NDN Blog

We can't say that the digital divide is gone, but it certainly is changing its shape, thanks to trends in mobile broadband adoption. NPR ran a story on Morning Edition today that reported on a Pew Hispanic Center study on the intersection of race and mobile use. I've written about this stuff before, and Simon covers it in his Dawn of a New Politics presentation-- really interesting.

The data show, as you can see in the chart at left, that blacks and Hispanics use broadband and other features on their mobile phones at consistently higher rates than whites. The report offers four explanations for this phenomenon:

1. Cost. In our networked world, everyone who can have broadband access wants it.  Mobile broadband is cheaper than in-home broadband.  Blacks and Hispanics tend to be lower-income, and so gravitate toward mobile.
2. Youth. Young people tend to be early adopters. Black and Hispanic populations skew young.  'Nuff said.
3. Network Effects: As more people in these communities adopt the technology, the effects are compounded as they pull in their families and other social networks.
4. Convenience: Particularly for Hispanics, who tend to be more itinerant  and more in touch with family and friends abroad, connecting to the network via mobile makes a lot more sense than in-home broadband.

Is this a good thing? Surely.  In-home broadband connections are prohibitively expensive for many Americans, and in a world where it's increasingly a necessity to be connected, it's hugely important that there is a lower-cost option for lower-income people. 

But is this the end of the digital divide? Surely not. Blacks, Hispanics, and lower-income Americans do still lag in computer use and in-home, fiber broadband connections.  While mobile broadband is helping to level the playing field, there is a degree of functionality that is lost on a cell phone.

No more than about 40% of black and Hispanic users access the internet on their phones-- reflective in part, no doubt, of the lower usability of mobile web-- and that remains a critical indicator.  Until every parent can view their child's grades online, and every student can learn to use the web for research, and every car buyer can search the internet for the best loan rates-- until then, the digital divide will remain a reality we need to challenge. We should be encouraged by this report, but not complacent.

(h/t JS)

Much is made of the power of mobile phones.  Indeed, much is made of them right here on this blog.  But, as with all seemingly magical tools of development/healthcare/education/whatever, there is a tendency to get swept up in the zeitgeist and to think of the mobile phone as a silver bullet. And as with all things, it's not. In fact, we can't think of the phone, or the internet, or any other technology as inherently good or bad. They're simply tools. New, powerful, disruptive tools-- but just tools.

Bear with me while I illustrate my point by weaving a thread through two articles published recently in faraway parts of the world:

• Yesterday, a Sri Lankan newspaper covered a recent leak that the government intelligence services had been tapping the phones of an influential former general and his associates. The tapping was motivated not by any security concern, but by political concerns-- the general represented a powerful opposition group.

• An opinion piece in the African Business Daily last week looked at the "pros and cons of increased access to mobile phones" in Uganda. The "pros" were the usual litany of access to information and services-- but it was just that: access. (The "cons" had mostly to do with Uganda's highly regressive taxation scheme, but that's a conversation for another day.)

The point here is twofold.  First, mobile technology, like any other technology, is subject to misuse and abuse by those in power. Part of NDN's big argument about new technology (and the reason that we got involved in this space in the first place) is that new technolgoies are changing society in a similar way to how radio changed the world in the 1920s and 30s. But just as FDR used the radio to speak directly to the American people, Hitler used radio to speak to Germans.

As we see in Sri Lanka, and as we saw in Iran, mobile technology can be used equally by those on either side of any struggle. This is by no means an argument against the technology itself-- as I said, it's neither inherently good nor inherently bad-- but simply a reminder that we must be watchful for the same evils as ever.

Second, in Uganda as everywhere, access to a phone and a network is never the end in itself. The power of the technology lies in the information you can access and the services you can take advantage of. That's why we see our mission at Global Mobile as greater than simply expanding access to mobile technology-- even moreso, we're thinking about how we can leverage this technology to improve lives and socities around the world. Technology and services-- one is useless without the other.

It's a quiet week here at NDN, as we wind down for Thanksgiving. We'll be back at it next week, refreshed, well-fed and full of our usual sharp analysis.

Reflecting on the bounty of this harvest season, I am thankful for you, dear reader, for making Global Mobile one of the hottest new products out of our humble think tank. I hope you've been enjoying the blog, and let me know what you think!

But even I am probably not as thankful as this guy, who, through to the power of mobile technology, is hearing the good news that his life will be spared this holiday season, thanks to a generous pardon issued by our president.

Happy Thanksgiving!

While netbooks still comprise less than 10% of the PC market, their popularity is growing swiftly. Market reserach firm In-Stat came out with a report yesterday predicting that, three years from now, 31% of all notebooks will be sold through the mobile network operators. Essentially, they're predicting that we'll buy netbooks the same way we buy cell phones now-- at subsidized prices in exchange for multi-year service contracts.

I'm frankly surprised their estimate isn't higher. Within five years, I have to think the netbook/laptop distinction will be gone, and it will be effectively impossible to buy a new laptop that doesn't have mobile connectivity. These new devices will blur the line between smartphone and laptop, and the evolution of 4G data networks means that you won't have to compromise: portability and ubiquitous high-speed web access will meld seamlessly with the computing power we expect in today's personal computers. Can't. Wait. For. The. Future.

This is, as I've said before, particularly good news for people in the developing world. Just as cell networks have quickly leapfrogged landlines throughout most of Africa, Asia, and South America, 3G and 4G data networks are bound to arrive most places sooner than a fiber-optic cable connection to the global ICT network. As networks expand, more and more people will access the internet for the first time using netbook-type devices, and enjoy the same benefits of speed that I do, wired up in Washington, DC.

Following on my earlier reflections on the growth of mobile banking in the developing world, two more hits on the future of mobile money:

- Gartner tells us that in 2012, the most popular consumer mobile application will be mobile money transfers. Number six will be mobile payments. I, for one, cant wait until I can pay for lunch with the press of a button on my phone, and have my friends immediately reimburse me for their meals using their mobiles. Yum.

- In a similar vein, Juniper Research anticipates that, by 2014, the mobile money transfer market will be worth $65 billion-- and it will be driven primarily by remittances sent by migrant workers sending money from developed countries home to developing countries.

CGAP and DFID teamed up on a brand new report peering into the future of "branchless banking," which they define as the delivery of financial services in essentially any way other than through the traditional brick and mortar bank branch.  A big component of branchless banking is, of course, mBanking-- banking with your mobile phone.

The paper asks what governments and the private sector can do to affect the development and uptake of branchless banking in the next ten years, looking at the forces and uncertainties that will most strongly affect this progress. Then they conduct an interesting thought experiment, laying out four scenarios, in four imaginary countries, exploring the ways varying actions taken by the government and the private sector affect the growth of branchless banking.  It makes for pretty interesting reading.

The basic conclusion of the paper is that there is massive, latent, underserved demand for mobile/branchless banking, and if mobile operators, banks, and governments can work harmoniously to create a legal regime that is clear and stable, a policy environment that supports innovation and experimentation, and products that are  functional and secure, we'll see widespread adoption of mobile and branchless banking in the coming decade. It may not happen immediately, so mobile operators and banks will have to be patient with their investments, but it's hard to imagine it not happening.

I think they're right about this. Because, here's what I'm thinking: Four billion people on earth have mobile phones, and four billion people are "unbanked." That means, roughly, that two billion people have a mobile phone and no bank.  The market is there, the demand is there-- who's going to figure it out?

There was a short but remarkable piece in last week's Economist, about the amazing spread of cell phones in Iraq since the US invasion-- many Iraqis list the arrival of mobile technology as the single best outcome of the American invasion. During the war, the phones were used in all sorts of novel ways by people put in a pinch:

“I love my mobile phone like a baby,” says Umm Basm, a mother of two. During recent years of civil strife, when many stayed indoors, mobile phones were the lifeline. They also became a tool of commerce. Reluctant to risk their lives by visiting a bank, many subscribers transferred money to each other by passing on the serial numbers of scratch cards charged with credit, like gift vouchers.

Mobile networks were also used by the more nefarious parts of society.  Beyond the cell-detonated bombs that got considerable press in the US, mobile phone access has changed the way every seedy operator does business:

Criminal rings are among the parallel currency’s busiest users. Kidnap gangs ask for ransom to be paid by text messages listing a hundred or more numbers of high-value phone cards. Prostitutes get regular customers to send monthly retainers to their phones, earning them the nickname “scratch-card concubines”, while corrupt government officials ask citizens for $50 in phone credit to perform minor tasks.

Just goes to show that this technology is just a tool-- not inherently good or bad, and not an end goal in itself.

Despite rumors it was destined to die on the negotiating table, President Obama's town hall discussion with Chinese students went off in Shanghai on Monday. He spoke before a select group of university students, and took questions both from the audience and online. When the discussion turned to internet censorship, Obama's language was restrained-- the most controversial he got was a claim to be a "supporter of non-censorship."

There has been considerable harrumphing in the blogosphere that Obama was too soft. At least, they grumble, he could have called himself an "opponent" of censorship. I think this complaint is misplaced. The point of this event was not to loudly denounce censorship with the goal of changing policy in Beijing-- that would be a rather ineffective tack. I think (as does James Fallows) that his language was as confrontational as it could have been without crossing the line andoffending Beijing (which, given the litany of other issues we need their help on, is not something we want to do). 

For an average Chinese person-- or even for the educated elites who were inevitably populating the audience of this event-- having a government official take their questions and listen to their comments is an uncommon experience indeed. The goal of this event, as I saw it, was to give a display of open, democratic dialogue, and let the audience make of it what they will. Our example, I believe, is powerful.

Which is why certain other complaints about the event are spot-on. Several questioners in the audience were seemingly planted by the Chinese government-- an affront to the intended democratic nature of the event-- and the webcast, which should have brought the proceedings to millions more around the country, was reportedly choppy and hard to watch.

All things considered, the town hall was worth the political capital we spent on it, but it could have gone better. I'll give it a B-.

The President is in Tokyo today, and will be in China for the first half of next week.  In advance of the trip, our State Department hosted simultaneous press conferences in Beijing, Shanghai, and Guangzhou for audiences composed primarily of bloggers-- a first for the U.S. in China. The attendees-- a mix of English- and Chinese-language bloggers-- were able to openly ask questions and comment on China's internet restrictions, and several bloggers live-Tweeted the proceedings.

This is yet another example of the very smart 21st Century Statecraft being plied by the Clinton Department of State. Rather than limiting ourselves to interacting strictly with the governments of foreign countries, we can engage directly with people around the world. By lending credence to China's bloggers, we help them in their effort to become a respected and efficacious voice for change in their own country. Even in cases in which our own objectives don't quite line up with the ideals of the bloggers themselves, empowering a multitude of voices is a big step in the right direction.

We do, naturally, seem to be getting a bit of pushback from Beijing. When he stops in Shanghai next week, President Obama is hoping to hold a town hall meeting with Chinese youth in his typical free-flowing, agenda-free format.  Rumors abound that the Chinese and U.S. officials are having some trouble agreeing on the terms for the event, and it may be scuttled as a result. Fine. I, for one, would rather see the town hall ditched than see a phony compromise event in which the attendees have no freedom to speak their mind.

I was over at the Newseum last week for a conversation hosted by our friends at Mobile Future. The discussion centered around how we can support innovation and investment in the mobile industry with smart policy. The key talk came from Tom Kalil, Deputy Director of the White House Office on Science and Technology Policy, who, as I'm sure you recall, wrote a paper for our affiliate the New Policy Institute last year called Harnessing the Mobile Revolution.

In his talk, Kalil hit on many of the same arguments he made in his paper last year, about the power of mobile technology to improve health care, enhance economic development, and promote democracy-- particularly in the developing world. He also identifies a few of the biggest challenges we'll face in the coming years. A video of his talk is here-- well worth a watch: