Mobilizing Entrepreneurship

Many of this century’s conversations about the potential of mobile technology and development seem to have a familiar ring. Some people get that same starry-eyed look that was so prevalent at the end of the 20^th century when the topic of microfinance began to emerge. Lots of excitement. Lots of promises. Lots of ad hoc activity and hopeful anecdotes. However, we still have a long way to go before we reach anything near a full understanding of the sector’s true scope, scale, and impact, so I believe this hopeful speculation should be matched by an equal push for reliable data collection and rigorous information sharing.

That does not mean that we at Omidyar Network are not bullish on mobile technology. We are. We have staked a lot, both financially and organizationally, on its power, and we will continue to do so. But we also recognize that “we don’t know what we don’t know.” The technology is still young, and some fundamental questions need to be answered—and answered correctly—if we are ever going to see a fraction of the dividends that the mobile for development optimists are projecting.

The current trajectories are undeniably promising and developments are coming quickly. In fact, they have never moved more quickly. In July 2012, the World Bank issued its report on Maximizing Mobile, which provides one of the best sector overviews to date and graphically captures the dynamism of the mobile market, especially in the developing world.¹Figure 1, taken from page 8 of that report, shows how mobile applications can maximize development.

Irrational exuberance aside, we are now at a crossroads that will irrevocably determine the future of “mobile cum development tool.” At Omidyar Network, our vision is a vibrant mobile ecosystem built on a platform of affordable Internet access for a majority of the developing world. We have identified three fundamental ecosystem enablers that will drive us toward that vision:

Figure 1.

“Maximizing Mobile for Development”

1. 1. Mobile devices will provide affordable access to the Internet

2. 2. A locally relevant set of services, including things like a localized Wikipedia and classified ads, will address the most pressing needs of local consumers

3. 3. Mobile money infrastructure will facilitate the monetization of mobile applications, services, and commerce

By focusing on the simultaneous evolution of these three mutually reinforcing enablers, we hope to create a virtuous economic cycle in which innovation drives adoption, which in turn drives new investment and further innovation.

What follows are examples of how we are engaging with our network to support these enabling forces and unleash this virtuous cycle. Like anything worthwhile, this can only be done in partnership with other sectors, organizations, and people, so we are eager to hear feedback and to keep the conversation going—starry eyed or otherwise.

Affordable Access

As the infographic in Figure 1 highlights, cell phones have reached every corner of the world, with nearly six billion subscriptions in 2011. That’s a six-fold increase in less than a decade. This growth has been fueled by the developing world, with three out of four subscribers now in developing countries. About 75 percent of the world’s population, now has access to at least a basic cell phone. This connectivity has clear economic benefits; Waverman, Meschi, and Fuss found that in emerging economies, every 10 percent increase in mobile phone adoption drives a 0.81 percent increase in GDP growth.²

In contrast to the widespread availability of mobile voice services in emerging markets, the penetration of the Internet is extremely low. Across Africa, for example, only an estimated 4 percent of people use any Internet service, while that number in India is 10 percent, according to International Telecommunication Union (ITU) data.³ By contrast, in the United States mobile-broadband penetration is 54 percent and it is more than 90 percent in South Korea, according to the same ITU report. In a seminal 2011 paper published in the Economic Journal,⁴ Czernich et al. show that a 10 percentage point increase in broadband adoption raises annual...