Dear Colleagues, To me, it seems that subsidies are useful as a way to exploit bifurcation points in the development of the bottom of the pyramid.
MNCs (multinational corporations) in developed countries should be stimulated to start entrepreneurial ventures in developing countries as well as invest in locals who wish to pursue such ventures. This means that these MNCs invest in the ICT-structure and share in the accompanying gains. For the MNCs it will be crucial whether they are able to design a profitable business model. In all these cases in which MNCs enter the BOP-countries, locals need to play a central role. So, although developed countries may initiate the entrepreneurial activities, locals (work and knowledge) and MNCs (knowledge) work together to make it all work. For MNCs, a main focus is the development of a profitable (thus innovative) business model. The role of governments of "developed" countries then depends on what MNCs need from these governments in order for the MNCs to be able to have a profitable business model in place. Governments of developed countries could, for example, contribute by subsidizing the education of locals to use the ICT that is offered. These same locals can then again educate other locals and as the market grows in size, locals can start their own ventures in educating the market. Therefore, it seems to me that some form of subsidizing isn't so "bad" for as far as it fulfills certain conditions: - The business model makes sufficient use of locals. - Subsidizing by governments of "developed" countries is aimed at those aspects of the business model in which the MNC needs help to put a profitable business model in place (against reasonable costs). - The initiative of the MNC helps to make use of bifurcation points in the development of the BOP, which makes it possible for the subsidies to be temporary. - As you pointed out, the subsidies need to reach the locals personally. Regards, Martin On 12/10/04, Cornelio Hopmann wrote: > As it was tacitly touched upon in our recent focused discussion and is a > hot topic for WSIS-2005, I would be interested in other opinions. > > To state it: in many cases they should not!...and not for the sake of > avoiding spending but rather to avoid harming the "Developing" > Countries. > > Why? Investing in and operating ICT-infrastructure takes money. This > money may be spent in 3 different ways: > > (a) Paying for equipment (or reducing it's price) to be donated > (b) Subsidizing material Operation-costs (like communication lines, > energy etc.) > (c) Paying local personnel totally or partially ..snip... ------------ ***GKD is solely supported by EDC, a Non-Profit Organization*** To post a message, send it to: <[EMAIL PROTECTED]> To subscribe or unsubscribe, send a message to: <[EMAIL PROTECTED]>. In the 1st line of the message type: subscribe gkd OR type: unsubscribe gkd Archives of previous GKD messages can be found at: <http://www.edc.org/GLG/gkd/>
