Technology and Economic Development in the Developing World

Here are exerpts from a great article on the role of technology in Third World economic development.

Q: When and why did the U.N. decide that Internet access is important for economic development.

A: This came out of the General Assembly debate on globalization. We studied the role of the technologies and determined that unless developing countries are able to leverage technologies, and particularly the Internet, they won't be able to achieve their goals.

The Internet can diffuse information and bypass some of the obstacles they face. With better information, people can get better integrated into the economy. And they can be independent economic actors, not just receivers. The ICT Task Force was created, bringing together government and industry representatives. It's a multi-stakeholder approach.

The first step is creating an awareness among policymakers that this can be done. The Internet can be a major shaper of change in the developing countries. We've seen it happen in places like Costa Rica, Estonia, and Ireland. In Costa Rica, in 10 years, it leapfrogged other nations. There are many countries with better resources, and they're bigger, but they're way behind.The second step is to help create the right policy and regulatory environment for broadband, and satellite, and wireless.The third step is to work with the private sector to lower the costs of technology. There's a reward here for them. If technology diffusion takes off, the private sector can invest and make money in places where they wouldn't have made a profit before.We're very early in the process. It's hard to say that X technology investment led to Y growth. But early evidence shows that those that adopt technology fast and early, do well.

Q: What can diffusion of technology achieve?

A: If technology is properly used for economic development, you can transform the way development is done. So much money has been spent for development assistance, and the results have been relatively meager.We're saying the reason these monies have done so little was the projects were on such a small scale. So how do you take a leap of scale? Technology can be the multiplier that increases the impact.We're working on a significant project now. We're linking all secondary schools in the developing world with the Internet. We're turning them in to e-schools. This will provide better training for teachers, better text books, and better ideas. You use the schools for training students and teachers, and as hubs for Internet access for the community around them. Pilots are being launched in India, Mozambique, Bolivia, and Ghana.

Q: Is there a tipping point in developing countries, where if a certain percentage of people become middle class, you have a mass consumer market, and economic health can accelerate?

A: Yes, this is true. If you have a middle class which provides a sufficient market for consumer goods, you have the basis for rapid industrial expansion, and jobs for poor people. It becomes a virtuous cycle rather than vicious cycle.It's happening in China, India, and to some extent in Pakistan. It's happening in lots of countries in Asia. But it's not happening in Africa -- though South Africa might be an exception. In Latin America there has been some economic development, but there is such income disparity. The middle class is not strong enough.

Q: What are the main hurdles?

A: The main problem is for policymakers to recognize the opportunity. They see it theoretically. But when it comes to where they spend their scarce dollars, they don't do it. It's a difficult choice. They need to be convinced, and to do it right.They need to think of it in new ways. This isn't a matter of buying 10,000 computers or rolling out broadband. They should be thinking, how can I do health or education better with technology? There has been a lot of waste in using technology in ways that are not relevant.

Q: What's the role of the cell phone in increasing economic development.

A: It's a very important tool. Communication is critical. For people who are not connected, it's a way to get in touch, to get information. It has been a tremendous boost, even in the poorest countries, such as Cambodia, Mali, and Mozambique. They get access to markets, prices, farm information, and borrowing.The cell phone is of fundamental importance -- it's more important than radio and television as a communications tool for economic life. In these poor countries, it's a more affordable solution than the PC.

Q: Do technology companies have a big business opportunity here?

A: There are tremendous opportunities, provided they're willing to take the long haul. These markets will grow. They can explode once they get it right. It's in the interest of the businesses not just to sell computers but to help the countries -- to be partners with them. It will take five- to seven-year commitments to make it happen.

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