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    When you read an article about mobile phones in Africa today, you can’t help but notice the claims – that « mobile phones revolutionalize people’s lives Now, while GSM stands for Global Systems for Mobile Communcations, Schmitt found another meeting: God Sends Mobiles.» A 10 percent increase in mobile penetration boosts GDP by 1.2 percent.Even the cell phone companies themselves have promised to « make life better ». But is this true?

    The introduction of telecommunications infrastructure – and primarily mobile phones – can have important impacts upon market performance and welfare in developing countries. In general, there are two primary mechanisms through which mobile phones could have a positive economic impact:As a positive externality of the mobile phone industry – ie, investment in the IT sector has spillover effects on other economic sectors.Via specific services provided by cell phone companies in Africa, or development projects using cell phones in an attempt to improve the development outcomes of the poor.An externality is a cost or benefit arising from an activity, which does not accrue to the person or organization carrying out the activity. The well-being of a consumer or production capability of a firm are directly affected by actions of other consumers or firms, rather than indirectly through prices.Also known as spillover effects

    That’s the theory. Now, we know that theory is fine, but what about reality? An emerging body of literature suggests that this theory is indeed happening. I wanted to highlight some of the economic literature in this area – not exhaustive – in both Asia and Africa. This is mainly in two categories – first, those in agro-food markets; and second, those in labor markets. Fisheries in India (Jensen 2007)Grain markets in Niger (Aker 2008)Farmer participation in Uganda (Muto 2009)Internet kiosks and soybean prices in India (Goyal 2009)Labor markets in South Africa (Klonner and Nolen 2009Also, Donner, J. 2005. The Use of Mobile Phones by Microentrepreneurs in Kigali, Rwanda: Changes to Social and Business NetworksInformation Technology and International Development, Winter 2005, Volume 3, Number 2“Mobiles are enabling people to invest in and draw on social capital”Goodman, J. 2005.Linking Mobile Phone Ownership and Use to Social Capital in Rural South Africa and TanzaniaFeatured in Vodafone Policy Paper Series, Number 2, March 2005.

    Comparing cell phone and non-cell phone regions in India, Jensen finds that cell phone coverage is associated with a strong reductionin price dispersion across markets, as these graphs show. If we look at the second graph, we see that prices across fish markets in the region vary widely before the introduction of cell phones. Once cell phones are introduced, as is seen by the red line, dispersion across these markets goes down – they are harmonized.

    But what does this mean for welfare – the well-being of the poor? Here the theoretical predictions are ambiguous. While improvements in efficiency

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    Rutgers - Presentation Transcript

    1. ~4.5 Billion
      Mobile Subs
      in 2009
    2. Source: TomiAhonen Almanac
    3. The cell phone is the single most transformative technology for development.Jeffrey Sachs
    4. The Hype Cycle
      Source: Gartner Group
    5. 1. Pioneer
      2. Breakout
      3. Consolidation
      4. Maturity
      Phases of Markets
    6. A global volunteer network of NGOs, activists, technologists, academics, media
      A community of practice for knowledge and skill sharing
      An onlinemDirectory of apps, case studies, research, how-to materials
      An innovation channel
    7. The Use of Mobiles
      Disasters and Relief
      Early warnings
      Urgent alerts
      Refugee coordination
      Supply chain management
      Environmental Monitoring
      GPRS individual and crowd data
      Organizing/Advocacy
      Constituency engagement
      Legislative advocacy
      Mobilization
      Getting Out the Vote
      Information dissemination
      Political campaigns/candidates/parties
      Economic Development/Livelihoods
      Payments
      Micro loan management
      Market data/information
      Small enterprises (SMEs)
      Health:
      Disease surveillance and mapping
      Patient management
      Public health education (HIV, TB, STDs)
      Supply chain management (drugs, food)
      Telemedicine
      Accountability/Transparency
      Election monitoring
      Human rights monitoring
      Corruption monitoring
      Budget tracking/participatory budgeting
      Media and (Citizen) Reporting
      Incidence/news mapping
      Incident photo/video footage
      News dissemination in restricted environments
    8. Functionality
      Voice/Audio
      SMS
      Mobile Web
      Mobile Applications
      Data Collection
      Supply Chain
      Medical records/Imaging etc
      USSD
      Location-based apps and services
      Bluetooth
      Photos and Video/Life-stream
    10. 1. It’s all very exciting2. Are we there? If not, what do we need?…with a dose of realism
    11. It’s all really exciting…
      Computing is not at the margins anymore, (though people still are.)
      Communications is now in the hands of people who have not had it before
      Innovation is happening everywhere
    12. “God Sends Mobiles”(Schmitt 2002)
      "The cell phone is the single most transformative technology for development” (Jeffrey Sachs)
      “A 10% increase in mobile penetration boosts annual GDP by 1.2%” (Deloitte 2007)
      “Making lives better”
    13. Mobiles…A Wonderful World?
      (Positive) Externalities
      Cell Phone Services and Development Projects
    14. Empirical Research on the Impact of Mobile Phones
      Fisheries in India (Abraham 2007, Jensen 2007)
      Grain markets in Niger (Aker 2008)
      Farmer participation in Uganda (Muto 2009)
      Internet kiosks and soybean prices in India (Goyal 2009)
      Labor markets in South Africa (Klonner and Nolen 2009)
    15. Mobile Phones and Fish Price Dispersion (Jensen 2007)
    16. Cell Phones and Welfare
      Welfare improves with market efficiency, but how welfare is distributed among consumers, producers and traders is ambiguous
      Increase in fisherman’s profits and a reduction in waste (Jensen 2007)
      Traders’ profits increase (higher prices) and consumer prices decrease (Aker 2008)
      Increase in monthly wholesale price of soybeans (Goyal 2008)
    34. 2. Are we there? If not, what do we need?
    37. The Mobile Eco System
      Source: Rudy de Waele
    38. Key Issues
      Incredibly promising and exciting
      Commercial, competitive, very fluid field
      Privacy and security
      Fragmented platforms
      Many pilots, no scale
      Impact unclear. Much trial and error
      Focus on apps but not on an enabling environment
      Lack of open platforms and applications
    39. Key Issues
      Significant capacity issues (NGOs and Gov)
      Lack of capable intermediaries
      Little knowledge of what works in what setting
      Data alone may be largely useless unless it provides the right information delivered through the right channel in the right form at the right time.
    40. Towards a framework
      Additive versus transformative
      Contextual and user-focused
      Sustainable (unsolved)
      Driven by demand
      Build it and they will come does usually not work
      Localized but shareable
      Built on open standards?
      Built on existing knowledge
      • Applicable channel?
      • In what context?
      • Successes?
      • Failures?
      • Critical success factors?
    42. Needed
      Targeted (and outsourced) R&D
      ICT innovation marketplaces
      Venture funds and PPPs
      Strong intermediaries
      IT, mobile, data, information visualization, etc
      User adoption studies and contextual research
      Nokia and Microsoft
      Better topographies (and case studies)

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