Technology a pathway out of poverty
Social media and access to information and communication technology is a pathway out of poverty, according to new research. By Adam Cooke.
It will take a century for a poor household to tweet its way out of poverty. That’s a very long time for anyone wondering where their next meal is coming from. But it’s a significant new finding because it proves once and for all that social media and access to information and communication technology (ICT) is a pathway out of poverty.
This is one of the central findings of economist Prof Julian May, director of the Institute for Social Development at the University of the Western Cape, who released his study at the Towards Carnegie 3 conference in Cape Town recently. Based in the poorest 20 areas in four East African countries, the study found that access to ICT contributed about 0,5% to annual household income and had a measurable transformative role.
“The finding is significant because it shows that a mobile phone on its own leads to an increase in income,” May told the conference which brought together the country’s top academics, government officials and NGOs to focus on strategies to overcome poverty and inequality. “There aren’t many things that cost so little and yet have this result. In the face of many other huge plans like land reform that lead to little measurable change, this study shows that a mobile phone can change lives — we can say now that here is a resource that shows a difference.”
He warned against becoming evangelical about ICT, but said “the availability of mobile phones is a potentially valuable tool to improve the livelihood of the very poor over the medium term (six to 10 years) and contribute towards their escape from poverty traps”.
The starting point for his research was “the staggering uptake of mobile phones in Africa accompanied by persistent levels of poverty”. He showed that by late 2010, Africa had exceeded Western Europe in terms of the number of mobile connections, and Internet usage between 2 000 and 2011 had grown by more than 2 000% — five times more than for the rest of the world.
“We wanted to find out whether this uptake of mobile phones could be a new tool in poverty reduction and what we found was that there is a small but positive benefit to the very poor,” he said.
The study took place in 1 600 households in 2008 and 2010 during a period of dramatic food price increases and global economic crisis, and yet the income of the poorest people who had access to mobile phones went up. “Access to ICT buffered people against poverty,” he said. “The gains made as a result of ICT access for the most poor were twice that for the non-poor. As a result there was a steady convergence between the income of the poor and the non-poor. Over a 10-year time horizon the modest additional gains from ICT can be seen to disproportionately benefit the very poor.”
More than that, “if you put a mobile phone into the hands of someone with an additional year of education, their income increased further and if you add skills and entrepreneurship training this income figure increases even more”.
The poor used mobile phones to grow their income in a range of innovative ways such as developing better communication networks, hearing about jobs on offer and communicating more directly with those offering work. But a mobile phone also meant a household could deal more effectively with a crisis which would ordinarily have led to large expenses on travel, and a household could find more efficient ways of sending money to relatives. For instance, in East Africa M-Pesa is a hugely successful mobile-phone-based service that enabled an estimated 17m users to deposit, withdraw and transfer money.
But mobile phones also allowed users to check on things like food prices. “In Uganda, where the main crop of small scale producers is plantain, farmers can find out what prices are being offered at markets and what the demand is and so decide when they harvest and when they take their produce to market,” he said. In both Uganda and Rwanda, there were government services where farmers could send an SMS to a free number and hear instantly what coffee prices were in regional markets.
May’s study was particularly significant when viewed in the SA context where 70% of the unemployed were between the ages of 15 and 35, said Rumbidzai Goredema of the DG Murray Trust.
Speaking at the conference, which was funded by the National Planning Commission and UCT, Goredema said the trust and NGO Career Planet had created a mobile tool aimed at putting job seekers in touch with job providers. Based on the Indian mobile tool Babajob — which connects up to 1 000 work seekers every working day and over the last three years 900 000 jobs have been posted by employers — the mobile information hub is a bridge between a social networking and a job site. It allows employers to hire people that someone they know can vouch for.
“We are not the first to try replicate this model in SA,” she said. Last year, the Praekelt Foundation launched Ummeli, a mobile jobs portal hosted on Vodafone Live. In Ummeli’s first two weeks, it attracted 20 000 members while Athlone-based RLabs launched Uusi, a Mxit-based platform connecting work seekers and placement services attracted 100 000 users.
But the Career Planet platform was developed specifically for users with non-WAP-enabled phones and basic feature phones that use an unstructured supplementary service data (USSD) platform. And this is where their problem lay: the costs of accessing the hub at 20c for 20 seconds prevented the poorest people from using it.
“The challenge here is to create platforms that bypass traditional barriers of cost and accessibility and equip youth with the skills and information they need to seek out opportunities,” Goredema said. “The Babajob platform in India is freely accessible to users, contributing to its success. We need to get bodies such as the Independent Communications Authority of SA to ensure such mobi sites can be subsidised or zero-rated so users who have limited airtime can get access,” she said.
The high mobile and Internet costs in SA were a major barrier to ICT’s ability to change the lives of the poor.
“Measures need to be taken at a structural level so that the high access to mobile technology is translated into higher levels of access to information and services that could facilitate successful connections to opportunities,” she said.
For May, these structural changes also pointed to problems in the department of communications — the very reason he did his research in the more forward-looking East African countries in the first place.
“The department of communications has not done a proper job in terms of providing clear and unambiguous policy, with the result that channels for the delivery of ICT are confusing and function poorly. Internet and mobile phone costs remain high compared to East Africa and as a result we are not doing justice to the many projects that could help alleviate poverty,” he said. — (c) 2012 Mail & Guardian
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