A new report argues developing countries will be left behind unless they master new Information and communication technology.  Lisa Schlein reports from Geneva the report by the U.N. Conference on Trade and Development says technological innovation is a major engine for growth. 

The report says globalization is here to stay and poor countries will not be able to fully benefit from it, unless they become adept at using the new information and communication technology (ICT).

It says the creative use of ICT can increase the productivity of enterprises.  For example, in Thailand, UNCTAD has found that a 10 percent increase in the share of employees using computers was associated with 3.5 percent higher productivity.

Although the ICT industry has shown dynamic and positive results in several developing countries, mainly in Asia, the report says the digital divide between rich and poor countries remains great. 

A mobile phone with a high quality video displays (file photo)

UNCTAD's Anh-Nga Tran-Nguyen says mobile phone subscribers are increasing rapidly in developing countries.  She says they have almost tripled during the past five years and make up nearly 60 percent of mobile subscribers around the world.

"But, compared with the developed countries, this is still very low, because developed countries have reached saturation with over 100 percent in the rate of penetration of the mobile phone," she said.  "And, this rate is similar to countries with economies in transition.  With respect to Internet penetration rates, we estimate that in 2008, developed countries will have reached 65 percent, while developing countries remain at the very low level of 13 percent." 

Tran-Nguyen says the situation is even worse in respect to broadband computer access where developed countries have a penetration rate of 28 percent compared to three percent in the poor countries.

The report says the rapid pace of innovation in the ICT sector has brought down the price of these products and is making them more accessible to poorer people. 

Two examples of this are the establishment of telecenters, which are relatively cheap to use.  And, it says the use of mobile telephones has been a boon to micro-businesses, which operate on a tiny budget.

UNCTAD says governments in developing countries must lead the way in educating and training their people to use the new information and communication technology. 

The U.N. economists say industrialized nations have made major efficiency gains and significantly reduced costs by using these services.  What works for the rich countries, they say can also work for the poor countries.