The Digital Divide Will Not Be Bridged By Business Models Alone

December 8, 2015 Editor 0

Reading through “To Really Help the Global Poor, Create Technology They’ll Pay For” in the Harvard Business Review, I was conflicted by the main point made by Alex Deng, Chairman of Huawei’s Corporate Sustainable Development Committee, that for many ICT4D projects to scale beyond a pilot there needs to be some sustainability plan on how those projects will become self-sufficient in the long-term.

For many projects, revenue generation will remain an elusive if not impossible goal precisely because they address needs that exist in the spaces between business opportunities. Many will always rely on funding from outside sources, from charitable donations, from volunteer labor of some sort.

Yet, Deng has a point; if not revenue, there needs to be some sort of idea on how these projects will continue past their initial funding cycle, as he states:

As simple as it sounds, development projects need revenue. Many organizations aim to narrow the “digital divide”: the socioeconomic gap between people with Internet access and the skills to make use of it and people who lack those resources. Using information and communications technology (ICT) for development is fairly common, but surprisingly, most digital divide projects don’t generate revenue. Some projects seem never to have been designed as anything other than pilots: they remain limited and local, delivering only marginal benefits.

If Deng is equating lack of revenue with perpetual pilotitis, then I see the point, although I believe it to be sweeping beyond the point of usefulness. What we have here, as far as I can see, is an incorrect positioning of where technology fits into this process. Deng’s assertion that ICT4D projects need to generate revenue assumes that revenue can be generated at the technology level (either technology itself, applications, software, or infrastructure) or at the use level (either by individuals or governments).

I am not saying this cannot be true, but I think it demonstrates a misunderstanding of how technology serves these projects. The technology itself isn’t the focus as such; it is one agent in a larger system that stimulates the objective being done. And monetizing this activity undercuts the advantages being presented to those most bound to the negative aspects of the digital divide, as this quote from Tony Roberts suggests:

Provision of ICT4D on a fee-paying basis inevitably confers advantage on those with existing cash. Where the objectives of ICT4D initiatives include reaching people under-served by existing market mechanisms then mechanisms other than the market need to be found.

Again, this is the crux of the argument. To address the digital divide and those pockets of the underserved that have been failed by the market, it seems illogical to address that by turning to the very thing that assisted in generating the divide in the first place: the market. This isn’t some anti-market diatribe. The market indeed has much to offer emerging economies and ICT4D projects, particularly in terms of project feedback, which Deng accurately picks out in the following:

By charging even a small amount, ICT initiatives get a clear signal about how to adapt their offerings in response to changing conditions. Without this feedback, they operate in a vacuum of good intentions, insulated from the market and ultimately cut off from the very communities they are trying to serve.

Agreed with on the whole, but I am not sure how that cuts off these projects from the very communities they are trying to serve precisely as the very communities they are trying to serve are often beyond the pale of market reach.

If one wanted feedback on market awareness, particularly on what those most affected by the digital divide would be most willing to pay for, I suspect a good place to start would be to gather feedback on what they are paying for now. Where does your ICT4D service fit into that equation? How much expendable income is left over to invest in it? If the answer is none at all, then your funding sources automatically turn elsewhere, ie. Deng’s feedback collection turns elsewhere, however, to determine the best approach:

To determine the best approach to using ICT for development (or ICT4D, as it’s sometimes called), Huawei recently interviewed 150 telecom operators, government bodies, regulators, NGOs, and social enterprises in 11 countries. Many people we spoke with said there were simply too many projects that were based on good ideas but lacked adequate funding. Some countries have grown so frustrated with small, unsustainable pilot projects that they have actually banned them: Uganda, for example, which has only one doctor for every 25,000 people, has issued a moratorium on new mobile health initiatives.

Therein lies the problem. While the situation described in Uganda is a real (and painfully common) manifestation of too much cash available only as yearly or short-term expenditures (foundations, large NGOs, etc.), too little oversight (need for country-level M&E of ICT4D projects) and not enough collaboration (aside from the lack of PR benefits, how many of these projects could be combined?), I am not sure the counterbalance to that situation is a revenue-driven ICT4D economy, or least not exclusively.

The telecom operators, government bodies, regulators, NGOs, and social enterprises are stakeholders, surely, but not the only ones. Community-oriented feedback, at the most granular of levels, might balance this revenue-only model a bit. Ultimately, it will be a balance between revenue and philanthropic work. One goes where the other cannot, and vice versa. So they work in some sort of symbiotic balance, ideally.

You may also be interested in Huawei’s report Digital Enablement: Bridging the Digital Divide to Connect People and Society

By Michael Gallagher of Panoply Digital and originally published as ICT4D as revenue generator: complications in serving the underserved.

Go to SourceReprinted from ICTWorks

Categories: ICT

Tags: digital divide