The following article, “Can Technology End Poverty?” was originally published by Harvard Business Review as part of the Insight Center on Scaling Social Impact sponsored by The Bridgespan Group. I am pleased that Siemens Stiftung shares my view that technology has to be suitable and relevant to the lives of its users. To do this for people living in poverty, this means going beyond our own understanding of the usage of technology, looking into others’ experience, and identifying their real problems and needs. I support the “empowering people. Award” and its call for innovative ideas to addressing the ultimate goal of ending poverty.
Can Technology End Poverty?
If you believe the hype, technology is going to help us end global poverty. Advances have indeed made a huge difference in the lives of the poor, but there’s also a healthy amount of skepticism out there. Berkeley researcher Kentaro Toyama has a blog dedicated to calling out naïve or inappropriate uses of information and communication technologies (ICT). Calling himself the ICT4D jester (using the development jargon for “information and communication technologies for development”), he has no shortage of material. We’ve all heard stories of computers that sit unused in African classrooms; on a recent post, the jester takes aim at texting cows.
The organization I’m part of, BRAC, is known for going to scale with solutions that are often radically low-tech. We’re more likely to scale up birthing kits that cost less than 50 cents apiece than mobile apps that might diagnose disease; more likely to open one-room schools in rented spaces or even boats, where children sit on the floor and learn to think creatively, than insist that every pupil have Internet access.
But I’m hardly a naysayer when it comes to tech. I agree with Peter Diamandis and Steven Kotler, who write in Abundance: The Future is Better Than You Think that higher productivity associated with the falling cost of technology is leading us to a world of plenty.
The trick is making sure everyone shares in the coming abundance — or at least has a fair shot at doing so.
To do that, it’s vital that technology be suitable and relevant to the lives of its users. That’s easier said than done in a world where most product innovations are geared toward the rich.
We can take some lessons from Bangladesh, where BRAC is heading full steam into mobile banking with bKash (bikash means “growth” in Bengali), which is now the largest mobile banking provider in the country. BRAC Bank (the commercial bank owned by BRAC) launched the service as a pilot in five branches in November 2011, asking small enterprise borrowers to make repayments via local agents — who would send a receipt via text message — rather than in person at branch offices.
Even though it was designed to save time for hard-working families, asking borrowers to forego their passbooks in favor of SMS confirmations made them extremely uncomfortable. Shameran Abed, who runs BRAC’s microfinance program, explains what happened: “In the first couple months, a lot of our borrowers would send the money through their mobile phones and then physically show up at the branch to check with the accountant that the money had turned up.”
You may chuckle at that, but consider things from the point of view of a Bangladeshi smallholder farmer. “In a country where most people think that the only thing that is irrefutable is hard copy documentation with someone’s signature affixed to it, we were asking our borrowers to take a major leap of faith,” Abed says. “Some of them said to us: ‘If ever there is a dispute and we end up in court, no magistrate or judge will want to see an SMS confirmation. They’ll want to see proof” — meaning a hard-copy passbook.”
BKash is now advertised widely, with 30,000 agents and 2.2 million users. We’re confident in the cautious approach we’ve taken, and more importantly, the clients seem so, too.
But what happens when you ask customers to make a leap of faith and the chasm proves too wide? The consequences can be harmful — often more so for poorer clients than the ones pushing the solution.
BRAC learned this lesson from its foray into community-owned tube wells and irrigation pumps in the 1990s, documented in Ian Smillie’s Freedom From Want. Since water deep in the ground doesn’t belong to anybody, we thought of giving loans to organizations of the landless poor to drill and manage deep tube wells and sell the water to rice farmers, who would in turn benefit from higher yields.
The promise was exciting — the details far less so. The project depended on sufficient demand from farmers, which depended on ensuring they had access to high-yield seeds, fertilizer, and pesticides. It also meant gauging demand for irrigation with a certain level of precision, which meant accurately forecasting the sale price of rice.
In the end, the program had far too many moving parts over which BRAC and the borrowers had insufficient control. At the program’s peak, 700 pumps covered 27,000 acres, with the loans constituting 9% of BRAC’s total microfinance portfolio. By the end of 1993, half of the pumps were operating at a loss and many loans were in arrears. The program was shut down in 1996, and although it refunded 100% of the loan repayments, it went down as one of BRAC’s biggest failures.
If details about fertilizers and crop yields seem tedious, that’s part of my point. We need to learn to hang onto the positive energy of the tech-innovation movement — in the words of Steve Jobs, stay hungry and foolish — even when the complexities don’t exactly liven up our cocktail party chatter (or, for that matter, galvanize investors).
In that regard, social entrepreneurs should heed the following:
Invest in local innovation. The poor and marginalized may not have been to school, but that doesn’t mean they’re uneducated. They’re often experts at jugaad, the Hindi word for “frugal innovation.” Piecemeal, low-tech solutions often go further — and are more easily scaled-up — than anything dreamed up by R&D-centric outsiders.
Grapple with the human dimensions of the problem. Understand not just the thrill of empowering people in principle, but the challenges in practice. To really know what managing a well means for a group of landless villagers, one needs to understand workaday hassles easily overlooked in the excitement of helping people. One must be sensitive to the stress of uncertainty with new innovations, such as replacing cumbersome microfinance passbooks with digital money.
Immerse yourself in the details. If you find yourself frustrated, bored, or driven to distraction by the nitty-gritty (the financial yields of improved rice varietals, say), that’s a sign you may be on the right track — and safer from the jester’s taunts. The prospect of billions rising up from poverty with nothing more than gadgets is indeed a fanciful notion — and not a helpful one, either. But the evidence says that when we tether enthusiasm to reality, the reality starts to budge.