraska-Lincoln. His research interests are in the areas of Quality Information Systems (Data Quality), Data Mining, Data Analytics, Big Data, Business Process Reengineering & IT, Software Quality and Reliability, System Quality, and Total Quality Management (TQM) & IT.