Saturday, March 12, 2005

The Real Digital Divide

Mar 10th 2005 From The Economist print edition

Economist argues "Forget computing power, give mobile phones to uplift the developing countries"

... even if it were possible to wave a magic wand and cause a computer to appear in every household on earth, it would not achieve very much: a computer is not useful if you have no food or electricity and cannot read.

Rather than trying to close the divide for the sake of it, the more sensible goal is to determine how best to use technology to promote bottom-up development. And the answer to that question turns out to be remarkably clear: by promoting the spread not of PCs and the internet, but of mobile phones.

A new paper finds that mobile phones raise long-term growth rates, that their impact is twice as big in developing nations as in developed ones, and that an extra ten phones per 100 people in a typical developing country increases GDP growth by 0.6 percentage points.

they can have a dramatic impact: reducing transaction costs, broadening trade networks and reducing the need to travel, which is of particular value for people looking for work. Little wonder that people in poor countries spend a larger proportion of their income on telecommunications than those in rich ones.

Instead of messing around with telecentres and infrastructure projects of dubious merit, the best thing governments in the developing world can do is to liberalise their telecoms markets

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