Cornelio Hopmann raises some important points. I agree that IT may often be used by service providers rather than by the poor directly. But I don't agree that there is no connection between what companies can sell to the poor and the needs of poor households. In conjuction with Professor CK Prahalad and others, we have documented a number of win-win business models. I realize that such approaches are still controversial, and that examples of corporate practices that have not benefitted the poor still come readily to mind. But for example, ITC, an Indian company that has put Internet-connected computers in farmers' houses, situating these e-choupals so that each serves 600 or so farmers, and supplied daily market prices for crops, found it necessary to create trust and economic and social value in order for its business model to succeed. They are now serving 4 million farmers. The case study can be found on <www.digitaldividend.org>. Nor is this an isolated example. We and our colleagues have documented win-win examples in many sectors. And we have evidence that companies which simply try to take their products downmarket often fail.
So I would suggest that there may be an important and overlooked connection between the market forces that drive globalization and their need for growth, when taken to the village level--and meeting the real needs of the poor. In many but not all of the examples we have studied, ICT plays a critical role--as a tool that enables transparent transactions, or helps drive costs down, or provides access to information, etc. Perhaps the connection between a business approach and the poor would be more clear if I describe the benefits to the poor that we think we see from pro-poor business strategies, and then the appropriate role of technology might be more evident. These include: 1) Breaking local monopolies of traditional goods and services, whether credit, or water, or agricultural inputs. Often local middlemen are the most exploitive of all, and a large company that rationalizes the supply chain can lower price and improve quality, providing competition to the local middlemen in ways that benefits poor people. Micro-finance is a classic example; or the e-choupals that ITC has deployed, offering lower price inputs and higher prices for the farmer's grain than the local (monopoly) auction markets. 2) Providing access to empowering technologies and/or information. In the example above, ITC provides internet access and market prices, empowering farmers. Internet kiosks, such as those provided by n-Logue, Drishtee, can often play a similar role. So can cell phones, such as those provided by Smart Communications in the Phillipines, which makes pre-paid text-messaging units available in very small units ($.03), within the range of virtually everyone--enabling people to find jobs, sell goods, even do remittance transactions; virtually all of the 14 million customers Smart serves are very low income, yet the company is growing rapidly and is profitable. 3) Creating jobs. HLL's Shakti distribution system for consumer products aims to create 500,000 self-employed entrepreneurs. Grameen Phone has close to 100,000 entrepreneurs providing village phone service. Vodacom in South Africa has more than 10,000 entrepreneurs who own and manage community phone shops. These are big, profitable businesses who are also creating jobs and wealth for local entrepreneurs--both win. In effect, these companies are extending commercial activities and market processes down to the village level--and in ways that are, we believe, beneficial to customers and local partners, as well as to the company. In fact, we think these mutual benefits are closely linked--that, in most cases, large companies will succeed commercially in selling to poor people if they also serve their real needs and create real local value and trust. If that's true, then it is not a matter of enlightened leadership, but as I suggested above, of extending the market processes that characterize global economic integration clear down to the village level--so that poor people can benefit from choice, market competition, and better price and quality, employment opportunities, etc., just as other (middle class) consumers do. It is this potential overlap between the needs of large companies for growth and what they need to do to succeed in low income communities, and the needs of the poor, that is truly a huge opportunity. And it suggests that a key step to making globalization work for the poor is to get large companies to stop ignoring the poor and instead take them seriously as a market. As for technology, we see good examples using Internet kiosks, cell phones, handhelds, software on servers that is accessible over any form of connectivity, wireless broadband--in our experience the business model is more critical in determining whether the technology is really useful in serving the poor than is the choice of technology per se. But that is not to undercut the role of technology--without ICT, very few effective services will get beyond the urban fringe into rural areas, and efficient commercial processes cannot function, nor can the poor really access or benefit from global markets. But the role of technology is for the most part precisely the role it plays in facilitating a global market process already--what is new is providing efficient transactions, more competitive markets, access to information, or transparency in rural areas. Allen L. Hammond Vice President for Innovation & Special Projects World Resources Institute 10 G Street NE Washington, DC 20002 USA V (202) 729-7777 F (202) 729-7775 [EMAIL PROTECTED] www.wri.org www.digitaldividend.org ------------ This DOT-COM Discussion is funded by USAID's dot-ORG Cooperative Agreement with AED, in partnership with World Resources Institute's Digital Dividend Project, and hosted by GKD. http://www.dot-com-alliance.org and http://www.digitaldividend.org provide more information. To post a message, send it to: <[EMAIL PROTECTED]> To subscribe or unsubscribe, send a message to: <[EMAIL PROTECTED]>. 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