Wednesday, March 3, 2010

Of smartphones and scooters

I quite often like to put my historian's hat back on, so I was interested in the history of the Internet that Heloise and Kathleen sent out (http://sixrevisions.com/resources/the-history-of-the-internet-in-a-nutshell/ ). As I read through it, I was reminded of how slow and torturous a road it actually was. Is it possible we might sometimes be expecting too much, too fast, from developing countries in their path to the information society? Is it also that these paths might be different but that ultimately they'll end of in pretty much the same place? Maybe, with time, those paths could be converging, or, at the very least, they might adapt more appropriately to their various contexts?

As i was thinking about this, I was struck by the analogy between the transportation and telecommunications environments, particularly as they relate to the difference between the developed and developing world. In the developed world (although I'll restrain my thoughts to North America for the sake of my argument) the transportation environment is dominated by cars and trucks, which are used for both economic and leisure purposes. Bicycles, and to a certain extent scooters, are used mainly for leisure purposes (disappointingly). In the developing world (again let's say Asia for the sake of our argument) bicycles and scooters have dominated much more of the transportation environment. (I should say I'm excluding mass transit - or public access in a way- as it doesn't really relate to my analogy for now). Bikes and scooters are also used much more for instrumental purposes, than social or leisure ones, in the developed world. Cars and trucks aren't as prevalent there, seeing as they simply aren't affordable enough (yet). Some of you will now see where I'm going with this. Is it fair to say that there is an analogy with the situation with mobiles and PCs and the path to (internet) connectivity? In the telecommunications environment, replace car with PC, bicycle with phone and scooter with smartphone and I see interesting similarities. You can even extend the analogy to thinking about a super-highway - that essentially refers to the Internet (yes, rather than a "series of tubes"..), with dirt paths being low bandwidth GSM/CDMA networks.

Bicycles (mobiles) need to ride on dirt paths, and can't access the super-highway (Internet). You still have recurring costs related to accessing the dirt path, but it's much cheaper than the super-highway. Of course the bikes on dirt paths don't go to all the fabulous places that the super-highway takes you to, and you can't carry as much as cars, so there are much smaller scales of benefits compared to a car, but the scale of benefits is probably commensurate with the potential of local economic opportunities.

The interesting thing is scooters (e.g. smartphones) are able to get on the superhighway but the on ramps in developing countries are prohibitively expensive and generally force you to pay by usage. Most people in developing countries can't afford the scooters or the tolls to get on superhighways, but scooters are still more affordable than cars and paying by usage is generally a more cost-effective strategy than a monthly subscription for the super-highway. Consequently, it can be expected that in the medium term there will be a lot more scooters out there, more and more of which will be traveling on the super-highway. There would be a growing number of cars in the developing world as well (especially Tata-like cheap cars - which is analogous to the OLPC, Asus, etc.) - and more people getting super-highway subscriptions, but the rate of growth would be much lower than that of scooters getting on to the super-highway through usage-tolls. The biggest problem though is that curently those who own the dirt roads (i.e mobile operators) control the tolls and decide how much it will cost to access the superhighway and attempt to control how you will experience it. (The best solution to this is generally that there be a greater number of toll operators who need to compete with each other for the use of their on-ramp, but also, potentially, that the government step in to regulate toll operators.)

What's also interesting is that as time goes by there is less and less distinction between scooters (e.g. smartphones) and cars (eg. PCs), as Tuk Tuks and other three wheeled scooters seem to suggest. Some of the scooters are gaining in speed and power, which makes them quite effective on the super-highway.

Now I've certainly taken this analogy too far and have obviously over-simplified the different environments, but I still think there are potential lessons for us:
- in the transportation environment we don't try to suggest that nations in the developing world should build a super-highway before they have an adequate network of lesser roads and paths
- the decision to purchase and use a bicycle, scooter or car is based on many complex decisions, based on costs, incentives and sometimes simply uniqueness. Why for example is Burkina Faso full of bicycles, Benin full of scooters and Senegal full of cars? I assume the difference is due to costs (differences in affordability and purchasing power); incentives (regulations, infrastructure, government programs, etc..) and uniqueness (cultural factors, etc..). The same can probably be said of the choice to purchase mobiles, PCs or anything in between. Decisions will be based on those three sets of factors which, in turn, will create very different environments in different countries (think for example of the difference between the Philippines and its mobile omnipresence and that of Indonesia and its - relative - PC/wifi prevelance)
- It still isn't clear that there are more than marginal benefits to having a car, as compared to a scooter in the developing world. I think the same can be said of the difference between the benefits of a PC and a smartphone. The same can be extrapolated, in my view, from the difference between access to the Internet and access to mobile telephony in the developing world. The case has not yet been made that the economic and social benefits of the Internet, as compared to those of mobile networks, warrant the added costs. Economists might suggest that developing country citizens have chosen quite rationally to spend money on the tool they felt was most appropriate for their needs - the mobile - (I'm not sure that's right, but it's certainly a possible hypothesis).

Bike indicators: http://www.earth-policy.org/index.php?/indicators/C48/