Tag Archives: Technology

The secret of economic growth

The search for the ultimate secret of economic growth consumes many great minds and reformers. Theories abound from endogenous to exogenous economic growth models.

One of the latest trends, at least in the development community, is to look more closely at the role of technology in spurring economic growth. For instance, USAID has recently set up the Development Innovation Ventures program and there is a new initiative that seeks to empower women through mobile technologies. There are successful examples – take, for instance, mobile banking, which has transformed Africa.

Yet, as Bill Clinton reminded us earlier this week – technology alone is not enough. It is a necessary component of development, yet without focus on institutions – the success will be limited:

“Do we need technology? Yes,” he said. “But it needs to be in the service of building functioning institutions. The big problem in poor countries is they don’t have the institutions we take for granted.”

Moreover,

Clinton cautioned that while technology holds much promise to help bring progress, technology in itself isn’t sufficient to elevate the condition of the world’s poor, and in some cases (particularly in developed countries), technology is often part of the problem.

One of the founders of the modern institutional economics field, Nobel Prize Laureate Douglass North, has a similar take on new technologies. He argues that institutional and organizational restructuring are key if one is to take advantage of new technologies.

In other words, what allows market economies to succeed is their flexibility and the resulting ability to adapt and adjust to new challenges. Further, North concludes that it is indeed “the economic and political institutions in a society (together with the technology employed) that determine the efficiency of markets.”

One way to look at this debate is from the point of view of innovations rather than new technologies alone. Development is not only about countries being able to import new technologies, it is also about countries’ ability to innovate, create, and embed new technologies in formal and informal practices.

As long as that innovation is restricted by poor rule of law, weak contract enforcement, lacking investment, and insufficient real and intellectual property rights, successes with the use of new technology to alleviate poverty and drive growth will be an exception rather than the norm. Just ask the UN.

Tracking Disasters and Improving Donor Coordination

Ushahidi map for Haiti after the earthquake

What do Kenya, Haiti, and Chile have in common? Socially-devastating events – whether they are man- or nature-made – and the need the help people in a desperate situation.

When ethnic violence spread across Kenya following the presidential election in 2008 not only the country, the whole region was shocked over the magnitude of the disaster.  More than a thousand dead and more than a hundred thousand displaced – a real human catastrophe.  The real problem faced by those seeking to restore peace was documenting instances of ethnic violence and figuring out where help is most needed.

A post on one of the forums by a Kenyan national suggested the development of an online mapping system, that would allow citizens to report instances of violence using the most common technology available – cell phones.

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The Role of Advocacy in ICT Sector Development

In Romania during the early 2000s, an alliance of information and communications technology (ICT) business associations formed the Tech 21 Coalition, which developed a business agenda offering practical solutions to barriers facing the industry. Their efforts resulted in a dialogue with the government that produced reforms such as introduction of a zero salary tax on software developers to prevent brain drain. Following implementation of these reforms, Romania ICT companies created 1,500 jobs within 18 months, and significantly enhanced the competitiveness of the Romanian ICT sector.

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New Technology Used to Track Violations and Violence in Afghan Elections

USAID has teamed up with Fortius One’s GeoCommons, Google, Development Seed, Relief Star-Tides, Synergy Strike Force, and Alive to roll out this interesting tool to provide people with opportunities to share information about elections in Afghanistan.

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The tool gives a snapshot of voting patters and other interesting information that you can track geographically.  You can even send an SMS about incidents and they will appear on the map.

Can you hear them now?

About 20 elephants in the Samburu-Laikipia ecosystem currently wear Save the Elephants GPS collars. The latest model delivers one positional point from each elephant every hour. The technology of the new collars is not only intricate but also economical: To save expense, conserve battery power, and minimize weight, the collar mechanisms receive positional information from GPS satellites but then transmit that information by way of low-cost SMS (short message service) blurts on Safaricom, Kenya’s leading cell phone network. In other words, everybody in Kenya has a mobile phone, even the elephants. Read the rest of this article from National Geographic Magazine>>

From 2000 to 2005, mobile phone subscribers in developing countries grew fivefold, reaching almost 1.4 billion. Subcribers in China, India, and Brazil outnumber those in the United States and European Union. Wireless Intelligence expects that between 2005 and 2010, the world will add an additional one billion mobile phone subscribers. Eighty percent of that growth will occur in developing countries, mostly among households making less than $3,000 annually in locally adjusted dollars. Growth is accelerating fastest in sub-Saharan Africa, where, for example, Nigeria’s mobile phone subcribers grew from 370,000 to 16.8 million in just four years.

People like to think that we are social animals, driven by our need for interaction and community, and that may be why the mobile phone industry has become a bellweather for economic growth in regions across the world. Phones are used for more than keeping in touch with family and friends, they are used for conducting business – allowing for transactions not otherwise possible due to distance or lack of financial infrastructure (bank accounts are often linked to mobile phones in developing markets).

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