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March 2002 |
Economic and capacity implications of Geo-ICT
Context: Stakeholders in GDI
The stakeholders can be categorised as follows:
- At national and macro-level: National government politicians /politics providing policy direction on information acquisition and distribution, including the regulations and (economic and financial) conditions for acquisition and distribution, such as privatisation of government bodies, general pricing and cost-recovery strategies.
- At institutional level: National surveys or organisations providing framework data, like national mapping agencies (NMA), national cadastres and (public) registers agencies, and national surveys on geology, soils, hydrography, etc.
- At product mediation level: Geospatial Data Service Centres (GDSC), defined here as a facility or organisation that is the intermediary (“broker”) between the data suppliers and the data users for specific applications. A GDSC facilitates the integrity of access to the required data by ensuring the system technical services as well as the administrative, data security and financial services necessary to mediate between data suppliers and data users.
- At public level: Users of the data and information, where a distinction can be made between the intermediate (value-adding) users or organisations and the end users (beneficiaries) of the information.
Economic implications
Effects and aims of public reforms
National surveys and cadastres, like many other (semi-) governmental organisations, are forced to undergo technical and organisational reforms in an economic development that has yet to prove where the exact economic benefits of the technology and the information lie (see also Nijkamp and Verrips, 2000). Public organisations and agencies in some countries have started this organisational reform, often aiming at more financial autonomy, (semi-)privatisation, increased drive and monitoring of performance, and enhanced service orientation and customisation.
Some of these requirements can be accommodated by Geo-ICT. These include customisation of information, which can generate increasing economic opportunities and bring benefits. On the other hand, it must be acknowledged that most western economies are already primarily service economies. Most of the GNP is generated by the service sector, allowing Geo-ICT to exert a greater influence on the GNP. In less developed countries this may not be the case. Yet there is the possibility of multiple, often unpredictable, applications of this information inside as well as outside government. In a study of the Australian land and geographical infrastructure activities, PriceWaterhouse concludes that return on investments may be up to 400% (PriceWaterhouse, 1995), although this is considered by some to be subject to further research in terms of uncertainties regarding the assumptions made in the calculation (Groot, 2001, p. 6).
Table 2 Shift from market place to market space
| Shift from | To |
| Mass marketing and advertisement | Target, one-to-one interactive marketing and advertisement |
| Mass production (standard products, Services) | Mass customisation |
| Monologue | Dialogue |
| Paper catalogue | Electronic catalogues |
| One-to-many communication model | Many-to-many |
| Supply-side thinking | Demand-side thinking |
| Customer as target | Customer as partner |
| Segmentation | Communities |
| Physical products and services | Digital products and services |
| Branding, megabr | Communication, diversity |
| Intermediation | Distintermediation, new intermediation |
National and macro level – policies and interest
Good governance needs an understanding of the physical, economic and human geography of a nation and the changes over time of that geography. It is in the interest of governments to finance the generation of foundation data for public interest, without actually looking at the economics, i.e. costs and benefits of that information generation and use, or assuming these benefits to far outweigh costs (Nijkamp and Verrips, 2000). Public interest can be served by policies and regulations that ensure:
- Unlimited and efficient production and access to national foundation data for the purpose of governing
- Broadest access to national foundation data for society
- Lowest possible (transaction) cost to society as a whole
- Optimal sustainable development by use of geospatial information.
The first two observations imply more effective governance and administration tools, the third a cost saving to society and the latter, economic benefits to society. However, the relation between the four is not evident, let alone measurable. For national mapping agencies, this would mean, for example, that one would like to measure (and quantify):
- Financial efficiency gains of citizens and businesses when using and applying (improved) fundamental data sets
- Efficiency gains of public administration, mainly in the back offices of public agencies that make use of and/or need fundamental topographic data for their daily work
- Cost avoidance of maintaining and updating data by the public
- Cost savings of duplication of data acquisition.
How can national policies and regulations on geospatial information can fulfil these targets? Performance at this level needs to be linked to national objectives and performance indicators, which in less developed countries generally relate to economic development and poverty alleviation.
Intermediate economic level – changes within organisations and institutions
The monopoly of mapping agencies on geo-information products has been changing since the broader introduction of ICT in society during the late 1970’s and early 1980’s. As a result, the private sector has been getting access to technology similar to that of national surveys, and could thus challenge these monopolies. Yet, Groot (2001) has arg\ued that fundamental data sets are still the basis of all other geo-information data, and should therefore remain under government regulatory control. A more or less free marketplace could govern any value-adding data. This does not deny that government funded mapping agencies will have to deal with the implications of national policies of cost recovery and performance improvement. Governments are cutting the budgets of these agencies and looking for more structural solutions through revenue generation, cost recovery, performance measurement and enhancement, and, in the context of government reform, privatisation.
Table 3 Capacity building- Purpose and focus. (Adapted from Groot and Geogiadou, 2001)
| Purpose | Focus |
| Human resources development | Supply of technical and professional personel |
| Organisational strengthening | Strengthening the management capacity of organizations; embedding geo-information communication technology solutions (systems and processes) as well as strategic management principles |
| Marketing strengthening | Strengthening the capacity to market products and services including general public relations skills |
| Institutional strengthening | Strengthening the capacity of an organisation to develop and negotiate appropriate mandates and modus operandi as well as appropriate (new) legal and regulatory frameworks |
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