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Demand for information and communication technology‐based services and regional economic development *
Author(s) -
Anselmo de Castro Eduardo,
JensenButler Chris
Publication year - 2003
Publication title -
papers in regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.937
H-Index - 64
eISSN - 1435-5957
pISSN - 1056-8190
DOI - 10.1111/j.1435-5597.2003.tb00002.x
Subject(s) - information and communications technology , convergence (economics) , divergence (linguistics) , externality , disadvantage , virtuous circle and vicious circle , supply and demand , economics , network effect , business , industrial organization , economic geography , regional science , economic growth , microeconomics , computer science , geography , linguistics , philosophy , artificial intelligence , world wide web , macroeconomics
. The relationship between the uptake of Information and Communication Technology‐based services (ICT) and regional economic development is examined here; we address in particular the idea that ICT will promote regional economic convergence. We argue that ICT can generate contradictory trends of regional convergence and divergence and that, under conditions of non‐regulated market supply, the effects leading to divergence can be dominant. The approach is based on the development of a regional demand model, which is the combination of two sub models, one dealing with the effects of network externalities and the other based on the concept of potential demand for ICT. The main conclusion is that less populous, more peripheral and poorer regions with weaker existing social and economic networking will encounter problems of insufficient demand. This in turn will delay the launch of new services and slow the rate of uptake. Negative dynamic effects of low ICT use on economic performance will generate a vicious circle of cumulative disadvantage.