Steel Frame

There is converging evidence that ICT and the rise of connectivity have a positive impact on macroeconomic development. Yet at the project level, socio-economic results are rarely measured beside number of users and revenues. Anecdotal evidence suggests that ICT at the BoP can save lives and multiply incomes manyfolds – but there is no systematic impact assessment done to

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exceptions. Additionally, so far there is no tool to single out

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of ICT4D is still recent, it is simply too early days to assess the long-term impact of ICT on development. Finally, in any given sector, assessing the socio-economic impact of ICT

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approaches should be compared to that of other means to reach a given socio-economic goal, to make sure that using ICT is the best way to improve the BoP’s future.

11.1 Growing evidence of positive

economic impact

Several studies have been conducted over the past years, all pointing to similar numbers in terms of impact of mobile phones: every 10% increase in mobile phone penetration corresponds to an approximate 1% increase in a developing economy growth rate.147 _{This can be easily} understood as telephony creates new markets, the most obvious being for handsets and for telecommunications,

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seen in the examples studied in this report, new markets of value-added services ride on those of communication. The macroeconomic impact of ICT on GDP can be linked to various types of microeconomic impacts on the budget of BoP households. ICT-enabled services can:

Save costs, providing an existing service in a more

ƒ

cost-effective way. This is the case of mobile money transfers for example, that avoid the cost of transportation to a bank (which in the case of social transfers could represent as high as 30% of the transfer amount) or risky – and costly – informal channels such as bus drivers.148 Out of our study, examples with the largest numbers of users (above 5 million) are those that provide such

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FINO has 28 million users in India, M-PESA 13 million in Kenya, and Bradesco more than 5 million customers

LQ%UD]LO149 _{Another application of this is remote health} consultation: HealthLine Bangladesh, providing a simple doctor consultation for less than half a dollar, advantageously replaced a long trip the doctor added to traditional consultation fees, amounting to several dollars. HealthLine and other such health hotlines in developing countries reach several million users each.150

Improve existing economic opportunities:

ƒ

By better linking supply and demand and improving ‡

logistics, effectively extending the reach of the existing market (in agriculture for instance, empowering farmers who can now make informed decision on where and when to sell and get better prices for their products, knowing the various options of neighboring markets). By improving existing practices through expert advice (in ‡

agriculture for instance) or by creating new job prospects though adult education programs (either teaching skills that open job opportunities such as ICT or English, or training existing staff for better results like in healthcare

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ƒ especially in the case of “local agent” models that employ local entrepreneurs to bring the

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typically scale to up to a few thousands local agents (in the case of Drishtee or eChoupal) to several tens

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147 _{For every 10% increase in mobile penetration rates, studies reported the following: 0.81% increase of economic growth on average in 120 countries; 1.2%} increase in the economic growth India states (after a critical threshold of 25% penetration); 1.2% increase in Sudan GDP growth rate.

Respective sources: Information and Communications for Development 2009: Extending Reach and Increasing Impact, Christine Zhen-Wei Qiang, World Bank, 2009 ; available at www.ffem.fr/jahia/webdav/site/proparco/shared/PORTAILS/Secteur_prive_developpement/PDF/SPD4_PDF/Christine-Zhen-Wei-Qiang- WorldBank-Mobile-Telephony-A-Transformational-Tool-for-Growth-and-Development.pdf

India: The Impact of Mobile Phones. Moving the Debate Forward, Vodafone Group, 2009. Available at: http://www.vodafone.com/etc/medialib/public_policy_se- ries.Par.56572.File.dat/public_policy_series_9.pdf

Economic Impact of Mobile Communications in Sudan, Ericsson and Zain, Deloitte, 2009. Available at: http://www.ericsson.com/res/thecompany/docs/sudan_ economic_report.pdf

the case of M-PESA, Bradesco or FINO), be they employees or franchisees, with a multiplier effect as each agent typically serves up to 1,000 clients. Yet it must be noted that many of the “agents” already had a business before.151 _{The ICT services are often an} add-on to an existing job rather than a truly additional employment opportunity.

The corresponding savings or income increases have been reported anecdotally. The projects seen in this

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to 400% income increase for some of their clients. Some of the local agents managing the ICT kiosk of Drishtee or eChoupal have seen their income double or more, while retailers proposing Bradesco banking services

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comprehensive or systematic study of the impact of ICT services on their clients.

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impact of ICT

More than economic impact on which there is some information, what is crucially missing is a measure of the other impacts of ICT. From this study, the anecdotal evidence

gathered seems to point to the following possible impacts:

Overall:

ƒ ICT can empower the BoP and give them pride of using complex technology and accessing previously unavailable information.

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ƒ Mobile money avoids unsafe

trips carrying cash for many people at the BoP. It also creates opportunities for microsavings, microcredit and

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ƒ ICT can improve farmers’ knowledge on agro-practices as well as on the world economy. BoP clients of agro-news services through mobile or internet for instance started requesting international commodity

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and revenues if it is coupled with logistic support for sales of inputs and outputs.

In health:

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cost of care, allowing to include the poorest in health insurance schemes. It also helps the most remote to access quality care via remote diagnosis tools (from SMS queries to healthlines to telemedicine). Yet if an issue is detected, ICT will not replace the need for physical access to medicines or to a “real doctor” consultation and operation.

In educati

ƒ on: At school, ICT can improve attendance (of both teachers and students) and school results. For adults, ICT can improve employment prospects via professional training either in ICT itself or in language skills. Remote training can help bridge the gap in many areas between the developed and developing world. As this area is still very new and education takes time before showing impact on a country’s population, the impact of

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ƒIn both health and agriculture, ICT needs to be coupled with physical infrastructure to have a full impact. And in all cases seen, the impact of ICT alone remains hard to single out$GGLWLRQDOO\DVWKH¿HOGRI,&7'LVVWLOOUHFHQW it is often too early to assess the long-term impact of ICT on development – plus, there does not seem to be clear methodologies to measure that impact. All this points to a real need to improve our understanding of the role that ICT can play on development.

11.3 The need: Developing credible

methods to assess the impact of

ICT4D and testing it against other

means to accelerate development

ƒAs projects take a few years to design relevant services that people are ready to pay for, they do not have resources to spare on impact assessment during their

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stand today). NGOs, research agencies and donor- led initiatives have a real role to play there, helping the world understand the impact of ICT4D projects on

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socio-economic services to the poorest.

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impact monitoring and evaluation tools that allow to single out the impact of ICT, and then to conduct long-term studies regarding that impact, so far mostly gathered anecdotally. Maybe most importantly, in any given sector, assessing the socio-economic impact of

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enabled approaches should be compared to that of other means to reach a given socio-economic goal. Development projects should not aim at promoting a

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through ICT or other means. For this, further research will need to determine in which areas ICT is just a costly tool to achieve a result that other means can bring at lower costs, and when, on the contrary, ICT is indeed the best tool to improve the lives of the BoP.

151 _{Most recent “VillagePhone” type initiatives, offering shared phone services in remote rural areas, similarly scale up to several thousand operators, creating jobs} at least for a certain period of time until connectivity, handsets and energy availability improve.

12. The environmental impact