⇓ More from ICTworks

Is ICT4D Dooming Poor People to Greater Income Inequality?

By Wayan Vota on July 15, 2015

food-or-tech

I firmly believe in Kentaro Toyama’s maxim that technology magnifies human intent (read his book Geek Heresy?), and since I am an optimist, I therefore believe that information and communication technology can improve the lives of people at the base of the pyramid.

Yet, my utopia is questioned by a World Bank working paper that found global income inequality has fallen steadily from a Gini coefficient of 72.2 in 1988 to 70.5 in 2008 but that the decrease in global income inequality masks increases in income inequality within individual countries.

An further analysis by the International Monetary Fund found that income inequality rose in most of the 51 countries analyzed, and that technological progress had a greater statistically significant impact on inequality than financial globalization. This seems to confirm Kentaro’s suggestion that, “If Adam Smith’s invisible hand spurs economic growth, it also pickpockets from the commons.”

Are we actually increasing income inequality with ICT4D?

wef-ict-report

Robert Pepper and John Garrity of Cisco examine this issue in their “ICTs, Income Inequality, and Ensuring Inclusive Growth” chapter of the Global Information Technology Report and they found four main mechanisms that dictate the process by which ICTs contribute to macroeconomic growth by affecting inputs to GDP growth:

  1. ICTs contribute to GDP directly through the production of ICT goods and services as well as well through continuous advances in ICT-producing sectors,
  2. ICTs contribute to total factor productivity growth through the reorganization of the ways goods and services are created and distributed,
  3. ICT industries generate positive employment effects, and
  4. increasing applications of ICTs (capital deepening) leads to rising labor productivity.

Now how can we get those four contributions working on behalf of the poor? Robert and John wisely say we need to close the disparity in ICT usage and they offer us five policy actions to increase the positive benefits of ICTs to those at the base of the economic pyramid:

  1. Focus public resources and incentives for building broadband Internet access out to rural and underserved communities.
  2. Connect schools and libraries to broadband Internet service and ensure widespread connectivity within schools.
  3. Remove excess taxation on devices and access, and consider targeted subsidies for certain populations.
  4. Develop robust ICT training curricula and programs.
  5. Focus on closing the gender gap in ICTs.

Looking at this list, I’m sure you can think of programs that do each of these recommendations, but do you know of any programs that do all five? And at scale? Or is Kentaro right with his epic screed from Geek Hersey on our current belief in technology-driven development solutions?

“Novel, measurable, large-scale, turbo-charged, value-free, market-oriented packaged interventions for freedom-drunk, goal-driven, meritocratic individualists dominate our notions of social change. This creed has been terrific so far for those of us who have benefited. But the world’s persistent challenges and imminent crises suggest that what got us here won’t take us further. For a more enduring humanity, we need a better narrative of progress.

I am sure that if you’ve read this far, you have an opinion. So click here and tell us what it is in the post comments.

Filed Under: Economic Development, Featured
More About: , , , , ,

Written by
Wayan Vota co-founded ICTworks and is the Digital Health Director at IntraHealth International. He also co-founded Technology Salon, MERL Tech, ICTforAg, ICT4Djobs, ICT4Drinks, JadedAid, Kurante, OLPC News and a few other things. Opinions expressed here are his own and do not reflect the position of IntraHealth International or other ICTWorks sponsors.
Stay Current with ICTworksGet Regular Updates via Email

6 Comments to “Is ICT4D Dooming Poor People to Greater Income Inequality?”

  1. Geek Heretic says:

    Nice post, Wayan! One of the facts I trot out frequently is that even in the United States, technology has done little to address inequality. Over the last four decades, we’ve seen a golden age of digital innovation, and the technology has penetrated far — public libraries all have Internet-connected PCs, and smartphones are owned even by very poor households. Yet, during the same time, inequality has skyrocketed. I’m not claiming one led to the other, but there’s no explanation here where the conclusion would be that technology alleviates inequality.

    • John Garrity says:

      Yes, good post, Wayan, and an important discussion. What we are observing is that ICTs are powerful for growth, but in situations of uneven access & use, ICTs may help to concentrate resources. Erik Brynjolfsson and Andrew McAfee have been observing this in the corporate world for a while: in IT-intensive industries, the most successful companies are pulling away from their peers (in finance, healthcare, etc.). https://hbr.org/2008/07/investing-in-the-it-that-makes-a-competitive-difference The challenge is to implement policies that ensure more equal access and utilizations of ICTs. While gaps in access are closing (e.g. mobile telephony, broadband, etc.) we are observing a new and growing digital divide with regard to utilization. More to come and much work to do.

  2. Thanks for a nice and stimulating post, Wayan.

    I loved Kentaro’s quote, “If Adam Smith’s invisible hand spurs economic growth, it also pickpockets from the commons.” I’d say that just as economic growth doesn´t necessarily translate into higher human development (or less inequality), the same would be true to ICTs or even with technology in general. I think by now we have overwhelming evidence that trickle-down approaches don´t work and were just a lazy strategy by those who prefer laissez-faire, policy minimalism. That’s why if we expect to see ICTs reducing inequality it can´t be left to chance: we need development-friendly ICT policies, deliberately aimed at denting inequality.

    On the other hand, there are many factors that together lead to greater or lesser equality. For example, I’d argue that fiscal policies count for much more than any effects ICTs can have. Or that I suspect many of the countries which have significantly extended electricity provision (hard to pick against) in the last 15-20 yrs may also show increasing inequality during those periods. I think it’s unrealistic to expect conclusive, causal correlations between greater ICT penetration and (overall) equality. Plus we clearly have limitations on knowing how to measure the impact of ICTs on development (not unlike Solow computer paradox about productivity not long ago).

    But if we direct technology at specific dimensions of accepted sources of inequality (linked for example to provision of medicines for AIDS patients, conditional cash-transfer schemes, university agricultural extension programs, etc.), then we can be reasonably confident that those technology effects will contribute to decrease inequality ‘somehow’ (and we can fine tune indicator models later, or better, in parallel).

    So in closing I’d just paraphrase Kentaro by saying that ICTs can magnify human intent to decrease inequality – if such an intent indeed exists…

    P.D. The first couple of lines from Kentaro’s rather pointed and ingenious quoted paragraph at the end of the post reminded me why I stopped reading Wired magazine some time ago. 😉

  3. John Opossum says:

    These headlines (and articles) are beginning seem to growing more Upworthy-esque by the day.

  4. Tony Roberts says:

    Uncritical ICT provision – or uncritical ICT4D – is doomed to accentuate inequality. So-called ‘open’ ICT or ICT made available according to market principles will further advantage those that are already privileged as they are better placed to exploit its advantages. Conversely critical ICT4D – that focuses consciously on building the human capacity and intent of disadvantaged people to manage their own development – holds the potential to accentuate social justice.

  5. Joyce says:

    I don’t think “technology” is contributing to income inequality. ICT is a tool for human beings to use in their lives. Too many ICT4D practitioners seem to forget that.

    I’ll use an example that’s close to home: VPN. Now, I realize that ICT4D people don’t consider VPN as ICT4D, but that’s because they neglect cybersecurity. (!) However, we view it as a means to protect activists as well as a way to circumvent censorship and to protect the privacy of citizens from the prying eyes of governments and other unsavory folks.

    The reality is that our target audience is doing the same thing human beings have been doing since the dawn of existence: communication. All tech does is speed up the time it takes to reach a big audience. Before, when Russians were passing around samizdat or when the American colonists were writing pamphlets, it took a lot more work and people to get their messages out. The goals are the same now.

    The truth is that income equality is up across the globe because the people at the top continue to take more of the global resource pie. Not sure if the stat is accurate, but I recently read that 80 people own half of the world’s wealth. If that is due to technology, it is more because of transportation technology than ICT, as goods are easily shipped anywhere. Until we change the global consumer culture mindset, income inequality will continue to rise.

    Building institutions and eliminating corruption should be the top focus of development practitioners everywhere. Apps and mobile programs are ineffective unless those things are addressed first.