Several high-tech leaders, including Bill Gates, question the value of information technology (IT) for developing countries, especially when compared to priorities like food, medicines and schools. In a sense, they are correct: anti-virus software is no substitute for vaccines. But Mr Gates, also an eminent vaccine philanthropist, and his fellow doubters are selling their industry short by overlooking the many things IT can do for the world's poor.
For starters, IT can make markets work. Much of economics is concerned with how markets take the things we have-labour, raw materials-to make things we want. How do millions of independent, dispersed consumers tell millions of independent, dispersed producers, exactly what they want, so collectively they don't make too many clocks and too little bread? Market information, especially prices, is the key.
In well-functioning economies, when there aren't enough eggs to meet demand, their price increases. Farmers, seeing profitable opportunities, breed more hens to produce more eggs. People want more eggs, and like magic, more eggs appear. Just as important, farmers earn more income and consumers pay less for eggs. Whether Wall Street or West Africa, information makes markets work.
Unfortunately, things don't work as well in poor countries. They often lack even basic communication technologies, so signals don't travel and markets don't perform well. This is how IT can help.
In developing nations, most adults are employed as farmers or labourers. The farmer's primary interest is how much he can sell eggs for. While prices often differ across villages, the farmer typically knows only the local price. So even if, say, the urban price is higher, he doesn't know to send his eggs to the city. Nor does he realise that it is profitable to breed more hens. He misses opportunities to earn more income, and urban consumers face excess prices.
Simple technology can help. Visiting Bangladesh recently, we saw farmers using cellular phones to call several villages and cities before deciding where to sell their products. They were spending 20 cents to call because, by one farmer's estimate, they would make 50 percent greater profit when selling their eggs. By pursuing the highest price, the farmers send their eggs to where they are valued most, lowering the price for consumers. This is the market at its best, with a little technology greasing the wheels.
How does IT help labourers? In rural villages, permanent employment relations are rare. Most employers' labour needs vary greatly from day to day, often unpredictably. So on a typical morning, workers gather in their village centre and employers come by to hire them. Often, hours are wasted searching for brief employment opportunities, or worse, workers in one village may stand idle while employers in nearby villages can't find enough workers.
Bangladesh again provides evidence of how technology helps. Observing workers from Grameen Bank install a village phone, one of us clambered up a tree to help hang an antenna wire. Not surprisingly, a foreigner on the verge of a plunge drew inquisitive on-lookers.
Asking why so many men were idle, we were told there was no work in the village that day. After completing the installation, we called Grameen officers in nearby villages. Within minutes three onlookers had farm-work. Those men earned wages that day, and the farmers who hired them produced more. More sophisticated technologies like networked computers could enhance matching and reduce search time, a single click revealing job opportunities or prices in all relevant locations.
In both examples, IT delivered real economic benefits, farmers and workers earning more income. With that income, they can pay for more things they need, like food, medicine or school fees for their children.
On a larger scale, the effects would be profound. Instead of helping just three workers or farmers, a communication kiosk in every village in the developing world could put extra money every day in the pockets of the three billion people surviving on less than $2 a day. The only sustainable way to end deprivation is to enhance earnings possibilities. IT can do exactly this, with the invisible hand of the market becoming a helping hand to the world's poor.
Of course, the poor need more than just markets. We must keep investing in health and education, especially in creative ways like those of Mr Gates' foundation. But it's not an \'either-or' proposition, because IT can provide in these areas as well.
For instance, many public health problems can be prevented or treated through information dissemination, often at lower cost than treating the problem afterwards. IT is the best way to deliver such information rapidly and at low cost. Further, putting health clinics online could raise their productivity and allow for remote diagnostics and information where doctors or medical references are in shortage.
There are as many valuable applications for education, including distance access to libraries, textbooks and instruction where such things are scarce, as well as for governance, community and social mobilisation and commerce. IT is the gift that keeps on giving. Once in place, we can transmit information for a variety of uses, at little additional cost.
Recent advances dramatically lowered the costs of technology and access. The limiting factor now is that we're not thinking about IT's real value, the \'I', so it's not high on the development agenda. It should be. Never before has there been a single tool with the potential to provide so much to the poor, in so many
ways. t (Project Syndicate)
Robert Jensen is Professor of public policy at the John F Kennedy School of Government, Harvard University, Richard Zeckhauser is Professor of political economy at the John F Kennedy School of Government.
