2 – #INTRODUCTION

2 #INTRODUCTION

We live in a connected world.  

Not limited to the wealthy nations and peoples of the world, nearly six billion of the planet’s seven-billion-and-counting individuals own a mobile.  Rich and poor, everyone sees the value in being continuously in-touch.  Connectivity creates opportunity.

A story related in THE ECONOMIST perfectly illustrates the relationship between connectivity and opportunity.  For thousands of years, fishermen in the Indian state of Kerala, on the nation’s southwestern coast, sailing their sturdy dhows into the Indian ocean, have dropped their nets, said their prayers, and harvested the sea’s bounty.  Once they’d filled their hold, the fishermen would head back to the mainland.  At this point, they’d be faced with a choice: where should they sell their fish?  The Kerala coastline, dotted with ports and fish markets, offers fishermen lots of choices, and the markets need fish every day.  Working from instinct, the fishermen would pick a port, and sail into it.

Inevitably, other fishermen would have had the same idea, pulling into the same port at the same time, their holds also filled.  Suddenly there’s a problem of oversupply: Too many fish for sale means low prices at the market.  A fisherman might just barely cover their costs, no matter how hard they worked, or how many fish they caught.  Meanwhile, just a few kilometers away, another fishing port had been forgotten by all the fishermen that day.  No fish for sale in that market, at any price.  The Kerala fishermen had grown used to their subsistence lifestyle, and Kerala fishmongers to their inconstant supply.  It’s just the way things were, the way they’d always been.

In 1997, mobiles came to Kerala.  Cell towers began to spring up all over Kerala, including its extensive beaches.  Radio signals travel in straight lines, so mobile coverage carried out to sea for nearly 15 miles.  Anyone could make a call from the middle of the Indian ocean, almost out of sight of land – if they had a reason to make a call.

As is the case everywhere, the first mobiles were expensive to own and use, so only the wealthy could afford them.  A month of a fisherman’s income barely covered the price of the cheapest mobile.  (In relative terms, mobile cost as much to a Kerala fisherman as a good used car would cost us.)

At least one fisherman had enough spare cash to purchase a mobile.  That mobile went out to sea and at some point – no one knows precisely who, or where, or when – someone rang that mobile.  Over the course of a conversation, the fisherman learned about a fish market which going without fish that day.  He immediately set his sails for that port, and made a tidy profit on his eagerly awaited fish.

The next day, the fisherman phoned around, calling each of the fish markets in succession, learning which of these markets most needed fish – and would pay the most for it.  That day the fisherman made another excellent return on his catch.  The same thing happened the day after that, and the day after that.  With his mobile to check the markets, every day brought a very nice profit.

News of the mobile-facilitated fish market spread very quickly throughout Kerala.  Within a few months, every fisherman, from the poorest to the most well-off, owned a mobile, checking prices at several fish markets before selecting a port of call.  Three things happened as a result: every fish market now had a supply of fish; the price of fish at one market matched the price of fish in another market; and the fishermen now got the best possible price for their fish, every day.  That mobile, which had cost a month’s income, could be paid off in just two months.  

Kerala’s fisherman have a new tool, helping them earn more money.  They’re not alone.  Farmers in Kenya use DrumNet, a text messaging service allowing them to check the current market prices for their produce at a range of locations.  When a farmer readies his vegetables for sale, he sends a text message to DrumNet, using the response to select the market offering him the best price.  Forever at the mercy of the weather, insects and crop blights, farmers have also suffered from ‘informational asymmetry’ in the marketplace, never knowing quite enough to make the most of their opportunities.  Connectivity wipes away these asymmetries: using DrumNet, Kenyan farmers have been earning as much as 40% more for their vegetables.

In Karachi, the largest city of Pakistan, barbers have always had to rent an expensive stall in the public markets to ply their trade.  As Pakistanis bought mobiles, a different kind of commerce became possible.  A barber can just print up signs reading “FOR A HAIRCUT CALL 03XX-YYYYYYYYY”, posting them on any available space.  Everyone is better served by this relationship: the client gets on-call service in his home, while the barber saves a fortune in rent.  

The market, which had always been attached to a place in space and a point in time, has migrated into our mobiles, following us everywhere, all the time.  Unexpected and unpredicted, most businesses have little understanding of how this transition to a universal market fundamentally transforms commerce.  Yet billions of individuals have already grasped the truth: the mobile is the most potent tool for wealth-creation since the invention of the metal axe-head, thousands of years ago.

The business case for the mobile is irresistible: a small investment yielding enormous returns.  Owning a mobile in Bangladesh or Peru or Nigeria dramatically improves your capability to care for your family.  As people saw their employers and friends and family using the mobile to earn more money, the mobile became the must-have device, the universal item in the 21st-century toolkit.

Marshall McLuhan wrote “We shape our tools, and thereafter our tools shape us.”  Seeing it as an essential element for our success in the world, we have taken up the mobile.  We grow richer, but this gift comes at a cost: the more we use the mobile, the more we are transformed by it.

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