Chapter 7: Rural Computing
This chapter is dedicated to the topic of how Information technology can revolutionize the lives of the poor people ( mostly living in rural areas ) in emerging markets. In a slight departure from the norm of this book, we will not look at this chapter not from a commercial aspect of how software companies can design products that will appeal to this market but rather take a more holistic view of this problem that is very close to my heart. Although they are a few success stories of late, designing any kind of product for this market is still a very nascent concept and one which is fraught with inherent dangers. It is as much a socio-economic challenge as much as a commercial business challenge. Lets begin by looking at the basic challenges in brining the power of information technology to the rural setting and then at how we can overcome those to achieve the end goal.
There are three stages of evolution to make the vision of Rural computing a reality. Let’s look at these various stages and see the progression from one to another.
First of there is the infrastructure challenge as in any setting in emerging markets. Rather than focusing on the usual infrastructural limitations like network, power etc, I would like to spend some time talking about a few others like accessibility to computers, lack of credit lines for the poor and the role of governance in establishing the right environment etc.
Driving awareness around computing is a key aspect of driving participation from the rural populace.
1. Profit maximizing institutional and individual shareholders
2. Creation by spin-off from existing regulated institution
3. Centralized organization with branch offices located in cities
Mainly non-profit institutional shareholders
Creation by conversion from NGO or formation of new entity
Decentralized set of small units in areas with weak infrastructure
To illustrate the concept of Microcredit, lets look at a couple of examples of financial services organizations that have successfully operated a micro credit policy to the poor.
After just two years in the field, ICICI, India's second-largest private bank, now has close to 1.5m customers that qualify as deeply poor, and an associated loan portfolio of $265m. It has achieved this by working through 53 small microfinance banks, which are superb at marketing loans but are constrained by having them sitting on their balance sheet. ICICI lends to the microfinance institutions at 9.5-11%, a bit more than it charges its corporate clients, and the microfinance institutions re-lend the money at 16-30%. The microfinance providers are responsible for the first 5-12% in loan losses to ensure that they proceed with caution. Returns were good for the first two years and ICICI is expanding the scheme.
According to some estimates, demand for loans from poor but creditworthy people in India could amount to $40 billion, 40 times the current supply. Very little of this demand could be met from charitable sources, but billions of dollars could be made available on commercial terms. Lots more could be raised by allowing small institutions to take deposits.
Many of the world's biggest banks have recently launched interesting pilot projects. ABN Amro owns a microfinance bank in Brazil, Real Microcrédito, jointly with ACCION, and provides credit to five microfinance institutions in India. Deutsche Bank recently raised a $75m investment fund and syndicated a large loan on behalf of ProCredit in Germany.
The most obvious way for large banks to get into microfinance is through handling remittances, a business that according to the World Bank is worth $225 billion a year and growing strongly. Until now it has been dominated by transfer agents such as Western Union and by informal arrangements, often with high charges or high risks. But money transmission is becoming more competitive, and global banks are well placed because they already have systems that can send large amounts of money around the world cheaply.
The most ambitious big bank in this area is Citigroup. It does not deal with individual microfinance customers, but has already established relationships with microfinance institutions in 20 countries and thinks the number could soon grow to 30. Working through its Banamex subsidiary in Mexico, it is providing life-insurance policies sold by microfinance firms and is preparing for various bond offerings, private placements and even the securitization of a large microfinance institution's loan portfolio that will be resold to investors. For its wealthy clients, it has created guarantee funds that allow them to put up collateral in America for credit extended in poor countries. The list goes on.
Citi's biggest contribution, though, is its belief that microfinance can become a valid, profit-making business. If it is right, the other big banks will also pile into the market—and so will investors.
Overlaying this with a technology offering can have interesting implications. For example, we can use this channel of distribution to allow young villagers to open internet kiosks for “community computing” described in another section of this chapter.
Community computing
What is Community computing ?
Due to the various economic constraints faced by the rural populace, I advocate creating a new paradigm called “Community Computing” that will make computing accessible without huge upfront costs. Community computes are the ones that are accessed by multiple people that don’t own the equipment.
Community computers can be typically used in environments like schools, libraries, internet and gaming cafes, community centers etc.
They represent a huge market opportunity that is particularly important in emerging markets. Estimates indicate that the computers ratio to computer users in the emerging markets is about 1:30 whereas in the developed world it is about 1:8. This tells us that there is a huge opportunity of tapping this nascent market to provide the best computing experience of the users.
There are many initiatives world wide to create cheap computing devices at price points ranging from $100-$300 per device. While this is a noble idea, I wonder about its many potential short comings like the feasibility of mass production of such a device, the knowledge barrier to its adoption, distribution and maintenance channels etc.
Rural Resource Centers
Governments and other NGOs in some countries have been experimenting with the idea of consolidating all the technology assets into one simple center of dissemination. Such centers have the following common characteristics:
RRCs are Community centers for social and commercial get-togethers that promote the concept of shared computing resources
One lead villager who is well versed in the technology and applications that are being serviced in the resource center. This “volunteer” is typically paid for by the kiosk operator like an NGO or a government agency.
RRCs should contain “kisosks” that are dedicated to a specific cause like agricultural computing, e-Government etc.
RRCs promote the use of a “Shared Computing” model ( described below )
Shared computing model
For example, in a hospital environment, doctors, nurses and other medical practitioners might use computers in a “community” environment to access different kinds of data. The radiologist might be accessing a CT scan image of a patient while a physician might be pulling up the medical records of the same patient. Security, user context switching, data navigation, privacy of data etc are key aspects of Community computing models.
In an enterprise environment, they could be used in industries like manufacturing ( shop floors ), healthcare ( hospitals ), retail kiosks etc.
Dedicated Kiosks
Specialty kiosks like the ones that can help farmers with agricultural information, ones that helps fishermen with local fishing information etc are far more useful than general purpose PCs that hold very little intrinsic value themselves in rural settings. Dedicated kiosks could be locked down versions of personal computing devices but by limiting their functionality to one specific domain, we are greatly simplifying the use and maintenance of the device, reducing the price point and promoting faster deployment and acceptability of computing as a life style “companion” rather than a complicated scientific device which is the current perception. Later on this chapter, we will examine a few excellent examples of rural applications in the areas of agriculture , trading, e-Government etc that can all be considered as good examples.
Community involvement
Creation of Rural Resource centers and establishing shared computing resources are predicated on getting very strong local support for the initiatives. Healthnet in Uganda, Cybersheperd in Senegal, EChoupal in India are all initiatives that were carried out with great local volunteer support by governments and multinational companies. Phase 1 : Government and NGO Infrastructure
Many of the issues we considered in Chapter XXX regarding the role of a government in promoting the use of information technology apply here in this context as well. Things like telecom infrastructure, socio economic incentives of doing business with the poor, accessibility to the poorest are all gauging factors that contribute to the effectiveness of a rural computing network. Agencies other than the government also play a key role in ensuring the right climate for reaching the poor in an effective manner.
An open and pro-active government. This is critical. Governments in developing countries could greatly benefit from having a "champion" of public information, who will support consumers' and citizens' rights to information. Governments in emerging countries have a far more significant role to play than its counterparts in the developed world. Here are some of the major roles the government plays in influencing the adoption of Information Technology among the poor populace:
Fiscal policies: Federal policies around elements of IT like import duties for hardware, restrictions on foreign direct investment in this sector etc are all important levers in fostering a very healthy domestic IT sector.
IT enabling Government Functions: Governments may also consider adopting electronic tools to support processes such as providing education, health services information and streamlining public procurement
MicroCredit channels: In the developing world, nobody has the reach and influence that the governments have in almost every part of the world. Using this reach to enable a viable micro-credit channel for the rural poor will go a long way in ensuring a faster adoption of technology.
IT policies: Appropriate and forward-looking IT and telecommunication public policies, legislation and an understanding of their overall impact on a country's welfare is a key requirement from a country’s governance. Without appropriate policies players in the global information economy have no protection and the scale of their operations remains limited. High Internet tariffs, for instance, have historically being considered the most important obstacle to the development of a vibrant IT sector. Another example is e-commerce which, in the developing country context, cannot exist without a very specific set of public policies, an effective and e-enabled banking system and compliance with international practices. A strong and an independent regulator is needed to ensure that regulatory policy is enforced fairly and in a timely manner. Timing is everything as the underlying technologies and trends are in constant flux.
Infrastructure: All of the above points could contribute to a conducive infrastructure for IT adoption but physical infrastructure is another important element. Communication Infrastructure is in the critical path of making any meaningful progress in the IT segment and more the governments let private sector to get involved, the faster are the chances of reaching critical mass. Without infrastructure, IT can do very little and rarely at the local level. But with an investment in infrastructure, simple applications can have big impacts at all levels. Infrastructure costs decrease while effectiveness is enhanced when developing countries learn from what has being done elsewhere, and adopt the most current approaches to using IT, thus 'leapfrogging' less effective, even counterproductive, technologies.
Case Study: Costa Rica
Of the many countries that realize the importance of Information technology to elevate the living standards of the general population, Costa Rica is one of the few that has been able to articulate and work towards a sound vision over the last decade. The government of Costa Rica has enabled the emergence of such a sector. The jury is still out on whether this has led to poverty reduction but in the overall scheme of things, it is a great case study on this subject.
From the middle of the last decade, the Costa Rican government has aggressively pursued pro-active policies to develop an Information technology sector focused on the export market. These have included business incentives such as Free Trade Zones and duty free and low-duty exports and a heavy investment in a modern infrastructure and telecommunications network Also, since the 1970s, the Costa Rican government has invested heavily in general education, literacy and technical skills development. The intention was to drive economic growth.
The combination of government initiatives, stability, an educated workforce and appropriate infrastructure provided enabling conditions to attract investment. It is now estimated that more than 10% of GDP is attributable to technology exports. Costa Rica has also become a fairly attractive FDI destination with about $700 Mil USD in FDI projects. This is one of the highest in the region and can be directly attributed to the stability and foresight that the government has placed on the importance of the IT sector. An increasing percentage of exports are in software development and IT services as well as hardware and components. Today, Costa Rica has a very modern telecommunications infrastructure and is one of Latin America’s most densely networked countries (1 in 5 people have a telephone line). It also has one of the most educated and IT literate workforces outside Western countries. However, it is questionable whether this has truly affected the bottom slice of the social pyramid and whether the information technology sector has had any impact in the day to day lives of the poor. The GINI Index of Costa Rica is still at a high level of 46 indicating that there is still plenty of uneven distribution of income. There have been few significant linkages between this export sector and the rest of the economy and the ICE is lagging behind on the provision of remote telecommunication services. Although, the growth of the ICT export sector has contributed to national economic growth, the most direct impact on poverty reduction has been via the strong focus on education and skills development rather than through IT use per se.
Overall Costa Rica shows a remarkable picture of how a small poor country can make rapid strides by demonstrating a vision for the information technology sector and actively pursuing it. It also further validates the premises around other socio economic advancements that are necessary to uplift the masses and bridge the gap between the rich and the poor.
RURAL Computing
This section focuses on what information technologies can do to help in alleviating poverty. Despite huge inflow of donor money into alleviating poverty, the infrastructure of disbursement and ensuring an optimal distribution channel is a major challenge that is yet to be solved. The many stake holders in this context include governments, donors, private parties with vested interest, the poor and their diverse interests make it a complex ecosystem. Figuring out how software can help streamline some of these processes is a work in progress and in this section we will look into some of the successful case studies.
For corporations, the dual nature of the objectives in this exercise namely the philanthropic cause and establishing a self funded profitable business from addressing the needs of the poor also contributes to a lack of a longer term strategy. As more and more companies are establishing fledging business that are thriving by establishing a profitable business model by focusing on the “Bottom of the Pyramid” companies are looking at this underserved market as a longer term growth opportunity. In this section, we will look at some of the popular genres of rural computing applications that resonate with the rural populace.
· Agriculture Services: It is no secret that the rural economy in any part of the world is primarily driven by agriculture based occupations. There are several examples of how Information technology has transformed crops, fishing, cattle herding herding etc. Here are some examples of technology in use in this setting :
o GPS based services for Fishing: GPS kiosks connected to the internet use satellite data and overlays it on local geographic information to provide predictive forecasting of fishing data. Fishermen use this information to know what regions of the sea would be best for fishing. This saves them precious time, keeps them safe and maximizes their yield per trip to the sea.
o Commodities market information: In a country where 200 million people are engaged in farming or related activities, ITC ( a $2 Bil conglomerate ) is developing its internationally competitive agricultural business by empowering, not eliminating, the independent small farmer. The company is setting up of a network of Internet-connected kiosks, known as e-Choupals, through which farmers can receive all the information, products and services they need to enhance their farming productivity and receive a fair price for their harvest. Through the choupal, ITC sources the farmer's produce directly, reducing its procurement and transaction costs. Currently ITC has set up 4300 e-Choupals covering six states and 25,000 villages. By 2010, the e-Choupal network plans to cover over 100,000 villages, representing one sixth of rural India, and create more than 10 million e-farmers.
o Rural healthcare systems: Healthcare for the rural poor is one of the most important functions for a developing economy. An excellent example in which technology has pronounced impact is the HealthNet initiative in Uganda. HealthNet is pioneering the use of Personal Digital Assistants (PDAs) in the African healthcare sector to provide practitioners with real-time access to vital information. The technology also allows for easier consultation, real-time ordering of medicines, and access to medical journals - all of which improves the quality of Uganda's health care system. HealthNet Uganda's leadership and strategic planning have allowed it to successfully transition from a grant-funded project to a stand-alone non-profit organization, in part due to its ability to secure support from the Ugandan government. By introducing cutting-edge technology within an innovative business model, HealthNet Uganda is successfully working to improve the health of millions of citizens.
o Farmers Call Center: This experimental service pioneered in India is called t he Kisan ( stands for farmer ) Call Center( KCC ). The KCC offers three levels of interaction and support in agriculture, fisheries and animal husbandry domains, through national experts and corresponding directorates at the Central level. Questions coming through to the call center varies from “What is the seed treatment of groundnut, with dosage?” to “What is the method of controlling yellowing in a paddy nursery?” . These questions were answered by KCC agricultural and fisheries specialists. This is the working system for providing domain services in agriculture, fisheries and animal husbandry. Typical knowledge requirements in agriculture extend to soil, seed, water management, post-harvest management, productivity increase, crop insurance, banking and financial systems, education, healthcare, and employment or entrepreneurial opportunities.
· E-Government: As we have seen in the earlier section, governments in developing countries play a vital role in promoting Information Technology. Government functions like issuing land titles, grievances filing, birth certificates, tracking reimbursements, pension remittances etc are all prime candidates for computerization. Drishtee is an example of a 3rd party that has entered the market in India to make e-governemnt applications available in a rural friendly format to the poor.
· Education: Even primary education in rural areas of developing countries cannot be taken for granted. Elementary and computer related education make great starting points for raising the awareness of technology in far flung areas. Self paced tutorials in vernacular languages are very appealing. Entrepreneurs have also attempted to create stand alone kiosks aimed only at educational causes. Surprisingly, the primary audience currently is adults who are seeking computer skills rather than children seeking primary education.
· Communication Services: Low overhead communication technologies like cell phones and SMS messaging have revolutionized developing countries. It is well documented that the Cell phone market in Asia and Africa are exploding. These low cost devices can be a platform for delivering real time information and compelling applications. Smart Communications of Philippines has transformed the cell phone market in the Philippines by enabling electronic sales of airtime via short message service (SMS) and by reducing the unit size of such sales to as little as US$0.03. This innovation has enabled millions of low-income Filipinos to access communications services - 98% of Smart's subscribers are l ow-income, pre-paid customers. Its distribution system, using SMS technology, allows merchants to re-sell minutes, taking a commission on every sale, in essence creating a business opportunity for 450,000 entrepreneurs.
· Entertainment: Rural areas in developing countries spend a disproportionate amount of their disposable income on entertainment like movies, music etc. Rural computing that can marry information with entertainment will get a lot of traction.
Case Study 1: “Cyber Shepherd” project in Senegal, Africa
One third of Senegal’s nine million people are pastoral and are dependent on cattle farming. It relies on the ability of herders to manage grazing and water resources. This requires the seasonal movement of flocks and herds. Herders move their animals when the rains cease, in search of new pasture and watering points. In Senegal, this search takes them from the parched savannas of the north to more fertile areas in the south. The ever more fragile environment is subject to great pressures. In this context, the seasonal movement of livestock is essential to the survival of the herds, but it is also a source of problems.
The movement leads to many conflicts between migrant herders and farmers in the pasture areas, and between sedentary and migrant pastoralists. There is also the risk of introducing or spreading animal diseases in the host area. Moreover, traveling such long distances wears out the already poorly nourished herds, leading to lower milk and meat
production. Yet these migrations remain essential to the economy where livestock production accounts for 15 to 35% of gross domestic product and between 15 and 30% of export revenues. Transhumance is thus a central feature of the primary sector in Senegal and provides rural people with 55 to 75% of their income.
How can technology help rural communities to protect pastures that are threatened, in the long term, by overexploitation?
The Cyber Shepherd project aims to use new technologies to provide pastoralists with information about resources in the transhumance zones.Field surveys were conducted among more than 200 families in Burkina Faso, Mali, and Senegal to compile an inventory of traditional practices and local know-how in the use of pastoral resources, with a view to combining them with modern tools and knowledge and making them more accessible. Three zones were selected in Senegal as sites for a pilot project. In each of these trial zones, herders have been taught to read and to prepare geographic maps by working with GPS (Global Positioning System) devices that are linked to satellites and that can be used for accurate positioning on the ground. Several of these herders have also been equipped with cell phones to speed up the exchange of information and provide them with an "early warning system" against pending disasters.
Some herders have received IT training so that they can access information available on the Web. All the equipment needed for Internet connection has been installed in each pastoral unit, where real-time information on pasture issues can be accessed through a site. This is the first time in Africa that a combination of technology and local resources have been used for tracking livestock migrations. Pastoralists say that the project has lifted a number of constraints by making information available about pasturelands and watering spots. Before the project, it was very hard for herders to get information, because they had to wait for the weekly market or go off to see for themselves where they should take their animals. In practice, people involved in the project have had trouble putting the new technologies to use in these rural areas.
Case Study 2: B2Bpricenow.com in Philippines
Philippines like most other developing countries has more than 60% of its work force in the agricultural sector. This includes farming, fishing and other related occupations. There was a severe need to connect small time farmers to mainstream markets to empower them and B2BPricenow.com was the answer and this brief case study will illustrate how this website and its associated infrastructure helped the farmers.
B2Bpricenow.com is an e-marketplace in the Philippines that enables farmers, fishermen, and SMEs to access market prices and trade products. The marketplace can be accessed via web site or cell phone. The first phase of the project involved obtaining content for the B2B web site from a variety of agricultural and fishery cooperatives and training them to access and post products on the site. The second phase of the project focussed on getting target groups connected to the Internet and conducting actual transactions online.
The project objective was to “enable farmers to harness the benefits of information and communications technologies to promote economic development and social well-being.” The objective was that by providing transparent and timely market information to both buyers and sellers, the project will enhance efficiencies in the agricultural market. In addition, the ability of farmers to tap buyers and sellers directly and to obtain competitive prices for inputs and outputs should result in higher incomes - direct poverty alleviation impact. The rationale behind the project was that farmers in the Philippines, particularly those in rural areas, have long suffered from lack of market price information and poor access to buyers and sellers. Co-operatives and government agencies collected samples of prevailing market prices several times a week that were then disseminated on demand a day or two later. Often the available prices were out of date. Also, the system was unable to provide comprehensive price information throughout the 7100 islands of the Philippines. So, producers have been unable to get the best value for their produce. Furthermore, there was no mechanism to allow farmers and co-operatives to market their products and trade directly with distant buyers and sellers. B2B provides a free electronic bulletin board and marketplace designed to bring relevant market information directly to farmers, primarily through their cooperatives. As an electronic bulletin board, the web site enables users to gain greater negotiating leverage from awareness of prevailing market prices for their products. Project activities to date include establishment of the web site, creation of web site content, and a training/information road show presented in over 30 cities. The training program included computer training and online basics. Currently, project activities are focused on getting cooperatives connected to the Internet in 1,500 municipalities through the establishment of business centers on cooperative premises. A major technical challenge has been poor quality or non-existent telephone connections. This has limited access to municipal centers. For areas far from any telephone service, B2B is looking to use satellite and wireless technology companies. While B2B has focused on the Internet, it has become obvious that mobile phones offer a greater opportunity for relevant and useable service. They are common in the Philippines and text messaging is popular. B2B offers part of its service through SMS and will expand this aspect in response to demand. In August 2003, B2Bpricenow.com had nearly 2000 businesses connected to its website.
The project contributes to pro-poor growth as:
• Farmers may increase their revenues by getting competitive prices for their produce
• Farmers may lower costs by communicating electronically with other cooperatives that have similar purchasing and marketing requirements
• Price and supply volume information aids farmers to make better crop and other investment choices, and
• The site enables farmers to broaden their customer base and to trade with one another
Case study 3: HealthNet in Uganda
Technology continues to be vital to the development of many African nations. The digital divide between industrial nations and the developing world represents an opportunity for many micro-enterprises to build sustainable models for profitability and growth. HealthNet Uganda (HNU), a project funded by SATELLIFE, a U.S.-based non-profit organization, was created in an effort to demonstrate the effectiveness of using personal digital assistants (PDAs) in healthcare in Africa. HealthNet Uganda is transitioning from a grant-funded project to a self-sustaining non-profit organization. The project conducted market and profitability analyses and identified potential clients. In addition, the underlying assumptions that define HNU’s business model—including the willingness and ability of consumers to spend a premium on HNU services, the effectiveness of the technology, and ongoing support of critical partners and constituents—were scrutinized and evaluated. The use of information and communications technology (ICT) has had a significant impact on healthcare worldwide and Uganda will be no exception. In fact, the analysis shows that Uganda, and potentially other developing nations, have an urgent need for ICT in the delivery of healthcare. HealthNet Uganda’s services will be used by medical professionals, students, NGOs, and other individuals and institutions involved in the Ugandan health sector. All of HNU’s targeted users see the value in having readily available real-time access to information. The availability of information ensures accurate reporting and analysis of health data and provides doctors with the ultimate tool to care for patients. Health workers in remote parts of the country will now be able to consult with peers, access information from medical journals and order drugs and medical supplies in real time. This ability to share information could have far-reaching benefits for the health sector in Uganda. The Ministry of Health in Uganda has enacted policies which demonstrate its commitment to the use of ICT in healthcare. Currently the Ministry uses technology in its Health Management Information System (HMIS) for telemedicine. However, there remains lingering concerns about the necessity, applicability, and affordability of PDAs. Policy implications of PDA adoption will have to be considered as a necessary part of HNU’s model. As HealthNet Uganda transitions to a self-sustaining organization, the most obvious challenge is the scarcity of financial and human resources. With the support of stakeholders and partners, thorough strategic planning and analysis, and dedicated leadership, it is likely that HealthNet Uganda will not only succeed in its stated objectives, but will lead the way for further innovation in the delivery of services in the health sector in Uganda through the use of ICT.
Food for thought
We have collectively not even scratched the surface of what’s possible with information technology to aid the poor and downtrodden. As it has been evident from this chapter, technology is only a part of the solution and a simultaneous push from the governments, NGOs , the rural populace and other parties with vested interests is essential to make this dream a reality. This dream cannot be fulfilled without a comprehensive well thought out plan as we discussed in the earlier portion of this chapter.
The global economy is increasingly a market economy and our systems must operate under market constraints. That means, for example, that infrastructure is expanding where it is most convenient - usually where it is profitable and there is a large enough market for private-sector investment. Conversely, it is not infiltrating areas below the minimum revenue threshold, sparsely populated regions for example. In other words, scale is also of utmost importance. Even the Grameen Bank can operate its cell-phone project in Bangladesh partly because the population density in that country makes it feasible. One way that developing countries can address that market constraint is to be more strategic about infrastructure investments. Instead of investing in land-based telecom infrastructure that is used only part of the time and often not for any productive effort (in economic terms), a country could invest in satellite links to beam down Internet connectivity to rural areas. That connectivity may prove more productive because it would be a catalyst to a number of other activities as we have seen in the local level examples. Over the Internet, voice communication would also be possible, and scale may be achieved over a multitude of communities in large rural areas, thus decreasing costs even below the levels of the originally intended land-based systems.
One strategy for initiating that change to more productive investments would be to identify leverage points, to do a cost-benefit analysis of making any IT infrastructure investment. For example, three areas of a country need information. One area produces silk, another okra and the third fish. Because the global market for silk is far larger than for the other products, it would make more sense to initially concentrate the IT infrastructure to serve the silk-producing areas. That analysis is often missing and may represent another role for development organisations to play.
It might not be an exaggeration to argue that in a global economy, IT is a material necessity. Many people say 'Isn't it more important in rural areas to have electricity than it is to have IT access'? Common wisdom might say yes, but if an investment in IT can spark greater growth in the long term, wouldn't that justify the initial costs for IT? If the silk-producing community can use IT to generate economic activity that is greater than what would be produced if the community invested in electricity to power a factory, should they not make the IT investment?
An investment in IT can also be measured in different terms, as a social good. Perhaps having the technology to contact a hospital and describe the symptoms of a very sick person and receive a written procedure back, would be more important to the community than electricity to light village homes at night. Of course the decision is to be taken by the local community, but in the information age, for the first time, the question of what comes first among electricity, telephone, and information does not have to be a foregone conclusion.
Sources
World Bank Poverty redcution initiative
www.worldbank.org/poverty/strategiesUnited Nations Conference on Trade and Development
http://www.unctad.orghttp://www.digitaldividend.org/
