ICT shifts will have winners and losersSunday, May 03, 2020
Close scrutiny will show that most 'crisis situations' are opportunities to either advance or stay where you are. — Maxwell Maltz
The declaration of COVID-19 as a pandemic on March 11, 2020 by the World Health Organization (WHO) triggered social distancing measures. With stay-at-home measures in place in Jamaica and around the world traffic congestion moved from the roads to telecommunications networks as telework (working from home), e-learning (learning from home), and home entertainment surged. Consequently, the demand for cellular data, and especially residential broadband data usage, increased by over 30 per cent in Jamaica, while commercial usage (normally prioritised by operators) have declined.
Operators like Flow and Digicel are struggling to respond to this shift in demand, demonstrated by the frequency of contractors laying cable in several areas. The question that is being posed is: Will these behavioural changes triggered by this pandemic result in long-term demand for information and communications technologies (ICT) or is this just a blimp on the radar?
The answer to this question will determine how, and the pace, that the Jamaican economy will integrate into the world digital economy.
Since the liberalisation of the telecommunications sector at the turn of the century there has been an explosive growth in cellular phones increasing from a paltry 20 per cent to a ubiquitous 94 per cent penetration in 2019. A high percentage of cellular users purchase data for Internet access. Fixed broadband (cable Internet access) had an initial surge, but has stalled at around 50 per cent to 60 per cent of households.
There are approximately 881,000 households in Jamaica based on the 2011 census. If approximately 60 per cent of these households have broadband access, this means that nearly 352,000 households, or 40 per cent, have no fixed broadband access. In this new COVID-19 paradigm, fixed broadband is required for telework and for e-learning classes.
There have been stories of individuals spending inordinate and unsustainable amounts of money on mobile (cellular) broadband to have their children attend online classes. The unavailability of fixed broadband in households is exacerbating inequalities in education during this COVID-19 period. The Government will have to examine strategies to ameliorate this situation.
The data indicated that these households without fixed broadband are predominantly located in the rural areas. A 2014 study by the College of Business and Management at the University of Technology, Jamaica (the most recent information) indicated a substantial urban/rural digital divide in Internet access. Sixty-four per cent of urban residents and 36 per cent of rural households had Internet access. What accounts for the low overall Internet access and this urban/rural digital divide?
Let's first look at the digital divide. The main contributing factor is that substantial segments of rural Jamaica lack the infrastructure for high speed Internet. The operators do not view these areas as economically feasible as the population density is sparse and the cost of running cable is expensive. Other technologies besides cable have been used/tried without success.
Demand is the second factor. Studies we have done in 2015 and 2018 indicated that while Internet usage has increased, the sophistication of use was low. The primary uses were associated with social media — Instagram, Snapchat, Facebook, YouTube, Twitter — in addition to entertainment. Direct commercial uses such as e-learning, Internet banking, purchasing of goods and services, and e-government were fringe activities.
It is my opinion that residential demand for these fringe services will become mainstream after COVID-19 and therefore the derived demand for broadband (Internet services) will increase. More people have adjusted to online services, inhibitions have evaporated, confidence has increased, and the convenience has become seductive. There is no turning back. People who were loath to conduct online banking have adjusted and have become more comfortable with the process. This will result in further staff attrition in this sector.
This new paradigm will have winners and losers. One obvious loser will be newspaper sales. Newspaper sales have plummeted over the last six weeks, while online viewing has surged. Even if there is some sales increase after this pandemic, sales will continue to be anaemic. The newspaper business model will need to change. The distribution of movies via movie cinemas faced serious threat even before COVID-19. An increasing number of people are using Netflix and other streaming services and are likely to continue. The Academy of Motion Picture Arts and Sciences, for the first time, will allow some movies released on streaming services to qualify for the 2021 Oscars because of COVID-19. An ominous sign.
The benefit of telework will become mainstream both in the private and public sector. Companies will determine which jobs are more suitable for telework. Other workers, such as construction and services workers that cannot be separated from their work site, will not be able to access this benefit. The extension of work to an individual's home will create other issues such as privacy, work-life balance, and the management of telework.
Work-from-home staff have already started to complain about micromanagement and the plethora of unnecessary meetings. Companies will need to manage by results, monitor performance measures, and consider purchasing only laptops for staff as desktops are not flexible enough for telework. Companies will also need to provide good technical support to teleworkers.
E-learning, which has had its fair share of resistance, is now the only gig in town. Both teachers and students have had to adjust on the fly to this new situation. How will educational institutions integrate e-learning after COVID-19? E-learning will not go away. We will require increased Internet access at home for both students and parents. There is growing evidence of a strong association between school performance and home Internet access and use of computers. There may be designated days when students will have the option to have home classes. This may have an impact on fees as they are already having. Both companies and schools may coordinate and determine that, for example, every third Friday parents and students can work from home.
An associated challenge for both parents and, especially, students is digital literacy. Our research has indicated that while students are technically skilled, which is one aspect of digital literacy, students' knowledge of issues regarding privacy, security, and creative use of technology is woefully inadequate. Digital literacy among adults should be worse than students. Digital literacy will need to be included as a core aspect of any e-learning strategy.
For all the above to come to fruition there is a need to invest in reliable, accessible, and affordable telecommunications infrastructure, not just roadwork. There is consistency in the literature which indicates that for broadband investments, the gross domestic product (GDP) contribution tends to range between 0.3 per cent and 1.4 per cent for every 10 per cent increase in penetration. The Internet economy, to which having a high-class infrastructure is a prerequisite, has been estimated to represent as much as 5.7 per cent of GDP for the EU as a whole. The employment multiplier from ICT (for example, broadband or high-tech investments) has been estimated to range between 1.4 and five new jobs. This is an area that is rife for public private partnership.
Another critical infrastructure which I will address in a subsequent article is affordable electricity.
The private operators, particularly Flow and Digicel, will need to increase their capacity in the short run to respond to current demand. To achieve this, Government should facilitate temporary spectrum allocation to service providers to reduce congestion and expand broadband access. The quality of service provided by Internet providers will need significant improvements.
There is too much downtime and fluctuation in service. Service providers will point to vandalism of equipment as the reason, but that's only part of the story. The Office of Utilities Regulation (OUR) should require minimum service quality of data services from service providers which is monitored and disclosed to end users. As alluded to before, the cost of fixed broadband for low-income households will need to be subsidised.
Over the centuries crises have resulted in significant and long-lasting changes in behaviour, including public health, geopolitics, and economic well-being. The current conditions present an opportunity to create inclusive growth and development. While tackling COVID-19 we must plan for ex post.
Professor Paul Golding is former dean of the College of Business and Management at the University of Technology, Jamaica. Send comments to the Jamaica Observer or firstname.lastname@example.org.