Development – The Policy and Internet Blog

How ready is Africa to join the knowledge economy?

“In times past, we searched for gold, precious stones, minerals, and ore. Today, it is knowledge that makes us rich and access to information is all-powerful in enabling individual and collective success.” Lesotho Ministry of Communications, Science and Technology, 2005.

Changes in the ways knowledge is created and used — and how this is enabled by new information technologies — are driving economic and social development worldwide. Discussions of the “knowledge economy” see knowledge both as an economic output in itself, and as an input that strengthens economic processes; with developing countries tending to be described as planning or embarking on a journey of transformation into knowledge economies to bring about economic gain. Indeed, increasing connectivity has sparked many hopes for the democratization of knowledge production in sub-Saharan Africa.

Despite the centrality of digital connectivity to the knowledge economy, there are few studies of the geographies of digital knowledge and information. In their article “Engagement in the Knowledge Economy: Regional Patterns of Content Creation with a Focus on Sub-Saharan Africa”, published in Information Technologies & International Development, Sanna Ojanperä, Mark Graham, Ralph K. Straumann, Stefano De Sabbata, and Matthew Zook investigate the patterns of knowledge creation in the region. They examine three key metrics: spatial distributions of academic articles (i.e. traditional knowledge production), collaborative software development, and Internet domain registrations (i.e. digitally mediated knowledge production).

Contrary to expectations, they find distribution patterns of digital content (measured by collaborative coding and domain registrations) to be more geographically uneven than those of academic articles: despite the hopes for the democratizing power of the information revolution. This suggests that the factors often framed as catalysts for a knowledge economy do not relate to these three metrics uniformly.

Connectivity is an important enabler of digital content creation, but it seems to be only a necessary, not a sufficient, condition; wealth, innovation capacity, and public spending on education are also important factors. While the growth in telecommunications might be reducing the continent’s reliance on extractive industries and agriculture, transformation into a knowledge economy will require far more concentrated effort than simply increasing Internet connectivity.

We caught up with Sanna to discuss the article’s findings:

Ed.: You chose three indices (articles, domain registration, collaborative coding) to explore the question of Africa’s “readiness” to join the knowledge economy. Are these standard measures for the (digital) knowledge economy?

Sanna: Academic articles is a measure often used to estimate knowledge-rich activity, so you could consider it a traditional variable in this area. Other previous work measuring the geographies of codified knowledge have focused on particular aspects or segments of it, such as patents, citations, and innovation systems.

What we found to be an interesting gap in the estimation of knowledge economies is that even if digital connectivity is central to the knowledge economy discourse, studies of the current geographies of digital knowledge and information on online platforms are rare. We argue that digitally mediated participation in information- and knowledge-intensive activities offers a metric that closely measures human capacity and skills. An analysis of digitally mediated traces of skills and information might thus complement the knowledge economy discussion and offer a way to better detect the boundaries of contemporary knowledge economies. To address the gap of research on digital content, we examine the geography of activities in collaborative software development (using the GitHub platform), and the registration of top-level domains. While there are other indicators that we could have included in the analysis, we selected these two, as they have a global reach and because they measure two distinct, but important segments of knowledge economy.

Ed.: To what extent do the drivers commonly associated with knowledge economies (e.g., GDP, broadband Internet, education, innovation) explain the patterns you found? And what were these patterns?

Sanna: While connectivity plays a role in all three categories, it seems to have a strong effect only on digital content creation. Conversely, the production of academic articles is more strongly related to GDP than to connectivity. Innovation capacity appears to have a positive relationship to all three content types. Education as a topically narrower variable appears, perhaps unexpectedly, to be related only to variance in academic articles.

In terms of the patterns of these variables, we find that the geographies of collaborative coding and domain registrations are more uneven than the spatial distribution of academic authoring. Sub-Saharan Africa contributes the smallest share of content to all three categories, providing only 1.1% of academic articles. With 0.5% of collaborative coding and 0.7% of domain registrations, SSA produces an even smaller share of digital content.

While comparison across absolute numbers informs us of the total volume of content creation, it is useful to pair that with a standardized measure that informs us of the propensity of content creation across the populations. Considering the most productive countries in terms of their per capita content creation suggests geographies even more clustered in Europe than looking at total numbers. In SSA, the level of individual countries’ content production falls within the two lowest quintiles more often in the case of collaborative coding and domain registrations than with academic articles. This runs contrary to the expectation of contemporary digitally mediated content being more evenly geographically distributed than traditional content.

Ed.: You measured “articles” by looking at author affiliations. Could you just as well have used “universities” as the measure? Or is there an assumption that connectivity will somehow encourage international co-authorship (does it?) — or that maybe “articles” is a better measure of knowledge quality than presence of universities per se?

Sanna: We chose this indicator, because we consider scientific output in the form of academic articles to represent the progress of science. Publication of academic articles and the permanent scientific record they form are central for the codification of knowledge and are a key enabler of knowledge-intensive processes. Beyond being an indicator often included in the knowledge economy indices, we believe that academic articles offer a relatively uniform measure of knowledge-intensive output, as the process of peer-reviewed publishing and the way in which it constructs a permanent scientific record are rather similar around the world. In contrast, other systems for knowledge-intensive outputs such as registering patents and innovation systems are known to be vary greatly between countries and regions (Griliches, 1990).

We didn’t use the number of universities as an indicator of the knowledge economy, because we wanted to look at measures of knowledge-intensive content-creation. While universities educate individuals and increase the nation’s human capital, this ‘output’ is very diverse and looks very different between universities. Further, we wanted to assess whether education in fact drives the development of knowledge economy, and used a measure of enrollment rates in secondary and tertiary education as an explanatory variable in our analysis.

Ed.: There’s a lot of talk of Africa entering the “global” marketplace: but how global is the knowledge economy — particularly given differences in language and culture? I imagine most cultural and knowledge production remains pretty local?

Sanna: The knowledge economy could be seen as a new dynamic stage in the global economic restructuring, where economic processes and practices that place greater emphasis of intellectual abilities take place in the context of an increasingly interconnected world. To the extent that African information- and knowledge-intensive goods and services compete in these global markets, one could consider the region entering the global knowledge economy. While the markets for knowledge-based goods and services may be smaller in various African countries, many produce regionally or nationally and locally targeted knowledge-rich products. However, this understanding of the concept of knowledge economy tends to focus on commercial activities and scientific and technical knowledge and neglect indigenous, local or cultural knowledge. These types of knowledge have a higher tendency of being tacit rather than codifiable in nature. Unlike codified knowledge, which can be recorded and transmitted through symbols or become materialized in concrete form such as tools or machinery, tacit knowledge takes time to obtain and is not as easily diffused. While these tacit types of knowledge are prevalent and carry significant value for their users and producers, they are less easily converted to commercial value. This makes their measurement more challenging and as a result the discourse of knowledge economies tends to focus less on these types of knowledge production.

Ed.: Is the knowledge economy always going to be a “good” thing, or could it lead to (more) economic exploitation of the region — for example if it got trapped into supplying a market for low-quality work? (I guess the digital equivalent of extractive, rather than productive industries .. call centres, gig-work etc.)

Sanna: As is the case with any type of economic activity, the distributional effects of knowledge economies are affected by a myriad of factors. On one hand, many of the knowledge- and information-rich economic activities require human capital and technological resources, and tend to yield goods and services with higher value added. The investment in and the greater presence of these resources may help nations and individuals to access more opportunities to increase their welfare. However, countries don’t access the global information- and knowledge-based markets as equal players and the benefits from knowledge economies are not distributed equally. It is possible that exploitative practices exist in particular where institutions and regulatory practices are not sufficiently powerful to ensure adequate working conditions. In a previous study on the Sub-Saharan African gig economy and digital labour – both areas that could be considered to form part of the knowledge economy – some of the authors found that while a range of workers in these domains enjoy important and tangible benefits, they also face risks and costs such as low bargaining power, limited economic inclusion, intermediated value chains leading to exploitation of less experienced workers, and restrictions in upgrading skills in order to move upwards in professional roles.

Ed.: I guess it’s difficult to unpack any causation in terms of Internet connectivity, economic development, and knowledge economies — despite hopes of the Internet “transforming” Sub-Saharan African economies. Is there anything in your study (or others) to hint at an answer to the question of causality?

Sanna: In order to discuss causality, we would need to study the effects of a given intervention or treatment, as measured in an ideal randomized controlled experiment. As we’re not investigating the effect of a particular intervention, but studying descriptive trends in the three dependent variables using the Ordinary Least Squares (OLS) method of estimation in multiple linear regression framework, we cannot make strong claims about causality. However, we find that both the descriptive study of RQ1 as well as the regression modeling and residual mapping for RQ2 offer statistically significant results, which lend themselves for interpretations with relevance to our RQs and that have important implications, which we discuss in the concluding section of the article.

Read the full article: Ojanperä, S., Graham, M., Straumann, R.K., De Sabbata, S., & Zook, M. (2017). Engagement in the knowledge economy: Regional patterns of content creation with a focus on sub-Saharan Africa. Information Technologies & International Development 13: 33–51.

Sanna Ojanperä was talking to blog editor David Sutcliffe.

Why we shouldn’t believe the hype about the Internet “creating” development

Vast sums of money have been invested in projects to connect the world’s remaining four billion people, with these ambitious schemes often presenting digital connectivity as a means to achieve a range of social and economic developmental goals. This is especially the case for Africa, where Internet penetration rates remain relatively low, while the need for effective development strategies continues to be pressing.

Development has always grappled with why some people and places have more than others, but much of that conversation is lost within contemporary discourses of ICTs and development. As states and organisations rush to develop policies and plans, build drones and balloons, and lay fibre-optic cables, much is said about the power of ICTs to positively transform the world’s most underprivileged people and places.

Despite the vigour of such claims, there is actually a lack of academic consensus about the impacts of digital connectivity on economic development. In their new article, Nicolas Friederici, Sanna Ojanperä and Mark Graham review claims made by African governments and large international institutions about the impacts of connectivity, showing that the evidence base to support them is thin.

It is indeed possible that contemporary grand visions of connectivity are truly reflective of a promising future, but it is equally possible that many of them are hugely overblown. The current evidence base is mixed and inconclusive. More worryingly, visions of rapid ICT-driven development might not only fail to achieve their goals — they could actively undermine development efforts in a world of scarce resources. We should therefore refuse to believe it is self-evident that ICTs will automatically bring about development, and should do more to ask the organisations and entities who produce these grand visions to justify their claims.

Read the full article: Friederici, N., Ojanperä, S., and Graham, M. (2017) The Impact of Connectivity in Africa: Grand Visions and the Mirage of Inclusive Digital Development. Electronic Journal of Information Systems in Developing Countries, 79(2), 1–20.

We caught up with the authors to discuss their findings.

Ed.: Who is paying for these IT-development projects: are they business and profit-led, or donor led: and do the donors (and businesses) attach strings?

Nicolas: Funding has become ever more mixed. Foundational infrastructure like fibre-optic cables have usually been put in place through public private partnerships, where private companies lay out the network while loans, subsidies, and policy support are provided by national governments and organizations like the World Bank. Development agencies have mostly funded more targeted connectivity projects, like health or agricultural information platforms.

Recently, philanthropic foundations and tech corporations have increased their footprint, for instance, the Rockefeller Foundation’s Digital Jobs project or Facebook’s Open Cellular Base stations. So we are seeing an increasingly complex web of financial channels. What discourse does is pave the way for funding to flow into such projects.

The problem is that, while private companies may stop investing when they don’t see returns, governments and development funders might continue to pour resources into an agenda as long as it suits their ideals or desirable and widely accepted narratives. Of course, these resources are scarce; so, at the minimum, we need to allow scrutiny and look for alternatives about how development funding could be used for maximum effect.

Ed.: Simple, aspirational messages are obviously how politicians get people excited about things (and to pay for them). What is the alternative?

Nicolas: We’re not saying that the rhetoric of politicians is the problem here. We’re saying that many of the actors who are calling the shots in development are stubbornly evading valid concerns that academics and some practitioners have brought forward. The documents that we analyze in the article — and these are very influential sources — pretend that it is an unquestionable fact that there is a causal, direct and wide-spread positive impact of Internet and ICTs on all facets of development, anywhere. This assertion is not only simplistic, it’s also problematic and maybe even dangerous to think about a complex and important topic like (human, social) development in this way.

The alternative is a more open and plural conversation where we openly admit that resources spent on one thing can’t be spent on another, and where we enable different and critical opinions to enter the fray. This is especially important when a nation’s public is disempowered or misinformed, or when regulators are weak. For example, in most countries in Europe, advocacy groups and strong telecoms regulators provide a counterforce to the interests of technology corporations. Such institutions are often absent in the Global South, so the onus is on development organizations to regulate themselves, either by engaging with people “on the ground” or with academics. For instance, the recent World Development Report by the World Bank did this, which led the report to, we think, much more reliable and balanced conclusions compared to the Bank’s earlier outputs.

Ed.: You say these visions are “modernist” and “techno-determinist” — why is that? Is it a quirk of the current development landscape, or does development policy naturally tend to attract fixers (rather than doubters and worriers..). And how do we get more doubt into policy?

Nicolas: Absolutely, development organizations are all about fixing development problems, and we do not take issue with that. However, these organizations also need to understand that “fixing development” is not like fixing a machine (that is, a device that functions according to mechanical principles). It’s not like one could input “technology” or “the Internet,” and get “development” as an output.

In a nutshell, that’s what we mean when we say that visions are modernist and techno-determinist: many development organizations, governments, and corporations make the implicit assumption that technological progress is fixing development, that this is an apolitical and unstoppable process, and that this is working out in the same way everywhere on earth. This assumption glances over contestation, political choices and trade-offs, and the cultural, economic, and social diversity of contexts.

Ed.: Presumably if things are very market-led: the market will decide if the internet “solves” everything: ie either it will, or it won’t. Has there been enough time yet to verify the outcomes of these projects (e.g. how has the one-laptop initiative worked out)?

Nicolas: I’m not sure I agree with the implication that markets can decide if the Internet solves everything. It’s us humans who are deciding, making choices, prioritizing, allocating resources, setting policies, etc. As humans, we might decide that we want a market (that is, supply and demand matched by a price mechanism) to regulate some array of transactions. This is exactly what is happening, for instance, with the spread of mobile money in Kenya or the worldwide rise of smartphones: people feel they benefit from using a product and are willing to pay money to a supplier.

The issue with technology and development is (a) that in many cases, markets are not the mechanism that achieves the best development outcomes (think about education or healthcare), (b) that even the freest of markets needs to be enabled by things like political stability, infrastructure, and basic institutions (think about contract law and property rights), and (c) that many markets need regulatory intervention or power-balancing institutions to prevent one side of the exchange to dominate and exploit the other (think about workers’ rights).

In each case, it is thus a matter of evaluating what mixture of technology, markets, and protections works best to achieve the best development outcomes, keeping in mind that development is multi-dimensional and goes far beyond economic growth. These evaluations and discussions are challenging, and it takes time to determine what works, where, and when, but ultimately we’re improving our knowledge and our practice if we keep the conversation open, critical, and diverse.

Ed.: Is there a consensus on ICT and development, or are there basically lots of camps, ranging from extreme optimists to extreme pessimists? I get the impression that basically “it’s complicated” — is that fair? And how much discussion or recognition (beyond yourselves) is there about the gap between these statements and reality?

Nicolas: ICT and development has seen a lot of soul-searching, and scholars and practitioners have spent over 20 years debating the field’s nature and purpose. There is certainly no consensus on what ICTD should do, or how ICTs effect/affect development, and maybe that is an unrealistic — and undesirable — goal. There are certainly optimistic and pessimistic voices, like you mention, but there is also a lot of wisdom that is not widely acknowledged, or not in the public domain at all. There are thousands of practitioners from the Global North and South who have been in the trenches, applied their critical and curious minds, and seen what makes an impact and what is a pipe dream.

So we’re far from the only ones who are aware that much of the ICTD rhetoric is out of touch with realities, and we’re also not the first ones to identify this problem. What we tried to point out in our article is that the currently most powerful, influential, and listened to sources tend to be the ones that are overly optimistic and overly simplistic, ignoring all the wisdom and nuance created through hard scholarly and practical work. These actors seem to be detached from the messy realities of ICTD.

This carries a risk, because it is these organizations (governments, global consultancies, multilateral development organizations, and international tech corporations) that are setting the agenda, distributing the funds, making the hiring decisions, etc. in development practice.

Nicolas Friederici was talking to blog editor David Sutcliffe.

New Report: Risks and Rewards of Online Gig Work at the Global Margins

The cartogram depicts countries as circles sized according to dollar inflow during March 2013 on a major online labour platform. The shading of the inner circle indicates the median hourly rate published by digital workers in that country. See the report for details.

The growth of online gig work — paid work allocated and delivered by way of internet platforms without a contract for long-term employment — has been welcomed by economic development experts, and the world’s largest global development network is promoting its potential to aid human development. There are hopes that online gig work, and the platforms that support it, might catalyse new, sustainable employment opportunities by addressing a mismatch in the supply and demand of labour globally.

Some of the world’s largest gig work platforms have also framed their business models as a revolution in labour markets, suggesting that they can help lift people out of poverty. Similarly, many policymakers expect that regions like Sub-Saharan Africa and Southeast Asia can capitalise on this digitally mediated work opportunity as youth-to-adult unemployment rates hit historic peaks. More broadly, it has been suggested that online gig work will have structural benefits on the global economy, such as raising labour force participation and improving productivity.

Against this background, a new report by Mark Graham, Vili Lehdonvirta, Alex Wood, Helena Barnard, Isis Hjorth, and David Peter Simon, “The Risks and Rewards of Online Gig Work At The Global Margins” [PDF] highlights the risks alongside the rewards of online gig work. It draws on interviews and surveys, together with transaction data from one of the world’s largest online gig work platforms, to reveal the complex and sometimes problematic reality of this “new world of work”.

While there are significant rewards to online gig work, there are also significant risks. Discrimination, low pay rates, overwork, and insecurity all need to be tackled head-on. The report encourages online gig work platforms to further develop their service, policymakers to revisit regulation, and labour activists to examine organising tactics if online gig work is to truly live up to its potential for human development, and become a sustainable situation for many more workers.

The final section of the report poses questions for all stakeholders regarding how to improve the conditions and livelihoods of online gig workers, particularly given how these platforms have become disembedded from the norms and laws that normally regulate labour intermediaries. Specific questions that are discussed include:

Is it necessary to list nationality on profile pages? Will online gig workers receive formal employment contracts in the future?
What formal channels could exist for workers to voice their issues? Where should governments regulate online gig work in the future?
Will governments need to limit online gig work monopolies? And how will governments support alternative forms of platform organisation?
What online forms of voice could emerge for workers, and in what ways can existing groups be leveraged to promote solidarity?
To what extent will companies be held accountable for poor working conditions? Do platforms need a Fairwork certification program?

The report also offers suggestions alongside the questions, drawing on relevant literature and referencing historical precedents.

Read the full report: Graham, M., Lehdonvirta, V., Wood, A., Barnard, H., Hjorth, I., Simon, D. P. (2017) The Risks and Rewards of Online Gig Work At The Global Margins [PDF]. Oxford: Oxford Internet Institute.

Read the article: Graham, M., Hjorth, I. and Lehdonvirta, V. (2017) Digital Labour and Development: Impacts of Global Digital Labour Platforms and the Gig Economy on Worker Livelihoods. Transfer. DOI: 10.1177/1024258916687250

The report is an output of the project “Microwork and Virtual Production Networks in Sub-Saharan Africa and Southeast Asia”, funded by the International Development Research Centre (IDRC), grant number: 107384-001.

New Report: Risks and Rewards of Online Gig Work at the Global Margins

Is it necessary to list nationality on profile pages? Will online gig workers receive formal employment contracts in the future?
What formal channels could exist for workers to voice their issues? Where should governments regulate online gig work in the future?
Will governments need to limit online gig work monopolies? And how will governments support alternative forms of platform organisation?
What online forms of voice could emerge for workers, and in what ways can existing groups be leveraged to promote solidarity?
To what extent will companies be held accountable for poor working conditions? Do platforms need a Fairwork certification program?

The report also offers suggestions alongside the questions, drawing on relevant literature and referencing historical precedents.

What Impact is the Gig Economy Having on Development and Worker Livelihoods?

There are imbalances in the relationship between supply and demand of digital work, with the vast majority of buyers located in high-income countries (pictured). See the full article for details.

As David Harvey famously noted, workers are unavoidably place-based because “labor-power has to go home every night.” But the widespread use of the Internet has changed much of that. The confluence of rapidly spreading digital connectivity, skilled but under-employed workers, the existence of international markets for labour, and the ongoing search for new outsourcing destinations, has resulted in organisational, technological, and spatial fixes for virtual production networks of services and money. Clients, bosses, workers, and users of the end-products of work can all now be located in different corners of the planet.

A new article by Mark Graham, Isis Hjorth and Vili Lehdonvirta, “Digital labour and development: impacts of global digital labour platforms and the gig economy on worker livelihoods”, published in Transfer, discusses the implications of the spatial unfixing of work for workers in some of the world’s economic margins, and reflects on some of the key benefits and costs associated with these new digital regimes of work. Drawing on a multi-year study with digital workers in Sub-Saharan Africa and South-east Asia, it highlights four key concerns for workers: bargaining power, economic inclusion, intermediated value chains, and upgrading.

As ever more policy-makers, governments and organisations turn to the gig economy and digital labour as an economic development strategy to bring jobs to places that need them, it is important to understand how this might influence the livelihoods of workers. The authors show that although there are important and tangible benefits for a range of workers, there are also a range of risks and costs that could negatively affect the livelihoods of digital workers. They conclude with a discussion of four broad strategies – certification schemes, organising digital workers, regulatory strategies and democratic control of online labour platforms — that could improve conditions and livelihoods for digital workers.

We caught up with the authors to explore the implications of the study:

Ed.: Shouldn’t increased digitisation of work also increase transparency (i.e. tracking, auditing etc.) around this work — i.e. shouldn’t digitisation largely be a good thing?

Mark: It depends. One of the goals of our research is to ask who actually wins and loses from the digitalisation of work. A good thing for one group (e.g. employers in the Global North) isn’t necessarily automatically a good thing for another group (e.g. workers in the Global South).

Ed.: You mention market-based strategies as one possible way to improve transparency around working conditions along value chains: do you mean something like a “Fairtrade” certification for digital work, i.e. creating a market for “fair work”?

Mark: Exactly. At the moment, we can make sure that the coffee we drink or the chocolate we eat is made ethically. But we have no idea if the digital services we use are. A ‘fair work’ certification system could change that.

Ed.: And what sorts of work are these people doing? Is it the sort of stuff that could be very easily replaced by advances in automation (natural language processing, pattern recognition etc.)? i.e. is it doubly precarious, not just in terms of labour conditions, but also in terms of the very existence of the work itself?

Mark: Yes, some of it is. Ironically, some of the paid work that is done is training algorithms to do work that used to be done by humans.

Ed.: You say that “digital workers have been unable to build any large-scale or effective digital labour movements” — is that because (unlike e.g. farm work which is spatially constrained), employers can very easily find someone else anywhere in the world who is willing to do it? Can you envisage the creation of any effective online labour movement?

Mark: A key part of the problem for workers here is the economic geography of this work. A worker in Kenya knows that they can be easily replaced by workers on the other side of the planet. The potential pool of workers willing to take any job is massive. For digital workers to have any sort of effective movement in this context means looking to what I call geographic bottlenecks in the system. Places in which work isn’t solely in a global digital cloud. This can mean looking to things like organising and picketing the headquarters of firms, clusters of workers in particular places, or digital locations (the web-presence of firms). I’m currently working on a new publication that deals with these issues in a bit more detail.

Ed.: Are there any parallels between the online gig work you have studied and ongoing issues with “gig work” services like Uber and Deliveroo (e.g. undercutting of traditional jobs, lack of contracts, precarity)?

Mark: A commonality in all of those cases is that platforms become intermediaries in between clients and workers. This means that rather than being employees, workers tend to be self-employed: a situation that offers workers freedom and flexibility, but also comes with significant risks to the worker (e.g. no wages if they fall ill).

Read the full article: Graham, M., Hjorth, I. and Lehdonvirta, V. (2017) Digital Labour and Development: Impacts of Global Digital Labour Platforms and the Gig Economy on Worker Livelihoods. Transfer. DOI: 10.1177/1024258916687250

The article draws on findings from the research project “Microwork and Virtual Production Networks in Sub-Saharan Africa and South-east Asia”, funded by the International Development Research Centre (IDRC), grant number: 107384-001.

Mark Graham was talking to blog editor David Sutcliffe.

What Impact is the Gig Economy Having on Development and Worker Livelihoods?

We caught up with the authors to explore the implications of the study:

Ed.: Shouldn’t increased digitisation of work also increase transparency (i.e. tracking, auditing etc.) around this work — i.e. shouldn’t digitisation largely be a good thing?

Mark: Yes, some of it is. Ironically, some of the paid work that is done is training algorithms to do work that used to be done by humans.

Mark Graham was talking to blog editor David Sutcliffe.

Examining the data-driven value chains that are changing Rwanda’s tea sector

Behind the material movement that takes tea from the slopes of Rwanda’s ‘thousand hills’ to a box on a shelf in Tesco, is a growing set of less visible digital data flows. Image by pasunejen.

Production of export commodity goods like tea, coffee and chocolate is an important contributor to economies in Africa. Producers sell their goods into international markets, with the final products being sold in supermarkets, here in the UK and throughout the world. So what role is new Internet connectivity playing in changing these sectors — which are often seen as slow to adopt new technologies? As part of our work examining the impacts of growing Internet connectivity and new digital ICTs in East Africa we explored uses of the Internet and ICTs in the tea sector in Rwanda.

Tea is a sector with well-established practices and relations in the region, so we were curious if ICT might be changing it. Of course, one cannot ignore the movements of material goods when you research the tea sector. Tea is Rwanda’s main export by value, and in 2012 it moved over 21,000 tonnes of tea, accruing around $56m in value. During our fieldwork we interviewed cooperatives in remote offices surrounded by tea plantations in the temperate Southern highlands, tea processors in noisy tea factories heavy with the overpowering smell of fermenting tea leaves, and tea buyers and sellers surrounded by corridors piled high with sacks of tea.

But behind the material movement that takes tea from the slopes of Rwanda’s ‘thousand hills’ to a box on a shelf in Tesco, is a growing set of less visible digital data flows. Whilst the adoption of digital technologies is not comprehensive in the Rwandan tea sector (with, for example, very low Internet use among tea growers), we did find growing use of the Internet and ICTs. More importantly, where they were present, digital flows of information (such as tea-batch tracking, logistics and sales prices) were increasingly important to the ability of firms to improve production and ultimately to increase their profit share from tea. We have termed this a ‘data-driven value chain’ to highlight that these new digital information flows are becoming as important as the flows of material goods.

So why is tea production becoming increasingly ‘data-driven’? We found two principal drivers at work. Firstly, production of commodities like tea has shifted to private ownership. In Rwanda, tea processing factories are no longer owned by the government (as they were a decade ago) but by private firms, including several multinational tea firms. Prices for buying and selling tea are also no longer fixed by the government, but depend on the market — flat rate prices stopped at the end of 2012. Data on everything from international prices, tea quality and logistics has become increasingly important as Rwandan tea firms look to be part of the global market, by better coordinating production and improving the prices of their tea. For instance, privately owned tea factories (often in remote locations) connect via satellite or microwave Internet links to head offices, and systems integration allows multi-national tea firms the ability to track and monitor production at the touch of a button.

Secondly, we need to understand new product innovation in the tea sector. In recent years new products have particularly revolved around growing demand in the retail market for differentiated products — such as ‘environmental’, fair trade or high quality teas — for which the consumer is willing to pay more. This relates most obviously to the activities in the fields and tea processors, but digital information is also crucial in order to allow for ‘traceability’ of tea. As this guarantees that tea batches have satisfied conditions around location, food safety, chemical use, fair labour (etc.) a key component of new product innovation is therefore data — because it is integral to firms’ abilities to prove their value-added production or methods.

The idea of agricultural value chains — of analysing agricultural production from the perspective of a fragmented network of interconnected firms — has become increasingly influential in strategies and policy making supported by large donors such as the World Bank and the International Fund for Agriculture Development (IFAD), an agency of the UN.

These value chain approaches explore the amount of economic ‘value’ that different actors in the supply chain are able to capture in production. For instance, Rwandan tea farmers are only able to capture very small proportions of the final retail prices — we estimate they are paid less than 6% of the cost of the eventual retail product, and only 22% of the cost of the raw tea that is sold to retailers. Value chain analysis has been popular for policy makers and donors in that it helps them to formulate policies to support how firms in countries like Rwanda improve their value through innovation, improving processes of production, or reaching new customers.

Yet, at the moment it appears that the types of analysis being done by policy makers and donors pay very little attention to the importance of digital data, and so they are presenting an unclear picture of the ways to improve — with a tendency to focus on material matters such as machinery or business models.

Our research particularly highlighted the importance of considering how to adapt digital data flows. The ways that digital information is codified, digitised and accessed can be exclusionary, reducing the ability for smaller actors in Rwanda to compete. For instance, we found that lack of access to clear information about prices, tea quality and wider market information means that smallholders, small processors and cooperatives may not compete as well as they could, or be missing on wider innovations in tea production.

While we have focused here only on tea production, our discussions with those working in other agricultural sectors — and in other countries — suggest that our observations have significance across other agricultural sectors. In agricultural production, strategy, policy and researchers mainly focus on the material elements of production — those which are more visible and quantifiable. However, we suggest that often underlying such actions is a growing layer of digital data activity. It is only through more coherent analysis of the role of digital technologies and data that we can better analyse production — and build appropriate policy and strategies to support commodity producers in sectors like Rwandan tea.

Read the full report: Foster, C., and Graham, M. (2015) Connectivity and the Tea Sector in Rwanda. Value Chains and Networks of Connectivity-Based Enterprises in Rwanda. Project Report, Oxford Internet Institute, University of Oxford.

Chris Foster is a researcher at the Oxford Internet Institute. His research focus is on technologies and innovation in developing and emerging markets, with a particular interest on how ICTs can support development of low income groups.

Why haven’t digital platforms transformed firms in developing countries? The Rwandan tourism sector explored

Caption — Tourism is becoming an increasingly important contributor to Rwanda’s economy. Image of Homo sapiens and Gorilla beringei beringei meeting in Rwanda’s Volcanoes National Park by Andries3.

One of the great hopes for new Internet connectivity in the developing world is that it will allow those in developing countries who offer products and services to link to and profit from global customers. With the landing of undersea Internet infrastructure in East Africa, there have been hopes that as firms begin to use the Internet more extensively that improved links to markets will positively impact them.

Central to enabling new customer transactions is the emergence of platforms — digital services, websites and online exchanges — that allow more direct customer-producer interactions to occur. As part of our work exploring the impacts of growing internet connectivity and digital ICTs in East Africa, we wanted to explore how digital platforms were affecting Rwandan firms. Have Rwandan firms been able to access online platforms? What impact has access to these platforms had on firms?

Tourism is becoming an increasingly important contributor to Rwanda’s economy, with 3.1% direct contribution to GDP, and representing 7% of employment. Tourism is typically focused on affluent international tourists who come to explore the wildlife of the country, most notably as the most accessible location to see the mountain gorilla. Rwandan policy makers see tourism as a potential area for expansion, and new connectivity could be one key driver in making the country more accessible to customers.

Tourist service providers in Rwanda have a very high Internet adoption, and even the smallest hotel or tour agency is likely to have at least one mobile Internet-connected laptop. Many of the global platforms also have a presence in the region: online travel agents such as Expedia and Hotels.com work with Rwandan hotels, common social media used by tourists such as TripAdvisor and Facebook are also well-known, and firms have been encouraged by the government to integrate into payment platforms like Visa.

So, in the case of Rwandan tourism, Internet connectivity, Internet access and sector-wide platforms are certainly available for tourism firms. During our fieldwork, however (and to our surprise) we found adoption of digital tourism platforms to be low, and the impact on Rwandan tourism minimal. Why? This came down to three mismatches – essentially to do with integration, with fit, and with interactions.

Global tourism platforms offer the potential for Rwandan firms to seamlessly reach a wider range of potential tourists around the globe. However, we found that the requirements for integration into global platforms were often unclear for Rwandan firms, and there was a poor fit with the existing systems and skills. For example, hotels and lodges normally integrate into online travel agencies through integration of internal information systems, which track bookings and availability within hotels. However, in Rwanda, whilst a few larger hotels used booking systems, even the medium-sized hotels lacked internal booking systems, with booking based on custom Excel spreadsheets, or even paper diaries. When tourism firms attempted to integrate into online services they thus ran into problems, and only the large (international) hotel chains tended to be fully integrated.

Integration of East African tourism service providers into global platforms was also limited by the nature of the activities in the region. Global platforms have typically focused on providing facilities for online information, booking and payment for discrete tourism components — a hotel, a flight, a review of an attraction. However, in East Africa much international tourism is ‘packaged’, meaning a third-party (normally a tour operator) will build an itinerary and make all the bookings for customers. This means that online tourism platforms don’t provide a particularly good fit, either for tourists or Rwandan service providers. A tourist will not want the complication of booking a full itinerary online, and a small lodge that gets most of its bookings through tour operators will see little potential in integrating into a global online platform.

Interaction of Rwandan tourism service providers with online platforms is inevitably undertaken over digital networks, based on remote interactions, payments and information flows. This arms-length relationship often becomes problematic where the skills and ability of service providers are lower. For example, Rwandan tourism service providers often require additional information, help or even training on how best to use platforms which are frequently changing. In contexts where lower cost Internet can at times be inconsistent, and payment systems can be busy, having the ability to connect to local help and discuss issues is important. Yet, this is the very element that global platforms like online travel agents are often trying to remove.

So in general, we found that tourism platforms supported the large international hotels and resorts where systems and structures were already in place for seamless integration into platforms. Indeed, as the Rwandan government looks to expand the tourism sector (such as through new national parks and regional integration), there is a risk that the digital domain will support generic international chains entering the country — over the expansion of local firms.

There are potential ways forward, though. Ironically, the most successful online travel agency in Rwanda is one that has contracted a local firm in the capital Kigali to allow for ‘thicker’ interactions between Rwandan service providers and platform providers. There are also a number of South African and Kenyan online platforms in the early stages of development that are more attuned to the regional contexts of tourism (for example Safari Now, a dynamic Safari scheduling platform; Nights Bridge, an online platform for smaller hotels; and WETU, an itinerary sharing platform for service providers), and these may eventually offer a better solution for Rwandan tourism service providers.

We came to similar conclusions in the other sectors we examined as part of our research in East Africa (looking at tea production and Business Process Outsourcing) — that is, that use of online platforms faces limitations in the region. Even as firms find themselves able to access the Internet, the way these global platforms are designed presents a poor fit to the facilities, activities and needs of firms in developing countries. Indeed, in globalised sectors (such as tourism and business outsourcing) platforms can be actively exclusionary, aiding international firms entering developing countries over those local firms seeking to expand outwards.

For platform owners and developers focusing on such developing markets, the impacts of greater access to the Internet are therefore liable to come when platforms are able to balance between global reach and standards — while also being able to integrate some of the specific needs and contexts of developing countries.

Read the full report: Foster, C., and Graham, M. (2015) The Internet and Tourism in Rwanda. Value Chains and Networks of Connectivity-Based Enterprises in Rwanda. Project Report, Oxford Internet Institute, University of Oxford.

Broadband may be East Africa’s 21st century railway to the world

The excitement over the potentially transformative effects of the internet in low-income countries is nowhere more evident than in East Africa. Reposted from The Conversation.

The excitement over the potentially transformative effects of the internet in low-income countries is nowhere more evident than in East Africa – the last major populated region of the world to gain a wired connection to the internet.

Before 2009, there wasn’t a single fibre-optic cable connecting the region to the rest of the world. After hundreds of millions of dollars of investment, cables were laid to connect the region to the global network. Prices for internet access went down, speeds went up, and the number of internet users in the region skyrocketed.

Connecting 21st-century Africa takes more than just railways and roads. Steve Song, CC BY-NC-SA

Politicians, journalists and academics all argued that better connectivity would lead to a blossoming of economic, social, and political activity – and a lot of influential people in the region made grand statements. For instance, former Kenyan president Mwai Kibai stated:

I am gratified to be with you today at an event of truly historic proportions. The landing of this fibre-optic undersea cable project in Mombasa is one of the landmark projects in Kenya’s national development story.

Indeed some have compared this to the completion of the Kenya-Uganda railway more than a century ago. This comparison is not far-fetched, because while the economies of the last century were driven by railway connections, the economies of today are largely driven by internet.

The president of Rwanda, Paul Kagame, also spoke about the revolutionary potentials of these changes in connectivity. He claimed:

In Africa, we have missed both the agricultural and industrial revolutions and in Rwanda we are determined to take full advantage of the digital revolution. This revolution is summed up by the fact that it no longer is of utmost importance where you are but rather what you can do – this is of great benefit to traditionally marginalised regions and geographically isolated populations.

As many who have studied politics have long since noted, proclamations like these can have an important impact: they frame how scarce resources can be spent and legitimise actions in certain areas while excusing inaction in others.

Two moments of change

Because the internet is so frequently talked about in revolutionary terms, colleagues Casper Andersen and Laura Mann and I decided to compare in a paper the many hopes, expectations and fears written about the internet with those from another transformational moment in East Africa’s history: the construction of the Uganda Railway.

The original opening up of East Africa was built from steel, not fibre-optic. Nairobi Government Printers, Author provided

The Uganda Railway was built from 1896 to 1903 between Mombasa and Lake Victoria, connecting parts of East Africa to each other and the region to the wider world. There were strong views at the time of what this could bring. The journalist and explorer Henry Morten Stanley claimed:

I seemed to see in a vision what was to happen in the years to come. I saw steamers trailing their dark smoke over the waters of the lake; I saw passengers arriving and disembarking; I saw the natives of the east making blood brotherhood with the natives of the west. And I seemed to hear the sound of church bells ringing at great distance afar off.

A young Winston Churchill waxed lyrical on the new railway:

What a road it is! Everything is apple-pie order. The track is smoothed and weeded and ballasted as if it were London and North-Western. Every telegraph post has its number; every mile, every hundred yards, every change of gradient, has its mark … Here and there, at intervals which will become shorter every year, are plantations of rubber, fibre and cotton, the beginnings of those inexhaustible supplies which will one day meet the yet unmeasured demand of Europe for those indispensable commodities… In brief, one slender thread of scientific civilisation, of order, authority, and arrangement, drawn across the primeval chaos of the world.

Learning from expectations

After a full analysis of the historical and contemporary texts, we can make two key points.

The hopes and fears people hold about changes to how they connect with other people and places are surprisingly similar across generations. But there are notable differences between these two moments, a century apart.

The arrival of the railway revolved around the use of technology to integrate an empire and open up new lands to imperial ambitions. By framing the arrival of the railway as allowing the core to extend its dominion over the periphery, what was said and written at the time served to legitimise the extension of colonialism.

The arrival of fibre-optic cables, however, presents a different story. Instead of a world of shrinking space between the core and periphery, it tends to lean more on the idea of a “global village.” The need to connect everyone to the global economy overrides concepts of self sufficiency, local economies, or trade outside the global marketplace.

These visions matter because they leave little room for alternatives. Just as dominant narratives around the arrival of the railway presented a worldview amenable to colonialism, contemporary dominant narratives offer a convenient justification of globalised capitalism and neo-liberalism.

How people imagine they are connected to the world matters. They shape how we make sense of the world and ultimately what steps we take to re-shape the world. We should therefore look to the past, and not just the future, when we examine the effects of the changing ways in which we are connected.

Investigating virtual production networks in Sub-Saharan Africa and Southeast Asia

Ed: You are looking at the structures of ‘virtual production networks’ to understand the economic and social implications of online work. How are you doing this?

Mark: We are studying online freelancing. In other words this is digital or digitised work for which professional certification or formal training is usually not required. The work is monetised or monetisable, and can be mediated through an online marketplace.

Freelancing is a very old format of work. What is new is the fact that we have almost three billion people connected to a global network: many of those people are potential workers in virtual production networks. This mass connectivity has been one crucial ingredient for some significant changes in how work is organised, divided, outsourced, and rewarded. What we plan to do in this project is better map the contours of some of those changes and understand who wins and who doesn’t in this new world of work.

Ed: Are you able to define what comprises an individual contribution to a ‘virtual production network’ — or to find data on it? How do you define and measure value within these global flows and exchanges?

Mark: It is very far from easy. Much of what we are studying is immaterial and digitally-mediated work. We can find workers and we can find clients, but the links between them are often opaque and black-boxed. Some of the workers that we have spoken to operate under non-disclosure agreements, and many actually haven’t been told what their work is being used for.

But that is precisely why we felt the need to embark on this project. With a combination of quantitative transaction data from key platforms and qualitative interviews in which we attempt to piece together parts of the network, we want to understand who is (and isn’t) able to capture and create value within these networks.

Ed: You note that “within virtual production networks, are we seeing a shift in the boundaries of firms” — to what extend to you think we seeing the emergence of new forms of organisation?

Mark: There has always been a certain spatial stickiness to some activities carried out by firms (or within firms). Some activities required the complex exchanges of knowledge that were difficult to digitally mediate. But digitisation and better connectivity in low-wage countries has now allowed many formerly ‘in-house’ business processes to be outsourced to third-parties. In an age of cloud computing, cheap connectivity, and easily accessible collaboration tools, geography has become less sticky. One task that we are engaged in is looking at the ways that some kinds of tacit knowledge that are difficult to transmit digitally offer some people and firms (in different places) competitive advantages and disadvantages.

This proliferation of digitally mediated work could also be seen as a new form of organisation. The organisations that control key work marketplaces (like oDesk) make decisions that shape both who buyers and sellers are able to connect with, and the ways in which they are able to transact.

Ed: Does ‘virtual work’ add social or economic value to individuals in low-income countries? ie are we really dealing with a disintermediated, level surface on a global playing field, or just a different form of old exploitation (ie a virtual rather than physical extraction industry)?

Mark: That is what we aim to find out. Many have pointed to the potentials of online freelancing to create jobs and bring income to workers in low-income countries. But many others have argued that such practices are creating ‘digital sweatshops’ and facilitating a race to the bottom.

We undoubtedly are not seeing a purely disintermediated market, or a global playing field. But what we want to understand is who exactly benefits from these new networks of work, and how.

Ed: Will you be doing any network analysis of the data you collect, ie of actual value-flows? And will they be geolocated networks?

Mark: Yes! I am actually preparing a post that contains a geographic network of all work conducted over the course of a month via oDesk (see the website of the OII’s Connectivity, Inclusion, and Inequality Group for more..).

Mark Graham was talking to blog editor David Sutcliffe.

Mark Graham is a Senior Research Fellow at the OII. His research focuses on Internet and information geographies, and the overlaps between ICTs and economic development.