Other initiatives
Other initiatives include a $500 million joint venture between the World Bank's International Finance and Softbank, a Japanese technology investment company, to provide seed money and technological support and advice to Internet start-ups in developing countries.
The World Resource Institute's Hammond, however, says that the most progress will only be made with support and investments from the private sector. "What's sustainable is profitable enterprise," he says.
That's a view preached by Iqbal Quadir, a former investment banker who helped found a mobile phone company in his native Bangladesh that provides phone service to many of the country's poorest residents who do not have access to the public phone network.
After discovering that much of Bangladesh's population does not have access to a telephone, Quadir began a project to help his country and establish a profitable enterprise. He persuaded Grameen Bank, a microlending institution that provides small loans to the poor in Bangladesh, and Telenor, a Norwegian phone company, to team up with him in launching GrameenPhone. The bank provides loans to residents to buy wireless phones; in turn, those people charge fellow residents for use of the phone, providing the operator with a business and the user with a service not currently available, Quadir says.
Why don't more private companies focus on poor countries such as Bangladesh? Quadir says that part of it is the perception that because the population is poor, there is no market for technology products and services. He also points to the difficulty of working in some countries that may not have an infrastructure in place to support new technology.
C.K. Prahalad, professor of business administration at the University of Michigan and chairman of a software company called Praja, says businesses can be successful in developing countries if they approach such markets with a different mindset. He argues that companies need to back away from traditional notions and ways of doing business, such as providing only text-based information in English on the Web or concentrating on ownership of technology instead of access to it. "The moment you separate ownership from access, the opportunities are huge," Prahalad says.
HP is among those taking Prahalad's advice with its World e-Inclusion program, which the company estimates will total $1 billion in sales and services in 2001 and is aimed at reaching out to new markets often left untouched by major corporations. HP plans to launch initiatives in 1,000 villages worldwide that include providing access to health-care and education information in developing countries, setting up telecentres where residents can pay to access the Net or telephones, and providing the poor with better opportunities to sell their products via the Web.
"The philanthropy primarily used in developing nations is not sustainable," Hurst says. "When the donations stop, the programs die. What we're committed to is putting solutions in place that are economically viable."
Obstacles remain for businesses willing to take a risk on the poorest markets. Many agree that those governments must be willing to let industry invest in their countries. Even Hurst acknowledges that HP, for now, is working only in countries that are receptive.
Some countries, such as Jordan and Costa Rica, have been very aggressive in trying to lure technology companies to invest in their nations and to provide access to technology. But McConnell and others say governments need to make it more attractive for private companies to conduct business in their countries, namely by creating a friendly regulatory environment. This includes deregulating the telecommunications sector, creating an independent regulatory agency to monitor competition and providing legal protections for intellectual property.
Of course, certain countries are reluctant to change their regulations, particularly those that rely on revenue from their telecommunications monopolies. Lupberger, for one, tries to convince government policymakers that it's in their best interests to take the necessary steps to lure foreign investment.
"What we try to argue [to government leaders in developing countries] is that if you can come in with the right kind of environment . . . introduce privatisation and competition, the private sector will come and build out," Lupberger says.
