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.

In India, killing the corner shop

When in India, if you have forgotten to pack toothpaste, or you have run out of cigarettes, you can just step out, and buy it from a small shop, around the corner. The store is usually open past 10:30 pm in the night, and if the person running the store does not have what you want, he will offer to deliver it to you.

The landscape of India’s cities and small towns are dotted by these small shops, most of them pop-and-mom outfits. They are very personalized operations that know you and your family, and may even let you pay the next day if you are short of cash, or in a hurry. They are also places for the people of the neighborhood to congregate for an evening chat.

Now these retailers feel threatened that they could be driven out of business by Western style super markets like Wal-Mart, Carrefour and Tesco who have an eye on the Indian market.

So far the Indian government has kept the foreign retail chains out of the market, by blocking foreign retail giants out of India, but local retailers already face competition from recent forays into large-scale retail business by big Indian groups like Reliance of Mumbai, which is setting up a chain of Reliance Retail stores, across the country, ahead of foreign competition.

More than 20,000 traders, farmers and shopkeepers protested on Wednesday against the entry of private retail giants like Wal-Mart into India which they say would destroy millions of livelihoods, according to a report from Reuters.

Retailers are large vote banks. Reliance too would perhaps want to delay the entry of foreign retailers until after they have their act together, and the business house has strong connections with the Indian government.

In the long-term though, the Indian market will not be able to resist the entry of multinational retail chains. What will that do to the traditional retailer ?

It seems that the corner shops will still have their traditional customer base. Folks will not drive some miles to a supermarket, and stand in serpentine queues to buy a tube of toothpaste or a pack of biscuits. Besides corner shops offer relationships that the large supermarkets do not. It is true that large supermarkets will offer loyalty cards and coupons and a variety of schemes, but that in itself will not remove the sheer convenience of the corner store.

The large multinational retail chains may however squeeze out the small retailer by a stronger control over the supply chain. Because of the volumes they will purchase, they will be able to offer the best produce from the farmers, cut off intermediaries, and generally make sure the best merchandise at the best price comes to their chain of stores. That would mean that people are more likely to do their volume purchasing at the supermarkets, to take advantage of the discounts.

Will there be enough of daily business still left over for small retailers ?

It is too early to sing an ode to the corner retail store. But the day these shops roll down shutters will be a very sad day indeed not only for the retailer but for his customers. It will be the end of a timeless tradition in the country, that served well both the retailer and the consumer.

Who will rein in the CIA if not the Supreme Court ?

By refusing to hear the appeal from Khaled El-Masri, an illegal detainee of the CIA (Central Intelligence Agency), the US Supreme Court may have passed up an opportunity to rein in the CIA, and restore faith in the American way of life. El-Masri had appealed after the decision of lower courts not to hear his case against the CIA on national security grounds.

Last week, the New York Times revealed that a 2005 Justice Department memo endorsed interrogation techniques were some of the harshest ever used by the CIA. They included head-slapping, exposure to freezing temperatures and simulated drowning, known as water-boarding.

That was torture by any interpretation of the term, but frankly pales in its audacity and brutality when compared to the alleged torture of El-Masri under a CIA program called “extraordinary rendition”.

To get around US federal and international conventions, the CIA is said to have invented the concept of “extraordinary rendition”, the unlawful kidnapping of foreign citizens, and their transfer to secret prisons in countries that have little regard for human rights and legal niceties.

Suspects are detained and interrogated either by US personnel at US-run detention facilities outside US sovereign territory or, alternatively, are handed over to the custody of foreign agents for interrogation, according to the American Civil Liberties Union (ACLU). In both instances, interrogation methods are employed that do not comport with federal and internationally recognized standards, ACLU added.

El-Masri, a German citizen of Lebanese origin, by his account was abducted in Macedonia in 2003 and flown to Afghanistan for interrogation, under the “extraordinary rendition” program. The 44-year-old alleges he was tortured during five months in detention, four months of which were spent in a prison in Kabul, Afghanistan, nicknamed the "salt pit".

On his flight to Afghanistan, he says, he was stripped, beaten, shackled, made to wear "diapers", drugged and chained to the floor of the plane.

By his account, he was finally released in Albania after the Americans realized they had got the wrong man. For a copy of El-Masri’s petition before US District Court for the Eastern District of Virginia see here.

There are a number of people kidnapped tortured by the CIA under “extraordinary rendition”, according to civil liberties unions. Some were probably terrorists, but that does not make “extraordinary rendition” justified. If the US and other free countries do not follow norms of fair play, detention, and interrogation, and instead look for subterfuges, they will lose the high moral ground they have taken with regard to the terrorists. The free world is appearing to be just a brutal as the terrorists.

Rather than give the CIA cover under the "state secrets" privilege, US courts should have seized the opportunity to bring some accountability into the CIA and the US government.

There are dangerous man at large, and not all of them are Islamic terrorists. Some of them are in the pay of the US government.

Related article:

They torture prisoners in Myanmar, Iran, and yes the US

A Google phone. So why the fuss ?

Tracking tech companies these days is like tracking movie stars and other celebrity. Will she marry that handsome dude she has been seeing of late ? Does that mean she has fallen out with that gorgeous hunk she was seen with last week at the Ritz ? And by the way, any truth to reports that she had had a silicone implant ?

There is abundant speculation in the mainline newspapers, trade publications and blogs that Google may be bringing out a mobile phone. Surely Google Inc. is loving it, as did Apple Inc. when all that speculative frenzy built up around the iPhone. Folks save them a lot of advertising bucks by doing their work for them. We had pre-announced the iPhone based on crumbs Apple fed us, and we are now trying to pre-announce the Google phone – whether it is a real phone or only software.

If Google brings to market a phone, that is nice. It is also nice every time Nokia Corp. or Motorola Inc. bring out a phone with some new feature. But it is nothing to get into a paroxysm about.

Yes, the PC changed the world in many ways, but another mobile phone will not.

In fact the mobile service providers will ensure that the phone does not go very far. Mobile service providers want control, and they will want control over everything that goes into that phone. Apple wrested control from AT&T by offering it exclusivity, but, despite the popularity of the product, remember it runs on only one network in the US.

The only way Google can play this game to its advantage is to buy wireless spectrum, and allocate it to buddies who will invest in mobile communications companies. There are reports they are going to do just that. But getting into the service provider business to make sure its content and applications is on the phone, is akin to starting up a PC company that ships only Google apps. Google does not seem to know what to do with its cash just now.

I am more inclined to take the view that Google like Microsoft Corp. may emerge as a provider of software and reference design to mobile phone makers like Nokia and Motorola. Miguel Helft at the New York Times is one of a number who are coming around to this view.

Microsoft hasn’t been very successful in this market because cell phone makers have always been wary of large companies invading their turf. That is the reason Nokia has invested in Symbian, a developer of software for phones. Google too will be seen as an upstart by entrenched phone makers.

Besides, if folks like Nokia use the Google software, they will still be required to tweak it for the operator, who may decide he wants Yahoo’s application, rather than Google’s.

But all this hasn’t answered my question. Why is everyone going ga-ga over Google’s new phone/phone software ? Are we so starved for excitement ?