IGADD

If market-building activity is to penetrate rural areas, certain challenges must be addressed in each of the stakeholder groups who may be involved in wireless market-building in Asia. In each major emerging market of Asia, DigitalDivide.org invites stakeholders in these categories to converge into Brain Trusts that encourages joint ventures that close the Divide. Here are some players:

National Governments in Asia: e-ASEAN and APEC-Tel, the telecommunications consortium of the Asia Pacific Economic Cooperation network, already provide structures through which government-to-government standards can be set to facilitate wireless diffusion into Asia. The World Bank plays an active role in encouraging public policy integration so that each country has a change to leap-frog over its competitors, taking skillful advantage of its distinct strengths. The recommendation of DigitalDivide.org is to build on these activities by a) using the government’s “bully pulpit” to bring stakeholders together and challenge them to create alliances, b) rewarding companies with subsidies and tax advantages if they serve needs of the poor, c) fostering the creation of investment instruments that target entrepreneurs seeking to close the digital divide, d) altering “universal services” policies so that they these induce investors to serve the poor.

IT Corporations: These are divided into two categories: multinationals and smaller entrepreneurial companies confined to local or national markets. Most MNCs in the IT sector are dangerously wedded to expensive cost structures. Their value proposition in the Digital Divide space is four-fold: 1) They are in the best position to argue that the latest emerging technologies are fit to the distinct needs of low-income consumers, not hand-me-downs from the rich markets. 2) They can create quasi-philanthropic internal businesses that show how their technology can be adapted to the needs of the poor. 3) They can put charge their R&D operations to the task of finding applications that fit the realities of informal economies, 4) They can adapt an innovation that emerges from one market, say, India, to their operations in another part of the world, say, South Africa. They can display these value-added dimensions in their roles as members of strategic alliances.

Once wireless carriers reach low-income markets, they must call upon the creativity and inventiveness of small and medium-sized businesses to create content that fits the realities of each location. Each aspect of the wireless value chain can include small and medium-sized business that will help wireless carriers achieve success within informal economies.

Investor institutions: The big investment banks such as Goldman Sachs and JP Morgan and venture capital firms have mostly been on the sidelines as IT and telecom corporations have responded to the digital divide. However, state-linked banks and those serving the agricultural sector or that finance rural telecom are in a good position to take a lead on efforts to close the digital divide. Nonetheless, a deliberate and sustained effort must be made to “build the business case” for engaging the top financial talent of these banks in efforts to close digital divide. Tthe big national banks in each emerging markets that fuel Asia’s wireless revolution should be encouraged to work closely with other commercial stakeholders to define opportunities to investors as wireless moves ever-closer to the village level.

Most major investor institutions in Asia already are engaged in the effort to broaden the base of microcredit operations in their countries. Assessing their interests in microcredit is a starting point in any effort to build a case for their involvement in the larger matter of closing Digital Divide in their countries.