Notes from Russell Southwood's lunch at the Berkman Center

The story starts, (as many do in our space), with a John Perry Barlow piece in Wired on the Internet and Africa.  UN ICT Task Force, the DotForce, and other institutions cropped up at a key moment, with lots of hype and promise of collaboration of private sector, civil society, government.  Those were exciting times.

But it’s now time to reassess, to cut through the hype.  The stories people have told, or arguments people make, for why and how technology would change development have not played out on a large scale.  There’s a famous story that people hear time after time, about the fishing village in India where Internet enables people to get weather information that in turn tells them when to go out in their boats (and/or pricing information for what people will pay for their fish, added Colin Maclay).  Where is that village?  (It’s in Pondicherry.)  We hear the same stories, but they tee up myths that need to be debunked.  Those stories are on a series of themes:

* Economics: Why don’t you do business in Africa?  1) Markets are small.  Tend to be government- and donor-driven.  2) Risk of change, corruption, etc. by the government and no recourse.  3) Internet itself is tiny.  Low return on investment generally.

* Technology: Pricing of software and hardware is a huge problem.  Hand-helds: interesting hyrid systems, but all donor driven.  No major technology break-throughs in terms of hardware and software, despite the amount of brain-power focused on this problem.  Ethan: World Computer Exchange is getting computers out there at $50 per machine, but unclear what they’re being used for.

* E-commerce: Cutting out the middleman.  Something in the high-90s percent of e-commerce transactions in Africa take place in South Africa.  One of the big problems is transaction costs.  Visa in US: 2.5% transaction cost.  PayPal is 3.2%.  To do so in Kenya: 7% vig.

* Knowledge: Information is power.  Empower your citizens.  Better pricing information will drive growth and profits.  But the middleman is there for a reason: he has a truck.  Also: we’re not focused enough on what the uses of the information are.  We set up information gathering systems, but then don’t focus on whether the system exists on the ground for someone to do something about it.  We should challenge the assumptions about whether information can make a difference.

* Open Source: I’m curiously ambivalent about it.  It’s a bit like “Revolution” was to those who grew up in the 1970s.  People in Africa can’t pay for MSFT software, so they should use free Linux stuff.  Variant: information, and content, is meant to be free.  (But need to bear in mind that someone has to pay people to create the content).  “ISPs often run Linux,” the line goes.  But too few people are using it.  There’s a skills-base shortage.

We need to rethink our stories and our reasons for “why ICT for development.”

Ethan Zuckerman (Russell’s host): We’re so desperate for success stories, we keep telling the same ones over and over again.

Ethan: Huge projects for changing the world get funded to the tune, at a maximum, of $2 MM.  Are we so off base that we shouldn’t be getting money?

Russell: Schools and hospitals need the money more than digital divide projects, the rationale often goes.  The harder problem, though, is identifying projects that we can succeed at and make a difference through that success.  

Mike Clough in response to Dave Winer‘s question: the most successful technology in African history is the telegraph.  Mobile phones are the answer?

Andrew: But Net technologies are easier than mobile telephony technologies.  Cheaper, easier, stupider technology.

Russell: The tipping point is when the phone companies go over to digital switching.

Ethan: You could start a “telephone company in a box,” on a low-end Cisco box, get to a remote village, and run a VoIP service.  Cisco could sell it for $3,000 – $4,000, but could they really create a market?  Would it undercut what else Cisco is doing?

Geoffrey Kirkman: The problems are people-related, not just technology-related.

Andrew: What’s the Berkman Center‘s ideal role in this space?

Russell: Somebody’s got to serve as the institutional memory of this space.  Someone needs to keep track of things and remind us what works and what doesn’t.  Meetings are useful, to a point.  Speed of decision-making, via e-mail especially, is very helpful in Africa.  But conferences: I’m skeptical.  It’s about consensus. 

Dave Winer: What does success look like?

Russell: Look at Africa.  Look at Botswana.  Low level of corruption and a fair amount of wealth, from diamonds.  Look at Somalia, with its war-torn landscape.  I’d rather see more Botswanas than Somalias. 

Russell: Not worried anymore about the imperialism problem.  The 6,000 subscribers to my e-newsletters can unsubscribe.  They don’t have to listen, but they do.

Russell: Despite being a lefty, I find myself citing free markets as a model of what works in development.  It’s going to take a long time to have good success stories, though.

Ethan: In response to whether the diaspora approach is working: As much as 75% of the people running successful tech business have experience elsewhere, and it can be overwhelming.  But people don’t always come back.  The process is long.  It’s a blunt instrument.

Andrew: One of the hardest heretical truths you’ve talked about is the settlement regime.  Stop focusing on a few extra bucks out of Geneva. 

Russell: ITU sets the settlement regime, who pays whom what.  It used to be government to government discussions, but there’s now privatization, so the market has begun to set the rates in international telecomms.  The ITU structure has the private sector, governments and other agencies and moves awfully slowly.  So, it’s now irrelevant.  Focus elsewhere.  But people still seem caught in the ITU’s orbit.

Andrew: Someday we’ll be surrounded by lots of internet protocol outlets.  So governments should set up their communications regime to anticipate that end.  What do you make of that meme?

Russell: Keep focused on what people will do with the communications. It’s not enough to say that cheap communications are a good on its own.

Ethan: Are we barking up the wrong tree (aaaahhhhooouuu! he says) and we should really be talking about tarriffs?

Russell: Maybe.

Ethan: So maybe we’re not working in the right field, you mean?

Russell: You all come in Christians and leave Atheists.

Andrew: The Berkman Center for Trade and Tarriffs.  (Has a nice ring to it).

Colin: It’s always about more.  We keep peeling away at the onion.  We’ve previously focused too narrowly, and not diversely enough.  We need integrated plans.  No more silos for this stuff.

Ethan: Digital Divide has been wrong from the start.  It’s just a Divide.

Geoffrey: Is it too late to use the excitement of technology as a tool to get at all these other things?

Russell: I suppose that’s what I do.  We’re working at the end of the day on politics with a small “p”.  The IXPs thing that Andrew works on is a good example of that.

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