Helping Connect People at the Bottom of the Pyramid

Stephen DeAngelis

October 30, 2014

“No industry or household in the world will reach their future potential without access to broadband,” write Adie Tomer (@AdieTomer) and Rob Puentes (@rpuentes), “it is the electricity of the 21st century.” [“Here’s the Right Way to Build the Futuristic Cities of Our Dreams,” Wired, 23 April 2014] Analysts at McKinsey & Company agree with that assessment. “In a little more than a generation,” they write, “the Internet has grown from a nascent technology to a tool that is transforming how people, businesses, and governments communicate and engage. The Internet’s economic impact has been massive, making significant contributions to nations’ gross domestic product (GDP) and fueling new, innovative industries. It has also generated societal change by connecting individuals and communities, providing access to information and education, and promoting greater transparency.” [“Offline and falling behind: Barriers to Internet adoption,” Telecom, Media and High Tech Extranet, 8 October 2014 (registration required)] Although the benefits of connecting societies are well known, the McKinsey analysts report that barriers exist preventing 60 percent of the global population from getting online. Most of those without access to the Internet are from of low-income households — the four billion people who are economically at the bottom of the pyramid. If Tomer and Puentes are correct, that these people will never reach their full potential without access to broadband, the world community needs to help get them connected. With all of the global challenges we face, we can’t afford to lose the mind power, work power, and will power of the majority of the world’s population.

 

Tomer and Puentes assert that technology must be used in three ways. “First, technology must support improved productivity.” The plight of the poor won’t change if economic conditions don’t change. Wealth must be generated. “Second, technology must support a more inclusive economy.” This will be easier to achieve in urban areas than it will be to achieve in rural areas. Unfortunately, McKinsey analysts estimate that approximately 64 percent of offline individuals live in rural areas. “Third, technology must support a more resilient economy.” The poor always find themselves on the tip of the whip as economic and environmental situations change. We need to find a way to make their plight less susceptible to the bullwhip effect they now feel. McKinsey analysts have identified five positive trends that are helping improve connectivity among the poor. They are: the expansion of mobile-network coverage and increasing mobile-Internet adoption, urbanization, shrinking device and data-plan prices, a growing middle class, and the increasing utility of the Internet. Unfortunately, they report, up to 4.2 billion people remain offline. They note:

“Without a significant change in technology, in income growth or in the economics of access, or policies to spur Internet adoption, the rate of growth will continue to slow. The demographic profile and context of the offline population makes it unlikely that these individuals will come online solely as a result of the trends that have driven adoption over the past decade. Estimates from multiple sources suggest that 500 million to 900 million people will join the online ranks by 2017, expanding the online population to 3.2 billion to 3.6 billion users. By these projections, between 3.8 billion and 4.2 billion people-more than half of the forecasted global population-will remain offline in 2017. … We estimate that approximately 64 percent of these offline individuals live in rural areas, whereas 24 percent of today’s Internet users are considered rural. As much as 50 percent of offline individuals have an income below the average of their respective country’s poverty line and median income. Furthermore, we estimate that 18 percent of non-Internet users are seniors (aged 55 or older), while about 7 percent of the online population are in that age bracket. Approximately 28 percent of the offline population is illiterate, while we estimate that close to 100 percent of the online population can read and write. Lastly, we estimate that 52 percent of the offline population is female, while women make up 42 percent of the online population.”

That description of the challenges facing the disconnected population could make the situation look hopeless; but, it’s not. There are offline ways of introducing technology that can overcome some of the challenges, like illiteracy and location, and help prepare populations to get connected. Specifically, I’m thinking of a program that I’ve previously written about sponsored by the Global Literacy Collaborative. The Global Literacy Collaborative is sponsored by Tufts University, Georgia State University, and the Dalai Lama Center for Ethics and Transformative Values. The vision of the organization is to bring literacy to 100 million people by the end of the decade. By any measure, that is a daunting task. According to the Collaborative, “There are nearly 800 million illiterate people on this planet. It is estimated that if we could reduce that number by 170 million we could remove 12% of the world’s poverty. [The Global Literacy Collaborative is] developing a platform using mobile computing to reach these populations with child-driven learning.” [“Executive Summary,” Global Literacy Collaborative, 7 December 2013] The Collaborative faces many of the same challenges as those who want to get the disconnected parts of the global population connected. The people they want to reach are located in remote rural areas, they have little to no familiarity with technology, and they are functionally illiterate. But the Collaborative has demonstrated that positive steps can be made. A fuller report of what the Global Literacy Collaborative is doing can be found in an article I wrote entitled “The Global Literacy Collaborative Demonstrates the Power of Technology-assisted Education.” The article contains a video about the success they have achieved under very challenging circumstances. What follows is a synopsis of what was done.

 

Project participants went to two remote villages in Ethiopia and distributed 20 android Motorola Xoom tablets (40 in total) and provided each village with a solar-charging system. Computer engineers from the University of Addis Ababa taught adults in the village to use the solar power units so that the tablets could be recharged every night. The computer engineers also provided twenty tablets in each village to children, but were instructed not to teach the children how to use them or problem solve for them. They didn’t even teach them how to turn the tablets on. Each tablet was loaded with more than 300 applications, videos, and activities for the children to select. They weren’t taught how to use these apps either. Nevertheless, by the end of the month, every app had been activated and the children were totally comfortable with these technologies. The researchers discovered that children soon selected their favorite apps and spent most of their time using them. It should be pointed out that many of the village adults started learning along with their children. The point is, there are proven approaches that can be used to help prepare low-income households to come online. Will getting low-income households online really help? Panos Mourdoukoutas (@PMourdoukoutas), a professor and Chair of the Department of Economics at Long Island University/Post, certainly thinks so and he’s not alone. He reports that Facebook founder Mark Zuckerberg is teaming up with Internet.org to help the world’s poor get connected. [“How Facebook And Alibaba Are Turning The World’s Poor Into Entrepreneurs,” Forbes, 5 October 2014]

 

Mourdoukoutas discusses some of the recommendations of the late C.K. Prahalad, who wrote, “If we stop thinking of the poor as victims or as a burden, and start recognizing them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity will open up.” In other words, the best way to help the poor is not through charity but by providing them with opportunity. Mourdoukoutas writes;

“This opportunity could be pursued with partnerships between the poor and the world’s multinational corporations to spark innovation and sustainable growth strategies, according to Prahalad. ‘What is needed is a better approach to help the poor, an approach that involves partnering with them to innovate and achieve sustainable win-win scenarios where the poor are actively engaged and, at the same time, the companies providing products and services to them are profitable.’ Already companies like Alibaba have been doing that in rural areas of China, where a big chunk of the world’s poor are, through E-tailing. ‘E-tailing’s impact is more pronounced in China’s underdeveloped small and midsize cities,’ reveals another McKinsey study. ‘We found that while incomes in these urban areas are lower, their online shoppers spend almost as much money online as do people in some larger, more prosperous cities — and also spend a larger portion of their disposable income online. For these shoppers, the utility of online purchasing may be higher, since they now have access to products and brands previously not available to them, in locations where many retailers have yet to establish beachheads.'”

By combining the efforts of groups such as the Global Literacy Collaborative and Internet. org, we can help prepare those living at the bottom of the pyramid to get online. Mourdoukoutas concludes, “That’s where the fortune at the bottom of the pyramid is.”