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Towards a National Knowledge-Based Economy:

Current Situation and Prospects for the Future

 

By Dr. Nasser Saidi,

Minister of Economy and Trade and Industry, Lebanon

Keynote Speech at MIT Club of Lebanon Dinner

Beirut, March 16, 2000

 

Honored guests, ladies and gentlemen.

It is with great pleasure that I share with you tonight the vision of the Government of Lebanon towards the realization of a national knowledge-based economy. I will discuss the current status of the enabling building blocks for such an economy and the projected road ahead for their advancement while staying in tune with global developments on the knowledge-based frontier.

The developed countries began experiencing the so-called ‘third industrial’ or knowledge-based revolution – the dawn of the information age - at the end of the 20th century. However, we, in Lebanon were seeing the products of the ‘second industrial’ revolution in the form of systematically researched and developed advanced weaponry being put to the test on our land and people! With the end of the war and hostilities period, the Government of Lebanon faced a number of challenges that had to be addressed quickly to allow the country to restore its national economy and rebuild its infrastructure. Having depended prior to the war on key service sectors such as tourism, trade and banking, it became apparent after the war that more modern means of offering such services were badly needed to help rebuild and stabilize the national economy.

Given the evolution of the information age, from local to national to global levels, the natural choice was to resort to the basic building blocks of the information age i.e. information and communications technologies (or ICTs) as (1) facilitators for this modernization process and (2) enablers of new knowledge-based industries to be developed to support the national economy and foster new areas of growth. Within this context, the Government of Lebanon embarked on various national projects geared towards the widespread deployment of ICT, protecting its use through proper legislation and standardization, showcasing its benefits through pilot activities, institutionalizing the needed reforms for its optimal use in support of services in both the public and private sectors, and creating the needed environment and incentives to foster its growth for the creation of vibrant knowledge-based industries for national and regional consumption.

 

What has been achieved in this regard – the current situation?

The ICT Infrastructure:

In the mid 1990s, a massive infrastructure project was launched with the objective to provide the country with sufficient fiber optic and microwave connections for transporting multimedia assets (data, voice and video) over a range of protocols (ATM, Frame Relay, ..etc.). Today, this project has lead to the availability of such high bandwidth capacity in major cities along the Lebanese coast, excluding unfortunately the South, in addition to some inner cities such as Zahle. This has allowed more efficient delivery of Banking and financial services and modernizing our payments system. In addition, satellite communication links are available through a main gateway located inland, with a number of Internet Service Providers (ISPs) having their individual satellite antennas.

The available ICT infrastructure has been able to support a relatively large number of ISPs– around 17 - with a total subscription base of some 100,000 to 150,000 users that pay current monthly unlimited Internet access rates ranging between $10 and $19. Certainly, a record low price for a developing country – these figures match current US Internet access fees. Despite these low fees, the monthly recurring fees for available direct communication links (64k to 2Mbps) remain somewhat high; they are currently being assessed for reductions or change in pricing formulas.

 

Legislation and Standards:

‘Knowledge is power’ or at least, a means to power. Yet to preserve such intellectual capital, one needs legislation. To address this, the Government of Lebanon became one of the first Arab countries to pass a modern law for the protection of Intellectual Property Rights in June 1999, covering all types and forms of multimedia assets. This move has encouraged a number of multinational companies such as Microsoft and Ericsson to open offices in the country, and is encouraging other companies to invest and establish themselves in Lebanon, benefiting from our liberal rights of establishment laws. We have recently sent a modern Patents law to Parliament that will provide strong incentives for the development and establishment of industries, such as pharmaceuticals, that are dependent on patent protection.

On the level of standardization, the Lebanese agency for norms and standards, LIBNOR, which is under the auspices of the Ministry of Industry, has taken a leading role in putting various ICT standards in place. Standards committees for systems and communications hardware and software are working to insure that relevant ICT deployments throughout the country meet and/or follow a certain standard.

 

Pilot ICT / knowledge-based projects:

To showcase the offerings of ICT in a knowledge-based working environment, the Government of Lebanon began work on 3 distinct pilot projects:

SchoolNet: this project involves interconnecting some 24 schools (1 PC at each school) throughout the 6 mouhafazats (or districts) of Lebanon via a central server located at the Ministry of National Education, which in turn is directly connected to the global Internet. The main focus of this project is to highlight online education communication and collaboration, in light of the new computer curriculum introduced by the Ministry, by making use of audiovisual conferencing facilities and various online multilingual references and encyclopedias. Distance learning, remote library access and customized courseware are but some of the showcasing deliverables expected from this pilot.

GovNet: this undertaking involves interconnecting some 30 government offices to one another and to 2 main government hubs to facilitate e-government services for the government itself (internal communications and transactions) and for the general public (various application forms, inquiries, registrations, general information, ...etc.). Increased productivity, accountability and improved services are the main outputs to be highlighted from this effort.

Trade Information System (TIS): this pilot effort focuses on trade facilitation and provides an online environment between the government agencies involved in the trade (import and export) process, namely the ports of entry/exit, Ministry of Finance (Customs) and Ministry of Economy and Trade. Using state-of-the-art standards and protocols such as EDI, XML, SET, SSL and others, this pilot will illustrate expeditious processing of trade transactions and related payments for the increased efficiency of the trade sector-goods will be cleared quickly and government tariffs will be collected promptly. An online harmonized commercial coding system will also be part of this pilot project.

Given the wealth of knowledge and talent available in this room tonight, I hope you will accept my invitation to participate in the execution of these projects.

 

Institutionalizing the needed reforms:

I will use the trade information system as an example to illustrate why a number of reforms are needed for optimal use of ICT. For each of the government offices involved in the trade clearance process, a great deal of paperwork filled with numerous signatures (at time 5 to 6 per form) is needed. If one were to automate this process with ICT, such paperwork and signatures would no longer be needed. However, a number of reform measures have to be legally enacted so as to avoid violation of existing laws and regulations. New legislation as relates to digital signatures and certificate authentication is needed so as to allow these online stamps to replace the customary signatures.

This example is but one of many that require institutionalization of simplified procedures in the public and private sectors, a process that is currently underway with the full support of the Government. Within the next two months I will be proposing a law for e-Commerce, digital signatures and authentication.

 

Creating the needed environment:

To provide the needed environment for creating knowledge-based industries and in line with international best practices, the Government of Lebanon has started worked on 2 main projects. One project focuses on a feasibility study for the creation of a so called ‘Beirut Emerging Technology Zone (BETZ)’ - a technology park area where local ICT entrepreneurs can either independently or in alliance with international organizations setup offices and further their R&D efforts for the creation of new or value-added ICT products or services. This effort is being funded by a grant from the US Trade and Development Agency (USTDA) and will have as its main output a blueprint for setting up such a zone and the benefits to be realized from it.

The other more recent project is the drafting of a law for establishing a ‘Media and ICT Free Zone’ which would be run as an independent agency through a public and private sector partnership having various tax, regulatory, and infrastructure incentives to attract various media and ICT companies from all over the world to setup hubs or regional centers in the zone. Under the law being drafted, the ‘Media and ICT Free Zone’ could even house a technology park such as BETZ as well as others that have a different focus (call centers, internet superhubs, software incubators, …etc.).Two private sector technology park initiatives worthy of mention here are the Roger Edde Byblos Global Village near Jbeil on the Lebanese coast and the Makse Industrial park in the Bekaa Valley.

 

The National ICT Committee – bringing the national projects together:

Given the diversity of efforts mentioned and the paramount need to coordinate for coherent fulfillment of these undertakings and their objectives, the Government of Lebanon has formed a National ICT Committee, headed by the Minister of Economy and Trade and Industry, and with membership from both the public and private sectors (covering business practices and academia). Supporting this committee are seven ICT advisory committees focusing on such key areas as national awareness, infrastructure and security, online banking and electronic payments, education, services for the citizen, legislation, and standards and norms.

The National ICT Committee is currently putting together with the assistance of international experts a business plan for ICT development in Lebanon. As envisaged, this plan will expand upon the current achievements on the ICT and propose additional work that will further the outreach of ICT development for the betterment of the Lebanese society as a whole.

 

What are we going from here – prospects for the future?

Having stated in brief the current achievements towards the realization of a knowledge-based economy, I move on now to what I anticipate to be key developments in this direction in the future.

 

The ICT Infrastructure:

With the full commitment of the Government of Lebanon to privatize the telecommunications sector, the available ICT infrastructure is certainly to improve. With more competition comes a more diverse array of cost-effective communications services. I anticipate seeing communication service providers offering hybrid solutions coupling land-based fiber optics, with microwave wireless, with satellite zone beam coverage, and hence being able to provide coverage all over the relatively mountainous terrain of Lebanon. This infrastructure outreach will truly constitute a solid National Information Infrastructure that will help in bridging the digital divide when combined with the proper education.

 

Legislation and Standards:

Work one-commerce, digital signature, certificate authentication, and online privacy legislation will be initiated and completed in the near future. Other legislation relating to e-banking and online payments will also be realized to help promote e-business, e-services and e-commerce projects.

On the standardization front, work will also progress to cover standards for the new entries in the ICT realm and upgrade the already established standards accordingly.

 

National ICT (or e-) projects:

The ShoolNet, GovNet, and TIS pilot projects will be further developed to be full-fledged e-projects. Furthermore, SchoolNet will most likely be linked up with a National Scientific Research Network (NSRNet) that interconnects national universities and institutes. These national networks will in turn be connected to similar regional country networks to form Intranets that share common cultures and so on.

GovNet, TIS and other government-centric projects will be further developed to form part of an e-government services system, with one-stop-shop portals allowing citizens on a local as well as international level (ex-patriots) to access and process the required information and applications, respectively. Tax filing, requests for birth records, and civil status records are but a few examples in this respect.

 

Institutionalizing the needed reforms:

With time, most, if not all, of the public sector procedures will be reinvented or simplified to facilitate optimal use of ICT solutions. With such solutions in place and with a civil service properly trained on their use, true productivity and accountability will be realized. Also, with such solutions in place, knowledge management applications can be developed and deployed to further assist in the decision support process.

 

Creating the needed environment:

Beyond the realization of technology parks or zones, a more collaborative atmosphere will be created between the academic and research environments in higher education on one side and the existing or newly start-up Media or ICT companies on the other. This collaborative effort, whether through internships, coop programs, transfer of technology agreements, or sponsored research activities will undoubtedly foster more robust ICT development on the national level – right ideas can be prototyped and tested at the right time, in hopes of addressing a niche market. Setting up entrepreneurship programs and cash award competitions as at MIT, will add to this level of collaborative and effective business planning. Networking with other international entrepreneurship centers and effectively exchanging ideas will also help in creating the needed environment for local ICT creativity and launching of businesses.

 

ICT Workforce – leveraging the Lebanese know-how:

By realizing most of the anticipated future developments towards achieving knowledge-based industries, a side benefit would be the reduction in the brain drain of capable national ICT graduates or seasoned experts to other countries. With the availability of what is needed to develop knowledge-based industries, the market demand and compensation for needed staff will ultimately increase to reach levels comparable to other international countries and hence the incentives for leaving would not be there. And to the contrary, the ex-patriots abroad will start to think about coming back and contributing towards realizing sustainable knowledge-based industries.

As clearly evident by the number of Lebanese that have attained advanced degrees from world renowned institutions like MIT, Harvard, Stanford, and Caltech, and that currently hold high level management positions in global ICT companies such as Microsoft, Compaq and Hewlett Packard, Lebanon has a wealth of know-how that can truly succeed in fostering a knowledge-based economy.

In closing, I hope that I have succeeded in conveying to you the direction Lebanon is heading in towards the realization of a knowledge-based economy. I look forward to exploring possible opportunities for cooperation between our government and your distinguished group. I hope that you will join me in helping Lebanon to be on the edge of the frontiers of today’s knowledge-based economy.

Thank You!


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