Cell phones will relieve poverty.
Last month marked the 40th anniversary of the Apollo 11 lunar landing, an extraordinary event for all of us to celebrate. Forty years later, there is another extraordinary phenomenon to celebrate – billions of people around the world, including those in the poorest countries, now have computers in their hands that are thousands of times more powerful than the computers that guided the lunar mission.
Over half of the people in poor countries, including more than one quarter of people over the age of 14 in Afghanistan, use these hand-held computers. In many of the places where the devices have proliferated there are still inadequate roads, poor schools, ill-equipped hospitals, unreliable electricity, and no potable water.
But recently, these computers—also known as cell phones—have been helping local people to tackle these challenges.
How has such powerful technology landed in the hands of the poor and why will it continue to reach even more people?
First, the cost of computing power has decreased exponentially during the last 40 years and will likely continue to do so.
Second, computers’ versatility means that they can handle many tasks including voice communication, which almost everyone finds useful. It has mass appeal.
Third, because people waste less time connecting with others and miss fewer opportunities, voice communication allows people to achieve more and earn more. As a result, ordinary people are willing and able to pay for cell phone service.
Serving the masses, profitably
This, in turn, has led to profits for companies that are putting these computers in people’s hands. Companies have invested billions of dollars and built massive cell phone infrastructure in even the poorest countries—based on ordinary people’s advancement resulting in their ability to pay for services.
Why is this so remarkable?
With these computers, even the poorest countries are advancing economically, faster than before. For example, in Africa alone, many countries’ annual GDP growth has reached 5%. While some of this growth is attributable to minerals and commodities, countries lacking such resources are also growing. In fact, annual growth in countries in Africa without mineral wealth was negative between 1980 and 1994, before the introduction of cell phones. However, between 1995 and 2007, these same countries grew at an average rate of 2.5%.
When citizens gain economic clout, institutions are forced to respond to their needs. In this way, these hand-held computers are increasing accountability. Lack of government accountability stems largely from concentration of power, which is exacerbated by mineral wealth or foreign aid to central governments. Cheap and useful computers in the hands of the people represent a dispersion of economic power that provides a countervailing force. According to Freedom House, nearly 70% of countries in Sub-Saharan Africa are now rated free or partly-free, up from 40% in 1980. The recent events in Iran—whatever their outcome—demonstrate how increased communication through such devices bolsters democratic pressures.
Finally, after these computers proliferated widely because of the mass appeal of voice communications, their versatility can be used to perform new tasks. Thanks to new applications, they are being used in banking, healthcare, marketplaces, and crowd-sourcing. With the advent of broadband access, voice communication through Internet protocol is possible without depending on the cellular network. Entrepreneurs will continue to capitalize on this versatility, using these computers as a platform for new businesses and technology.
Most importantly, these powerful computers have proven a critical point: productivity tools in the hands of people empower them to take problems—including the problem of bad governance—into their own hands, leading to economic and democratic progress.
Solving poverty, from the bottom up
This should alter our thinking. Instead of taking a top-down view of the two billion people living on less than $2 per day and being daunted by the scale of the “problem,” we should see the bottom-up potential of two billion problem solvers. There must be innumerable affordable innovations for agriculture, energy, and water purification that ordinary people can use to tackle challenges and increase incomes. Increased incomes are an advancement in and of itself. Their dispersed nature makes them not vulnerable to abuse.
The solution to closing the gap between rich and poor lies in the hands of individuals—engineers, scientists, designers, financiers, and entrepreneurs—who can design and deliver productivity tools. The adoption of these tools, made affordable by the increases in productivity and income that they yield, leads to economic growth, entrepreneurship, and accountability. The resulting trajectory of economic and democratic progress for the poor will be no less spectacular than the Apollo 11 mission.