How can IT enable economic growth in developing countries?

Abstract In this paper we review theories on the economic significance of IT and telecommunications, and discuss the nature of the economic effects that should be expected from the diffusion of these technologies and increased emphasis on information activities. Economic and social theory both lead to the suggestion that the diffusion of IT and telecommunications, and intensification of information activities do not lead deterministically to economic growth. Rather, organisations are faced with pressures to work out changes in the ways they do business or deliver their services, and policymakers must plan for a macro‐economic environment that facilitates economic and social changes. A crucial question which emerges in this context is whether organisations in developing countries acquiring information and communication technologies (ICT) should also seek to transfer ‘best practice’ for doing business. In this paper we question the feasibility and desirability of such an approach, and suggest that developing countries should make efforts to develop organisational practices which are locally appropriate.