Linking ICT to the development of knowledge-based economy pillars

Information and communications technology (ICT) is one of the main pillars of knowledge-based economy, according to the World Bank, and it is a prerequisite for economic growth. This study aims to link ICT to the development of knowledge-based economy and its main pillars. Several studies have theoretically illustrated the role of ICT in the development of knowledge-based economy, but the literature lacks empirical detailed investigations. ICT can provide a major support for the development of knowledge-based economy and the other three pillars: the economic and institutional regime, education and skills, and the innovation systems. ICT is the backbone of knowledge-based economy and imperative for its development. The World Bank measures the ICT index based on telephones, computers and Internet users. A dynamic information infrastructure is needed to facilitate effective communication, dissemination and processing of information and knowledge. Several international reports have highlighted the power of knowledge for any national economy. Also, ICT can play a major role on developing people's education and skills, a major pillar of the knowledge economy. Furthermore, ICT can play a major role on innovation. The information technologies market, which includes hardware and software, is by itself a rich market for innovation and the production of new products. Additionally, ICT facilitates innovation in other fields. Based on the analysis of the World Bank data of knowledge economy (KE) indices of worldwide countries in 1995, 2000 and 2012, this study detected significant associations between ICT and knowledge economy pillars in these years; hence it plays a significant role in the development of knowledge-based economy and its pillars. Also, findings indicate that (1) even though the ICT pillar is not the most significant one in the field, its significance level has increased from 1995 to 2012; (2) the ICT pillar has been the most significant factor throughout on innovation pillar in all of the years studied and (3) the ICT pillar is the only one that has been consistently significant and a positive factor in knowledge economy and each of the economy pillars. These findings can inspire less-developed countries to further develop their knowledge economy through ICT.