August 21, 2008
Internet
and MobilePhones Spur Economic
Development
By Jeffrey Sachs
The digital
divide is beginning to close. The flow of digital information – through mobile
phones, text messaging, and the Internet – is now reaching the world’s masses,
even in the poorest countries, bringing with it a revolution in economics,
politics, and society.
Extreme poverty
is almost synonymous with extreme isolation, especially rural isolation. But
mobile phones and wireless Internet end isolation, and will therefore prove to
be the most transformative technology of economic development of our time.
The digital
divide is ending not through a burst of civic responsibility, but mainly
through market forces. Mobile phone technology is so powerful, and costs so
little per unit of data transmission, that it has proved possible to sell
mobile phone access to the poor. There are now more than 3.3bn subscribers in
the world, roughly one for every two people on the planet.
Moreover, market
penetration in poor countries is rising sharply. Indiahas around 300mn
subscribers, with
subscriptions rising by a stunning 8mn or more per month. Brazilnow has more
than 130mn subscribers, and Indonesiahas roughly 120mn. In Africa, which
contains the world’s poorest
countries, the market is soaring, with more than 280mn subscribers.
Mobile phones are
now ubiquitous in villages as well as cities. If an individual does not have a
cell phone, they almost surely know someone who does. Probably a significant
majority of Africans have at least emergency access to a cell phone, either
their own, a neighbour’s, or one at a commercial kiosk.
Even more
remarkable is the continuing “convergence” of digital information: wireless
systems increasingly link mobile phones with the Internet, personal computers,
and information services of all kinds. The array of benefits is stunning.
The rural poor in
more and more of the world now have access to wireless banking and payments
systems, such as Kenya’s famous M-PESA system, which allows money
transfers through the phone. The information carried on the new networks spans
public health, medical care, education, banking, commerce, and entertainment,
in addition to communications among family and friends.
India, home to world-leading software engineers,
high-tech companies, and a vast and densely populated rural economy of some
700mn poor people in need of connectivity of all kinds, has naturally been a
pioneer of digital-led economic development. Government and business have
increasingly teamed up in public-private partnerships to provide crucial
services on the digital network.
In the Indian
states of Andhra Pradesh and Gujarat, for example, emergency ambulance services
are now within reach of tens of millions of people, supported by cell phones,
sophisticated computer systems, and increased public investments in rural
health.
Several
large-scale telemedicine systems are now providing primary health and even
cardiac care to rural populations. Moreover, India’s new rural employment
guarantee scheme, just two years old, is not only employingmns of the poorest
through public financing, but also is bringing tens of millions of them into
the formal banking system, building on India’s digital networks.
On the fully
commercial side, the mobile revolution is creating a logistics revolution in
farm-to-retail marketing. Farmers and food retailers can connect directly
through mobile phones and distribution hubs, enabling farmers to sell their
crops at higher “farm-gate” prices and without delay, while buyers can move
those crops to markets with minimum spoilage and lower prices for final
consumers.
The strengthening
of the value chain not only raises farmers’ incomes, but also empowers crop
diversification and farm upgrading more generally. Similarly, world-leading
software firms are bringing information technology jobs, including business
process outsourcing, right into the villages through digital networks.
Education will be
similarly transformed. Throughout the world, schools at all levels will go
global, joining together in worldwide digital education networks. Children in
the USwill learn about Africa, China, and Indianot only from books and videos,
but also
through direct links across classrooms in different parts of the world.
Students will share ideas through live chats, shared curricula, joint projects,
and videos, photos, and text sent over the digital network.
Universities,
too, will have global classes, with students joining lectures, discussion
groups, and research teams from a dozen or more universities at a time.
In my book The
End of Poverty , I wrote that extreme poverty can be ended by the year 2025. A
rash predication, perhaps, given global violence, climate change, and threats
to food, energy, and water supplies. But digital information technologies, if
deployed co-operatively and globally, will be our most important new tools,
because they will enable us to join together globally in markets, social
networks, and efforts to solve our common problems.
**
Jeffrey Sachs is Professor of Economics and Director of the Earth Institute at
ColumbiaUniversity. He is also a special
adviser to the UN secretary-general on the Millennium Development Goals.
http://www.realclearmarkets.com/articles/2008/08/internet_and_mobile_phones_spu.html
[Non-text portions of this message have been removed]
