Thursday, December 6, 2007

Mobiles and the digital economic boom

A lot is said about the potential for mobiles to leapfrog Africa into world class connectivity. This blog also commented on the bright future for mobiles in Africa.

It is time to move beyond the hype and start asking the questions how this will actually work. Surely providing all with a mobile will not ignite an economy? One needs capital, labour, bioophysical resources, infrastructure, social networks...

It has been documented that mobiles can be used for banking and buying air time, and possibly can be upgraded to the buying and selling of products and services. It is also documented that farmers make use of cellphones to access the latest pricing information. The role mobiles play in nurturing social capital has also been discussed. But does this have a measurable effect on economic development?

The World Telecommunication/ICT development report 2006 does argue that mobiles in particular do have an effect:
The sector that so far has had the strongest impact in developing countries is the mobile sector, particularly since mobiles are not just a different or complementary way of communication but have opened up entirely new communication means in many parts of the developing world. The boom of the mobile industry has not just created new jobs and revenues but also contributed to economic growth by widening markets, creating better information flow, lowering transaction costs, and substituting for costly physical transport.

Apart from the impact of the mobile sector, the transformation of economic relationships and processes is particularly visible in those countries and areas that have the highest Internet penetration levels. The spread of broadband seems to have a particularly important role in certain areas, including for the emergence of e-commerce, teleworking, and e-education and health. This highlights the need for developing countries to pay special attention to broadband deployment and strategies.

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