There has been a good deal of optimism in the international development community about mobile communications technologies and what they bring to the effort to build the capabilities of small entrepreneurs in developing countries. Columbia University’s Jeffrey Sachs believes mobile phones and the internet represent a turning point in global economic development. “Mobile phones and the internet end isolation, and will therefore prove to be the most transformative technology of economic development in our time,” Sachs wrote in 2008.
Much of the excitement can actually be traced to two fairly recent developments: advances in the manufacturing industry that have permitted drastic reductions in the price of mobile phones; and the expansion of broadband coverage across the developing world.
Mobile for the masses
These two developments have encouraged a sharp increase in mobile subscriptions in a number of low-and-middle income nations, particularly where recent economic growth has afforded people more disposable income. The World Bank estimates that four out of every 100 people in the developing world had mobile phone subscriptions in 2000. By 2010, the figure had risen to 72 percent, reflecting a remarkable 1,500 percent increase within a decade.
Exactly how small entrepreneurs in the developing world use their mobile phones for business differs from country to country, region to region. The current price of smartphones is beyond the reach of the vast majority of small farmers in Southeast Asia or Africa. But text messaging and simple internet access work on more affordable low-end phones.
The greater challenge
In a report published by the World Bank in 2012, information and communications technology (ICT) specialist Michael Minges details how small farmers in Africa obtain pricing information through short message service (SMS). Minges says that relatively inexpensive SMS technology keeps African farmers informed about where they can get the best prices for their produce, saving them time and travel costs. Fishermen in the Philippines are making similar use of their mobile devices, which afford them the ability to complete transactions with wholesalers long before they return to shore with the day’s catch. In both instances, informal social networks perform an essential function. Government agencies and various development organizations are presently working on programs of this nature in many developing countries.
But the greater challenge to the international development community now is how to bring more of the benefits of new ICT technologies to small entrepreneurs in the developing world, much like what RingCentral is doing for small businesses in the US, Canada, and the United Kingdom. And this is where we’re likely to see more innovation in the future. While it’s perhaps too early to provide more sophisticated cloud-based phone services on any meaningful scale in nations where still too many live on less than $2.50 a day, the World Bank asserts that creative strategies and informal arrangements are working where new technology is yet unavailable.
The right tools
Observers argue over how long the semiconductor industry can continue to produce cheaper, more powerful chips at its current, mind-boggling pace. All things considered, however, it’s safe to assume we’ll be seeing the same rate of progress for least another decade. Meanwhile, the cost of delivering broadband services in the developing world is likely to decline even further as infrastructure development and economic growth begin to improve living standards. And, as it was with the internet and text messaging 13 years ago, the new technology of wealthier countries today will become standard service in developing nations tomorrow.
This is why, while much of the ICT sector continues to focus on what’s new for consumers in high-income countries, policymakers in international development have already begun to look into what’s next for small businesses in the developing world. That is good news, of course. After all, the fairly simple notion that people can improve the quality of their lives when provided with the right tools is a fundamental force behind the truly great innovations in technology and economic development we have seen so far.
About the Author:
Lucia Harks spends her days building websites and web toys. She’s always interested to collaborate and learn about upcoming and existing industry trends. She aims to help empower every woman on technology by sharing tech, security, startup, web design, lifehacks, and other related news.