Calling an end to poverty
Thursday, July 7, 2005
All eyes are on what governments can do to end poverty, with aid, debt relief and trade top of the agenda at this week’s G8 summit. But what about the role that business can play?and, in particular, technology firms? It is increasingly clear that, when it comes to bridging the ?digital divide? between rich and poor, the mobile phone, not the personal computer, has the most potential. ?Emerging markets will be wireless-centric, not PC-centric,? says C. K. Prahalad, a management scholar and author of ?The Fortune at the Bottom of the Pyramid?, a book that highlights the collective purchasing power of the world’s 4 billion poorest people and urges firms to try to profit from it.
Mobile phones have become indispensable in the rich world. But they are even more useful in the developing world, where the availability of other forms of communication?roads, postal systems or fixed-line phones?is often limited. Phones let fishermen and farmers check prices in different markets before selling produce, make it easier for people to find work, allow quick and easy transfers of funds and boost entrepreneurship. Phones can be shared by a village. Pre-paid calling plans reduce the need for a bank account or credit check. A recent study by London Business School found that, in a typical developing country, a rise of ten mobile phones per 100 people boosts GDP growth by 0.6 percentage points. Mobile phones are, in short, a classic example of technology that helps people help themselves.
But despite rapid subscriber growth in much of the developing world, only a small proportion of people?around 5% in both India and sub-Saharan Africa?have their own mobile phones. Why? The price of handsets is the ?biggest obstacle? to broader adoption, says Alan Knott-Craig, boss of Vodacom, which runs networks in five African countries. Azmi Mikati of Investcom, which runs networks in Africa and the Middle East, estimates that the number of users would double in those markets if the cheapest handset cost $30 instead of $60.
Read the full article here.
Source: The Economist