Networked, innovative - How poorer countries can benefit

Dialogue forum, 22 February 2018

Digitalisation of everyday life is a global phenomenon from which developing countries are not spared. Over 80% of people in these countries have access to mobile phones and use them for such things such as mobile banking, mobile insurance or e-learning. But who actually benefits from the increasing spread of information and communication technology?

There is no question that a range of digital offers are beneficial for people in developing countries. Weather apps allow precise weather forecasts and simplify work for farmers. Using the payment app M-Pesa, people can make payments and transfers even if they have no bank account. And broader sections of the population can be reached in the fields of education and health if regions that are isolated in terms of infrastructure can become better connected in a virtual way. The messaging service WhatsApp is being used a lot for business and is thus becoming a market place.

Tech startups create jobs
Bernhard Kowatsch, head of the World Food Programme’s Innovation Accelerator in Munich was optimistic about the potential: "Digital work creates employment opportunities for millions of people," he said. In Kenya, depending on which survey you look at, between 26 and 46% of the population have an internet connection. Startups like Andela are emerging that are being supported by Facebook or Google. Andela gives programming training to people in Africa and places them with US tech companies for a small charge. Kowatsch has great hopes for blockchain technology, a system that is increasingly being used for payments. Its special feature is that it is not controlled by an institution like a bank, but by information. Kowatsch believes that, by the year 2025, blockchain technology will make digital identities and bank accounts available worldwide. It is already undergoing testing today, for example to make cash transfers to refugees safer and more transparent – thereby making it much easier for them to buy food and other items. Kowatsch explained the benefits in a project that the Innovation Accelerator is conducting: “Instead of using a bank account, the transactions are made directly between the refugees and the retailers. This saves 98% of the standard fees."

Our moderator Patrick Illinger and the experts Victoria Wenzelmann, Bernhard Kowatsch and Andrej Zwitter (from left to right) saw light and shadow in terms of digitalisation in developing countries.

But not every person in developing countries benefits equally from technological progress. “There are often privileged people who make a career with the help of digitalisation,” Victoria Wenzelmann pointed out. She is a co-founder and director of Global Innovation Gathering (GIG), which brings together hub managers, hackers and entrepreneurs from around the world. Its focus is on technological innovations for Asia, Latin America and Africa. Wenzelmann believes that technology alone is unable to solve social and political problems, despite individual successes like the internet platform, Ushahidi. The latter was developed by bloggers and programmers following the manipulated 2007 presidential elections in Kenya, as a way to report and locate acts of violence using crowdmapping. Today the software is used after all kinds of disasters, for example to obtain an overview of the extent of damage, and to procure the required aid. “Technology can make a major contribution to democratisation, but the stimulus needs to come from people,” said Ms Wenzelmann.

Risk of a Wild West mentality

Andrej Zwitter, Professor of International Relations at the University of Groningen, reminded listeners of the downsides of digitalisation for developing countries. He admitted that global inequality in education could only be combated digitally. “But digital innovation in development aid means experimenting with the most helpless in society,” he pointed out. A major problem, Zwitter warned, was the lack of regulation of digital business models by the authorities. “While this promotes innovation, it can easily lead to a Wild West mentality." He added that, despite having the best of intentions, many actors were unaware of the problems their actions created. Needless to say, this is not a new phenomenon. In the 1990s, for example, humanitarian aid was not sufficiently professionalised, and some conflicts were actually prolonged because food was delivered to conflict parties.

A concrete example of how digital offers of assistance can be reversed came in 2010 during a flooding and famine crisis in Pakistan. At that time, a software program like Ushahidi was being used to try to coordinate offers of assistance more efficiently. “Unfortunately," explained Zwitter, "it also allowed the Taliban to plan attacks on the aid organisations, since they knew exactly where they would be operating." Even well-meant initiatives like "Techfugees", a social enterprise that is coordinating the tech community’s response to the dire situation of refugees, are not always helpful. "At a meeting of Techfugees, it was found that not a single participant had ever set eyes on a refugee. Yet the people involved believed they knew exactly which apps needed to be developed." As a further problem, Zwitter cited the potential power of companies like Facebook, Amazon or Google. He warned that this creates incredible dependencies and an imbalance of power.

Approx. 200 guests lively discussed with the experts on the panel.

Western companies rolling up the market
Wenzelmann added that the monopolisation of services like M-Pesa by provider Vodafone had to be viewed critically. Even if local companies were to develop a comparable product, it is likely that local people would fall back on the tried and tested variant. "Global corporations are exploiting this fact," she said. "They view Africa as a market, rather than a partner, and are rolling out their digital products on many of the continent’s markets." Wenzelmann said that civil society needs to find solutions in this context if people were not to be left at the mercy of the corporations. "People need to be involved at an early stage!"

"Technology is neither a positive nor a negative force – it depends on how it is used," Kowatsch argued. He gave the example of the farming sector, where many activities are becoming redundant because of automation. But they also provide small farmers in developing countries with the option of using inexpensive drones in place of tractors. Many technology innovations would happen anyway, he pointed out, and at at a faster rate than was the case during industrialisation. Responses therefore need to be found to the developments, whether in research, in civil society, or even in governments and corporations. "In Togo, people are building farmbots from electrical scrap from industrialised countries. These are small robots that are used to help with harvesting activities for example," Wenzelmann explained. Children now have more time for school because of the reduction in the workload. However: "Hunger is a political and economic problem that technology will not be able to solve at the level of small farmers," Wenzelmann cautioned.

Digitalisation is a helpful tool in many areas. But on its own, it will be unable to fill people’s stomachs, or open up opportunities for them for sustainable development. And because digitalisation is changing all aspects of life, it should not be considered in isolation, either spatially or in terms of topics. In shaping the digitalisation process, the fields of politics, administration, the private sector and civil society all need to be equally involved. What we have seen up to now in poor countries is that the people who benefit more from digitalisation are those with a higher level of education and better networks. So a large section of the population remains excluded. This should be seen as an additional incentive for greater investment in education policy.

The next dialogue forum on 20 March 2018 will be on the subject of "Blackout – How stable are our systems?"

5 March 2018