Contents I. Acknowledgement iii II. Executive Summary vi III. List of figures ix IV. List of Tables xi V. Acronyms xii VI. Abstract xiii Chapter 1 Introduction and Formulation of Research Questions 1 1. Introduction 2 1.2. Research Questions 3 Chapter 2 Literature Review: The WEF’s Global Competitiveness and the Networked Readiness Index. Research Implications 7 2. Background - The World Economic Forum Initiatives and Programs 8 2.1 The Global Information Technology Report 8 2.1.1 The Networked Readiness Index 9 2.2 The Global Competitiveness Report 10 2.2.1 The Global Competitiveness Index 11 Chapter 3 Assessing Central America Competitiveness Comparison Factors and ICT implications 17 3. Central America Overview 18 3.1 Nine Pillars of the Global Competitiveness Index (GCI) 20 3.1.1 Macro economy 21 3.1.2 Institutions 21 3.1.3 Infrastructure 25 3.1.4 Health and Primary Education 26 3.1.5 Higher Education and Training 27 3.1.6 Market efficiency 29 3.1.7 Technological Readiness 31 3.1.8 Business Sophistication 36 3.1.9 Innovation 38 3.2 Answer to selected research questions 39 Chapter 4 Factors influencing Nicaragua’s competitiveness and ICT development: An underdeveloped nation’s perspective 48 4. Nicaraguan Telecommunication Industry Background 49 4.1. Factors affecting Nicaragua’s competitiveness 50 4.2. Survey Results 52 4.4 Answer to selected research questions 58 Chapter 5 Conclusion and Recommendations 64 Conclusion 65 Reference: 69 Appendix A: 72 Appendix B 75 Appendix C 76 Appendix D 78 End Notes 79 　 I. Executive Summary Information, Communication and Technology’s (ICT ) growth is being shaped by several structural transformations at different levels; economic, educational, social and political. Understanding the scheme and the particular stage for which a nation accesses to the networked global economy or migrates towards a knowledge economy is certainly of crucial interest in the formulation of this research. This research is intended to build up from previous research analysis and several reports from different organizations such as the World Economic Forum, INSEAD , the Organization of Economic Co-operation and Development (OECD), the reports published by the International Monetary Fund (IMF) and the Inter American Development Bank (IDB). Today’s technological revolution takes place under particular circumstances and occurs under diverse settings among its performers; these performers or players, access ICT differently; not all nations are shifting towards knowledge economies, and certainly not all societies have granted access to the networked world; nor are using ICT assimilation to rethink on how to use Information, design new business models, or ideally integrate and leverage communication and technologies. Previous research states on such arguments, (Lopez-Claros, Altinger, Blanke, Drzeniek, and Mia, 2006): Countries in Latin America cannot be yet characterized as knowledge economies and, therefore, may still benefit from leveraging external technology for their development. It is for these phenomena that this research is brought together; by indentifying building blocks and examining from among previous studies, above all, first from the nine pillars of the Global Competitiveness Index (GCI) those areas in which there are particularly key driver factors for economic growth in Central America (CA); by identifying fragile developing areas so that the less privileged performers may explore this analysis-based research for further assimilation and better comprehension about the opportunities for connecting into the networked global world and thus develop growth. Second, discourse based on arguments, particular interest is placed on research about the performance associated with information, communication and technology (ICT) in Central America, and especially in Nicaragua. Determining ICT strengths and weaknesses as to optimize the participation and benefit for its development is to be explored by appraising the Networked Readiness Index (NRI), particularly the WEF’s Executive Opinion Survey results for the CA region during the last six years. It is also due to this proliferation of researches that this study finds an opportunity to conduct research. By examining and doing exploration, this research offers a viewpoint built from a less deliberate approach, not from a developed nation, but from an underdeveloped one, not from the overall concept around ICT, but from analyzing the degree of preparation to participate and benefit from any or three blocks (ICT). This study does not focus on different frameworks and measure mechanisms, but rather interprets and focuses on one outline from the GCI and suggest an alternative model for understanding development, growth and engagement in the digital economy. This research takes five main thematic chapters. The first chapter is a broad introductory section of the issues to be discussed, indicates the limitations and the formulation of the research questions for which this study is significant important. Chapter 2 contains the literature review of the two index reports conducted by the WEF, the GITR and the GCR, above all, the networked readiness index (NRI) and the global competitiveness index (GCI), their implications, related analysis and significance for this research. It includes the scope and the methodology of this research study. The third chapter aims at assessing Central America competitiveness by focusing on CA overall country comparisons, putting together a series of insightful assessment factors and replying the research questions introduced later in this introductory chapter; particularly by evaluating the results of the Global Competitiveness sub indexes and glimpse the NRI implications for the region. In turn, it head to the fourth chapter, which focuses on the least competitive performer of the CA region, Nicaragua. This research brings important findings about the level of adoption and usage of ICT asserted by an independent survey conducted locally. Ideally under this chapter, it states the conditions under which CA and Nicaragua has a potential leading opportunity for growth. Finally, the study’s conclusions and recommendations are articulated in Chapter five. II. List of figures Figure 1-Networked Readiness Index ranking in Central America 2001 2007 4 Figure 2 the Global competitiveness Index results in Central America 2005 2007 5 Figure 3 ICT’s Structural Transformation Determinants’ 18 Figure 4 GCI's Institution pillar scores' in CA 2005 2007 22 Figure 5 Central America GCI's Nine pillars score Average 2005-2007 23 Figure 6 Factors affecting CA Institutions’ base on % of responses (adapted from Executive Opinion Survey 2005 WEF 23 Figure 7 Factors affecting CA Institutions adapted from Executive Opinion Survey 2005 WEF 24 Figure 8 Factors affecting CA Institutions adapted from Executive Opinion Survey 2005 24 Figure 9 Infrastructure Pillar scores in CA 2005 2007 25 Figure 10 Health and Primary Education Pillar scores in CA 2005 2007 26 Figure 11 Higher Education and Training pillar in CA 2005 2007 27 Figure 12 Quality of the Educational System in CA 2005 28 Figure 13 Availability of scientist and engineers in CA 2005 2006 28 Figure 14 Market Efficiency Pillar in CA 29 Figure 15 Efficiency of legal framework in CA 2005 30 Figure 16 Time required to start a business in CA 31 Figure 17 Judicial Independence in CA 2005 31 Figure 18 Technological Readiness in CA 2005 2007 33 Figure 19 NRI Technological Readiness: Individual Usage Component 2005 in CA (Selected variables) 34 Figure 20 Government prioritization of ICT in CA 2005 34 Figure 21 Laws relating to ICT in CA 2005 34 Figure 22 NRI Technological Readiness: Individual Usage Components Average 2005 in CA 35 Figure 23 NRI Technological Readiness: Individual Usage Component 2005 in CA (selected variables) 36 Figure 24 Business Sophistication pillar scores in CA 37 Figure 25 Innovation pillar scores in CA 2005 2007 38 Figure 26 CA Individual Pillar Average growth 2005 2007 41 Figure 27 Efficiency Enhancers Sub Index growth in CA 2005 2007 42 Figure 28 Basic Requirement Sub Index growth in CA 2005 2007 43 Figure 30 Sub index growth scores in CA 2005 2007 44 Figure 29 Innovation and sophistication sub index in CA 2005 - 2007 44 Figure 31 GCI Total Average growth in CA 2005 - 2007 45 Figure 32 Device Ownership <local survey> 2007 53 Figure 33 Laptop Ownership <local survey> 2007 54 Figure 34 Cell phone ownership <local survey> 54 Figure 35 Internet Usage <local survey> 2007 55 Figure 36 Internet Access in Schools in CA (NRI) 2005 56 Figure 37 Purpose Usage <local survey> 2007 57 Figure 38 Availability of online services in CA (NRI) 2005 58 Figure 39 Kind of Internet kiosk's users <local survey> 2007 59 Figure 40 what is known about the kind of people that uses internet in internet kiosks <Usage> 60 Figure 41 what is known about the kind of people that uses internet in internet kiosks <frequency of usage> 60 Figure 42 Nicaragua's GCI average growth vs. CA 2005 2007 62 Figure 43 Macro economy pillar in CA 2005 2006 65 Figure 44 Efficiency Enhancers Sub Index growth in CA 2005 2007 66 Figure 45 GCI overall average scores in CA 2005 2007 67 III. List of Tables Table 1- Previous approaches 9 Table 2 Nine Pillars of Competitiveness 11 Table 3 The nine pillars of competitiveness / the stages of economic development / Pillars sub indexes. 12 Table 4 GCI sub indexes’ weight at each stage of development 13 Table 5 Stage of Development and the GDP 14 Table 6 CA stage of Economic Development 15 Table 7 Evolution of NRI No. countries 40 IV. Acronyms CA Central America DR CAFTA Dominican Republic - Central America Free Trade Agreement FDI Foreign Direct Investment GCN Global Competitive Network GCR Global Competitiveness Report GCI Global Competitiveness Index GITR Global Information Technology Report GDP Gross Domestic Product ICT Information and Communication Technology INSEAD Institut Europ?en d'Administration des Affaires. The Business School for the World INFODEV The Information Development Program NRI Networked Readiness Index OECD Organization for Economic Co- operation and Development WEF World Economic Forum WB World Bank