Archive for the ‘Myths of ICT4D’ Category

ICT *or* Development

August 14, 2011

[The Jester is in a rambling mood. Those who wish to get straight to business should skip to sixth paragraph, just after the break.]

It’s been over two months since the Jester last wrote, and he returns with renewed amazement at bloggers who blog every week, Facebookers who update each day, and Twitterers who tweet once an hour.

It’s not that those two months have been without comment-worthy incident. The Jester’s notebook is filled with notes to self: “write post on ridiculous belief that associating with a for-profit guarantees breaking even”; “blog about non-profit crisis of faith in non-profit model”; “add Seva Mandir to list of NGOs keeping their eye on the real target of human growth”; “do Q&A entry for people thinking about an ICT4D PhD”; “spank Thomas Friedman for superficial analysis of role of IT in global problems”; etc.

So, the intention to write those posts was all there, and so was the technology. So, the Jester is left to conclude that it’s his own lack of capacity that is at fault. He will conveniently place blame on his advancing age.

Instead of starting with his backlog, which would (in the manner of the Indian rail system) cause all entries to fall behind by two months, he will instead reschedule his backlog to some as-yet-unknown future date (also in the manner of the Indian rail system), and continue with his most current thoughts. (To be fair to the Indian rail system, their on-time rates, particularly on express trains, has improved dramatically in just the few short years the Jester has known it.)

This week, the Jester finds himself in Nairobi, where he will debut a new act titled “ICT or Development: Why It’s So Difficult to Get Rich and Help the Poor Simultaneously.” Those fortunate enough to be in Nairobi can catch the talk at the iHub on Aug. 18. (The announcement does not yet indicate the time of the event, but not to worry – the Jester doesn’t know, either!) Throughout this week, the Jester will, if his advanced age doesn’t prevent him, post portions of the argument. So, to begin…

*

In 2004, the Jester visited some of the Akshaya rural telecenters in the Malappuram district of Kerala, India. These centers were initiated and subsidized by the state government, who sought “100% computer literacy” for the state, meaning that one person in every household should learn the basics of PC operation, e-mail, and Internet browsing. The state saw it as a development project, but unusually for communist-leaning Kerala, the telecenters were meant to be run as for-profit businesses by local entrepreneurs.

The telecenters the Jester saw on that trip varied in their apparent success. One had a row of shiny new PCs in a swanky air-conditioned office space and bustled with customers furiously working through a computer-literacy curriculum. The owner boasted that he was already making a good profit. Another stacked computer equipment floor to ceiling, so that at most one PC was actually usable. The owner said that he dragged members of low-income families in his village to his center to learn about PCs, even if they kicked and screamed. When asked about breaking even, he demurred, “What I care about is the development impact of this project.”

A year or two later, then-PhD-student Renee Kuriyan went back to the same district to explore in depth, and among other things, she confirmed what the Jester had seen informally – that most Akshaya entrepreneurs fell into one of two categories: Those who made money by marketing to richer clients, and those who had some impact on poorer clients, but made little money. A very small minority made money and served poor clients.

Since then, the Jester has seen or heard of myriad attempts to make a profit by serving the poor, or as C. K. Prahalad put it, “eradicate poverty through profits.” Yet, despite the ongoing excitement around social enterprises and the bottom of the pyramid, in actuality, it is very difficult to make a lot of money by selling goods or services to poor people in a way that has meaningful, positive impact on their lives, particularly with ICT. The Jester made a similar point last year as ICT4D Myth 4, and will delve further this week, by explaining why impact through profits is so difficult, why the development world should stop being distracted by this mirage, and what the alternatives are.

But, before he does so, he will insert a few clarifications for those contentious readers who have cued up potential counterexamples. The hope is that this will save the Jester from having to name more Fools-for-the-Day than are strictly necessary.

First, the statement contains a hedge: The Jester only says that it is very difficult, not that it is absolutely impossible to make a lot of money by selling meaningful goods or services to poor people. One or two counterexamples do not falsify the assertion. Even with the hedge, though, the Jester pushes back against bandwagon-jumpers who assume every development challenge can be solved with a for-profit solution.

Second, the thesis is about making a lot of money. A little money is easy. Of course, what is a lot depends on the eye of the beholder, but it seems reasonable to suggest that “a lot of money” is not what microentreprises make when they primarily serve poor communities. There are also some interesting social businesses, of the kind that Muhammad Yunus advocates. For example, Yunus says that microfinance organizations should charge no more than 15% above operating costs (that does not allow for profits a la Compartamos Bank in Mexico). Another example is Aravind Eye Hospital, whose sincere focus on ending preventable blindness keeps the owners from becoming Sir Richard Branson.

Third, the claim is about profit and impact made by selling goods and services to poor customers. Specifically, it excludes instances where the buyer is not the beneficiary. The most prominent cases of this are when governments or charitable donors purchase goods or services on behalf of poor customers. Here, it’s possible to get rich, as some “beltway bandits” do in the United States – these firms, so called for the circular highway that runs around Washington D.C., earn their primary income by winning development contracts from USAID, the World Bank, and other large funders. Bandits raise two kinds of issues: One, do they deserve credit for serving the poor, if someone else is footing enough of the bill to make them rich? If a Good Samaritan pays full price for a loaf of bread to feed a hungry child, does the baker get to claim to have aided the child? The Jester thinks not. Two, if the beneficiary isn’t paying, then does it count as social enterprise or public service? The Jester says public service. The only enterprise in such cases is the outsourcing of a task – that part of it is not social. Conversely, the social intent lies between the funder and the beneficiary. Anyone getting rich in the middle is a profiteer.

Fourth, the net impact must be meaningful and positive. Coca Cola is certainly making a lot money by selling to poor clients, but is their impact positive? Does the joy from carbonated sugar water outweigh the consequences of lost teeth? Is the cost of changing a ring tone really worth the money spent?

The Jester has so far avoided the possible counterexamples of the mobile phone (voice call) and M-PESA, both of which appear to be making lots of money and serving the poor. Indeed, if their net impact on the poor were conclusively positive, the Jester would concede that they are valid – and powerful – counterexamples. But, the Jester would not be the Jester if he accepted conventional wisdom without a fight. He denies, rather, that all the evidence is in yet.

He can’t help but think of the case of television, once hailed as the means to bring education to millions, but now the means by which millions self-lobotomize by watching Snooki. Mobile-watchers rhapsodize about the rapid proliferation of GPRS and the ironically named smartphone, but won’t they just become another channel for Snooki? And, what will corporations with large marketing budgets do when the world’s least educated people can transfer money by phone? It’s almost enough to make this nut long nostalgically for market imperfections.

In any case, the Jester’s core point is a warning for those hoping to get rich by selling to the poor and a caveat for those thinking breaking-even is the only, or the effective, route to scale. In the next post, the Jester will enumerate why it’s so difficult to make a lot of money by selling goods or services to poor people in a way that has meaningful, positive impact on their lives, particularly with ICT.

The Gap to Be Closed

April 21, 2011

The Jester now turns to the comments by Eric Brewer from a panel about ICT4D a couple of weeks ago (audio available here). Brewer started his comments with the following: “Technology is the only path forward, it’s not optional… if there’s a gap to be closed, there is no other mechanism.” He continued that economics might be an alternate mechanism, but that if so, it was so that people could become richer and then buy more technology.

This is an established line of thinking, and on the surface, it’s incontrovertible. Certainly, the incredible quality of life that most middle-class people in the world enjoy today is a direct consequence of incredible technologies. We’re freed from the tyranny of darkness because of lighting and power infrastructure. We can set up white-collar offices anywhere because of modern heating and air conditioning. We have terrific mobility due to automobiles and airplanes. We have much longer lives due to improved nutrition and amazing healthcare. And, we can know when some distant acquaintance has a hangover because of Facebook. As the cliché goes, the average person in a developed country today has a dramatically higher quality of life than kings and queens did even a century ago. And, it certainly is because of technology. The Jester cannot disagree.

So, if all of this is true, and it does seem to be irrefutably so, where is the error in thinking that “if there’s a gap to be closed, there is no other mechanism” other than technology? Ha, Jester! What do you say to that?!

The simple response is that the real gap to be closed is a gap of human intent and capacity, and not of temporary outcomes. Short of a technology that really could replace caring, capable parents and teachers (and no, Mr. Negroponte, even OLPC version 10 isn’t going to be it), technology doesn’t contribute significantly to closing that gap. In terms of the tired fish analogy, the goal is to show people how to fish, not to provide them with a turbo-charged robotic fishing pole.

In fact, at some subliminal level, Brewer is sure to understand this despite the words that come out of his mouth, because the Jester is certain that as a father, Brewer cares deeply about how his children are raised. They will get caring parenting and a great teacher-led education. Ironically, they will probably be limited in how much TV they can can watch, and Brewer will probably carefully monitor their use of mobile phones and the Internet as they grow up. The advantage Brewer’s kids will have over the children of a poor illiterate banana farmer in Uganda is that they will be well-educated and have access to Brewer’s Rolodex. Does Brewer really believe he could even begin to replace that with even the best of today’s technology?

The Jester anticipates two possible reactions…

First, technology could be deliberately applied to those with the least capacity. The Jester applauds progressive efforts; inequalities can only be reduced through them. But, the world being what it is, it is difficult in reality to design a progressive technology that isn’t desired by the rich and powerful (and which they could do more with) but which is still desirable and meaningful for the poor and marginalized.

Apparent examples of such technologies are not real examples on closer inspection. For example, a mid-tier farmer in the developing world would definitely benefit from a better treadle pump, which the Jester has no use for. But, that’s because the Jester’s court salary and the wealth of his kingdom buys him a much more expensive and sophisticated system of irrigation that he doesn’t even have to know about to benefit from. Whatever technology might benefit a very poor person, the rich will have better versions of. At best, progressive technology building is playing a never-ending game of catch up without addressing the core inequality of human capacity.

Second, even if inequalities increase in an absolute sense, isn’t it still better if very poor people benefit even a little? This is the core of neoliberal philosophy, embraced both by free-market economists and Rawlsian political philosophers. It says, as long as everyone benefits a little bit, it’s okay for the superrich to get richer.

The answer to the abstract question is, it depends. It depends on how much the absolute inequality increases over the benefit to the poor. Rawls’s conception is nice in pristine theory, but given human nature (“power corrupts”) and limited resources (which gives global economic growth elements of a zero-sum game), many situations that appear to lead to minor benefit for the poor and major benefit for the rich actually lead, in the long run, to no real benefit for the poor and often increased ability for the rich to do as they wish. For example, note that in technology- and free-market happy America, the poor have not actually gotten any richer for some decades.  

The answer to the specific question of whether there are ICTs that would be of value to the very poor, even if rich owners of mobile telecoms get even richer is also, it depends… but the opportunities are preciously few, because the value of information and communication technologies is so dependent on information processing ability and social capital, two things which poorer, less educated people have much less of compared with richer folk. Unlike technologies like roads, electricity, and running water, it takes a lot more to extract value from them.

In the end, ICT is more a consequence than a cause of development. Technology correlates with development and it does contribute to development. But, a greater cause of both technology and development is human intent and capacity. The critical gap we want to close is not the having of technology, but the ability to design, build, and support technology. It’s again the difference between having access to Google products and being a potential employee at Google.

One way to see this, is to consider a genie who offers you one of two options at the snap of his fingers:

  1. Every poor person in the world immediately has free access to every ICT that could conceivably be invented over the next decade.
  2. Every poor person in the world immediately has the mental equivalent of a first-rate bachelors degree.

Knowing what will happen to the technology, knowing the costs to maintain the genie’s gifts, knowing that a good university degree grants far more than knowledge, and anticipating the impact on the next generation… which would you choose?

Educational Technology Debate

January 6, 2011

The Jester wishes he had been the one to write this superb article in Educational Technology Debate (ETD) by Kentaro Toyama! It’s really unfair that a person should have such insight and be a candidate for Brad Pitt’s long-lost more handsome half-brother. The full article, titled “There are no technology shortcuts in education,” is worth reading (incidentally, the Jester applauds the folks at ETD, who have provided a great platform for discussion about technology in education), but here are some juicy excerpts…

“Quality primary and secondary education is a multi-year commitment whose single bottleneck is the sustained motivation of the student to climb an intellectual Everest.”

“While computers appear to engage students (which is exactly their appeal), the engagement swings between uselessly fleeting at best and addictively distractive at worst.”

“With respect to sustaining directed motivation, even the much-maligned rote-focused drill-sergeant disciplinarian is superior to any electronic multimedia carnival.”

“…efforts to fix broken schools with technology or to substitute for missing teachers with technology invariably fail.”

“We need to distinguish between the need to learn the tools of modern life (easy to pick up, and getting easier by the day, thanks to better technology!) and learning the critical thinking skills that make a person productive in an information economy (hard to learn, and not really any easier with information technology).”

“If education only required an interactive, adaptive, constructivist, student-centered, EFotM medium, then the combination of an Erector Set and an encyclopedia ought to be sufficient for education.”

“In India, a typical text book costs 7.5-25 rupees, or 15-50 cents.”

“Certainly, a humanoid robot indistinguishable from a good teacher could work wonders!”

Toyama has previously written articles that question the value of technology in development (for example, see this Boston Review forum), but he has rarely expressed so much anti-technology sentiment. The Jester thinks that this might be because technology in education is particularly hard to get right and more likely to distract from core efforts towards better teaching and administration. Education also has a longer history of technology failures, whereas, for example, agriculture and healthcare often benefit in tangible ways from technology.

What makes education different? The Jester believes it has to do with the fact that education is so much a social process, where the critical magic happens in the ongoing relationship between learner and the teacher (or parent or guide or mentor or whomever). The magic isn’t about information or knowledge or skill. It’s about inspiration, motivation, encouragement, scolding, etc., all of which involve a social, emotional element, that human beings (even when misguided) can generate far better than any technology on the horizon. Education is very unlike a vaccine, which works automatically after injection.

There are occasional self-taught geniuses, and they seem like counterexamples to the social nature of good education, but they are rare and still likely to have been raised in environments with motivational influences, however fleeting. One nod from a coolly distant father might be all it takes to make a kid work alone for months on a project, but in a poor educational environment, even that timely nod is missing (or lost in other noise)… and critically can’t be replaced by technology.

The question the Jester has for Toyama, though, is whether this kind of rational cornering of dissenters ultimately works to sway them. Among readers, only a very small minority are likely to be persuaded by an opposing view.

Some recent research by Matthew Feinberg and Robb Willer, for example, suggests that dire messages about climate change (this will be relevant… stay with the Jester here) can cause some people to shove their heads underground in denial, because the implicit threat to one’s foundational beliefs is so unnerving. A similar phenomenon might happen with people who are already so vested in technology for education, that their own livelihoods or reputations depend on its perceived success. As Upton Sinclair noted, “It is difficult to get a man to understand something when his job depends on not understanding it.” What is the best way to change their minds? The Jester, for once, is stumped. Any ideas?

Boston Review: Can Technology End Poverty?

November 9, 2010

This article by Kentaro Toyama in the Boston Review stole the Jester’s heart away. (Admittedly, it’s easy to steal a heart that is beating in your own ribcage.) Not surprisingly, the Jester recommends reading the full article, but here are some excerpts. A summary that echos the Jester:

If I were to summarize everything I learned through research in ICT4D, it would be this: technology—no matter how well designed—is only a magnifier of human intent and capacity. It is not a substitute. If you have a foundation of competent, well-intentioned people, then the appropriate technology can amplify their capacity and lead to amazing achievements. But, in circumstances with negative human intent, as in the case of corrupt government bureaucrats, or minimal capacity, as in the case of people who have been denied a basic education, no amount of technology will turn things around.

The issue of opportunity costs:

Despite critical needs in all areas of development, ICT4D proponents tend not only to ignore the opportunity costs of technology, but also to press for funding from budgets allocated to non-technology purposes. Presumably, this was one of the reasons behind OLPC’s brazen doublespeak in claiming to be “an education project, not a laptop project,” while expecting governments to spend $100 million for a million laptops, the original minimum order. In a fine example of the skewed priorities of ICT4D boosters, Hamadoun Touré, secretary-general of the International Telecommunications Union, suggests, “[governments should] regard the Internet as basic infrastructure—just like roads, waste and water.” Of course, in conditions of extreme poverty, investments to provide broad access to the Web will necessarily compete with spending on proper sanitation and the rudiments of transportation.

Technology also amplifies inequality:

Disseminating a technology would work if, somehow, the technology did more for the poor, undereducated, and powerless than it did for the rich, well-educated, and mighty. But the theory of technology-as-magnifier leads to the opposite conclusion: the greater one’s capacity, the more technology delivers; the lesser one’s capacity, the less value technology has. In effect, technology helps the rich get richer while doing little for the incomes of the poor, thus widening the gaps between haves and have-nots.

Caveat and rephrasing…

My point is not that technology is useless. To the extent that we are willing and able to put technology to positive ends, it has a positive effect. For example, Digital Green (DG), one of the most successful ICT4D projects I oversaw while at Microsoft Research, promotes the use of locally recorded how-to videos to teach smallholder farmers more productive practices. When it comes to persuading farmers to adopt good practices, DG is ten times more cost-effective than classical agriculture extension without technology.

But the value of a technology remains contingent on the motivations and abilities of organizations applying it—villagers must be organized, content must be produced, and instructors must be trained. The limiting factor in spreading DG’s impact is not how many camcorders its organizers can purchase or how many videos they can shoot, but how many groups are performing good agriculture extension in the first place. Where such organizations are few, building institutional capacity is the more difficult, but necessary, condition for DG’s technology to have value. In other words, disseminating technology is easy; nurturing human capacity and human institutions that put it to good use is the crux.

Be still my beating heart! (For anyone with masochistic tendencies, the author will be giving a CITRIS talk at UC Berkeley’s Blum Center, Nov. 10 (Wed) noon-1pm Pacific time. It will be webcast and put on YouTube.)  

For now, only Nicholas Negroponte’s response has been posted online, but it is worth reading; it fits nicely in the category of “ICT4D humor.” For ICT4D enthusiasts, it provides a textbook example of how not to make a case for your project. The Jester empathizes with the many people who, with genuinely positive intentions, devote their time to OLPC. If only they were led by a more reflective, self-aware leader open to constructive criticism! Perhaps they could engineer a coup.

In the following weeks, the Jester will use this space to discuss some of the points brought up by Boston Review respondents.

Myth 6: Technology counteracts “rich getting richer.”

November 7, 2010

Just in time for Myth 6, Nicholas Kristof, the patron journalist of international development wrote an article about inequality in America. As we all know, inequality is increasing. Kristof does a slick lead in, in which a statistic that sounds remarkably like that of many developing countries turns out to be one for the United States: The richest 1% of Americans make nearly a quarter of the country’s income (while 10% of the  country is unemployed and 14% is in poverty).

Striking, but what does this have to do with the Jester? Well, as he already illustrated in a previous post, the growing inequality in America is co-occuring with its golden age of innovation and technology. As Kristof notes, 80% of the gains in wealth between 1980 and 2005 went to the richest 1%, and that was the same period of time when the Internet, Windows, cell phones, Google, and iPods all went mainstream. Is this what techno-utopians mean when they say that ICT democratizes and that it levels the playing field?

As the Jester is fond (too fond?) of saying, technology is a magnifier of human intent and capacity. And, in America, there is little or no intent to address inequality , and there is a woefully uneven distribution of capacity. That means there’s an uneven distribution of nutrition, education, capital, social capital, etc. If you then sprinkle an even layer of technology on top, it magnifies the unevenness, and voila! The rich get richer; the powerful, more powerful.

Of course, the sprinkling isn’t even — rich people have more technology, which only worsens the effect. This latter problem is what’s called the “digital divide” and people are always trying to bridge it or close it. In ICT4D, there are constant calls for access: Bytes for all! The Internet for everyone! Cheap SMS for billions! But, leveling the playing field doesn’t solve the underlying problem: There are vast differences between the players. You can level the playing field all you want, but Babe Ruth is still going to hit more homers than the Jester.

Try the following thought experiment: You and an involuntarily poor farmer from the remote village of your choice are both asked to raise as much money as possible for whatever charitable cause you wish. To accomplish, this, you are given free, unfettered access to an e-mail account and an Internet-connected PC (or, if either of you prefer, a mobile phone with a data plan), and only that. Given a fixed amount of time, say, one week, who would be able to raise more money? [The Jester interrupts this program to give you time to think, and to link to a TV sitcom he’s become enamored of: Outsourced, about an American manager who runs a call center in India. And, now, back to our scheduled programming…] Clearly, you would. And why? You’re literate, accustomed to e-mail, able to write convincing messages, embedded in a wealthy social network, capable of organizing people, etc. In short, you have far greater capacity. Since the technology is exactly the same, the cause for the different outcomes lies not in the technology, but in the people. (Incidentally, sociologist Richard Florida does a brisk analysis of how social media is primarily augmenting the rich and educated in America.)

There are only two ways to handle this situation. The first is to apply technology progressively. If you could somehow provide the technology only to the poor and leave the rich without, then conceivably over time, the gap would close. There are problems with this approach, however. Philosophically, we’d then have to restrict the freedom of wealthy people, which the Jester finds difficult to advocate for. In practice, this is impossible — you can’t exactly keep the Internet and mobile phones out of the hands of the wealthy. And, finally, it’s not at all clear that even this would really change things. Imagine if the thought experiment above were conducted with the farmer having e-mail, and your having access only to paper, pen, and the postal service. The Jester still wagers that you’d raise more money.

The second way is to invest dramatically in the capabilities of the poor farmer. Education, “soft skills,” organizational skills, interaction with other social circles, etc. And, if that seems futile because adults don’t learn quickly, then invest in the farmer’s children for the next generation. The point is to direct attention to increasing the capacity of the less capable. The Jester agrees with Amartya Sen’s capability approach. Unfortunately for ICT4D-ers, this way doesn’t really require technology. There are plenty of very cheap things the world can do to improve the state of education, such as deworming. (For those who argue we should then use more technology in education, the Jester would like nothing more than to slap you awake into the real world, but instead recommends tuning in when he confronts the Grand Poobah of that view on a panel. The short response is that good schools can sometimes make positive use of technology, but bad schools inevitably do not. You can’t fix a bad educational system with technology, any more than you can fix a failing business with more PCs!)

Going back to St. Nicholas, the Jester isn’t saying that technology is the primary reason why inequality is increasing in America. It’s unlikely. There are plenty of other mechanisms by which the rich get richer: an accelerating meritocracy, an increasingly efficient capitalism, and better schools for the children of the educated. But wait, those things don’t seem like bad things! That’s, however, only because we include in our idea of “merit” qualities that we really shouldn’t ascribe credit for — a good education, a solid work ethic, healthy ambition. If you went to a bad school in a poor neighborhood, the odds are against you that you’d have emerged with those characteristics. The only way to counteract rich-getting-richer phenomenon is progressive policy. And, that is a problem not of technology, but of political will, i.e., human intent.

Myth 5: If you build it, they will come.

November 3, 2010

Next week, the Jester will, under cover of his secret identity, give a talk at UC Berkeley called “The Ten Myths of ICT for International Development.” In a demonstration of technology leading to questionable outcomes, Jesterial intent will be magnified through webcast and later available on YouTube.

Generous readers of the ICT4D Jester have already read four of the ten myths that will be presented. Where are the remaining six, readers might wonder? Actually, the Jester has since dreamt up a total of no less than twelve myths, but he has been remiss in posting. The impending talk was a good reminder. And so, here we are with Myth #5…

Recall from “Myth 3: Needs trump desires” that needs assessments are biased towards what outsiders perceive to be needs. Rich people (by which the Jester means middle-class and up) won’t settle for medical care that isn’t scientifically certified, but poor people are often comfortable with questionable healthcare. Rich people ensure quality education for their children; poor people consider third-rate private school at $2 a month quality education. Rich people believe houses should be constructed to earthquake-resistant codes; poor people are content with walls of concrete blocks stacked on top of one another.

None of this is to say that poor people don’t deserve good healthcare, good education, good housing, and a good many other things. Of course, they do! But, because of the tremendous human capacity for psychological habituation, people get accustomed to what they have. And, when people are accustomed to things, they don’t necessarily feel a strong motivation to change them, even when what they’re accustomed to might appear horrific from the outside.

Habituation to low standards is good on the one hand, since it keeps people sane. A hard life would be only harder, if people constantly felt the harsh contrast with a better life. But, habituation is also one of the greatest forces working against international development, because it means that impoverished people don’t necessarily feel the motivation to improve their own situation. Habituation is also one of the key reasons why in so many development projects, you build it, but people still don’t come.

The classic case of this in ICT4D is the telecenter. (Telecenters are Internet cafes with a development mission.) The Jester has visited over 50 telecenters across three continents and at least six countries, run by a variety of different organizations — governments, universities, private companies, and NGOs. In the vast majority of these, footfall was minimal. Even in those cases where the Jester stayed for more than a couple of hours, it was rare to observe more than one or two of clients per day. In short, whatever value these telecenters might have provided (that’s a whole ‘nother banana), demand was slim. The major exceptions were telecenters in certain locations that billed themselves as computer education centers (these sometimes did spectacularly well), and telecenters which otherwise provided a narrow service, such as allowing people to pay their electricity bills. Few people were interested in acquiring better knowledge of hygiene practices or learning superior agriculture techniques.

Of course, non-ICT development experts in healthcare and agriculture extension will tell you that it takes immense effort to motivate people, to say nothing of changing their habits. Motivation is at least half the battle. No doubt, readers will have heard comments along the following lines from on-the-ground practitioners: “You know what’s the biggest challenge in my job? Sure, funding is a problem, corruption is a problem, infrastructure is a problem. But the real challenge is motivating people to take an active role in improving their own lives.” Perhaps the most striking example of this that the Jester has heard, is that there are people with curable blindness, who are offered a fully subsidized surgical procedure to get back their sight (by groups such as the Aravind Eye Hospitals), who nevertheless decline the offer.

(At this point, the Jester feels compelled to say that he is not blaming the victim. Lifelong circumstances in which effort is not rewarded but upset by whims of weather or constraining social structures are bound to beat motivation out people. We have a bias towards believing that motivation is self-determined, but who’s to say that it isn’t due to inherited genes and the encouraging attitudes of parents and teachers, none of which are under our control? Political philosopher John Rawls argued that we cannot necessarily take credit for such traits.)

Insufficient motivation equals deficient intent. And that means that if technology is a magnifier of intent and capacity, no amount of technology will accomplish anything where there is deficient intent. Analogues in the rich world are easy to come by: In most of the developed world, every car must come with seatbelts and wearing them is mandatory, yet more than 20% of passengers continue not to wear them. Studies of gym membership and actual usage inevitably report that frequent users are in a tiny minority, despite all the technology they have access to. And, the Jester is flabbergasted by the number of Bay Area drivers lining up in the slow toll booths, because they never acquired the effectively free Fastrak automated toll-paying device. What are they thinking?

All of these are examples of cases where access is not the problem. Motivation is. Luckily, motivation is something that, if eager-beaver ICT advocates would get off their access soapbox, could be influenced by ICT using well-worn methods of social marketing. The Population Media Center’s Sabido methodology, for example, airs soap operas on broadcast television with positive social messages to influence healthcare outcomes. A radio and TV ad campaign in Ghana increased the fraction of people washing their hands. A study by IPA researchers, Dean Karlan et al., shows that SMS-based reminders to save can boost the fraction of people who stick to previously made commitments to save. (The Jester would note that changes in motivation often require person-to-person awareness campaigns, training sessions, and laborious “hand-holding” efforts, but since he so seldom has an opportunity to end on a positive note for ICT4D, he will not.)

Of course, all of these examples are consistent with technology magnifying intent and capacity. In these cases, it is the people behind the campaigns, whose desire is to boost motivation, whose intent and capacity are being magnified by technology.

“Myth of Scale” at TEDxTokyo

May 18, 2010

Here’s a man after my own heart! And, with striking good looks that rival the Jester’s…

http://www.youtube.com/watch?v=cxutDM2r534 

The talk is about the “myth of scale” – the misguided notion that scaling technological solutions can ever solve complex social problems.

Myth 4: There’s a fortune at the bottom of the pyramid.

April 8, 2010

In which of the following businesses does Google make a profit…?

     a)      Search
     b)      YouTube
     c)      Maps

If you are a typical Internet user, Google Maps and YouTube are probably not far behind Google Search in their value to you. And, if you’re under 20, there’s a good chance YouTube is among the most frequent sites you visit [i]. With all this usage, and so much value to consumers, you’d imagine that Google is raking in the revenue.

But, Google makes almost all of its revenue from Search. They like to say that their revenue is from advertising, which is true, but it’s mostly advertising on Search. Apart from Search, analysts believe that Google is losing money on YouTube [ii], and probably for Maps, as well. (No one but the folks at Google knows for sure, but the financial analysis and circumstantial evidence is compelling [iii].) In any case, Google isn’t trumpeting their profitability.

Why does the Jester care about Google making a profit? Why should international development care? Well, because if Google – sometimes hailed as the world’s smartest company – can’t break even on products that people love, then there’s not a lot of hope for the rest of us to extract revenue from the world’s poorest people for things they’re not even sure they want (see Myth 3).

Unfortunately, another myth – the myth that there is a “fortune at the bottom of the pyramid” – has caught on wildly in development, and for now it shows no signs of subsiding. People have been taken in by the smooth rhetoric of C. K. Prahalad and gangs of me-too business professors, eager to demonstrate their dubious relevance to the problem of poverty. Even non-profits with good successes behind them seem to have swallowed this nonsense, and have begun a hunt for more profit-oriented solutions. Let’s examine this rhetoric, which the Jester calls the “BOP fallacy.” Like Swiss cheese, it’s full of holes.

First, the claim is that non-private organizations – i.e., governments, non-profit s, and multilaterals – haven’t achieved much in development. Now, on the one hand, this might be true, because the record of development itself is bleak, as William Easterly has noted extensively [iv]. But, the alternative without non-private investments in global development would be far worse. In most countries, the vast majority of education and healthcare costs are taken on by governments – and efforts to privatize these industries have had a poor record. Next, whatever you may believe of the eventual value of the Green Revolution in Asia, over two decades, it flipped countries like India from net importers of food to net exporters. Much of the research and implementation of the Green Revolution was funded in great part by large non-profits like the Rockefeller Foundation, by multilaterals like the World Bank, and India’s own government. And, what about smallpox, still the only human disease to have been systematically eradicated? The credit goes to the World Health Organization and national governments all over the world.

Second, the BOP fallacy says that non-private organizations can’t sustain themselves financially. This is another ridiculous claim. Foundations like the Ford Foundation and the Rockefeller Foundation were established a hundred years ago, and not only have their coffers not shrunk, they’ve grown over time, with ups and downs due to investment markets. Organizations like the International Red Cross have been around for even longer, and they subsist largely on private donations. In fact, non-profits are amazingly good at sustaining themselves (in some cases, the Jester would even say, too good – once established, non-profits, like most other organizations, want to preserve themselves; no one wants to be out of a job).  

Third, and based on these first two fallacious points, the BOP storyline concludes that only for-profit initiatives can deliver the world of poverty. But, Prahalad himself struggled to find real exemplars of for-profit initiatives to make his point. His book is full of questionable examples. The e-Choupal village information centers are a cost center for ITC, and while they fan the flames of the PR they get from it, the number of centers has remained at 6500 in the six years that I’ve known of them. (Richa Kumar’s financial sensitivity analysis shows that at best, they are just barely breaking even – and she was being kind[v]. In 2004, when I went to visit an e-Choupal center, the sanchalak proudly showed me a PC gathering dust.) The Jaipur Foot, a $20 prosthesis, is given away free by the non-profit society who developed them in India. The Jester believes it’s a great program, but he’s not sure how that story fits into a book subtitled “Eradicating Poverty through Profits.” ICICI Bank has been one of the most persistent in trying to make inroads into poor, rural markets, but as of 2007, they have quietly, but dramatically, curtailed their activities in this area. Most telling is the transfer of Nachiket Mor, who energetically led ICICI’s rural banking initiatives as an executive, to president of the ICICI Foundation for Inclusive Growth. Why a foundation, if he could have made ICICI a fortune while inclusively providing growth opportunities for the poor? (One of the very few credible cases in Prahalad’s book of a self-sustaining organization doing good is the Aravind Eye Hospital, but it would be wrong to suggest they are making anything resembling a “fortune.” In fact, their social impact could be credited to the fact that they are focused primarily on ending blindness and not at all on making a fortune.)

If anyone is making a fortune with the BOP, it’s Prahalad and self-styled BOP consultants. The Jester guesses that BOP conferences outnumber BOP successes, 100 to 1. They make their money by charging gullible companies and serial entrepreneurs the corporate rate. It turns out you can make a fortune off of clueless corporations.

The reality is that it costs a tremendous amount to do business with very poor communities. Poor people live in communities that are harder to reach – they’re less likely to be on a paved road; they often don’t have fixed addresses; in rural areas, they’re more geographically dispersed. Systems that are well-greased for capitalism in rich societies are absent or full of friction in poor communities – identification, bank accounts, credit reports, and so on. And, often, human capital and institutional support is lacking. It’s not trivial to remove these frictions one at a time just with a tweaked business model. As most formal banks in India will tell you, the poverty premium is very real. The last thing you want is to have to set up a branch in every village, with a human teller, so that poor village residents can line up to take 15 minutes each making deposits and withdrawals of $2-3 dollars. Prahalad acknowledges this as the “poverty premium,” but as a stalwart business-school buccaneer, he claims that this difficulty is a huge opportunity. He’s wrong. The poverty premium exists for systematic reasons that are inextricable from poverty. Any business that is really “for profit” will quickly swim upstream where there is less market friction and more disposable income. And any businesses really in it to help, will quickly run into Tracy Kidder’s “mountains beyond mountains” [vi]. In fact, the Jester recommends a change of title for Prahalad, who could have gotten it right with one of two slight tweaks:

  • The Fortune at the Bottom of the Pyramid: Eradicating Poverty and Discovering that Compassion is a Greater Treasure than Profits, or perhaps,
  • The Fortune at the Middle of the Pyramid: Eradicating Middle-Class Disposable Income Through Profits.

Combine Myth 3 and Myth 4, and the conclusion you come to is that it is very, very difficult to devise a workable for-profit business model, especially if it’s poor people who are expected to pick up the bill for things that outsiders believe they “need.”

Having said all of the above, the Jester would like to issue some clarification, because his outlandish statements are prone to misinterpretation.

First, everything’s worth a shot. There are, to be sure, thriving businesses whose products actually benefit poor consumers. Soap for handwashing is one. Mobile phone voice calls are another. Er, maybe that’s it. But, except for mobile voice calls, these opportunities don’t add up to the kind of fortune that would excite the global business community. In fact, the story these days in the Bay Area is that venture capitalists don’t want to touch social enterprises – they’ve discovered there’s no money there.

Second, business as a whole, of course, is undoubtedly a driver of national economic development. If you could convince rich serial entrepreneurs to move to sub-Saharan Africa and start locally relevant businesses there, hiring local people, that would be worthwhile. Or, better yet, they could mentor local entrepreneurs to expand their own businesses. Geek Corps is one effort along these lines. The Jester believes in mentoring and building capacity on site.

So, to conclude, if you find that you’re just short of breaking even in an ICT4D project, especially after three years of tweaking and alongside 20 other smart, determined people who are trying something similar, you might want to consider the hard truth: Sometimes, there’s just no business model.

And, that’s why there are governments and non-profits.


[i] See, for example, Whitney, L. (2009) Kids’ search terms: sex, games, rock ‘n’ roll. CNET News, Aug. 11, 2009. http://news.cnet.com/8301-10797_3-10306357-235.html, retrieved Apr. 3, 2010. Bausch, S. (2006) YouTube US web traffic grows 75 percent week over week, according to Nielsen/NetRatings. Nielsen/NetRatings, Jul. 21, 2006. http://www.nielsen-online.com/pr/pr_060721_2.pdf, retrieved Apr. 3, 2010.
[ii]Analysts appear to agree that Google isn’t making money on YouTube. For a summary, see… Silversmith, D. (2009) Google losing up to $1.65m a day on YouTube. Internet Evolution, Apr. 14, 2009. http://www.internetevolution.com/author.asp?section_id=715&doc_id=175123&, retrieved Apr. 3, 2010.
[iii]Analysis similar to those for YouTube don’t seem to have occurred for Google Maps, but there is a lot of circumstantial evidence that Google is struggling to earn revenue there, too: Lenssen, P. (2009) Which Google apps make money? Google Blogoscoped, Jan. 7, 2009. http://blogoscoped.com/archive/2009-01-07-n84.html, retrieved Apr. 3, 2010. Darlin, D. (2005) A journey to a thousand maps begins with an open code. The New York Times, Oct. 20, 2005. http://www.nytimes.com/2005/10/20/technology/circuits/20maps.html, retrieved Apr. 3, 2010.
[iv] See, for example: Easterly, W. (2001) The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics. MIT Press.
[v] Kumar, R. 2004. eChoupals: A Study on the Financial Sustainability of Village Internet Centers in Rural Madhya Pradesh. Inf. Technol. Int. Dev. 2, 1 (Sep. 2004), 45-74. http://itidjournal.org/itid/article/view/192, retreived Apr. 8, 2010.
[vi] Kidder, T. (2003). Mountains Beyond Mountains: The Quest of Dr. Paul Farmer, A Man Who Would Cure the World, New York: Random House.

Myth 3: Needs trump desires.

April 2, 2010

Suppose you received an unexpected bonus of $20,000 right now, which of the following would you be most likely to spend it on?

      a)      Travel and tourism
      b)      A personal assistant for six months
      c)      A new multimedia system or new electronic gadgets

When the Jester asks this question in audiences consisting of university students, faculty, corporate employees, or non-profit/multilateral staff, he finds that most people spend on (a) or (c). A few people – usually multitasking overachievers – say (b).

If your sole goal in life were to increase your income, then (a) and (c) would be considered frivolous expenditures. Instead, you ought to take the personal assistant, and then use the time you gain from not having to do your laundry, answer silly e-mails, make travel plans, etc., to do more productive work. But, of course, your sole goal in life is not just to increase your income.

Well, neither is it for poor people! They have other desires, too, and in many cases, they are more interested in fulfilling those other desires, such as for entertainment, than for so-called needs.

The problem with “needs” is that except for the absolute minimum requirements to eek out survival, they are often a projection of rich observers onto the observed poor. When rich folk visit poor rural villages or poor urban slums, they’re prone to seeing nothing but needs: needs for clean water, needs for toilets, needs for basic healthcare, needs for better education, needs for better employment, needs for information. Casting these things as needs gives them a great urgency, but that urgency is not always felt by poor people themselves, who often have their needs met through poorer-quality alternatives. (Note that the Jester isn’t saying that better-quality options aren’t important; just that the need for them might not be urgently felt.)

If you’re reading this post, you are likely to be wealthy, at least relative to global standards. You’re a lot richer than the over three billion people who are below the World Bank’s poverty line of $2.50 a day, and probably richer than the 80% of the world population living on $5.15 a day, or $1880 a year. [i]

Of course, there are also people who are a lot richer than you. Let’s take, for example, Bill Gates, whose net worth hovers around $50 billion. He probably believes a personal assistant is an absolute need, and in fact, he has a small army who manages his home, his multiple offices, his schedule, and his e-mail. If he applied his own sensibility to the life that you or I lead, he’d assume a personal assistant is an absolute need to get any serious work done. Tourism and multimedia? How frivolous! Among options (a), (b), and (c) above, you ought to choose (b).

But, most of us don’t. We don’t because we have reasonably alternatives to manage our home, our office, our schedule, and our e-mail, although they are probably not nearly as efficient as Bill’s team of personal assistants. We are willing to settle for an alternative that a richer person considers a need, and then spend our disposable income on something fun. And, it’s the same for poor people. They are willing to settle for alternatives — what richer people have are luxuries — and then spend their disposable income on something fun.

For example! Many very poor people happily spend on ring tones, which can cost anywhere from a few cents to a dollar, depending on geography and telecom. Harder to believe are India’s “caller tunes,” where for 30 rupees a month (approx. $0.60), you can substitute the “ring” that people hear when they call you, with the music of your choice. You yourself never hear this music. Local photo shops in India also run a brisk business using Photoshop to matte photos of people against various backgrounds suggestive of Hindu mythology or scenes from Bollywood. These services can easily cost Rs. 200 ($4) per photo, in towns where few people earn above $4 per day. Increasingly, people in poor communities around the world pay a few months’ income to purchase fancy phones. And, in a paper that will appear at CHI 2010, Thomas Smyth and colleagues describe a thriving gray market of peer-to-peer video exchange on mobile phones. Informal businesses download a gigabyte of pirated movies onto mobile phones for Rs. 100-200 ($2-4). (Incidentally, have you ever performed a Bluetooth file exchange between mobile phones? These low-income folks who do P2P file exchange do it routinely. They overcome significant UI challenges to do these activities, unlike all of the poor people whose “needs” for better nutrition we keep trying to shove down their throats.)

In contrast, if you were to ask these very same people to pay $4 a month for health insurance, or $4 a month to send their children to private school, all would think twice, and most would decline. They might feel that the free government clinics are enough, or that the most they would pay for private schooling is $2 a month (typical for many of India’s low-end private schools).

What does this mean for ICT4D?

First, it means that needs are not necessarily NEEDS. Just because you’d be miserable without something, doesn’t mean that everyone is. I once met a man named A. V. M. Sahni, an ex-officer of the Indian Air Force, who began development work in and around Jhansi, Uttar Pradesh, after his retirement. He devoted much of his time evangelizing check dams, which are small dams that slow the flow of river water enough to soak local land. The result is that many dry areas can go from one crop a year to two or three. The rest of his time, Sahni would go into villages where check dams had their impact, and help farmers move from one crop to two crops. He told me that the farmers were overjoyed with two crops, but that he met resistance when he tried to go for three. Apparently, the farmers would say, “Who is this old man who has nothing better to do with his life than to push us to work like dogs?!” At two crops, these farmers were lucky to net $800 a year; but that was a boon to them, because it was already double what they used to make.  

Second, results of “needs assessments” should be interpreted properly, and in some cases, thoroughly reconsidered. In theory, needs assessments are conducted to avoid doing things that people don’t want. But, in practice, needs assessments themselves are the worst violators of this dictum. Needs assessments come with built-in biases of the people doing the assessment. The Jester has never heard the following question during a needs assessment interview: “Would you find it desirable to have a liquor store in your neighborhood?” This means that needs assessments often throw out, or neglect to ask altogether, information about what people want beyond development-related issues. Sure, everyone wants better healthcare and better education, but those desires may pale in comparison to the desire for a weekly film showing or a more extravagant wedding ceremony. Why is it important to know this? The Jester is not suggesting that development should cater to everyone’s basest desires, but rather… 

Third, it might be more important to build demand, than to clear the path to access. In ICT4D, projects spend so much effort trying to make it easier to have access to better X, without asking first the question of whether X is, in fact, something people actually desire. Given people have lots of desires, and that important goals in development might not be not be among the top, perhaps the emphasis should be on raising demand. One great story along these lines is about turning sanitation (a “need” that no one really wants) into demand. Over half of Indian households lack a toilet, and this is in spite of many well-funded attempts to get them out there. The failures have all focused on supply: lower costs, subsidies, distribution, etc. Recently, though, the state of Haryana began a “No Toilet, No Bride” campaign. With jingles such as “No loo? No ‘I do’,” the campaign has turned a needs-based issue of sanitation into one of aspiration. Apparently 1.4 million toilets have been built in Haryana over two years, partly as a response to the campaign. One Haryana man says, “I will have to work hard to afford a toilet. We won’t get any bride if we don’t have one now.” [ii] Building demand is often more important than designing the right gadget. Smyth’s paper about mobile video exchange, incidentally, is titled “Where there’s a will…” Of course, social marketing like this should only be undertaken for tried-and-true interventions, like toilets. The worst thing you could do is to raise demand for something that doesn’t work.

Fourth, just because something is a need, doesn’t mean there is a self-sustaining business model waiting to be discovered. See Myth 4.


[i] Shah, Anup. “Poverty Facts and Stats.” Global Issues, Updated: 28 Mar. 2010. http://www.globalissues.org/article/26/poverty-facts-and-stats, retrieved Apr. 2, 2010, based on World Bank Development Indicators, 2008.

 

[ii] Wax, Emily. In India, new seat of power for women. The Washington Post, Oct. 12, 2009. http://www.washingtonpost.com/wp-dyn/content/article/2009/10/11/AR2009101101934.html?hpid=topnews, retrieved Apr. 2, 2010.

Myth 2: Poor people have no alternatives.

March 28, 2010

Would you pay an additional 20% per year of your annual income, on any of the following…?
   a)      A chauffeur service
   b)      Reliable news
   c)       Private tutoring services
   d)      A supplementary health plan

Most people probably would not. The fact is, most of us already have alternatives to these things – transport, news, education, healthcare – at a much lower cost, and so even if we’re not getting the best version of those services, we’re content with what we have and would probably not pay a lot more.

Yet, coughing up the cash for a high-quality information service is often exactly what some ICT4D projects expect of very poor communities. Many telecenter projects, for example, thought that they could become self-sustaining by charging customers… 10 cents for a printout, 25 cents for an hour of Internet usage, $1 for a few hours of computer-literacy classes.

But, rich do-gooders often don’t realize that poor people have their own alternatives. A researcher I know once put together estimates of the costs of various information-based services available to a person in peri-urban neighborhoods of India metropolises [i]. She found the following: The per-hour cost of services ranged from free (e.g., general information, health information, agriculture information), to not much more than 12 cents (e.g., entertainment, news, education).

Meanwhile, the typical cost to use an Internet café for an hour in India is around 25 cents, and Internet café owners aren’t exactly raking in the big bucks. Any transaction cost that would help recover operating costs for ICT-delivered services, are often greater than what a poor client would be prepared to pay for the sake of services they already believe they have sufficient access to.

Granted, the services they can afford are not of the quality that you or the Jester would find acceptable. But, then, what you and the Jester find acceptable are probably not acceptable to Bill Gates and Sergei Brin. I’m sure their kids have healthcare plans that would teleport the world’s best plastic surgeon to the scene, in the event of a skinned knee. It’s all a matter of what you’re used to.

So, what are the lessons for an ICT4D project hoping to recover costs from the client? (1) If you’re planning to charge poor people for services that are supposedly to be good for them, the cost needs to be incredibly low; it needs to beat the alternatives they already have. (Note: This is not necessarily true for products they really want — but those are rarely products that are supposedly good for them. See Myth 3.) (2) Poor people have alternatives. (3) Yes, they do. Look again!

 


[i] The researcher was Aishwarya Ratan, Microsoft Research India.