The Communication-Driven Economy

(This posting originally appeared on the LiMo Foundation blog...)

I recently read an extremely interesting special section in The Economist, concerned in particular with how mobile communications, and "mobile finance", was positively affecting emerging economies. One figure that stuck with me was that adding ten cell phones into a population of 100 people had the net effect of raising the country's GDP by 0.8%; that's a simply staggering figure relative to the investment involved. Particularly in countries that have been historically lacking in infrastructure, mobile communications can be paradigm-changing: it allows instant communication with places and people that might have been days off, or otherwise inaccessible. By providing a flow of information of all kinds, where none existed before—especially over long distances, mobile communications make new markets and new products possible in ways that would have been out of reach otherwise.

Today, more people access the Internet, globally, from cell phones than from traditional computers. Many people have never accessed the Internet any other way. This is a continuation of the major "paradigm shift" which began in 1995, when "the Worldwide Web" moved from being a province belonging solely to the technically adept to something which was accessible and usable by anyone at all—with the right equipment, anyway. The "right equipment" was, of course, hideously expensive in global terms: a computer costs at least a couple of thousand dollars.

Today, we see cell phones that are, in terms of power and performance, the full equivalent of "desktops" or "laptops" of only a few years ago, at a fraction of the cost. And the cost only keeps getting pushed down. A phone that is capable of accessing the Internet, and hence the world, is within the reach of more and more people in the world. And, as The Economist points out, having that phone enriches and improves people's lives in tangible and quantifiable ways.

But cell phones and mobile devices don’t only drive economic change: they can drive political change as well. Five years ago, cell phones and text messaging played a crucial role in Moldova’s “Orange Revolution”; today, it’s at least as likely to be Twitter that is used for mass communications. Communications of this sort cannot be censored, and we can expect to be seeing such facilities playing an increasing role in all kinds of political discourse.

The device-manufacturing members of the LiMo Foundation ship on the order of a quarter of a billion phones worldwide annually. The economics of the electronics industry keep driving the cost of a device with a given feature set ever-downward; efforts both in the open source world and in organizations like LiMo do the same with software. Virtually every phone on the market comes with a web browser of some sort—ACCESS alone ships scores of millions of new installations of our browser product a year on phones at all price points.

Change on a global scale is rarely sudden. It’s a series of small changes - incremental ones. In the past twenty years, cell phones have gone from being a luxury available only to the wealthy to something that’s within the reach of the majority of people on the planet. At the same time, the power and functionality of the devices themselves has only increased. With that increased availability and functionality has come better flow of information and news, improved economic prospects, better education, and the ability to stay in contact with those who are physically distant, for people around the world. We’re only beginning to see the changes that will come out of a transition like this.

The "One Laptop Per Child" effort set out to produce a general-purpose, portable computer suitable for children's education at a cost of $100. It didn't quite achieve all of its goals, but it led to a number of interesting and useful experiments and results. It may be that the modern and increasingly functional cell phone turns out to be, to a large extent, the real "hundred dollar laptop" and not just for children.

[Lefty will be presenting at eComm, the Emerging Communications Conference, in Amsterdam, on behalf of the LiMo Foundation, on Oct. 28. For more details on the conference, please see http://europe.ecomm.ec/2009/]