Unwired World

By eweek  |  Posted 2001-01-15

For hundreds of years, fishermen in many remote places of the world have risked their lives by venturing out to sea without the benefit of knowing the days weather forecast.

These days, a villager in South America pulls the daily weather forecast off the Internet and reads it to the fishermen and other residents over a loudspeaker, alerting them to the possibility of dangerous storms.

This anecdote is what Hewlett-Packards Lyle Hurst likes to point out when discussing his companys decision to launch a for-profit program aimed at providing access to technology in developing countries. "You can extend resources by using [information technology] tools," says Hurst, director of HPs World e-Inclusion program.

Does it make sense to try to sell PCs and Internet access to South American fishing villages? For those who may question the value of focusing attention and resources on closing the "digital divide" in developing nations where many citizens lack basic needs, Hurst and others say such examples show how technology can make a real difference in the lives of those countries citizens. Furthermore, high-tech industry officials say, providing developing nations with access to technology is not only a way of promoting sustainable development, it can also make good business sense.

"Having access to a phone or other kinds of basic technology becomes really important for productivity and quality of life," says Allen Hammond, chief information officer at the World Resources Institute, a research group focused primarily on environmental protection that sponsored a conference on the global digital divide in Seattle in October 2000.

As world leaders grapple with the question of how to bridge the gap between the technology haves and have-nots, some observers question whether championing information technology is the best use of scarce resources. Even Microsoft Chairman Bill Gates has wondered whether providing residents in poor countries with a computer and Internet access is appropriate when they lack health care, education and other basic necessities.

A person with a terrible disease in a developing country is "not going to use a PC," Gates said at the World Resources Institute conference last fall. "You really have to deal with the basic issue of their health."

While many say Gates points are legitimate, they argue that his conclusions are not. They say that technology can provide the poor with essential information, while also assisting some in improving their economic situations. Technology assistance must be done in conjunction with traditional forms of aid, HPs Hurst says. "If we were just talking about selling PCs, this wouldnt make any sense," he says.

Ordering Priorities

Those differing viewpoints reflect a debate thats simmering within the development community about how much focus should be placed on addressing the global digital divide.

In a study commissioned by the World Bank, Ernest Wilson III, director of the University of Marylands Center for International Development and Conflict Management, found that developing countries on average are increasing their adoption and use of information technologies by 18 percent per year, but this is still below the 23 percent per year for developed nations. Wilson says that while this illustrates that a digital divide exists, it is unclear how much benefit developing countries would derive from narrowing it.

One view is that aid programs and organizations need to continue to focus on addressing the most basic needs, such as providing clean water and improving sanitation. But Bruce McConnnell, a former Clinton administration official who now heads McConnell International, a firm that advises foreign governments and others on using information technology, says that "there is a growing viewpoint that [information technology] is part of the solution."

Kent Lupberger, manager of investments in the Global Information and Communication Technologies Group of the International Finance Corporation — the World Banks private investment arm — says many officials who have worked with developing countries have a difficult time seeing the value of investing in information technology projects when their budgets for more traditional work in developing countries are shrinking. The challenge for him and others in his field, he says, is to show how information technology can help "get more bang for the buck."

Many observers say that if steps arent taken now to ensure that developing nations are not left behind as the worlds industrialized nations become more dependent on technology, the gap between the richest and poorest countries will only widen. "If you dont work now to bridge the digital divide, the people who will suffer the most will fall that much further behind," says Elli Kaplan, a spokeswoman for the United Nations Development Program.

The Group of Eight (G-8) industrialized nations made it a key priority following their summit meeting last summer in Okinawa, Japan, establishing a "dot-force" to help provide access to the Internet and improve computer literacy skills in developing nations.

International aid groups have also launched initiatives in conjunction with the G-8s work. For example, the U.N.s Development Program is working with the Markle Foundation and Accenture, formerly Andersen Consulting, to develop a strategic approach and recruit others to help developing nations take advantage of technology. The organizations will provide funding for pilot projects, which could include providing education via the Internet.

"What were saying is we have the capabilities to ignite some kind of spontaneous economic development," says Russ Meekins, a partner at Accenture.

Other initiatives include a $500 million joint venture between the World Banks International Finance and Softbank, a Japanese technology investment company, to provide seed money and technological support and advice to Internet start-ups in developing countries.

The World Resource Institutes Hammond, however, says that the most progress will only be made with support and investments from the private sector. "Whats sustainable is profitable enterprise," he says.

Thats a view preached by Iqbal Quadir, a former investment banker who helped found a mobile phone company in his native Bangladesh that provides phone service to many of the countrys poorest residents who do not have access to the public phone network.

After discovering that much of Bangladeshs population does not have access to a telephone, Quadir began a project to help his country and establish a profitable enterprise. He persuaded Grameen Bank, a microlending institution that provides small loans to the poor in Bangladesh, and Telenor, a Norwegian phone company, to team up with him in launching GrameenPhone. The bank provides loans to residents to buy wireless phones; in turn, those people charge fellow residents for use of the phone, providing the operator with a business and the user with a service not currently available, Quadir says.

Why dont more private companies focus on poor countries such as Bangladesh? Quadir says that part of it is the perception that because the population is poor, there is no market for technology products and services. He also points to the difficulty of working in some countries that may not have an infrastructure in place to support new technology.

C.K. Prahalad, professor of business administration at the University of Michigan and chairman of a software company called Praja, says businesses can be successful in developing countries if they approach such markets with a different mindset. He argues that companies need to back away from traditional notions and ways of doing business, such as providing only text-based information in English on the Web or concentrating on ownership of technology instead of access to it. "The moment you separate ownership from access, the opportunities are huge," Prahalad says.

HP is among those taking Prahalads advice with its World e-Inclusion program, which the company estimates will total $1 billion in sales and services in 2001 and is aimed at reaching out to new markets often left untouched by major corporations. HP plans to launch initiatives in 1,000 villages worldwide that include providing access to health-care and education information in developing countries, setting up telecenters where residents can pay to access the Net or telephones, and providing the poor with better opportunities to sell their products via the Web.

"The philanthropy primarily used in developing nations is not sustainable," Hurst says. "When the donations stop, the programs die. What were committed to is putting solutions in place that are economically viable."

Obstacles remain for businesses willing to take a risk on the poorest markets. Many agree that those governments must be willing to let industry invest in their countries. Even Hurst acknowledges that HP, for now, is working only in countries that are receptive.

Some countries, such as Jordan and Costa Rica, have been very aggressive in trying to lure technology companies to invest in their nations and to provide access to technology. But McConnell and others say governments need to make it more attractive for private companies to conduct business in their countries, namely by creating a friendly regulatory environment. This includes deregulating the telecommunications sector, creating an independent regulatory agency to monitor competition and providing legal protections for intellectual property.

Of course, certain countries are reluctant to change their regulations, particularly those that rely on revenue from their telecommunications monopolies. Lupberger, for one, tries to convince government policymakers that its in their best interests to take the necessary steps to lure foreign investment.

"What we try to argue [to government leaders in developing countries] is that if you can come in with the right kind of environment . . . introduce privatization and competition, the private sector will come and build out," Lupberger says.

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