Wednesday, October 10, 2007

Throwing computers at the digital divide won’t help

Every other multinational technology company these days has a strategy for bridging the digital divide, which in many emerging economies usually adds up to bridging the rural divide. While students and the rest of the people in the cities have access to the Internet, and consequently to information, rural economies do not, goes the story line.

The spiel continues: If only rural economies have access to the Internet, and consequently to information, that would eliminate middle men when farmers sell their produce, help farmers get the best price for their produce, ease out the village money-lender, and generally usher pastoral bliss.

Thus you have low-cost technologies like the One Laptop Per Child (OLPC) project's XO laptop, and Intel’s Classmate PC, and Internet Kiosks aiming at the new big market – bridging the digital divide in rural markets.

The management guru they often quote is C.K. Prahalad, author of the famous book “ The Fortune at the Bottom of the Pyramid”, which argues that there is money to be made at the bottom of the economic pyramid as well, if only goods are packaged in the right way, and at the right price points.

There are however a number of faulty assumptions in the strategy for bridging the digital divide adopted by multinational companies for emerging economies like Brazil and India. The divide in these countries is not only digital, but fundamentally one of inequality. It covers lack of access to sanitation, housing, electricity, education, and a whole lot of other things that the elites in these countries enjoy.

Thus technology, and the information it brings, is likely to be the least among the priorities among the poor and the governments in these countries. Perhaps that is the reason why the Indian government declined to join the OLPC project. It would rather spend money on setting up more schools, and outfitting them with blackboards, benches, and inexpensive writing equipment, than invest in a laptop for each child.

Prahalad has often been misunderstood by technology pundits. The management guru was largely talking about companies re-packaging and pricing necessities and small-value luxuries for rural masses. Thus Lever introduced its shampoos in small, single-use and low-cost sachets rather than in the costlier, gigantic packs they sell to well-heeled consumers. You just can’t re-package technology in small dollops and try to pass it off as a necessity to poor users who still can’t take advantage of it because they are illiterate, and whose primary concern is still their next meal.

A more appropriate metaphor is the public call offices (PCOs) set up in both urban and rural India by the government under license to small-time entrepreneurs. These phone booths were a success for one, because it met a felt need for communications among India’s urban and rural masses. India’s rural masses often migrate to the city for work, and need to stay in touch with their family back home. They can’t write letters, because they are illiterate. So they rely on messages sent through acquaintances, and the telephone, which does not require people to be literate to use them.

Illiteracy and poverty, and not lack of access to the Internet, is one of the more pressing and urgent problems in many developing economies.

The plans by tech companies to bridge the digital divide may in fact accentuate inequalities in rural economies. The computers and the Internet, and the information that it provides, may well go to the rural elites, rather than the rural poor, who are by the way mainly illiterate.

To the middlemen already holding sway in the rural economies, the tech companies may well help add another set of middlemen – those with access to information. Throwing computers at the digital divide, besides being fruitless, could even be dangerous.

No comments: