Technology in emerging economies:

Of internet cafes and power cuts.

I remember visiting the island of Roatan in Honduras, and traveling through Coxen Hole and its myriad shops and shacks. There beckoning me like a glass of water for a parched man was the sign "Internet Cafe". It was much cheaper than the $20 an hour connection on my cruise ship, and completely unexpected. Since then, I have seen internet cafes in Death Valley, small towns in Holland, India, and essentially anywhere I go. We can't live without it. The United States will soon be surpassed in total users by China. Is this a precursor for being surpassed in other ways?

Consider this link from The Economist:
http://www.economist.com/science/displaystory.cfm?story_id=10640716

Within a few months China will overtake America as the country with the world's largest number of internet users. Even when you factor in China's size and its astonishing rate of GDP growth, this will be a remarkable achievement for what remains a poor economy. For the past three years China has also been the world's largest exporter of information and communications technology (ICT). It already has the same number of mobile-phone users (500m) as the whole of Europe.

China is by no means the only emerging economy in which new technology is being eagerly embraced. In frenetic Mumbai, everyone seems to be jabbering non-stop on their mobile phones: according to India's telecoms regulator, half of all urban dwellers have mobile- or fixed-telephone subscriptions and the number is growing by 8m a month. The India of internet cafés and internet tycoons produces more engineering graduates than America, makes software for racing cars and jet engines and is one of the top four pharmaceutical producers in the world.

In a different manifestation of technological progress, the country's largest private enterprise, Tata, recently unveiled the “one lakh car”; priced at the equivalent of $2,500, it is the world's cheapest. Meanwhile, in Africa, people who live in mud huts use mobile phones to pay bills or to check fish prices and find the best market for their catch. Yet this picture of emerging-market technarcadia is belied by parallel accounts of misery and incompetence. Last year ants ate the hard drive of a photographer in Thailand. Last week internet usage from Cairo to Kolkata was disrupted after something—probably an earthquake—sliced through two undersea cables. Personal computers have spread slowly in most emerging economies: three-quarters of low-income countries have fewer than 15 PCs per 1,000 people—and many of those computers are gathering dust. And the feting of prominent technology projects in emerging economies is sometimes premature.

Nicholas Negroponte, of the Massachusetts Institute of Technology, has long been championing a $100 laptop computer, presented with most fanfare at the World Economic Forum in Davos two years ago. The laptop was supposed to sweep through poor countries, scattering knowledge and connectivity all around. But the project is behind schedule, the computer does not work properly and one prominent backer, Intel, a chipmaker, has pulled out.So how well are emerging economies using new technology, really? Hitherto, judgments have had to be based largely on anecdotes. Now the World Bank has supplemented the snapshot evidence with more comprehensive measures.

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