The Internet, Cell Phones, and Economic Development

Jeff Sachs says that when it comes to ending extreme poverty, cell phones and the internet will prove to be "the most transformative technology of economic development of our time":

Internet and mobile phones spur economic development, by Jeffrey D Sachs, Project Syndicate: The digital divide is beginning to close. The flow of digital information – through mobile phones, text messaging, and the Internet – is now reaching the world’s masses, even in the poorest countries, bringing with it a revolution in economics, politics, and society.

Extreme poverty is almost synonymous with extreme isolation, especially rural isolation. But mobile phones and wireless Internet end isolation, and will therefore prove to be the most transformative technology of economic development of our time. ...

Mobile phone technology is so powerful, and costs so little per unit of data transmission, that it has proved possible to sell mobile phone access to the poor. There are now more than 3.3bn subscribers in the world, roughly one for every two people on the planet. ... Probably a significant majority of Africans have at least emergency access to a cell phone, either their own, a neighbour’s, or one at a commercial kiosk. ...

The rural poor in more and more of the world now have access to wireless ... systems... The information carried on the new networks spans public health, medical care, education, banking, commerce, and entertainment, in addition to communications among family and friends. ...

On the fully commercial side, the mobile revolution is creating a logistics revolution in farm-to-retail marketing. Farmers and food retailers can connect directly through mobile phones and distribution hubs, enabling farmers to sell their crops at higher “farm-gate” prices and without delay, while buyers can move those crops to markets with minimum spoilage and lower prices for final consumers.

The strengthening of the value chain not only raises farmers’ incomes, but also empowers crop diversification and farm upgrading more generally. ...

Education will be similarly transformed. Throughout the world, schools at all levels will go global... Universities, too, will have global classes, with students joining lectures, discussion groups, and research teams from a dozen or more universities at a time. 

In my book The End of Poverty , I wrote that extreme poverty can be ended by the year 2025. A rash predication, perhaps, given global violence, climate change, and threats to food, energy, and water supplies. But digital information technologies, if deployed co-operatively and globally, will be our most important new tools, because they will enable us to join together globally in markets, social networks, and efforts to solve our common problems.

Comments

[Robinia]

Yep. The question is whether or not we can welcome the social innovation, the social learning, that can make this transformation come about.... or will we be stuck in a neoclassical frame that uses the police power of the state to prevent having us
join together globally in markets, social networks, and efforts to solve our common problems?

Believing in new technology is not so hard... believing in social process innovation.... might take convincing.

Blog it on along: yes,we can. WE can do it.

[Kaleberg]

The book Nature's Metropolis discussed the changes to agriculture wrought by the telegraph and railroad in the context to Chicago history. Before the telegraph, a farmer had to market his own crops. That meant guessing where a good market might be, loading the crops onto a cart, going there, negotiating a price, moving on if the price is too low and there might be a better price elsewhere and so on. After the telegraph, pricing was centralized on the Chicago exchanges. The crops were given standard grades and the farmer paid based on the centrally set price and shipping costs.

Lebergott pointed out the wage differences in neighboring towns in the early 19th century. Some workers were paid twice as much for doing the same work because there was a shortage of labor on that town, but possibly a surplus in a town perhaps ten miles away. There was no central job posting or wage and labor tracking.

Before eBay bookfinder, and half.com there were big differentials in the prices of various items. If I wanted a copy of an out of print book, I had to scour bookstores until I found what I wanted, and I usually paid whatever was asked. If I wanted to buy or sell a vintage sliderule, I had to search and follow up rumors, then evaluate the price on my own. Now I can scan the markets and make an intelligent, information based assessment.

We take this type of communications based pricing mechanism completely for granted. I can only hope that there will be more of it.

[ken melvin]

Correlation vs. causation?

[piglet]

"Jeff Sachs says that when it comes to ending extreme poverty, cell phones and the internet will prove to be "the most transformative technology of economic development of our time""

Yep, it's a fairy-tale world we live in. Tell us more fairy tales, Jeff. Go on.

[phone man]

ya i think we can do it

[Local Phone Shops]

Almost everyone owns a mobile phone nowadays. Even kids at the age of 10 have cellphones. And with regard to cellphones transforming technology economic development may not be so impossible to do.