More phones, not PCs?

Is the digital divide founded on a myth?

The Economist argues that it is. In its March 10 editorial entitled “The Real Digital Divide,” the magazine says it’s wrong to believe that plugging poor countries into the Internet will help them to become rich rapidly.The digital divide is not a problem in itself but a symptom of deeper, more important divides: of income, development and literacy, the Economist says.

“Fewer people in poor countries than in rich ones own computers and have access to the Internet simply because they are too poor, are illiterate, or have other more pressing concerns, such as food, health care and security. So 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.”

Instead of spending money on telecenters to give rural folk access to computers, countries should simply find ways to distribute more mobile phones, the magazine says.

“The more sensible goal is to determine how best to use technology to promote bottom-up development. And the answer… turns out to be remarkably clear: by promoting the spread not of PCs and the Internet, but of mobile phones.”

To bolster its argument, the Economist cites research that says mobile phones raise long-term growth rates, and that an extra 10 phones per 100 people in a developing country increases gross domestic product (GDP) by 0.6 percentage points.

The digital divide that really matters, the Economist concludes, is between those with access to a mobile network and those without, and that gap is rapidly closing.

Flawed view

Pushing mobile phones over PCs is not new. Dave Fernando, co-founder of Smart, has been making this pitch for several years. The argument is more timely today because the government is planning to spend P95 million to set up community e-centers in 111 municipalities nationwide by June 2006. Would the money be better spent elsewhere, as the Economist and Fernando suggest? Will people in remote communities be better served if the government simply liberalized the telecom industry further and let the market close the divide?

This is a tempting but flawed proposition.

First, an increase in the number of mobile phones will, by the very definition of GDP – the total market value of goods and services produced – raise this indicator.

Second, pushing mobile phones as the key to growth is simply waving a different magic wand. The Philippines had Southeast Asia’s biggest mobile phone market with 32.7 million subscribers in 2004, yet our economy was far from the best in growth or in absolute value.

Third, while useful applications are being developed for mobile phones, these tend to be rather simple, and the cost of access for the amount of data received remains high.

Today, even the fanciest smart phone is a poor substitute for a PC for accessing the Internet. Moreover, rural folk are unlikely to buy a fancy phone or pay the high rates to make the best use of it. All this leaves them still cut off from the vast amount of useful information, services and applications they can get off the Internet. Now that’s a real digital divide.

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