IS CAPACITY BUILDING NECESSARY

My colleague Shashank Ohja and I were chatting about a recent project in which an Asian country had contracted for the implementation of an ICT project from a nearby country. I casually repeated a comment standard in the “development community” for several decades that I would prefer a project that built capacity in the country with the project. Shashank rightly said that that the country should find the best deal it could, getting the best benefit to cost return on its investment.

Of course he was right. The whole theory of international commerce is built on this approach. All countries should do better specializing in the goods and services in which they have comparative advantage, trading them for other goods and services produced in countries according to their own comparative advantages. Why should ICT goods and services be any different? Surely developing countries should often trade the things they produce obeying their own comparative advantage for ICT goods and services produced abroad.

No one would suggest that the Sahelian countries should seek to compete with Intel in the production of silicon chips, nor with Microsoft in the production of software. Since ICT services, including software development and consulting, are increasingly tradable, why should not countries with a comparative advantage in these services also specialize and export? Why should not developing countries with comparative advantages in other products trade those products for chips, Microsoft software, and other services?

Still, I feel there is a set of core ICT competencies that should exist in a country, and that it would be bad policy to seek to import those competencies from others. All countries need gatekeeping competencies, to identify ICT needs and select appropriate products from domestic or international sources. Some services are still not tradable, and the capacity is needed at home to provide those services. Countries would be expected to have a comparative advantage in adapting technology produced to international standards in order for it to meet the needs of their own institutions; the capacity to do so should be built and maintained.

This seems to me to be a tricky area, needing more work to define the specific areas in which capacity should be built, and those in which countries should trade for needed ICT goods and services.