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

The?article that appeared in The Washington Post last Sunday titled “Our Cells, Ourselves” talks extensively about the growth of cell phone technology. According to that article, we have on a global scale reached yet another tipping point. As Malcolm Gladwell might say, the cell phone has become a social epidemic. Depending on who you ask, we have either just passed, or are about to pass the point in time in which there are half as many cell phones in use as there are people on the planet. It is notable that Eric Schmidt, chairman of the board and enlightened CEO of Google says that the trend “will end with 5 billion out of the 6 billion with cell phones,” a figure that reaches well into the Base of the Pyramid.

In fact, as we are seeing more and more with the BoP, a cell phone is the ideal tool in an informal economy, a network in which there is little more than ipso facto social infrastructure. Suddenly, a fisherman can call ahead to see which port will offer the highest price on the day’s catch, while at the same time, people who have never had access to financial services are being taken out of the somewhat insecure cash economy through value stored in prepaid networks. Network time is traded as a stable form of currency, and money is “wired” from a man working in the mines of South Africa to where his family can use it in Botswana. Cell phones are a more prevalent sign of “development” in Tibet than toilets are.While iphones and hotmail might be touted as the epitome of the “idea economy” of the developed world, they also represent a departure from the “developmental” mode of making people more secure by making societies independent. Instead, as we can observe in our everyday lives, the cell phone and everything that one can do with it represents a way of making people more secure by facilitating their growing interdependence. In this way, cell phones are a tool of social system creation and community cohesion rather than social system destruction, which is too often attributable to development efforts. Because of the web-like structure of electronic social networks, a global community is emerging at the rate of 1,000 new cell phones every minute!

I see another layer to the cell phone phenomenon which is in reality an exercise in democratization. Cell phones are largely doing for the BoP what the Bank of Italy (now Bank of America) did by democratizing financial institutions. As people become more connected to each other, they become stakeholders in each other’s world. Connectivity leads primarily to communication. According to the McKinsey Quarterly article (McKinsey has the distinction of being the same organization that advised AT&T – who had invented the cell phone – not to invest in them in 1980) published this month titled, “The State of Corporate Philanthropy: A McKinsey Global Survey,” of those large companies that had engaged in corporate philanthropy, one in four had no idea how to answer the question, “Are your stake holders giving you the credit you deserve for your philanthropic programs?” It surprises no one that there is a clear lack of communication between large company stakeholders (those most affected by philanthropic programs) and the CEOs who are most responsible for those programs.

As Jonathan Schwartz, CEO of Sun Microsystems notes, far more common than a laptop computer, the mobile handset is the way most people in the world have access to the broader world. With the proliferation of these tools, largely free with a plan, industries are democratizing. Schwartz notes that the development of information technology is largely now out of the hands of would-be technology “elites,” the developers themselves. The market community is dictating the evolution of technology with its needs. And few people in general have more acute needs than people in the “underdeveloped” world. In an age when communities can be mobilized via text message (I got a text from Barrack Obama the evening before the Potomac Primaries reminding me where the poling places were) is it any wonder that the communities which are most affected by large enterprise are using BoP potential along with these new network capacities to leverage their way into a truly global community?