Information and communication are
essential to trade. In the most general terms, buyers must communicate with
sellers, both must have information about product and pricing, and negotiation
of any kind requires selective communication of information. As a result,
information and communications technologies (ICTs) feature prominently in aid
for trade discussions. But, while ICTs can be helpful in a variety of
entrepreneurial scenarios, ICTs alone very rarely create meaningful change. A
focus on human and institutional capacity remains indispensible.
One
well-known example of ICT-for-development is the e-Choupal project run by
Indian agriculture conglomerate ITC (previously Indian Tobacco Company). Most
media descriptions of the e-Choupal project are as follows: agrarian villages
are supplied with a PC and satellite Internet connection that is paid for by
ITC and operated by a local farming household. Online, village farmers check
commodity prices, learn about farming practices, and place orders for seeds and
fertilizers. Over time, farmers learn to sell directly to ITC, and both parties
benefit by cutting out expensive middlemen.
The
project has garnered widespread acclaim, including the Development Gateway
Award and the Stockholm Challenge Award, both international prizes that
highlight innovative uses of ICT in development. The company caters to this
attention, and consistently speaks of the project in terms of ICT.
Closer
inspection, however, reveals a completely different reality. When I visited one
e-Choupal near Bhopal in 2004, the PC had not been turned on in months, and
farmers were certainly not learning about agriculture online. They did,
however, appear to be selling directly to ITC. It turns out that in addition to
the e-Choupals, ITC builds modern trading stations within a few kilometres of
the villages, each manned by ITC personnel and equipped with industrial
weighing machines, warehouses for storage and office space. Farmers go to the
trading stations to have their harvest assessed and leave within hours with
payment in hand. Compared with corrupt middlemen, who often make the farmers
wait for days as an aggressive negotiation strategy, ITC’s stations are a
welcome relief.
Importantly,
it’s not the computers but the physical trading stations and their corporate
efficiency that matter. Computers are used in station offices, but only for
routine office bookkeeping. And as for the e-Choupal PCs, if the farmers didn’t
also have access to the trading stations, they would probably see no benefit.
Conversely, even if an e-Choupal PC isn’t operating – as in the village I
visited – the farmers still benefit from the stations. Tellingly, ITC stopped
putting PCs in villages in 2007.
The
e-Choupal project is remarkable because of the canyon between public perception
of the project and what is happening on the ground. While ITC deserves credit
for their trading stations, overhyped ICT stories result in misconceptions
about what technology can accomplish. They leave an impression that ICT
provides packaged solutions to complex problems in trade and development, when
technology is better thought of as a tool that requires an able user to wield
it. Technology is a magnifier of human and institutional intent and capacity.
Its impact is multiplicative, not additive. In situations where intent is
negative (as with corrupt bureaucrats) or where capacity is infinitesimal (as
with severely undereducated communities), technology alone will not have a
positive impact.
Thus,
it takes more than an Internet connection to ensure that village artisans have
access to international markets. It also takes quality assurance, end-to-end
transport, relationship building with potential buyers and a well-managed
supply chain. It takes more than a wireless connection to make rural
telemedicine work; it also requires locally trusted healthcare workers,
technical support and maintenance, and hospitals and doctors dedicated to rural
outreach. And, it takes more than mobile phones to enhance the livelihoods of
slum residents; it also requires vocational training, the expansion of reliable
social networks and jobs that pay well for their skills.
When
ICT does have a positive impact, it amplifies existing trends or institutions
that were already having a positive impact to begin with. For example, in a
project called Digital Green that I helped launch in India, inexpensively
produced how-to videos of agriculture practices are used as the basis for
mediated educational sessions with farmers. In a pilot study, Digital Green was
found to be 10 times as cost-effective in persuading farmers to adopt new
agricultural practices as traditional agriculture extension. However, as
critical as technology is to Digital Green, it cannot have its impact without
partners that run effective agriculture extension programmes. Someone needs to
organize villagers, someone needs to produce content, and someone needs to
train and support session mediators. What limits Digital Green’s scale is not
the amount of video equipment it can purchase, but the number of good
agriculture extension organizations in the world. Where such organizations are
absent, the technology alone is useless. Institutional capacity must be
developed before Digital Green’s technology can have value. Disseminating
technology is easy – nurturing human and institutional capacity is the
challenge.
For
those considering ICT in aid for trade, I have two recommendations. Firstly,
focus on fundamentals. There are no shortcuts to establishing healthy markets
and trade partnerships. Human capital must be nurtured, trusting relationships
must be established, and supply chains must be built link by link. While ICT
may play some role in these activities, it is unlikely to play the dominant
role, any more than the back-office servers of a successful corporation are
what make it profitable. In particular, any initiative based primarily on ICT
is unlikely to solve a complex social or institutional problem by itself.
Secondly,
if ICT must be used, seek out trends or organizations whose impact on trade and
development is already established. Then, design the technology to amplify
their impact. Of course, it still takes good design, operational resources, and
ongoing effort to keep technology going, but that is exactly what
well-intentioned, capable people and institutions can provide.
Technology can do great
things, but only if combined with positive human intent and capacity.