Tag Archives: economic growth

New GSMA publication on how mobiles contribute to economic growth

The GSM Association, together with Deloitte and Cisco have recently published a useful report (.pdf 3.4 MB) on the contribution of mobiles to economic growth, and they intend to run their analysis on an annual basis so as to provide a barometer of change in the industry and its impact.

Some of the key findings of the report include:

  • For a given level of total mobile penetration, a 10% substitution from 2G to 3G penetration increases GDP per capita growth by 0.15% points
  • A doubling of mobile data use leads to an increase in the GDP per capita growth rate of 0.5% points
  • A 10% increase in mobile penetration increases Total Factor Productivity in the long run by 4.2% points

The Appendices provide much more detail about the precise econometric models used, and it is good to see such detail and transparency.  I retain some concerns, though, about the ways in which causality is imputed from what are essentially relationships between economic indicators.  This could be the basis of an interesting dialogue about methodologies for undertaking such research, which I guess would depend heavily on ideological premises!  However, using this as a starting point, it would be interesting to drill down in more detail to ask what factors need to be in place for the economies of particular countries to follow the general observations noted.  From my perspective, we need to learn more about what some of the poorest countries and peoples can do to ensure that they too benefit.  In other words, we need to disaggregate the data, and understand in detail about the wider governance structures, infrastructure and social conditions that need to be in place to enable growth.  That is, of course, if economic growth is of prime concern!

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Filed under 'phones, ICT4D

Development as ‘economic growth’ or ‘poverty reduction’

Will economic growth lead to poverty reduction?  I believe passionately that the market will never serve the interests of the poorest and most marginalised.  This seems to me to be so clear and obvious that it scarcely needs defending!  However, I am becoming increasingly worried that such opinions are very much in the minority. The dominant, hegemonic view amongst most of those working in the field of development really does seem to be that economic growth will indeed eliminate poverty.

Following my recent keynote at m4Life on 28th October, at which I argued that we need to develop ways in which mobiles can be used to support marginalised groups, such as people with disabilities, I was very strongly challenged by an African colleague, whose views I respect.  In essence, she accused me of being a typical western academic who does not really understand Africa, and that if I did I would know that most Africans wanted economic growth. By focusing on the poorest, she suggested that my views were tantamount to arguing that Africans should remain poor. I felt deeply hurt by these accusations, and am still smarting from their vehemence some two weeks later! I actually don’t know why, they hurt so much, but perhaps it is because I have elsewhere argued strongly that Africa is indeed rich, and that we need to help build on its richness rather than always describing it as being poor!  The irony is that the paper I have written on this has continually been rejected by academic journals – quite possibly because it too does not conform to accepted dogma!

I clearly need to learn to express my arguments more convincingly.  This is a brief attempt to do so in the form of some basic principles:

  • The potential for inequality to increase is inherent within all economic growth.
  • Economic growth, defined in absolute terms, cannot therefore eliminate poverty (see my critique of Jeffrey Sachs, for example, in ‘No end to poverty’)
  • If economic growth proceeds unchecked, it will inevitably lead to increased inequality that will ultimately fuel social and political unrest at a range of scale
  • A fundamental role of states is thus to intervene in the market to ensure that the poorest and most marginalised are not excessively disadvantaged.
  • Given that the market serves the interests of the majority of people, it is incumbent on those who care about reducing inequalities specifically also to address the needs and interests of the poor.
  • Such an argument can be justified both on moral grounds (that it is just), and also on socio-political grounds (to reduce potential violence)
  • With reference to mobile technologies, therefore, all I was doing in my keynote was to argue that companies, entrepreneurs, app developers, and all those claiming to use ‘mobiles for development’ should seek to address the needs of the poor and marginalised, alongside those of global corporations and their shareholders.
  • This is premised upon a belief that ‘development’ is about rather more than just economic growth, and includes notions of equality of opportunity and social justice.

These arguments are developed more fully in:

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Filed under Africa, Development, Ethics, ICT4D, Photographs