NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Monday, February 11, 2008

Mobile phones are frequently held up as a good example of technology’s ability to transform the fortunes of people in the developing world. In places with bad roads, few trains and parlous land lines, mobile phones substitute for travel, allow price data to be distributed more quickly and easily, enable traders to reach wider markets and generally make it easier to do business. The mobile phone is also a wonderful example of a ?leapfrog? technology: it has enabled developing countries to skip the fixed-line technology of the 20th century and move straight to the mobile technology of the 21st. Surely other technologies can do the same?

Alas, the mobile phone turns out to be rather unusual. Its very nature makes it an especially good leapfrogger: it works using radio, so there is no need to rely on physical infrastructure such as roads and phone wires; base-stations can be powered using their own generators in places where there is no electrical grid; and you do not have to be literate to use a phone, which is handy if your country’s education system is in a mess. There are some other examples of leapfrog technologies that can promote development?moving straight to local, small-scale electricity generation based on solar panels or biomass, for example, rather than building a centralised power-transmission grid?but there may not be very many.

Indeed, as a recent report from the World Bank points out (see article), it is the presence of a solid foundation of intermediate technology that determines whether the latest technologies become widely diffused. It is all too easy to forget that in the developed world, the 21st century’s gizmos are underpinned by infrastructure that often dates back to the 20th or even the 19th. Computers and broadband links are not much use without a reliable electrical supply, for example, and the latest medical gear is not terribly helpful in a country that lacks basic sanitation and health-care facilities. A project to provide every hospital in Ethiopia with an internet connection was abandoned a couple of years ago when it became apparent that the lack of internet access was the least of the hospitals’ worries. And despite the clever technical design of the $100 laptop, which is intended to bring computing within the reach of the world’s poorest children, sceptics wonder whether the money might be better spent on schoolrooms, teacher training and books.

The World Bank’s researchers looked at 28 examples of new technologies that achieved a market penetration of at least 5% in the developed world, and found that 23 of them went on to manage a penetration of over 50%. Once early adopters latch onto something new and useful, in other words, the rest of the population can quickly follow. The researchers then considered 67 new technologies that had achieved a 5% penetration in the developing world, and found that only six of them went on to reach 50%. That suggests that although new technologies are often adopted by a small minority of people in poor countries, they then fail to achieve widespread diffusion, so their benefits do not become more generally available.

Lavatories before laptops

The World Bank concludes that a country’s capacity to absorb and benefit from new technology depends on the availability of more basic forms of infrastructure. This has clear implications for development policy. Building a fibre-optic backbone or putting plasma screens into schools may be much more glamorous than building electrical grids, sewerage systems, water pipelines, roads, railways and schools. It would be great if you could always jump straight to the high-tech solution, as you can with mobile phones. But with technology, as with education, health care and economic development, such short-cuts are rare. Most of the time, to go high-tech, you need to have gone medium-tech first.