Re: [GKD-DOTCOM] Can Technology and a Business Approach Make Globalization Work for the Poor?

[Barbara Fillip]

Dear GKD List Members,

By "business approach"  do we mean an approach that relies on market
mechanisms?  Have we failed to see that the poor represent an important
market?

For example, it's generally accepted that the private sector will only
go so far in deploying IT infrastructure because some areas are simply
not profitable (hard to reach areas, areas where the people's purchasing
power is minimal).  To address this problem various solutions have been
developed, in particular involving government policies that provide
incentives for the private sector to go where it would otherwise not go.

Should we revisit this consensus and ask ourselves how the private
sector decides to invest or not invest in a particular area?  Are those
decisions based on false assumptions regarding the purchasing power of
the poor?  Or are we talking about small, local entrepreneurs taking
advantage of their knowledge of local markets?

A couple of related resources of interest:

Can ICTs help the urban poor access information and knowledge to support
their livelihoods?
http://www.unhabitat.org/programmes/ifup/conf/Theo-Schilderman.PDF 

Making Knowledge Networks work for the poor
http://www.itdg.org/html/icts/knowledge.htm 



Barbara Fillip, Ph.D.
Information and Dissemination Coordinator
DOT-COM Alliance
http://www.dot-com-alliance.org
(202) 884-8003




This DOT-COM Discussion is funded by USAID's dot-ORG Cooperative
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Re: [GKD-DOTCOM] Can Technology and a Business Approach Make Globalization Work for the Poor?

[Ed Deak]

Al,

I just got onto this forum and may have missed a lot, but as a small
organic rancher I feel you are ignoring a lot of pertinent facts when
talking about farming, especially in so called developing countries.  I
live in the middle of British Columbia, Canada, considered the
wealthiest country on Earth.

Right now I have made a deal to change my bull and have to get rid of my
5 year old, beautiful, healthy bull. There's about $10,000 worth of fast
food outlet hamburger meat in that bull, yet, I've been begging people
to take him for nothing, because our livestock prices at the farm levels
have been artificially destroyed by big business lobby groups, while
making huge profits at the retail levels both here in Canada and in the
USA.  Meanwhile there are almost 800,000 people in foodbank lines in
Canada, 65,000 more than a year ago, over 13% of them employed in some
chickenfeed, part time jobs, like millions in the USA and our animals
are worth nothing while people starve.

By next year thousands of Canadian ranchers will be put out of business,
their lands and holdings picked up by multinationals for a song. About
1.5 million Mexican farmers have been pushed off the land by NAFTA, the
Mexican middle and small business class destroyed, by some independent
estimates 70% of the country pushed below the poverty level, while their
imaginary GDP numbers doubled.  The figures are all there in the open,
if somebody's willing to look for them.  In India there have been and
are mass suicides by farmers,  in Poland and estimated 3 million farmers
will be forced off the land by their EU membership.

While you are talking about the wonderful effects of hi tech etc. on
farming communities, what will happen to these millions who still had
something while they were on their lands, but now have nothing in city
slums ?

For example, do you realize that up till now 97% of Iraqi farmers used
to reseed their own saved seeds, but now, as the legacy of Paul
Bremner's proconsulate, using their own seed has become illegal and
they'll be forced to buy their seeds from implanted multinationals ? 
What will happen to them? How many can survive ?  What are the long term
effects on the land and on human health of GM seeds and plants forced on
the World by a few corporations on their way to control the global food
supply ?

Please no neoclassical economic rhetoric.  I have been in farming on and
off, both at the chemical "Green Revolution" and organic levels since
1948 and hold the 1991 copyright on the only scientifically correct
definition of economic efficiency, well tested on World Bank forums,
used in PhD dissertations remaining unbroken.

As far I'm concerned, neoclassical economics may have started off as an
error, I will give Milton Friedman et al, that much credit, but by now
have become the biggest poverty creator and destroyer in history.

If you, or anybody, really intends to look into the causes and solutions
of daily growing global poverty and income gap, you won't find it in
ideological theories.  The claimed purpose of economics is supposed to
be "The science for the management and distribution of scarce
resources".  In my 59 years of historical and economic studies, plus my
own personal experience in 4 countries under every know political
ideology, I haven't found any evidence of any known economic theory that
came anywhere near this stated purpose.

Are there any solutions?  Yes, there are, but first we have to forget
everything we think we know and make a complete break with the past and
present, using them only as experience and bad examples.  Meanwhile
40,000 children will starve to death around the world today and every
day, while their governments and economists are reporting glowing GDD
and "growth" figures.

This is all for now.  With all the very best and cheers, 
Ed 
(Ed Deak, Big Lake, BC, Canada)


On 10/27/2004, Al Hammond wrote:

> Cornelio Hopmann raises some important points. I agree that IT may often
> be used by service providers rather than by the poor directly. But I
> don't agree that there is no connection between what companies can sell
> to the poor and the needs of poor households. In conjuction with
> Professor CK Prahalad and others, we have documented a number of win-win
> business models. I realize that such approaches are still controversial,
> and that examples of corporate practices that have not benefitted the
> poor still come readily to mind. But for example, ITC, an Indian company
> that has put Internet-connected computers in farmers' houses, situating
> these e-choupals so that each serves 600 or so farmers, and supplied
> daily market prices for crops, found it necessary to create trust and
> economic and social value in order for its business model to succeed.
> They are now serving 4 million farmers. The case study can be found on
> . Nor is this an isolated example. We and our
> colleagues have documented win-win examples in many sectors. And we have
> evidence that companies 

Re: [GKD-DOTCOM] Can Technology and a Business Approach Make Globalization Work for the Poor?

[Fola Odufuwa]

Dear Colleagues,

Roland Alden's recent contribution made very interesting reading. Some
portion of his comments, especially those relating to the
distance-annulling benefits of technology, aligns perfectly with a recent
article I wrote for some newspapers on a related aspect of the theme
which I believe would be beneficial in discussing some of the
far-reaching implications of the issue of technology, business,
globalisation and the poor...

---

Brain Drain.What Brain Drain?


"Knowledge is the most valuable commodity of the Information Age.
Knowledge is power. Knowledge is more powerful than jet fighters and
bombers"
- Ike Emegweali

Brain Drain is a popular 90's terminology used in describing the effect
of the migration from the African continent of skilled professionals to
developed economies. A 2001 report by the Pollution Research Group of
Natal University in South Africa says Africa has lost a third of its
skilled work-force in recent decades, and that it is costing the
continent up to USD$4b annually to replace them with expatriates.

There are two types of job openings in the global job market. The first
are poorly paid, dirty, and dangerous jobs usually scorned by nationals.
While the second are highly specialized, professional positions
available regardless of race or creed.

However, there are two broad defects of the popular brain drain theory.
The first defect is the attempt by brain drain theorists to link the
current wave of adult self-migration from Africa to the forced migration
of millions of able-bodied Africans brought about by slave traders four
centuries ago.

It is obvious that the two events do not equate in any meaningful
manner. The earlier movement of skills from Africa was imposed by the
physical capture of unskilled labourers who were permanently
disconnected from the continent on reaching foreign lands. In contrast,
the current upsurge of emigrating Africans is voluntary, and involves
essentially skilled professionals who have been pre-trained (somewhat)
in African schools.

The numbers, from different sources, speak for themselves. Over 480,000
skilled persons have left the Continent since 1990 for countries in
Europe, Asia, and America. There are over 21,000 Nigerian doctors
practicing in the United States. A third of experts in African
universities seek better employment opportunities abroad annually. Only
10% of Kenyan-trained medical staff remain in that country after
qualification. 60% of doctors trained in Ghana in the 1980s have left
for greener pastures. And the list keeps growing.

The second problem with the postulation on brain drain by analysts is
the suggestion that it is the best and the brightest that are
emigrating, leaving behind the weak, slow and unimaginative.

This is not completely true.

Brain drain is nothing but the global, gradual, shift into an
Information Age. And the first element of this new dawn is that
knowledge would be the means by which an individual can effectively
contribute to any society. "Brain drain" is the move by employers to
secure intellectual capital that would advance their businesses from
anywhere, and from anyone, irrespective of the race, gender, colour,
tribe, and country of origin.

In the knowledge economy, potential employees are being empowered by
technology (and mainly the Internet) to overcome barriers created by
geographical distances in their quest to join businesses that would make
meaningful contributions to a new world.

They are able to easily find on the Internet the businesses and
institutions that require their services. They are now able to become
what they want to be without encumbrances.

There are five major reasons why African professionals are emigrating in
droves. Many African professionals are running away from political
persecution from home governments. They are discovering that the
economic policies of the majority of African countries can be repressive
of growth and personal development. These policies have devalued the
effective worth of the wages they earn at home, so they are forced to
look for better earnings and working conditions. The reality is that
African wages in the most part just cannot compete with the West, and
maybe it should not.

They are also leaving to seek better career development and
international exposure. Finally, they are running away from war, crime,
and general insecurity of lives and property as obtains in many African
countries.

But the greatest reason for the fresh wave of manpower exits from the
continent, in my opinion, is the influence of technology. Technology has
enabled African professionals to find better jobs and opportunities. The
Internet (www and email) has made job search by candidates, and
recruitments by employers extremely fast. Technology has placed power in
the hands of professionals to discover the openings on the globe that
would make them become better, professionally and financially.

Th

Re: [GKD-DOTCOM] Can Technology and a Business Approach Make Globalization Work for the Poor?

[Vickram Crishna]

Not denying the examples Al Hammond has quoted, but just giving my own
(perhaps imperfect) viewpoint on how they work (comments interleaved
below):

On 10/27/04, Al Hammond <[EMAIL PROTECTED]> wrote:

> But for example, ITC, an Indian company that has put Internet-connected
> computers in farmers' houses, situating these e-choupals so that each
> serves 600 or so farmers, and supplied daily market prices for crops,
> found it necessary to create trust and economic and social value in
> order for its business model to succeed. They are now serving 4 million
> farmers.

In siting the e-choupal local systems (the ones I have seen use shared
VSAT narrowband for linkage) the choice devolves to the richer farmers,
who already have considerable influence in their local domains. While in
theory such centers are accessible to all, please recognise the local
reality of caste and community that limit access for some - what
percentage depends very much on local equations.

> 1) Breaking local monopolies of traditional goods and services or
> the e-choupals that ITC has deployed, offering lower price inputs and
> higher prices for the farmer's grain than the local (monopoly) auction
> markets.

At this point in time, the monopoly of local auctions is being replaced
with the monopoly of a large company. I hope that the e-choupal paradigm
will be augmented by other market mechanisms, supplied by other players,
whether corporate or something else.

Let us look one step further - is this globalisation? ITC is a
subsidiary of BAT, the trans-national tobacco company, but fought a
bitter boardroom battle a few years back against its parent in an effort
to preserve some form of independence. No holds were barred, including
selective leaks of confidential information to get board officers jailed
(subsequently released) for alleged tax and foreign exchange offences.
The e-choupal initiative is reputedly the brainchild of the winner of
that fight.

The way that e-choupal works has not brought about globalisation, it
seeks to fix problems in traditional market flaws.

> Grameen Phone has close to 100,000 entrepreneurs providing village phone
> service.

True, but they had a hard time getting out of the towns and cities in
the beginning - I am talking about 1999, which is 5 years ago. Quite a
few of those 'entrepreneurs' at the time were allegedly city socialites
- but the bills got paid. This sort of information isn't usually found
on the corporate web-site or in news reports, possibly because it
remains hearsay, without a concerted effort to record information at the
time. Had Grameen Phone set itself up as the straightforward commercial
phone service it really was, it wouldn't have been allowed to even get
off the ground, given the monopolistic behaviour of the local government
telco.

I mention these two examples only to show that the realities of social
change are very very complex and shouldn't be simplified into
'corporate' vs 'other model' - such divides do not serve the purpose
that are sought by questions such as this topic line suggest.

-- 
Vickram




This DOT-COM Discussion is funded by USAID's dot-ORG Cooperative
Agreement with AED, in partnership with World Resources Institute's
Digital Dividend Project, and hosted by GKD.
http://www.dot-com-alliance.org and http://www.digitaldividend.org
provide more information.
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:
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Archives of previous GKD messages can be found at: