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

by Chris Foster 10/02/2015

Have Rwandan firms been able to access online platforms? What impact has access to these platforms had on firms?

by Chris Foster 10/02/2015

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…

Economics, Social Data Science

Gender gaps in virtual economies: are there virtual ‘pink’ and ‘blue’ collar occupations?

by Vili Lehdonvirta 15/01/2015

Men and women tend to be rewarded differently for the same amount of work. Since online economies are such a big part of many people’s lives today, we wanted to know if this holds true in those economies as well.

by Vili Lehdonvirta 15/01/2015

She could end up earning 11 percent less than her male colleagues .. Image from EVE Online by zcar.300.

Ed: Firstly, what is a ‘virtual’ economy? And what exactly are people earning or exchanging in these online environments? Vili: A virtual economy is an economy that revolves around artificially scarce virtual markers, such as Facebook likes or, in this case, virtual items and currencies in an online game. A lot of what we do online today is rewarded with such virtual wealth instead of, say, money. Ed: In terms of ‘virtual earning power’ what was the relationship between character gender and user gender? Vili: We know that in national economies, men and women tend to be rewarded differently for the same amount of work; men tend to earn more than women. Since online economies are such a big part of many people’s lives today, we wanted to know if this holds true in those economies as well. Looking at the virtual economies of two massively-multiplayer online games (MMOG), we found that there are indeed some gender differences in how much virtual wealth players accumulate within the same number of hours played. In one game, EVE Online, male players were on average 11 percent wealthier than female players of the same age, character skill level, and time spent playing. We believe that this finding is explained at least in part by the fact that male and female players tend to favour different activities within the game worlds, what we call “virtual pink and blue collar occupations”. In national economies, this is called occupational segregation: jobs perceived as suitable for men are rewarded differently from jobs perceived as suitable for women, resulting in a gender earnings gap. However, in another game, EverQuest II, we found that male and female players were approximately equally wealthy. This reflects the fact that games differ in what kind of activities they reward. Some provide a better economic return on fighting and exploring, while others make it more profitable to engage in trading and building social…

Development, Economics

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

by Mark Graham 03/11/2014

This mass connectivity has been one crucial ingredient for some significant changes in how work is organised, divided, outsourced, and rewarded.

by Mark Graham 03/11/2014

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…

Economics

Economics for Orcs: how can virtual world economies inform national economies and those who design them?

by Vili Lehdonvirta 03/07/2014

Understanding these economies is therefore crucial to anyone who is interested in the social dynamics and power relations of digital media today.

by Vili Lehdonvirta 03/07/2014

Vili discusses his new book from MIT Press (with E.Castronova): Virtual Economies: Design and Analysis.

Digital gaming, once a stigmatised hobby, is now a mainstream cultural activity. According to the Oxford Internet Survey, more than half of British Internet users play games online; more in fact, than watch films or pornography online. Most new games today contain some kind of a virtual economy: that is, a set of processes for the production, allocation, and consumption of artificially scarce virtual goods. Often the virtual economy is very simple; sometimes, as in massively multiplayer online game EVE Online, it starts to approach the scale and complexity of a small national economy. Just like national economies, virtual economies incentivise certain behaviours and discourage others; they ask people to make choices between mutually exclusive options; they ask people to coordinate. They can also propagate value systems setting out what modes of participation are considered valuable. These virtual economies are now built into many of the most popular areas of the Internet, including social media sites and knowledge commons—with their systems of artificially scarce likes, stars, votes, and badges. Understanding these economies is therefore crucial to anyone who is interested in the social dynamics and power relations of digital media today. But a question I am asked a lot is: what can ‘real’ economies and the economists who run them learn from these virtual economies? We might start by imagining how a textbook economist would approach the economy of an online game. In EVE Online, hundreds of thousands of players trade minerals, spaceship components and other virtual commodities on a number of regional marketplaces. These marketplaces are very sophisticated, resembling real commodity spot markets. Our economist would doubtless point out several ways its efficiency could be radically improved. For example, EVE players can only see prices quoted in their current region, likely missing a better deal available elsewhere. (In physical commodity markets, prices are instantly broadcast worldwide: you wouldn’t pay more for gold in Tokyo than you would in New…

Social Data Science

Past and Emerging Themes in Policy and Internet Studies

by Vili Lehdonvirta 12/05/2014

It is simply not possible to consider public policy today without some regard for the intertwining of information technologies with everyday life and society.

by Vili Lehdonvirta 12/05/2014

We can't understand, analyse or make public policy without understanding the technological, social and economic shifts associated with the Internet. Image from the (post-PRISM) "Stop Watching Us" Berlin Demonstration (2013) by mw238.

In the journal’s inaugural issue, founding Editor-in-Chief Helen Margetts outlined what are essentially two central premises behind Policy & Internet’s launch. The first is that “we cannot understand, analyse or make public policy without understanding the technological, social and economic shifts associated with the Internet” (Margetts 2009, 1). It is simply not possible to consider public policy today without some regard for the intertwining of information technologies with everyday life and society. The second premise is that the rise of the Internet is associated with shifts in how policy itself is made. In particular, she proposed that impacts of Internet adoption would be felt in the tools through which policies are effected, and the values that policy processes embody. The purpose of the Policy and Internet journal was to take up these two challenges: the public policy implications of Internet-related social change, and Internet-related changes in policy processes themselves. In recognition of the inherently multi-disciplinary nature of policy research, the journal is designed to act as a meeting place for all kinds of disciplinary and methodological approaches. Helen predicted that methodological approaches based on large-scale transactional data, network analysis, and experimentation would turn out to be particularly important for policy and Internet studies. Driving the advancement of these methods was therefore the journal’s third purpose. Today, the journal has reached a significant milestone: over one hundred high-quality peer-reviewed articles published. This seems an opportune moment to take stock of what kind of research we have published in practice, and see how it stacks up against the original vision. At the most general level, the journal’s articles fall into three broad categories: the Internet and public policy (48 articles), the Internet and policy processes (51 articles), and discussion of novel methodologies (10 articles). The first of these categories, “the Internet and public policy,” can be further broken down into a number of subcategories. One of the most prominent of these streams…

Interviews, Tools

The social economies of networked cultural production (or, how to make a movie with complete strangers)

by Isis Hjorth 28/04/2014

Looking at “networked cultural production”—ie the creation of cultural goods like films through crowdsourcing platforms—specifically in the ‘wreckamovie’ community

by Isis Hjorth 28/04/2014

Nomad, the perky-looking Mars rover from the crowdsourced documentary Solar System 3D (Wreckamovie).

Ed: You have been looking at “networked cultural production”—ie the creation of cultural goods like films through crowdsourcing platforms—specifically in the ‘wreckamovie’ community. What is wreckamovie? Isis: Wreckamovie is an open online platform that is designed to facilitate collaborate film production. The main advantage of the platform is that it encourages a granular and modular approach to cultural production; this means that the whole process is broken down into small, specific tasks. In doing so, it allows a diverse range of geographically dispersed, self-selected members to contribute in accordance with their expertise, interests and skills. The platform was launched by a group of young Finnish filmmakers in 2008, having successfully produced films with the aid of an online forum since the late 1990s. Officially, there are more than 11,000 Wreckamovie members, but the active core, the community, consists of fewer than 300 individuals. Ed: You mentioned a tendency in the literature to regard production systems as being either ‘market driven’ (eg Hollywood) or ‘not market driven’ (eg open or crowdsourced things); is that a distinction you recognised in your research? Isis: There’s been a lot of talk about the disruptive and transformative powers nested in networked technologies, and most often Wikipedia or open source software are highlighted as examples of new production models, denoting a discontinuity from established practices of the cultural industries. Typically, the production models are discriminated based on their relation to the market: are they market-driven or fuelled by virtues such as sharing and collaboration? This way of explaining differences in cultural production isn’t just present in contemporary literature dealing with networked phenomena, though. For example, the sociologist Bourdieu equally theorised cultural production by drawing this distinction between market and non-market production, portraying the irreconcilable differences in their underlying value systems, as proposed in his The Rules of Art. However, one of the key findings of my research is that the shaping force of these productions is…

Development, Interviews

The economic expectations and potentials of broadband Internet in East Africa

by David Sutcliffe 13/03/2014

Were firms adopting internet, as it became cheaper? Had this new connectivity had the effects that were anticipated, or was it purely hype?

by David Sutcliffe 13/03/2014

Ed: There has a lot of excitement about the potential of increased connectivity in the region: where did this come from? And what sort of benefits were promised? Chris: Yes, at the end of the 2000s when the first fibre cables landed in East Africa, there was much anticipation about what this new connectivity would mean for the region. I remember I was in Tanzania at the time, and people were very excited about this development—being tired of the slow and expensive satellite connections where even simple websites could take a minute to load. The perception, both in the international press and from East African politicians was that the cables would be a game changer. Firms would be able to market and sell more directly to customers and reduce inefficient ‘intermediaries’. Connectivity would allow new types of digital-driven business, and it would provide opportunity for small and medium firms to become part of the global economy. We wanted to revisit this discussion. Were firms adopting internet, as it became cheaper? Had this new connectivity had the effects that were anticipated, or was it purely hype? Ed: So what is the current level and quality of broadband access in Rwanda? ie how connected are people on the ground? Chris: Internet access has greatly improved over the previous few years, and the costs of bandwidth have declined markedly. The government has installed a ‘backbone’ fibre network and in the private sector there has also been a growth in the number of firms providing Internet service. There are still some problems though. Prices are still are quite high, particularly for dedicated broadband connections, and in the industries we looked at (tea and tourism) many firms couldn’t afford it. Secondly, we heard a lot of complaints that lower bandwidth connections—WiMax and mobile internet—are unreliable and become saturated at peak times. So, Rwanda has come a long way, but we expect there will be more…

Economics, Ethics, Governance & Security

Staying free in a world of persuasive technologies

by James Williams 29/07/2013

Broadly speaking, most of the online services we think we’re using for “free”—that is, the ones we’re paying for with the currency of our attention—have some sort of persuasive design goal.

by James Williams 29/07/2013

We’re living through a crisis of distraction. Image: "What’s on my iPhone" by Erik Mallinson

Ed: What persuasive technologies might we routinely meet online? And how are they designed to guide us towards certain decisions? There’s a broad spectrum, from the very simple to the very complex. A simple example would be something like Amazon’s “one-click” purchase feature, which compresses the entire checkout process down to a split-second decision. This uses a persuasive technique known as “reduction” to minimise the perceived cost to a user of going through with a purchase, making it more likely that they’ll transact. At the more complex end of the spectrum, you have the whole set of systems and subsystems that is online advertising. As it becomes easier to measure people’s behaviour over time and across media, advertisers are increasingly able to customise messages to potential customers and guide them down the path toward a purchase. It isn’t just commerce, though: mobile behaviour-change apps have seen really vibrant growth in the past couple years. In particular, health and fitness: products like Nike+, Map My Run, and Fitbit let you monitor your exercise, share your performance with friends, use social motivation to help you define and reach your fitness goals, and so on. One interesting example I came across recently is called “Zombies, Run!” which motivates by fright, spawning virtual zombies to chase you down the street while you’re on your run. As one final example, If you’ve ever tried to deactivate your Facebook account, you’ve probably seen a good example of social persuasive technology: the screen that comes up saying, “If you leave Facebook, these people will miss you” and then shows you pictures of your friends. Broadly speaking, most of the online services we think we’re using for “free”—that is, the ones we’re paying for with the currency of our attention—have some sort of persuasive design goal. And this can be particularly apparent when people are entering or exiting the system. Ed: Advertising has been around for centuries, so…

Development

Seeing like a machine: big data and the challenges of measuring Africa’s informal economies

by Laura Mann 22/07/2013

In a similar way that economists have traditionally excluded unpaid domestic labour from national accounts, most African states only scratched the surface of their populations’ true economic lives.

by Laura Mann 22/07/2013

State research capacity has been weakened since the 1980s. It is now hoped that the 'big data' generated by mobile phone use can shed light on African economic and social issues, but we must pay attention to what new technologies are doing to the bigger research environment. Image by Nicki Kindersley.

As Linnet Taylor’s recent post on this blog has argued, researchers are gaining interest in Africa’s big data. Linnet’s excellent post focused on what the profusion of big data might mean for privacy concerns and frameworks for managing personal data. My own research focuses on the implications of big (and open) data on knowledge about Africa; specifically, economic knowledge. As an introduction, it might be helpful to reflect on the French colonial concepts of l’Afrique utile and l’Afrique inutile (concepts most recently re-invoked by William Reno in 1999 and James Ferguson in 2005). L’Afrique utile, or usable Africa represented parts of Africa over which private actors felt they could exercise a degree of governance and control, and therefore extract profit. L’Afrique inutile, on the other hand, was the no-go area: places deemed too risky, too opaque and too wild for commercial profit. Until recently, it was difficult to convince multinationals to view Africa as usable and profitable because much economic activity took place in the unaccounted informal economy. With the exception of a few oil, gas and mineral installations and some export commodities like cocoa, cotton, tobacco, rubber, coffee, and tea, multinationals stayed out of the continent. Likewise, within the accounts of national public policy-making institutions, it was only the very narrow formal and recordable parts of the economy that were recorded. In a similar way that economists have traditionally excluded unpaid domestic labour from national accounts, most African states only scratched the surface of their populations’ true economic lives. The mobile phone has undoubtedly changed the way private companies and public bodies view African economies. Firstly, the mobile phone has demonstrated that Africans can be voracious consumers at the bottom of the pyramid (paving the way for the distribution of other low-cost items such as soap, sanitary pads, soft drinks, etc.). While the colonial scramble for Africa focused on what lay in Africa’s lands and landscapes, the new scramble…

economics