Monday, May 19, 2008

Communication and Information Technology in the Developing World

This essay is a review of the global digital divide. It examines how information technologies, especially mobile phones, affect local economies in rural communities in the developing world. Wide scale access to information is essential for development in these places to occur.

This paper will examine the global digital divide and how technologies like mobile phones and the internet can strengthen local economies, and increase overall development in places like Africa, India and South East Asia. The digital divide is a phrase used to describe the gap that exists between people who readily have access to communication and information technologies and those who do not (Guillen, 2005). I will be looking at the digital divide as it applies to the global community. Technologies, like main line phones, mobile phones, and the internet, are so common in the developed world that they are sometimes taken for granted. We must remember that in the developing world, these technologies are a rare and valuable commodity. Providing new technologies that increase one’s ability to access information, is crucial to development. Roads and other commercial infrastructure are also important to development, but without large scale access to market information, large profitable businesses will never emerge.

For people who have access to them, technologies like the internet and mobile phones have made sharing information easier than ever. Individuals and businesses are interacting with people on a scale that never would have been possible before, thanks to mobile phone and the internet. Web cams and satellite images can bring us to some of the most remote parts of the world instantly. On the internet we can search through databases and find information about almost any subject, with the click of a mouse. Education is becoming easier, thanks to new research technologies. Most importantly, new technologies have the potential to expand and create new markets (Waverman, 2007).

New technologies have been booming in the developed parts of the world, but this means people without access to these technologies, particularly those in developing countries, are falling even further behind. Without access to these technologies, people in places like Sub-Saharan Africa, India and South East Asia can have no hope of their states reaching higher levels of development.

Today the mobile phone is being introduced into parts of the developing world, with promising results. Main line phones are expensive to install and the internet is still a long way off for most people in poverty stricken regions. Very few people own computers in Sub-Saharan Africa and South East Asia (see figure-1). People living in these areas are very unlikely to be on the internet. Cell towers are much easier to install, and are less expensive then LAN lines, which need to be buried underground. Cell towers are also easier to protect than the expansive underground infrastructures of LAN lines. The buried materials of a LAN line are easy targets for thieves; a cell tower is centrally located and can be effectively guarded. There are 2.2 billion mobile phone users in the world. Of those mobile phone users, 1.4 billion of them are in the developing world (Waverman, 2007). They all use mobile phones because LAN line phones are not an available option for them.

Easy international communication is a relatively new convenience. The first trans-Atlantic telephone cable, TAT-1, was installed in 1956 as a joint venture between AT&T and the British Government. Previously, if one wanted to call Europe from the United States it would have to be done via the radio. The process required you to schedule the phone call some three weeks in advance. With this method you were always running the risk of having your call disrupted or ended by sun spots or bad weather. When TAT-1 became operational, the service could provide for only eighty-six simultaneous phone calls at a time (Waverman, 2007).

The internet is also a relatively new technology. It has grown in importance since it was introduced in the early 1990’s. It is hard to deny the massive impact that the internet has had on the world at large. The internet provides potential wide scale communication to any part of the world. Increases in communication leads to increases in collective action. Productivity naturally increases with collective action, which will increase markets (Rheingold, 2008).

The internet has especially changed the business world. fancies itself as a store where customers can come to buy ANYTHING. Craig’s List and eBay have created a market place for anyone with an internet connection to use. All of this technology has become so ingrained in our culture and in our lives. We forget how easy technology makes things. We also forget that in many parts of the world people hardly live with the same level of convenience that we are able to enjoy.

One study estimates only 10% of the world’s population uses the internet on a regular basis. Researchers from the same study claim that access to the internet is related mainly to economic variables. “[We have gathered] evidence to the effect that the average standard of living and the average educational level in a country – arguably the analogs of socioeconomic status at the individual level – are strong predictors of internet use” (Guillen, 2005). The correlation is obviously that lower level incomes lead to lower levels of internet access, due to the expensive costs of supporting the technology. This creates a kind of catch twenty-two; without increased economic development, there will be limited access to information technologies, but in order to increase economic development the population needs access to information technologies. This is a problem that is widening the economic gap between high income nations and low income nations even further.

In order to understand how increased communication can affect economic development, I have looked at a study of fishing villages in India, and the effects that mobile phones have had on the business that is done in local markets. Businesses and markets are much different in rural places in India. In Kerala, a region in the southern part of India, the introduction of mobile phones has had a great impact on local fish markets. A study undertaken by Robert Jensen, a development economist at Harvard University, surveyed the price of sardines at 15 beach markets along Kerala’s coast. Before the introduction of cell phones into the area, the fish markets were extremely unstable. Local fisherman might catch plenty of fish, but they could not always sell everything that they caught. Fish that cannot be sold quickly spoil and have to be dumped back in the ocean. On some days, some markets might be desperate for fish and will buy them at any price, while other markets might be flooded with too many fish, which will sell for low prices or not at all. An entire day’s work can easily be wasted in this unorganized system. In the study Jensen found that on average, before mobile phones were introduced, 8% of fish were being wasted in this way (Waverman, 2007, Jensen, 2007). Some fishermen might try to take their boats to other nearby markets in an attempt to sell fish that no one else will buy, but fuel is expensive and there is no way to guaranteed there will be buyers anywhere. When the mobile phones arrived, everything changed.

Mobile phones provided fishermen with direct contact to fish markets. Fisherman could call ahead to nearby markets to find those in most need of fish. Fish markets began to stabilize. Fishermen began increasing profits by calling around to different markets in order to find the best prices for fish. The wasted days spent fishing and selling nothing began to disappear. Everyday fishermen were able to sell their fish at the best prices available, and so profits went up. As the markets stabilized the price of fish even went down, creating a situation beneficial to both the consumers and to the fishermen. Profits went up 8% for the fisherman, and prices came down 6% (Waverman, 2007, Jensen 2007). (See figure 2, for statistical information.)

All of this was made possible by an increase in communication. These everyday technologies might not seem like much to us, but to those fishermen in India, having a mobile phone could mean the difference between feeding their families, or starvation. What cell phones have done is provide access to information. Information is a precious commodity. Access to information widens markets, which increases potential growth. Productivity must increase to supply the widened markets. All of these things are good for business. The thought is, the more you add technologies, like mobile phones and the internet, to any market place, the more economic growth that market place will see (Jensen 2007).

Some Indian fishermen spend up to 15% of their incomes on mobile phones. This may seem like a lot of money, but it proves just how valuable this technology can be for people in the developing world. Mobile phones provide more than just access to information. In some instances mobile phone bills can be used as a sort of credit report. Someone who owns a mobile phone can show a lender his or her bill to display that they are financially responsible enough to pay a cell phone bill regularly over a length of time. This can be extremely useful in small rural economies, where credit is largely unavailable.

Microlending, a relatively new banking practice, where extremely small loans are issued to poverty stricken individuals, has become immensely popular in places like India. In 2006, Muhammad Yunus was awarded the Nobel Peace Prize for implementing wide scale microlending programs throughout India. A microloan can be used to buy sowing machines, or fishing gear which can be used to earn an income. A significant portion of India’s population is employed in these low-start-up-cost entrepreneurial businesses (Yunus, 2006). With more mobile phones providing a better credit checking system, larger loans can be issued to those who are approved, which may provide some Indians with the necessary capital to start up more profitable businesses (Waverman, 2007).

It would be naïve to assume that just by introducing cell phones into a region, a region can be saved from economic disparity. One of the many obstacles that needs to be overcome before this technology can be useful is the problem of illiteracy. For some illiterates, using the keypad to dial numbers on a mobile phone might be difficult or impossible. Without some basic skills, mobile phones may be too difficult for some people to use. Without the ability to utilize the technology to its full potential, introducing mobile phones to an illiterate population will fall short of its goal of increasing development.

A major trend in mobile phone use is short message services (SMS), sometimes referred to as text messaging. This technology is useless to an illiterate population, but to a population that can use it properly, it can be immensely useful. Leonard Waverman, professor of Economics at the London Business School, has challenged Google to develop search technology, which could be used by the fishermen in India and other areas to search on their mobile phones for potential buyers. At this point in cellular technology, a mobile phone is the equivalent to having a small computer in the palm of your hand. The mobile phone screen is merely the computer screen for the developing world.

In 2005, Jimmy Wales, founder and Monarch of the online encyclopedia Wikipedia, began talking about a day when access to the sum of all human knowledge would be made available to every person on the planet (Wales, 2005). Today, hundreds of millions of people are using Wales’ information bases to educate themselves. Jimmy Wales has been working closely with Richard Baraniuk, founder of Connexions, a leading company in online Open Education. Wales and Baraniuk describe online Open Education as, “a vast dynamic knowledge ecosystem that is in a constant state of creation, use, reuse and improvement” (Wales, 2008). The costs of education are rising, and some students, even in the developing world, are struggling to afford text books. With classroom texts provided online, education costs will come down. As this technology evolves, Wales hopes to give people in developing parts of the world a tool which they can use to educate themselves, starting with basic literacy skills and eventually progressing into other relevant fields of study, based on individual circumstances (Wales, 2005).

Those of us who live in the developed parts of the world are privileged with access to technology that is useful as well as entertaining. We need to appreciate this fact and realize the impact that this technology can have on people’s lives. This technology should make us rethink how we approach problems like poverty and even the spread of disease. The internet is a global platform. It has the power to unite the people who use it. Through global communication and the spreading of knowledge worldwide, we can all learn to live together more peacefully. An advanced cyber culture is emerging and we should do our best to include all people on this planet in that community.


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