Study of accomplishment level of growth of information and communication technology in The 6th Development Plan and its effect on the growth of output of other economic activities (Input-Output Analysis Approach by goal Programming Model)

Authors

• reza zeinalzadeh ¹
• mohammad ali yaghoobi ²
• mahdi khodaparast mashhadi ³
• masood homayounifar ³

¹ Assistant Professor, Department of Economics, Islamic Azad University, kerman Branch, Kerman, Iran.

² Associate Professor, Department of Applied Mathematics, Shahid Bahonar University of Kerman, Kerman, Iran

³ Associate Professor, Department of Economics, Ferdowsi University, Mashhad, Iran.

10.30495/jzpm.2022.4061

Abstract

Information and communication technology (ICT) is the most important technology that is the basis of change in human life nowadays. On the other hand, accurate and efficient planning is one of the basic foundations in achieving macroeconomic goals. Careful planning is currently heavily dependent on the development of information and communication technology. According to this in the 6th Development Plan, the ICT growth rate is targeted at 19.4 percent and is set to increase to more than 5 percent of GDP by the end of the program. Therefore the aim of this research is to investigate the level of accomplishment of the goals of The 6th Development Plan regarding the growth rate of 9 economic activities emphasizing ICT, and studying the effects of ICT on the output of the other economic activities in Iran. Input-Output Analysis Approach combined with goal Programming Model was used for data analysis. Data was extracted by input-output tables of 9 economic activities of 2011 from Iran Statistics Center and then it was updated for 2016 by RAS method. The results show that the targeted growth rates in The 6th Development Plan were not accomplished in construction, transportation, storage, electricity, water, gas, and ICT fields. For ICT a growth of 2.6 present was achieved, and accomplishment of such growth in ICT will have a little positive effect on the growth of output of other economic activities.
Keywords: Information and Communication Technology (ICT), Major Economic Activities, Input-Output Analysis, Goal Programming Model.
 
Extended Abstract
 
Introduction:
Undoubtedly, achieving sustainable economic growth is one of the important goals and priorities of any country. Therefore, several studies have been conducted on the economic growth of countries and the reasons for differences in their economic growth. Over time, with the expansion and generalization of economic growth models, the role of information and communication technology (ICT) as a symbol of technology in the economic growth process became apparent, and emprical studies conducted in the 1990s and beyond confirmed this (Sharif Azadeh & Jamshidi, 2011: 124-147).
Economic planning, by providing an analytical framework for economic structure, allows policymakers to provide an economic perspective taking into account existing constraints and problems. Nowadays, information and communication technology is one of the basic requirements in forecasting and planning.
Today, almost all scientists, experts and politicians agree on the important role of ICT and its high importance in the economy. Using ICT to reduce costs and increase the speed of supply of production factors, it is possible to increase production without the need to increase costs. Having such a feature has led to its significant expansion in all economic sectors such as industry and mining, services, agriculture and other economic sectors. Given the importance of this issue, experts have always tried to consider the impact of this technology on various aspects of the economy in developed and developing countries. In most of these studies, the impact of ICT on production, employment, productivity, and other important economic variables has been confirmed (Emami, 2018: 45-74).
Although studies have focused on the positive impact of ICT on economic growth and productivity, no studies have been conducted at the national or sectorial level of economic activity. Macro-level studies have an aggregation error and the results cannot be generalized to the whole field of economic activity, because the application and use of ICT in the field of different activities is different. Therefore, the purpose of this paper is to investigate the extent to which the growth of the ICT sector in the Sixth Plan and its impact on the growth of other major economic activities specified in the Sixth Economic, Social and Cultural Development Plan.
Methodology:
The present study is of applied-developmental type and in terms of data collection method is based on library-documentary data which has been done in a descriptive-analytical manner. The method used in this study is a combination of input-output analysis and Goal programming model. The specified model is estimated by using the Lingo software package V.12.
The year 2016 has been selected as the base year for the Sixth Economic, Social and Cultural Development Program, which started in 2017. In the Sixth Plan, the Average Annual Economic Growth Goals are set for 9 areas of activity, with a total average of 8% annual economic growth targets.
Input-output table 2011 The Statistics Center of Iran was aggregated based on 9 fields of activity and then updated by RAS method for 2016.
Finding:
Data was analyzed by two scenarios. The first scenario studies the level of accomplishment of economic growth goals, and the second scenario studies the effect of accomplishment of goals on growth of the other economic activities.
The results for the first scenario imply that the outputs of 4 fields of agriculture, crude oil and natural gas, mine and industry are higher than the anticipated goals in The Sixth Development Plan, and it is negative for the other 5 fields. The highest negative deviation belongs to building. The aimed goal for ITC was 19.4% in The Sixth Development Plan, while the accomplished growth rate for this field is 2.6% according to the ideal planning model. Industry is another field out of 9 which has been goaled in The Sixth Development Plan, which its aimed growth rate is 9.3%, however the analytical results show that it can be increased up to 15.3% regarding to the restrictions and assuming fixed technology.
The results of the second scenario indicate that if the desired growth for the field of ICT activity is achieved, the growth of all fields of activity will improve. In fact, a comparison of the results of the second scenario with the first scenario shows that the growth of all sectors of economic activity has improved somewhat. For example, the growth of other services has increased from 4.4 to 4.8 and the growth of electricity, water and gas supply has increased from 5.2 to 6 percent.
Conclusion:
This research studies accomplishment level of ITC growth in The 6^thDevelopment Plan and its effects on the output of other economic activities by input-output method and math programming method (Goal programming model). As mentioned above, the aimed annual growth rate of 19.4% is anticipated for ITC. The results of solving the model under the first scenario indicate that the accomplished growth rate for ITC will be 2.6% regarding to the restrictions and assuming fixed technology.
In addition, the results indicate the share of 2.9% of ITC in country economy in 2016. The results of solving the model indicate that the output of all economic fields will improve in case of accomplishment of ITC growth. This situation indicates the productive and applied effects of ITC. Also, ITC can affect production of economic sectors through promotion of productivity. This result is compatible with those of Naibel (2018), Latif et al. (2018), Moshiri (2017), and Emami (2018). Perhaps the main reason of lower relationship of ITC with the other sectors is that a significant share of economy of country obeys the traditional structure based on production and export of agricultural products, and ITC share is low in the other sectors. Another reason is low penetration rate of computer and internet, low internet speed, and high internet costs in Iran. Furthermore, lack of enough training and skillful human force produce problems for ITC perception and application, which weaken the effect of ITC on economic growth.

Keywords

• Information and Communication Technology (ICT)
• Major Economic Activities
• Input-Output Analysis
• Goal Programming Model

20.1001.1.22516735.1400.11.44.4.3

---

References

1. 1- Aghion, P., L. Ljungqvist., P. Howitt., P. W. Howitt., M. Brant-Collett & García-Peñalosa. C. (1998). Endogenous growth theory. MIT press.

   2- Aleemran, R., & Aleemran, S. A. (2018). "The Effect of Information and Communication Technologies on Economic Growth in Member Countries Department of D8", Iranian Journal of Information Processing and Management. 33(4), 1554-1574.

   3- Banouei, A.A., Ziyaee, Z., & Mohajeri, P. (2020). "Quantitative Analysis of Spatial Dimensions of Regional Economic sectors Using New Mixed EFLQ-RAS Method", Journal of Regional Planning. 9(36), 31-48.

   4- Charnes, A., Cooper. W. W.  & Ferguson, R. O. (1955): Optimal estimation of executive compensation by linear programming. Management science, 1(2), 138-151.

   5- Emami, K. (2018). "Is it Necessary for Iran to Increase the Share of ICT Sector in GDP? ", Journal of Economic Research. 18(68), 45-74.

   6- Jones, D. & Tamiz, M. (2010). Practical goal programming, Vol. 141, New York. Springer.

   7- Komijani, A., & Mahmoudzadeh, M. (2008). "The Role of ICT in Iran's Economic Growth (Growth Accounting Approach)", Journal of Economic Research, 8(29), 107-75.

   8- Kumar, R. R., P. J. Stauvermann. & Samitas, A. (2016). The Effects of ICT on Output per Worker: A Study of the Chinese Economy. Telecommunications Policy, 40(2-3), 102-115.

   9- Latif, Z., Latif, S., Ximei, L., Pathan, Z. H., Salam, S., & Jianqiu, Z. (2018). The dynamics of ICT, foreign direct investment, globalization and economic growth: Panel estimation robust to heterogeneity and cross-sectional dependence. Telematics and Informatics, 35(2), 318-328.

   10- Mahmoodi, M. & Mahmoodi, E. (2011). "The Effects of ICT on Employment of Service Sector in Iran", Journal of Economic and Policies, 19(58), 213-236.)

   11- Mehregan, M. R. (2013). Multiple objective Decision Making. First Edition, Tehran: Tehran University Press.

   12- Miller, R. E. & Blair, P. D. (2009). Input-Output Analysis: Foundations and Extensions. Cambridge University Press.

   13- Momeni, M. (2014). New Topics in Operations Research. Sixth edition, Tehran: Ganj Shaygan Press.

   14- Moshiri, S. (2017). "The Impact of ICT Effects on Production in Iran, Spillover and Absorption Capacity Effects", Journal of Economic Research, 52(2), 395-426.

   15- Niebel, T. (2018). ICT and Economic Growth–Comparing Developing, Emerging and Developed Countries. World Development, 104, 197-211.

   16- Oliveira, C., Coelho, D., & Antunes, C. H. (2016): Coupling input–output analysis with multiobjective linear programming models for the study of economy–energy–environment–social (E3S) trade-offs: a review. Annals of Operations Research, 247(2), 471-502.

   17- Pezeshki, Y., & Dabbagh Rezaei, S. (2005). "The Role of ICT in Economic Growth". Tadbir Monthly, 163, 44-38.

   18- Pohjola, M. (2002). The New Economy: Facts, Impacts and Policies. Information Economics and Policy, 14(2), 133-144.

   19- San Cristóbal, J. R. (2010). An Environmental/Input–Output Linear Programming Model to Reach the Targets for Greenhouse Gas Emissions set by the Kyoto Protocol. Economic Systems Research, 22(3), 223-236.

   20- Savulescu, C. (2015). Dynamics of ICT Development in the EU. Procedia Economics and Finance, 23, 513-520.

   21- Sharif Azadeh, M. R., & Jamshidi, Z. (2011). "Study of the Effects of ICT on Production in Mena Countries with Emphasis on Iran", Journal of Applied Economics, 2(7), 147-127.

   22- Tawfiq, F. (1992). Inpot-Outpot Analysis in Iran. First Edition, Tehran: Islamic Revolution Publications and Education.