Some of you may have read this article in the New York Times about Bruce Sterling’s now infamous quip “connectivity = poverty”. He muses that there is a correlation between the usage of texting, phones, facebook, skype, IM, twitter, etc and poverty. The final capping quote “poor people sure love talking on their cell phones” is particularly lovely (sarcasm). At first glance, if you think about life from a more comfortable middle-class view it seems to ring some truth.
But let me make this clear, his statement is pure and utter bullcrap. Having helped setup and launch a phone company in Haiti (www.digicelgroup.com) and having lived a year and a half in Kingston, Jamaica, I find Bruce Sterling’s statement smells of the hypocrisy of one who has never experienced real poverty. His statement is in fact completely backwards, the opposite “Unconnectivity = Poverty” is a much more representative truism. Throughout the world the poorest countries show the lowest rates of adoption for internet or mobile technologies. And throughout the developing world there is study after study that shows “connectivity = decreased poverty”. I have posted a big pile of links to studies at the bottom.
Anecdotally, I can also share the case study of Haiti. In 2006, when Digicel launched in Haiti, GDP per capita was $1300… i.e. the amount of money a person had to spend was $1300. The average cost of a phone was $100, with a $100 activation fee and $40/month fee – that is $680, 50% of a Haitian’s income!!! We launched with a price of roughly $20 for the phone, no activation fee, with an average person spending $15-$20/month.
The net result, note that the population of Haiti is 10,000,000 people:
Year GDP Growth* Mobile Phone Users**
2006 1.80 % 60,000 – 80,000 subs
2007 2.50 % 1,000,000 subs
2008 3.20 % 3,000,000 subs
*Sourced CIA Factbook
**Sourced – my own knowledge of sales in Haiti
People in Haiti threw an impromptu parade in front of Digicel HQ one day when I was there. When I visited the extremely impoverished farmers in Haiti’s rural areas they were extremely excited to be able to have cell phones to arrange transportation of their goods and to understand market prices. These are words I heard from their own mouths (French immersion pays off sometimes).
In many poor countries, remittance from the global diaspora is a major portion of GDP. By way of example, Haitians living around the world send back about $1 billion each year to Haitians in Haiti. To put this in perspective, the overall GDP of Haiti is about $10 billion, so 10% of the economy is basically money sent back from family & friends living abroad!
Previously, 10,000,000 Haitians had to split communications across around 100,000 total phones (landline + mobile). 1 phone per 100 people. And of course, the owners of those phones used them as a for profit enterprise. They would get a really long cord and sit outside their home, with their phone, and charge people money to use it! As you can imagine that kind of communication system hampers the ability for people to be able to talk, especially abroad.
When communications increase, people can more readily phone abroad and get access to money. This is micro-lending at its rawest. More communications fosters more $$$ at the lowest income levels. And this example (remittance) is only one form of how increased communications uplift people out of poverty. There are plenty of other reasons – from efficiency gains to better knowledge of market prices – that also help prove the point. These points prove the time and trued recipe seen over and over again – “Connectivity = uplifting people out of poverty”.
So, Bruce Sterling next time, before you wax poetically, maybe you can do a bit of research. Or instead stick to science fiction and throwing large SXSW parties in your aristo-hedo lifestyle of the rich and quirky before lamenting about the life of the poor. Go visit the poor before you make veiled comments like “poor people sure love talking on their cellphone”.
References
1. http://www.independent.co.uk/news/business/sustainit/closing-the-digital-divide-1640433.html – study showing mobile penetration = GDP
2. http://www.egovonline.net/articles/article-details.asp?Title=Mobiles-Penetration-Boosts-GDP&ArticalID=2228&Type=FEATURES – study showing mobile penetration = GDP
3. http://www.huawei.com/publications/view.do?id=5771&cid=10665&pid=10664 – study showing mobile penetration = GDP
4. http://www.jamaica-gleaner.com/gleaner/20060526/business/business2.html – tells more about Haitians growth in telephone customers
5. ftp://ftp.zew.de/pub/zew-docs/dp/dp0431.pdf – about developing worlds and transfers of cash through remittance
6. http://isim.georgetown.edu/Publications/RCRCCPubs/Orozco/Understanding%20the%20remittance%20economy%20in%20Haiti.pdf – Haiti and remittance