 Hi. Good afternoon. Welcome, everyone, to the New America Foundation. Thanks to everyone for joining us for the Afternoons event called Mobile Disconnect. Can mobile solutions really combat global poverty? My name is Jamie Zimmerman, and I'm the director of the Global Assets Project here at New America, a co-host of this event along with our Open Technology Initiative and its director, Sasha Meinrath. So I've been really excited about today's event and so thrilled to see a packed house, a lot of people in the room that are friends and colleagues, looking around for what I can tell. And what I'm hoping is going to be a lot of great energy today for this, I think, really amazing panel and a topic that I think is really important. So important that I'm actually taking a 15-minute break to come to this event from my maternity leave today and if you see a three-week-old baby roaming the halls of the New America Foundation, that is my son, and he may be the youngest person to ever attend an event at the New America Foundation. Though I don't know, Sasha, maybe your little girl was here early on too, yeah, pretty close. So anyway, I'm really excited to be here. The event has been a while in the making and stems from a number of conversations and observations over the last few months, even longer, on how mobile solutions and the role of technology broadly conspire innovation that will accelerate poverty reduction globally. Over the last few years there's been this explosion of interest in mobile solutions. We hear everything from mobile health, mHealth, mGovernment, mWomen, particularly in money or mobile money, all this related to financial inclusion, which has been a particular interest to the Global Assets Project, which is the program here in New America that I run. And just last year, our policy analyst within the Global Assets Project, Jamie Holmes and myself, wrote an article on the Mobile Money Revolution and its potentially powerful impacts on both increasing the effectiveness and the efficiency of financial empowerment efforts around the globe. And so, you know, since that time and, you know, and thereafter everywhere I turn, there is some sort of paper or event or new initiative or a conference on mobile solutions, on ICT4D or information communication technology for development. I think probably everybody knows this acronym, but just in case. Just yesterday morning even there was a White House event on innovation and global development that looked in part at mobile issues and mobile innovation. But with all this buzz and excitement, you know, I was also, at the same time, I've been having numerous conversations with others that are actually deep in the trenches of ICT4D, such as my colleague Sasha, who's going to be talking with all of you today, but many others who were, who've been cautioning me and saying, you know, don't get, don't get so caught up in the hype. You know, there's still a lot that needs to be done. You know, there's so much that's happening that's not really having, and maybe won't even, will never have the impact that people say that it's going to have. You know, there's a lot of buzz around this, but, you know, let's be, let's actually talk about this, you know, in a little bit more of a serious way. And so, you know, with both of these, you know, both sides of this coming together, a lot of excitement, but then also others, you know, kind of saying, whoa, kind of look, let's, let's get, you know, let's not get ahead of ourselves. It kind of got me thinking, you know, is the global development field looking at technology, innovation, and its relationship with global development realistically? Or are we getting caught up in the promise of innovation without considering some of the very real challenges and limitations presented with it? So between the hope and the hype, where do mobile solutions really stand? What is the real promise of these tools, and what will it take to actually fulfill that promise? These are the questions that have been burning for me and in my mind and the impetus for this event today. So as most, a lot of you probably saw on the screen before the event, you saw that map, there was a map that was being displayed in a video with it, which was just published today on Slate, the Slate.com, the website for Slate Magazine through a new partnership that we've started with them called Map of the Week. And what that map showed is mobile penetration levels worldwide. So how mobile is far outpacing fixed line phones almost everywhere in the world, but also how limited access remains in many parts of the developing world. So what this reminds us is that despite this amazing pace of growth and their estimates ranging between now five to six billion cell phone subscriptions worldwide to 87% global mobile penetration, that there is still a really great digital divide. I think even more telling is if we look at mobile access within countries and the growing connectivity divide between the haves and have-nots, the actual populations within those countries, which I believe is often ignored in global development circles, and particularly among those of us who get so excited about that six billion number and that 87% number and we think, wow, we're at scale, we're totally included and we're achieving this, but when you really look at the statistics, we're still a ways off. And this is the topic of an article that Sasha and I published just today, also in conjunction with the Map of the Week on Slate, where we argue that what we really need is a radical shift in thinking around ICT4D and how to address this digital divide. And our argument basically, I'll just talk about it really quickly in this article, is that we really feel that we need to find more practical and appropriate solutions to support truly universal low-cost mobile connectivity and ensure that the poorest households are able to truly harness the power of mobile connectivity in the way that we are arguing, the rest of us are arguing that they will, at some point in the near future, be able to do. So we look specifically at the case of mobile money in this article and argue that these services are not effectively reaching the poorest of the poor. In a 2010 study of Mpesa in Kenya, which I'm sure many of you know about, this mobile money service in Kenya that's probably the most well-known in the world, where mobile money penetration is greatest globally, 60% of the poorest quartile of the population does not use the service. And another, I think even more telling, a report by Research ICT Africa wrote to income expenditures of 17 African countries and found that many of the poorest individuals studied were spending over 16% of their total income on mobile services. So access and cost are big parts of the problem, despite the fact that technologies to dramatically lower the cost of connectivity do exist today. But the bigger picture issue at stake, I think in the case of mobile connectivity, what we argue in our article is that a rising tide does not lift all boats. As more people use and benefit from mobile services, the divide between those who have access to it and those who adopt it and those who don't will grow exponentially, creating a greater economic divide, leaving the poor further and further behind. So for all its promise, which I do very much believe in and I am an advocate of mobile solutions and mobile money, I think that there are very real risks to how we harness and apply new technologies to spur global development innovations, and we think that's warrants serious consideration. So that's our take on it, but I think this is a complex and dynamic sort of issue and it's really rife for debate, which is why we're here today to ponder the question, can mobile solutions really combat global poverty? If yes, how? When and under what context? If not, why not? What's standing in the way? And I think we got a jump start on this debate earlier in the week on the Global Innovation Showcase on CNN.com slash Innovation. The Global Innovation Showcase is a partnership between the CNN's GPS and New America Foundation's Global Assets Project, and we asked our panelists the question, are mobile solutions overhyped? And very interestingly to me, even among our experts, there aren't really clear answers. I think there was one resounding, yes, they're overhyped. And two other commentators said yes and no, literally said yes and no. And then another said it depends. So the jury is obviously still out on this question, on the issue. And I think this is only the beginning of a much longer conversation that will continue to shift and evolve and evolve. And so I'm thrilled that we get the opportunity to continue that conversation in person today with such an amazing group of panelists. So I'm going to introduce them to you, but before I do that, I'm just going to say a couple words about today's event structure. The panelists are going to come up, as well as our moderator, and make short presentations on their view of this issue. And then we're going to have a moderated debate before we open it up to Q&A among the audience. And I hope that we have plenty of time for a nice discussion with all of you. When you ask your questions, and I just say this at every event, because I think it needs repeating at every event, please wait for the microphone and speak directly into it because we do webcast live, all of our events. Without speaking into that microphone, those who are watching over webcast can't hear a word that you're saying. So if you could just, you know, hope we'll have people running microphones, if you could just wait. And then when you get that microphone, speak directly into it. State your name and affiliation if you can remember to do so. And please, please, please keep your question to a question and just one question at that, please. I know that you won't follow that, but I just thought I'd say it anyway. For the Twitter crowd in the room and online, you can tweet about or follow today's discussion on Twitter by following our events, hashtag M disconnect. And finally, for those wanting to continue the conversation after the formal panel ends, I hear that there is a gathering over at Circle Bistro, over in Washington Circle, as part of the cleverly named ICT for drinks event series. So without further ado, let's get started. It's a pleasure to introduce this panel to you today. And I think that this just might be the, you know, par for the course with the ICT 4D Innovation Tech crowd. But I think this might be one of the coolest groups of people that I've ever convened for an event. So I'm going to start with our moderator, Sasha Meinroth. He's the director of the New America Foundation's Open Technology Initiative and has been described as a, quote, community internet pioneer and a, quote, entrepreneurial visionary, which I think is pretty cool. He's a well-known expert on community wireless networks, municipal broadband and telecommunications policy. In 2009, he was named one of ours Technica's tech policies people to watch. And also in 2009, he was a recipient of the Public Knowledge IP3 Award for Excellence in Public Interest Advocacy. He's the co-founder of Measurement Lab, which is a distributed server platform for researchers around the world to deploy internet measurement tools, advance network research and empower the public with useful information about their broadband connections. He also coordinates the Open Source Wireless Coalition, a global partnership of open source wireless integrators, researchers, implementers and companies dedicated to the development of open source interoperable low-cost wireless technologies. Also very cool. Next is Mora O'Neill, who's the chief innovation officer and senior counselor to the administrator of USAID, the US Agency for International Development. In the public, private and academic sectors, Mora has focused on sustainable energy developments as well as entrepreneurship and innovation. And before coming to USAID, she served as a chief of staff and senior advisor in the US Department of Agriculture, as well as chief of staff for US Senator Maria Cantwell. Mora has started four companies in the energy, education and high technology areas and was once named the Greater Seattle Business Person of the Year. Mora also completed her PhD at University of Washington where her discovery research, and I think this is really cool, though the rest of it is also really cool, but I thought this was particularly cool, was on how narrow-mindedness occurs and the errors it leads in decision-making, which is really interesting. The next, and I think we're going to switch these name tags around, but the next speaker is going to be Katrin Verkloss. Katrin is the co-founder and editor of mobileactive.org, a global network of practitioners using mobile phones for social impact. Katrin is currently working on mobile projects in good governance and accountability and political participation in emerging democracies. She's also leading a team focused on mobile security tools for human rights defenders in repressive regimes. A native of Germany, she has written widely on mobile phones for organizing, advocacy and citizen participation for civil society organizations. She previously led several nonprofit organizations, such as the Nonprofit Technology Network, the National Association of IT Professionals working in more than one million nonprofit organizations in the United States. She's also the editor of Managing Technology to Meet Your Mission, and she was a 2009 TED fellow and a 2010 fellow at MIT Media Lab and was named by FAST Company as one of the most, quote, influential women in tech in 2011. Also very cool. So next on the line is Michael Terrazi, a senior policy specialist at CGAAP, the consultative group to assist the poor out-of-the-world bank. Michael joined CGAAP in 2008 as a member of their government and policy team, and he leads the team's efforts in the area of branchless banking regulation and has worked with regulators around the world to develop regulatory frameworks, such as the Maldives, Nigeria, Rwanda, Fiji, Haiti and Jordan. He's the co-author of Non-Bank e-Money issuers, regulatory approaches to protecting customer deposits and Islamic microfinance in emerging market niche. Michael teaches courses on branchless banking at the Boulder Institute of Microfinance, and he was chosen as a young global leader by the World Economic Forum and is a member of the forum's dialogue series on access to finance through technology. Prior to joining CGAAP, he was a corporate attorney in private practice and served as the European General Counsel for a mysteriously unnamed U.S. company, I noticed in your bio, unnamed U.S. company providing finance-related technological services to developing countries, and he also, after all that and within all that, served as an advisor to the Israeli-Palestine peace negotiations. And last but not least is Kintaro Toyama, a visiting researcher in the School of Information at the University of California, Berkeley, and he's working on a book arguing that increasing human wisdom should be the primary focus in international development activities. I wonder if we'll hear more about that today. Until 2009, Kintaro was assistant managing director of Microsoft Research India, which he co-founded in 2005, and at MSR India he started the Technology for Emerging Markets Research Group, which conducts interdisciplinary research to understand how the world's poorest communities interact with electronic technology and to invent new ways for technology to support their socioeconomic development. The group is known for such award-winning projects as MultiPoint, text-free user interfaces, and Digital Green. Kintaro also co-founded the IEEE ACM International Conference on Information and Communication Technologies and Development to provide a global platform for rigorous academic research in this field. Prior to his time in India, Kintaro did computer vision and multimedia research at Microsoft Research in the United States, the UK, and has also taught university mathematics in Ghana on top of all of that. So a very experienced, diverse crowd, and I'm really excited about the panel today and the diversity of views that I think will emerge in the discussion that we have. So thank you very much to our four panelists and our moderator for coming together today to share your thoughts and experiences. Thank you to Sasha and OTI for co-hosting the event with the Global Assets Project. Thanks to my team within the Global Assets Project for putting this all together while I've been MIA for the last three weeks, and thanks to all of you in the room for being here and for those of us joining online. Hope that you enjoy your participation as well. So thanks for joining us, and I hope you all enjoy. Thank you. You guys, come on up. Sure. I've got a list here, so I'm all right. So while folks do a little dance there, I'll just say, you know, it's really great. That's true. Yeah, there's a couple seats out front if anyone's standing there wondering where they're going to sit. But it's really great to be here. You know, I may be the geekery behind a lot of New America's work, but Jamie's really the brains behind a lot of the Global Assets and community-building facets of this. And if we've got geeks and brains, then these folks right here, they're the visionaries that are thinking about big fixes, big ideas, the future of this entire sector. And when I think about sort of the groupings of people that think about and talk about the future of mobile communications, I sort of break them down into another false dichotomy, which is this. You know, you have sort of a lot of people that sort of have this techno-deterministic, super-utopian, you know, this technology will save us all mentality. And then it seems like you flip almost directly from that into sort of the super-cynical, dismissive, ludite-esque kind of thought structure that says, you know, these things are evil and should be, you know, excluded from civil society as quickly as possible. And my hope is that today we're going to tread an honest assessment that marks out kind of the boundaries of these two strawmen and thinks about sort of the realities that we face, the knowledge that we've gained as we've garnered experience in these areas. And a lot of the work that I and the Open Technology Initiative team do is really focused on, you know, where do the realities of these technologies, the actual potential implications and impacts on local communities lie? How do we get beyond all of the marketing and PR shenanigans that we're faced with in this and actually learn about what's possible? And these four panelists know this through and through. And so my hope is, and I'm going to be scribbling maniacally over here on the podium as they talk, to think about sort of the questions and follow-ups to get a conversation started. I think this is probably the most important issue, facing civil society and participatory democracy. How we communicate in the future is absolutely fundamental to the future of civilization. And with that in mind, I think the work that these people are doing really arises as one of the most fundamentally important sectors on Earth. The questions that these people are grappling with and the answers that they are providing really fundamentally affect the very future of society. So to get us started, I'm going to turn it over to Mora, who's going to talk a little bit about her work and her experiences helping lead U.S. AIDS work in this area. Thank you. Well, thanks so much, Sasha. And I was thrilled to read the blogs. I was thrilled to have Jamie be so provocative because I actually think that sort of mash-up, along with the panel's ideas in just a minute, will help us, inform us to get to a better place, even if we don't always agree. So I will tell you just quickly that USAID has very heavily into the mobile revolution. We have a mobile solutions group, but also decentralized. Well, I was the one that said it depends. The only reason I said it depends on whether this mobile is overhyped is if you're taking a snapshot right now and say the second you put that mobile phone in somebody's hands, does their health, education, education are welfare outcome or civil society switch? And of course, I would say no. But I think that that's a wrong question to ask. I say are we on a trajectory to actually have it be a poverty eradication and to help create a more fair and just world and I am completely bullish. I'll give you some examples of where I come from on that and then quickly hit on adoption, access, affordability and apps, but more broadly what can people do with it and how does it really get a matter? So I actually lived in the pre-PC world and I remember when computers started showing up in government and corporations and the manager said, oh, that's ridiculous. They have a dumb terminal to a mainframe. Why would you need a PC? My employees are just going to play with it. It isn't going to improve productivity. And so I feel like some of the naysayers around mobiles are sort of similar to that with all due respect to my panelists who are as smarter smarter than me and will challenge me on this point. So I get it. I'm just supposed to be provocative so I will start by doing that. The second thing is on e-mail and internet. So e-mail was started really as a messaging system for the military is trying to figure out how to build in difficult conditions they could get messages out in it morphed into the internet with a lot of people saying same thing in what I would call Web 1.0. People, lots of articles including about Amazon there was going to be a boss that this is ridiculous. And certainly if you look at where Alta Vista and some of the search engines came they quickly became sort of massively unusable because they didn't have smart algorithms that really could connect to our brain and tell us where we really want to go. So this is by way of saying I think we are at Mobiles for Development 1.0 and so it's not that I don't think the 2.0 and 3.0 won't make huge difference but I'm completely bullish on this being revolutionary in terms of the ability to impact poverty and to make this a more just and fair world. So let me just touch on four points really quickly, adoption rates. It is absolutely true that there are gaps in adoption rates and I really think that the work that Sasha and Jamie did to say hey let's get real about who's actually owning these phones and where is really important and we ought to pay attention. So USAID along with the Cherie Blair Foundation and GSM realized there is a huge gap with respect to women at the bottom of the pyramid owning cell phones. Did an analysis that said 300 million more less women own mobile phones and men and we decided to partner globally to see if in three years we could cut that in half. And we realized we needed to cut it in half with a market based approach not by just giving the phones to poor women or giving them calling top of cards to be able to use it but rather to work with the mobile operators to build the business case for why would you target poor women and how could they become part of this? And we think that without that diligence to the bottom of the pyramid and to gender and to some other gaps that it could actually the mobile revolution could actually exacerbate problems. So hats off to people like New America who's bringing attention to where that's happening. The second thing is access. We see pretty dramatic differences in access. You know, not surprising that in places like the Democratic Republic of Congo or Sudan they have incredibly low or even Ethiopia has low penetration rates of mobile. So we got to pay attention to oh, have to speak up. Okay. Okay, I'll talk louder. We're going to have to figure out on access and we're going to have to monitor that as well is that fine to say it's 86 percent but in fact it's not ubiquitous around the world and in some of the poorest places it's particularly bad. So we're going to have to look at access. The next one is we're going to have to look at affordability and I know that the State Department is thinking about partnering with a number of people to think about could we actually figure out how to have breakthroughs with respect to affordability. We know that actually there are a number of poor countries around the world where internet access is three times as more expensive than the U.S. and it ain't cheap in the U.S. as well. So we got to work on adoption rates, we got for special groups, we got to work on access, we got to work on affordability and the last one is we got to say is there something useful you could do with this mobile phone? Besides listen to music and talk to each other which is hugely valuable but in terms of bottom of the pyramid kind of changes to poverty. So on that I'll say that there's some really encouraging stats. I know some of my panelists will talk about mobile money we think it is a game changing development imperative across all applications, across all outcomes but I'll give you a couple statistics. In Afghanistan about half the civil servants which are most of the military and police get paid in cash. When we funded a pilot to pay them through their mobile phone they thought they immediately got a 30% raise, they thought they got it from the cell phone company but that was actually not a 30% raise, they were for the first time getting paid what they were actually supposed to be paid there was just a few sticky fingers along the way when it was cash now we think that it has huge ability to actually put money where it should be in terms of salaries in cash for work in civil servants as well as others in terms of farmers reducing the middle men that are taking some of it as they are selling their crops or buying their inputs. So we think mobile money there's clearly examples we know that there's 500,000 bank branches around the world and there's 5 or 6 billion phones and so we know with M-PESA well not every statistic is fantastic we see a dramatic rise in financial inclusion we see a dramatic rise in the number of people who have access to mobile phones and their ability to store money for the first time and we know from our M women research that women are really excited about the ability to control their own money which is a nice way of saying hide their money from their spouses or their family members who want to steal it and it's a lot easier to hide a SIM card than cash so we're excited. Couple others in mobile health we're showing in Bangladesh some research that we will or some impact evaluation data that we will publish shortly on what happens when you send an SMS regularly to moms that are pregnant do they have healthier babies do they die less often do they seek more help and I'll give you a preview we're really excited about what that data is showing so in closing I'm completely bullish on mobiles for development that doesn't mean we should just close our eyes and hope all good things will happen in civil society in health and money and in access but I think that we should embrace it fully and understand that this mobiles for D1.0 is this crazy experimental phase where we're trying to find out just like we were at the beginning of the app store as the beginning of the computers where are those killer apps that will help raise the fortunes of people around the world to realize their full potential so thank you Sasha right thank you Mara so buy ICT 4D stock immediately use the take home message portfolio base because some of them will fail pretty spectacularly very good excellent so if we can bring up the first power point or presentation I think Katrina you're going to go next do you need this laser device so thanks New America foundation Jamie and everybody thanks everybody who's listening online from the Twitter stream it sounds like there's quite a number and we are on the panel rudely I am anyway watching the Twitter stream so there will be some provocation from there as well so I've been in this field for a fairly long time 2005 we didn't even talk about M4D at that point that term didn't exist and I was bullish at the time as well I was extremely excited looking at the growth of mobile technology and the penetration rates that were happening in developing countries or the growth rates that were happening in developing countries and so I was probably one of the people in the answer to Kiwanja's question online who did the hyping I think today it's the donors it's the development agencies who are doing a lot of the hyping of mobile for development and I want to step back for a second and actually remind us that mobile phones did not have they weren't aimed at development mobile technology and the need to communicate or let's put it this way the need to communicate and talk to one another is human need and so the growth rates that you're seeing around the world are a direct result not because of for development purposes or anti-poverty reasons it's because people want to talk to one another they want to consume entertainment information whatever it is social connection cohesion via and with their phones and these are affordable and fairly usable devices so you know the growth happened despite or certainly not because of development issues so the two areas where I you know have been sort of paying some attention have been excited about in the past and I'll fast forward to where I am today in a moment is the area of agriculture certainly and agriculture and particularly the work that people like Jenny Aker have been doing and looking at streamlining markets and making markets more efficient via access to information with mobile technology access to market prices the ability to bring to actually charge prices that are more in line with the environment around the ability to access information for to streamline markets really has been beneficial and there's a significant amount of data growing up amount of data in Kintaro I hope you'll speak to that maybe a little bit the other area certainly this is a picture from UNICEF is in the area of health health data collection patient management there are certainly mHealth is a huge growth factor if you buy stock buy in mHealth you know everybody's jumping on that bandwagon the world over including this country disease management etc enormous potential I think some of the data is missing so I'm looking very much forward to seeing what USAID is putting out as to whether helping patients or managing patients providing services via mobile technology actually includes better health outcomes I'd like to see some really substantive data but certainly there's a lot of activity there and the ability to gather data is quite substantial you know things like the work that UNICEF is doing for example zombie on Tanzania for the first time having birth and death registries which are important to look at kind of longitudinally what you know do are we actually achieving different health outcomes so they are helping the Tanzanian and zombie governments to actually have reliable birth and death data mostly collected via mobile technology we are also seeing that mobile phones are becoming increasingly sophisticated this is a very low cost or relatively low cost phone from India running Android the price of hardware as it were as we know from many a law is coming down and the functionality is increasing if you look at recent smartphone sales have been increasing despite our in in quantities much larger than expected and so globally we are seeing smartphone rates increasing that allow people to do a hell of a lot more than a simple phone that just runs phone and SMS would allow us to do that also of course on the flip side what you have been alluding to may lead us to a mobile digital divide right it's people who cannot read who cannot afford the latest and greatest even if it's only a $40 Android smartphone that have access to services or don't have access to services and very simple phones that other people do who are able to afford sort of the next generation of phones the work that I have been doing has obviously been particularly focused on democratic participation and I think we have seen the role of mobile technology in documenting and organizing and reporting in the recent revolutions this is a picture actually that I took in Cairo and you see the plethora of mobile phones there that wherever you go there are phones everywhere and people will immediately record and to some extent thanks to the very organized and very smart reporting from people from Syria we actually have a ton of information there set phones in part from there when traditional media is not having access so this is the kind of stuff that I get excited about now at this point because I think there are some significant challenges and problems and we're really needing to look at a much more nuanced and balanced view I don't know whether you are all familiar with the hype cycle it's actually a slide I usually have and I didn't for some reason include but Gartner a long time ago developed this sort of simple but conceptually compelling hype cycle look it up it's in the Wikipedia essentially it has a technology trigger it doesn't matter what it is let's just call it a mobile phone and you have this peak of inflated expectations right it's panacea it will solve the world it'll be the silver bullet to help with poverty you then go and I've been there into the trough of disillusionment where you realize no in fact it won't save the world and then you come to this what Gartner tends to call or likes to call the plateau of productivity the alliterations around here which is where we need to be fast that is understanding what the limitations are and understanding what the potential is and not putting the tool before the bandwagon so to speak agricultural pricing information is great if you don't is great but problematic or not enough if you don't have the road that actually allows you to bring the product to market before it spoils right so investments in basic health infrastructure and basic transportation infrastructure et cetera et cetera equally as important and the mobile phone isn't going to do it so mobile bunny I'm going to skip this it's a beautiful slide thank you to emers shoemaker who's a friend of mine who took this 440 billion dollars in remittances I don't know whether you'll be talking about remittances but personally I am fascinated with this so if you look at development and aid it's a combination of what remittances are and remittances are still happening through extremely expensive western unions so can mobile money help us to actually streamline the remittance market which is a much more reliable and I would argue better development or factor to increase GDP and in fact it is a large percentage of GDP in many countries 440 billion dollars and so to make that cheaper to actually have more money go to families back home that would be one interesting area where I'd like to see work done see gap to jump start some of the potential the other area that I have been extremely interested in is data protection so one of the things obviously that mobile allow us to do is track people extremely efficiently and effectively many governments do it your telephone company does it because it builds you it knows where you are, who you call who you SMS to, who calls you what your patterns are how long you're online, how much data you're transmitting etc in a development perspective I find this extremely problematic and there are very few people that are talking about this right now very few people if you're gathering sensitive health data over completely clear text and insecure SMS somebody's HIV status sensitive information protected by HIPAA standards in this country completely unregulated by development organizations they don't self-regulate by countries certainly that have don't have any privacy or data protection stipulations and so you see the kind of ugly and dark underbelly right particularly people who are in at the bottom of the pyramid seem to not deserve by at least the lack of talking about it any kind of data protections that mobile phones really warrant we need this if we are talking about mobile telephony and mobile phones in development we need to talk about how do we protect that data that we're gathering the information that we're distributing and so this is the work that I've been turning to much more and I get into the trough of disillusionment quite a bit so data protection and M4D is I think possibly my new passion among other things to that just to conclude the international office of migration at the UN for the first time that I'm aware of a development organization has actually put out a data protection manual and kudos to them you can download it you can read it it's a good start it's not perfect but it's a very good start and so one of my anti-cautionary notes great work we need much more of it thank you Katrina now to carry on the conversation we are going to turn over to Michael who is going to talk a bunch about his work as well I think we'll start seeing more and more data as the panel continues good afternoon it's a pleasure to be here representing the gap many of you were a financial inclusion resource center our goal is to provide financial services or to help promote financial services for low income individuals around the world historically we've been involved in the quintessential micro loan the Grameen Bank Bangladesh example but we have over the last four or five years now I've been very much focused on branchless banking and the use of mobile to provide access to financial services to low income individuals around the world and I've been focusing primarily on the policy and regulatory aspects of that I should start with a confession I'm a lawyer I should say maybe a warning rather than a confession and it was funny because when I first heard the question you know are mobile solutions over-hyped I thought to myself I remember in law school where they said you can win any argument if you get to phrase the question and so the easy answer to the question was yes it's over-hyped if you're thinking that yes mobile solutions provide direct and immediate alleviation of poverty then yes it's over-hyped but if we phrase the question differently is there as much hope as there is hype is the room to be bullish like Mora who I agree with it's always good to agree with one of your donor members USAID it's not difficult to do but you know if you ask that question you'll find that the answer is also a resounding yes one of the key arguments against sort of getting too excited about technology is you can't just give technology to poor people and expect that to change their lives if you don't address the literacy question that allows them to use the technology or the gender disparity that might prevent certain women from getting that technology and that brings in a cohesive manner and I agree with that but what that argument overlooks is that we're not giving new technology that technology is already there we have we've been talking a lot about the 5 to 6 billion number how many people have mobile phones the number that Seagap is interested in is around 1.2 to 1.7 billion and that is the number of customers around the world who have mobile phones bank accounts that's our target audience and yes it's not every poor person it's not necessarily even the bottom of the pyramid but it is a huge and significant number of people who have access to mobile services and not financial services or at least formal financial services and that's our target audience so we're not talking about new technology we're talking about technology that's already in the hands of 1.2 to 1.7 billion people and we need to really be able to use that technology for financial services obviously we've talked about M-PASA but M-PASA everyone says that was just a one-trick pony you can't replicate M-PASA and it's true we are having difficulty finding more M-PASAs around the world but you can't look at M-PASA and deny the potential of branches banking we have some very current figures just this morning Governor Ndungu of the central bank of Kenya there are more than 18 million users of mobile money in Kenya 14 million of which are just M-PASA another 4 million are other competitors that have entered the market that's compared to 15 million bank accounts so if you just take a look at the numbers in just four years the mobile money solutions have been able to penetrate deeper into the market, have greater impact into the market than 40 years of the formal banking sector you can't ignore that potential 18 million users of mobile money out of a population of 41 million safe to say that the adult population is much smaller so I think it's a comfortable figure to say more than half the adult population in Kenya relies on mobile money and that's very difficult to ignore one of the other things that's really important to keep in mind is that this happened remarkably quickly for those who are saying where are the results what's the impact on poor people what's the origin of payment cards here in the United States what we think the Visa and the MasterCards in our pocket that we think have been around forever well they started in the 1950s with diner club and it wasn't until 30 years later that people really started getting the traction out of plastic cards here in the United States it took an entire generation for that really to catch on and yet we see in just four years in Kenya given the right situation the huge amount of impact very very quickly so yes M-Pesa is an aberration in the sense that we haven't been able to replicate it but it's an aberration in the sense that it's so successful so quickly we would have anticipated that it would take much longer to reach these numbers and so therefore we are as my colleague Moira quite bullish on mobile money one thing I wanted to talk about and it's just some numbers we asked ourselves at SeaGap are we part of this hype we need data and so we asked ourselves what has been the impact on poor people of mobile money and so we did a few surveys and research on nine mobile money applications around the world I'm going to skip this first slide which is just a background on how branches banking works and we can get into that later if that's some sort of background that we need to all be on the same page but some of the questions that we asked ourselves about customer adoption the first one does it really reach the impact of unbanked low income individuals and the answer we found that on average 37% of mobile money users were previously unbanked so the answer is yes we are reaching poor people next was that half of these reach more than the average MFI in the microfinance institution in the same country so they have much greater outreach and penetration than the traditional microfinance institutions that have been operating for a much longer period of time Sasha is it okay if I just stand up there the next question we asked is does it scale faster than traditional approaches to branches to banking low income people and we discovered that yes it does and of course in the case of M-Pesa we saw that it took just three years to surpass the largest MFI that has been operating for 15 years so we do have not only a high level of penetration but a much faster level of penetration another question we asked ourselves is it cheaper than traditional bank products than when those have also been aimed at low income unbanked consumers again the answer was yes on average it's 19% cheaper than comparable bank services and we are investigating remittances as well and we hope to have more data for you on that level but what's interesting there the lower the transaction value the cheaper it actually is in comparison so for example if you're only sending $5 you know your savings is going to be much higher than what you normally have so the lower you're actually transacting which is typical of the low income users that we're targeting the cheaper it actually is for them and it's about half the price of informal options for money transfer and you know this is really important when people are arguing you know look mobile phones are very expensive for poor people you know you can't say that this is such a great deal for them even mobile financial services are very expensive you have to ask yourself relative to what what are the options the informal options they have available to them for example to send money and what we've discovered is that regardless of the fact that they have to pay for these services it is about half the price of their informal options they really include you know sending money with a friend or with a taxi driver you know it's interesting if you go online and you see how they're actually marketed to their target audience the security the safety of sending the money is one of the key components that's the key driving message I remember in South Africa one of the radio ads was about somebody who sent money with a taxi driver and they drove so fast they went right past the house where they were supposed to deliver it and they never saw the money again those are the options that they have they talk about the expense you always have to talk about what their other options are their expense compared to what and the last question we asked ourselves was what do the people really want from branches banking channels and that was primarily M-Pesa users and they want products that go beyond payments and 21% of M-Pesa users said that it's the most important instrument they have for savings that's a little bit misleading because really what the question said was the one service they want that they don't have is interest on the money they keep in their account so you're seeing that they really do look at this as a savings vehicle and they really do look at this as a banking vehicle and they actually want the same benefits they would get from a bank account so I think that's very telling one final point that I want to make which I think is sort of a key obstacle to having branches banking reaches full potential is when we talk about non-bank e-money there's M-Pesa is produced by SafariCom which is a mobile network operator it's not technically a bank and in very limited jurisdictions is that permitted it is in Afghanistan and we've seen some benefits from that it is in the Philippines obviously in Kenya and Indonesia Malaysia but you know it's a handful of countries that actually permit this model which we see as having among the largest impact in the world one of the problems is that when they let a mobile network operator be the issuer of the e-money they say well you're not a bank so we can't consider this money as deposits so you can't pay interest on it and it can't benefit from deposit insurance which I think is really kind of doesn't make a whole lot of sense there's no real risk involved there in allowing interest to be paid and CGAP has actually promoted the idea that we really need to go from payments to banking and to offer low-income users really the full array of banking benefits such as interest and deposit insurance on these e-money accounts thank you very much thank you Michael and now to bring up the end batting cleanup we have Kintaro who's going to talk about a lot of his work I already like the title brilliant so I'll turn it over to you thanks Sasha I'm going to be the skeptic on the panel what did you say on the CNN thing was that? yes and no actually I said it's over hyped period alright so I'm going to start with a question so I spent five years in India and I tell everybody that the reason why I went was because I love Indian food what is wrong with this picture so if any of you are familiar with Indian food on the left you see these samosas which you find in stalls all over the country what do you think is wrong with this picture? ketchup yes so what is wrong with ketchup well here's a country that had some of the most delicious kinds of gravy, chutney, sauces you can imagine and the thing that I was surprised to find when I went to India was that you go to any place that has samosas and they will always give you a little packet of ketchup what I think of as the blandest of condiments so what I find is the interesting lesson behind it I asked lots of Indian people why they want ketchup so much when they have all these other great options and the thing that I think is the most reasonable answer was that a lot of people said ketchup is seen as a foreign thing that is exotic and therefore desirable it's amazing, Indian students will put ketchup on their pizzas, on their sandwiches they'll dip their sandwiches in ketchup as they're eating it and so it's interesting in that from a, in one perspective it's a different culture we might think it's strange that somebody who has lots of other great options should choose ketchup as their condiment of choice at the same time it's very it makes sense from the perspective that there is something interesting about exotic things and what's exotic is different for everybody but there's something universal about that idea that something is interesting because it's exotic so what I'm going to try to do is talk about a similar kind of principle by which we can understand technology for development projects it doesn't mean that all technology projects are necessarily good or bad it just means that there's a certain way that you can explain how projects work or don't work my background is that I am a computer scientist it's kind of interesting that as a technologist I'm going to be the lone skeptic up here but I am a computer scientist by training and I used to run a research lab in India for Microsoft where we did how various different kinds of information technologies could be used for international development and some of our projects are up here we worked in agriculture, education healthcare, governments and so on and of course the reason why we went there was because there was actually a lot of promise and optimism around technology at the time mostly it was around the PC when I went there in 2004 but it shifted while I was there towards the mobile phone from people who are very prominent in this space and what I want to suggest is that is that it's hype in a particular kind of way and the best way that I can encapsulate what I think I learned over the last seven or so years of doing this kind of research is that the easiest way to think of technology is that it amplifies the underlying human intent and capacity that is there whether it's individual or institutional and it's very important that it only amplifies the human intent and capacity and by that what I mean is that it's not that technology is necessarily a net positive thing wherever you take it in some cases it might be net negative in some cases it might be net positive in a whole bunch of cases it will be net neutral with no strong contribution positive or negative and the way I'm going to try to illustrate this is through a series of three questions which I'll start asking now so the first one is imagine you on a very poor rural farmer somewhere are given the task of raising as much money for the charity of your choice and what you have to and the way you can do this is by is through a single mobile phone to which you have unlimited voice and data access for a period of one week okay so the question is who would be able to raise more money you or this very poor rural farmer somewhere in let's say in Kenya so who thinks you and who thinks the poor rural farmer okay so this is a fairly shy audience so I didn't see a lot of hands for either question but but most people who did raise their hand raise their hand for themselves and if you think a little bit about why that is it's often because you have richer friends you have a richer social network not virtually but in person you also will tend to have a stronger education many people in this room have a great capacity to organize do fundraising and so on and so forth mostly things that a very poor rural farmer will not have any experience with and so even though the technology is exactly the same the result is significantly different and that's because again the technology amplifies that underlying capacity that's there you can replace mobile phone with any technology you can replace it with Facebook you can replace it with the internet you can replace it with email you can replace it with a telegraph and the result will be the same so this very idea that technology somehow counter acts this phenomenon of the digital divide I think is wildly overhyped basically technology is multiplicative so if there's an existing inequality socially and economically that will tend to increase even though it might be the case that everybody has some benefit and the gap is increased so next series of questions I want everybody this time to start off with their hands up okay and and lower them the moment you see a question for which you believe the answer is no okay so the first question is should members of the army have guns okay most people still have their hands up a few people seem to have lower okay should police officers have guns okay couple hands down should ordinary sorry should ordinary civilians have guns okay should should they should they okay quite a few hands went down okay should five year old children have guns okay all the hands went down in some audiences there's still some hands up at this stage so I have to ask the last question should convicted serial murderers have guns so the point here is that the technology is the same in all these questions but in the context that you imagine it's either good or bad and one thing that I think we tend to do in development all the time is to find a particular solution and find and cherry pick all of the positive things that we can find about it right this project worked out really great this project was fantastic this project that has therefore it must be the case that this thing is fantastic whatever you do with it or or that it has that same potential everywhere you go and I'm going to suggest that that is not true not just with guns but with basically every information technology that we've seen so far used in development in particular I'm going to illustrate an example with television which in the 60s people thought was going to change the face of education not just in developing countries but also in places like the United States of America there are people then who were very bullish about television who thought that we could get rid of schools entirely because here's this device that not only streams audio but video right into your living rooms why bother with having to go to school that walking to school all of that nonsense when you could just have educational content streamed right into your living room well today we primarily think of television as a as a delivery channel for snooki and other options I think most people who are here who are parents will limit in some way their children's time with television it's amazing how this transformation has happened something that one generation thought was fundamentally positive could not do anything wrong and might even transform some things that are very hard to do and today we think of it probably as a minor minor evil so the important thing about technology is that it also amplifies whatever negative tendencies we have in the case of television it might have very sleazy tendencies even a little bit that we might have gets amplified by millions of viewers okay so finally I want to get back a little bit more into the history of information technologies in this case I'm actually going to go through this fairly quickly because I think it's hard for people in the back to read but basically these are quotes from various different documents by written by people who were technologists or technology supporters in their day where I left out the technology with the letter X, I usually ask people what they think X is and it's actually four different things cinema, radio, television and computers were believed to be fundamentally revolutionary for the classroom and the other thing that's interesting is that this has been basically happening at a rate of about one per generation possibly accelerating in hours again thinking about television television has been fantastic it does certain positive things you can find great research that shows that there are certain positive social impacts that television has especially if you take it to rural areas on the other hand on the whole we don't think of television as having fundamentally changed the face of poverty and poor parts of the world so you know one question is why do we keep having this very utopian vision of technology and I'm not saying that technology is necessarily bad just that it's value neutral and that the thing it's not the deciding factor in whether good development happens and the deciding factor is ultimately that underlying human intention and capacity so if you look at if you look at the kind of things that you read in the press in the United States about technology it tends to hype what the technology does so for example these are actual headlines Twitter is changing the way we live the internet democratizes access information social networking will transform learning and so on alright so let's look at the United States this is a graph from the US Census Bureau it shows the rate of poverty on the bottom which has basically been about 13% a flat 13% or so since the 1970s prior to the 1970s it was actually declining very consistently since about World War II obviously since the recession that has gone up I think the rate is now closer to 15-16% depending on how you count in the Census Bureau itself recently decided to count a little differently in the same period of time since the 70s when we haven't seen any budge in the rate of poverty we've had a virtual revolution in the information technology industry right so imagine here's the country that is arguably the most technologically advanced country in the world in its golden age of innovation everybody has all of these technologies in abundance and we haven't fundamentally seen a dent in the rate of poverty so what does that tell you? It tells you that it's not again that technology is necessarily bad but it's just not the deciding factor in solving very difficult social problems in this case I think the explanation is reasonably simple in the sense that it's basically that as a country I think we've basically kind of eased up on our desire to eliminate poverty beyond this point and so and it's interesting to if you look at the history of what happened around the 1970s all these different things suddenly stopped happening in the 1970s and we've basically cruising from that the technology by itself hasn't been able to undo it so it puts to question any conception of a technology-centric approach to development as the way to alleviate poverty in the world thank you thank you all so Kintara saying price to earnings ratio is way too high sell immediately all your ICT for D stock I want to start actually with this notion of technology is multiplicative because it actually intersects with a paper that I've very much loved by Rahul Tangia and Ernie Wilson called the dark side of Metcalf's law and I'd put that in originally our slate editorial I think they decided that was way too geeky and removed it but the notion was this Metcalf's law in essence states that there's a network effect right the more people have access to something say a telephone the more useful it is to everyone that's on that network and the internet and internet technologies are widely understood to be very similar right the benefits of having more people tweeting makes Twitter more beneficial to everyone else that's receiving those tweets and what Tangia and Wilson says but there's a flip side of this which is that if you're one of the people that's not on that network and not having the benefit of this exponentially growing positive effect that you're facing a growing negative right the discrepancy between you as not participating in this network and everyone that's on the network is growing and so in essence you're creating a new digital divide the closer we get to 100% the worst off those last few percentage people are and of course we know that certain constituencies the poor and the rural especially are systematically left out of all of these wonderful benefits and so I'll start by asking the panel you know a lot of this is framed in terms of access and adoption and I think intuitively we immediately can see how price is absolutely the number one barrier every piece of research I've seen has said that is the number one barrier to adoption but it's not the sole barrier and so I'd be curious about your thinking around what are the other barriers to getting those last few percent to benefit from these technologies I'll start I think there's a couple I think they're cultural barriers it's particularly true for gender but I just think there's cultural barriers that are and I think it's M4D 1.0 which means there's going to be some spectacular bankruptcies on the field as well as some successes some home runs but I think it's because we're in this experimental phase to find out what are the killer apps that must have information that is coming across that is going to be a game changer in either civil society or in health or in AG or in other ways so those are two I was going to come back actually to the issue of cost and cost is not an issue that's been solved right I mean we a long time ago quite a number of years ago a very visionary man and Steve Song and I talked about this over a few too many drinks probably and we started talking about we need a fair mobile index that is who's gouging which telco is gouging the poor the most right bottom line so he's actually taking it further I've turned to other things but he has actually taken it further and four you can see it on his blog there's sort of a bunch of different blog entries that I've done over the years apart on fair mobile today ICT research Africa is doing some significant and fabulous and wonderful research on the cost of mobile telephony particularly for the poorest of the poor and how much that constitutes of their disposable or not so disposable income and in some cases in some countries up to 40% right where for us something like God maybe two or one or less so this is not an issue that's been solved at all telcos are still gouging because SMS in particular is the money maker for mobile operators who are after all private venture commercial entities are still overcharging as far as I'm concerned when the fractional cost of an SMS is zero de facto so if we're saying mobiles are so important for development and yet we're putting all our baskets so to speak in many ways very expensive privately owned set of entities I see a disconnect with all due respect I have a real problem with the killer app terminology it just doesn't exist there is no such a thing as the killer app and I think the pursuit of that is a really feudal one and I think it also distorts the kind of conversation in a way that I don't know I'm just going to say the question of how do we get everybody to have a mobile phone in their pocket to me is a very different question from my perspective of how do we get those who already have a mobile phone in their pocket to use it for financial services and improving their lives we focus on that ladder question at CGAF and I think there's a lot of room to be optimistic about that and to suggest okay how do we get the phone into the other sort of 20% to the people or whoever what percentage it is it doesn't have the phone to me begs the question of assumes almost that the people who have phones are making the best out of them and are being able to use every service that they can with them so I would focus on that 1 to 2 to 1.7 billion that I quoted earlier that already have the phones in their pockets but I wanted just to address one of the points that Kintaro made because I thought it was a very interesting presentation I think I can safely say I agree with everything in terms of technology as a basket but there is one point that I don't think you addressed in particular to mobile phones which are very different than the technologies you cited obviously TVs and Apple computers and even cars are outside the reach of most poor people but mobile phones are quite different they are sufficiently priced that they can be in the hands of lots of unbanked people and that's that 1.2 to 1.7 number that I think that's a pretty important distinction so that we don't lump all technology in the same basket there are some very offensive technologies that poor people are using and can benefit from yeah so I guess I'll first say that I think the way speaking of the way questions are asked is that posing the question as one of the digital divide and having to close a digital divide either through access or through cost already is making an assumption about the kind of impact the technology is going to make you know it's we'll never close the digital divide as long as there is a social economic equality so what that means is this year is the mobile divide last year it was the PC divide next year it will be the tablet divide in fact that's already being to happen and who knows what comes next if our goal is to ultimately close a divide there is one glaringly obvious cause to the digital divide which is the social economic one you know everybody in this room can afford a fancy phone and it's not because the phone allows you to do something special you already have a fantastic education good social connections etc etc without those things we can keep closing these digital divides one after the other and the underlying situation won't change in fact I think one of the great things about the world today is that in fact there are 6 billion mobile phone accounts you know my hope is that when we get to about 6.5 billion we'll start thinking okay not much is changing maybe we should rethink this whole idea of excitement around mobile phones although I would argue that with vis-a-vis remittances for example you can reduce the cost to bring it into the realm of use the technology that exists at any given point that is as in the case of mobile technology most ubiquitous communication so you can actually lower cost of something that is extremely expensive now where 10% of your remittance money gets stricken off the top that doesn't get to the family in home country from the desperate and so that's 10% I believe that is that part of it that part is a great thing and it's fantastic if you look at just the remittance aspect right but think about what happens because it's clean think about what happens as mobile money becomes easier and easier frictionless less and less costly basically what you're doing is developing a pipe right into the wallets of the poorest least educated people in the world where at the other end are very large corporations with savvy marketing departments who already know how to sell to these people through Coca-Cola things like that you know one of the things I think is interesting even with bank accounts is this assumption that somehow not having a bank account is such a horrible thing in your life now I agree there are many things that are good about being within the formal financial framework but there are also lots of bad things as I think the United States has you know amply demonstrating the last couple years and so it's not that the technology doesn't have good aspects it's that you always need to look at it in the whole and on the whole all what you'll find is that the technology adding technology just reflects whatever tendencies are already there in the human institutions it's not very sexy the killer app is way sexier yeah I agree I wanted to follow up on the killer app and just ask a question but on this last one because I can't help but say it you know I think just because there's been abuses doesn't mean just like because there's bankruptcies on the stock market we should get rid of the whole thing so I do think that we see evidence of how important resilience is at the bottom of the pyramid and savings really does help resilience and there's plenty of studies on that so you're right getting a mobile phone that you can store money on doesn't in and of itself miraculously store money but the evidence of the powerful effect of resilience on the bottom of the pyramid for savings is there but I want to go back on the killer app because I love debates and I love disagreement so I'd be interested in knowing is that you are so opposed to that term because you don't believe that there will be killer apps at the bottom of the pyramid or because you think in thinking that way and characterizing it that way that we go down some wrong path so I just want to understand it's the latter it's the latter it's this idea which you know I think it's the extension of the mobile phone will help us help you know save the world is the silver bullet okay so we now reduce it one step and now it's the killer app that will end global poverty right or you know increase global health so I don't think because this is a complicated field there's two things development is really hard let's face it technology is really hard it's very fast moving and some in many ways working at opposite ends this focus on the killer app is I think an an unuseful conversation to have because it takes away from the nuance from the complexity from the complicatedness from the downsides it may also take away by the way from the investments in the road right that brings the food to market the product to market that you know somebody just figured out because they got access to market pricing information on their mobile phone you know it should be charged at a certain price but it actually unfortunately spoils because the investment in the road and infrastructure hasn't been made so I mean this is a question that I have for big development donors right are we actually because we're talking about all the killer apps not looking at basic infrastructure investment that are that are not that are not interesting and I didn't give you the headlines by no means are we not paying attention to civil society and fair elections and infrastructure whether it's clean water whether it's electricity but I do think that killer is a vernacular I think it would be foolish to think that there is one silver bullet to development just as there is one silver not one silver bullet to a happy life or a a degree. I guess I think of killer app as mass adoption where the marketplace in this case the marketplace we care deeply about is people the bottom of the pyramid when there's mass adoption I think that that's where you say they voted with their actions rather than what we think they should do and so that's where I think we should be much more in the learning mode of what is those mass adoptions I can tell you what those are by the way they're already are killer apps and mobile phones and they tend to be entertainment and petty vices like adult content if you go to any you know any peri urban area in India you'll find these little stores where for less than one or two U.S. dollars you can get several gigabytes of I see somebody nodding from India you can get several gigabytes of video of adult content of music everything that you could possibly imagine loaded onto that gigabyte of micro SD RAM and then you load it onto your phone and that's what people want to hear. One of the reasons why development is hard is that we're all the same right you know all of us when we have spare time we're not going to go and really study up that book on you know electronic engineering because we always want to learn it we're going to go and watch TV I don't think that's true I think you look at you know and one can have an argument about for-profit universities but you look at something like University of Phoenix 300,000 people you look at Open University in the UK that is changing people's lives right so it's different than going to the Ivy League schools but so I don't know I'm cautious about technology that enables stuff that doesn't actually make a difference. So let me suggest that that's true in an environment in which the society at large supports a culture of learning and where everybody is more or less guaranteed a reasonable education even before they get to college such that they have habits of studying understanding that grades matter and so on if you go to many of the regions of the world where people are earning to US dollars per day per household and things like that you'll find that the school system is in such a shambles that the children there have zero interest in learning it's an uphill battle just to get them to learn these things. I actually think they do care about learning it's just that there's a whole lot of obstacles that they don't care about learning is that the habits of what it takes to learn which are hard for anybody are even less there. Yeah I'm more optimistic for this kids in here. So I'll give you the count example of that which is the BBC world something trust whatever they call it it's not the BBC Trust has a program for learning English in Bangladesh I think possibly supported by the BBC or by DFID or some donor going through the roof it is one of the most popular M4D applications we have seen today that actually has user adoption in the millions people learning English on their mobile phones via a mobile channel, little lessons IVR types you practice, you get feedback etc super popular, super cheap vice services are extremely cheap in Bangladesh completely popular so there is a demand people do want to learn English gives you economic opportunities so now I think you're confusing the upper middle class in Bangladesh there are easily numbers in the several tens of millions to the average person in Bangladesh who probably struggles to read in their own language likely to have some data I mean you know a lot of this is it's interesting because you know again in law school they taught us if you have the facts you know you pound the facts and I've tried to do that and if you don't have the facts you pound the table and I kind of feel others have done that you know we put up some we put up some pretty interesting data up there about how people who don't have access to financial services are using the mobile phone to get those financial services and not only that they want more financial services and the regulators are the ones who are sort of standing in the way how do you address that okay that's easy so you actually don't have the one you actually don't have the one kind of data that really makes a difference which is out of the people who are using MPES on a daily basis what is one measure of their actual welfare not their actual usage but welfare that has shown an increase that is of sufficient magnitude that it makes a difference I agree with that we really do have to focus on the end game which is okay have they gotten out of poverty how is that a picture so for example the problem with this kind of any kind of data that shows usage is that you're falling into the fallacy of what's called the market test in economics which is basically that just because people buy it somehow it's making them better off and that's fundamentally one of the things that doesn't routinely happen even in regular life it's not clear to me that my entertainment choices are necessarily making me better off even though I spend money fair enough but would you say that we should still at least be in the business of helping to make those decisions and being able to at least save money where they can and have access to certain services or is that not enough for you wouldn't that be a first step so I would put it this way so I think the real question I want to make sure that I don't come off as saying that I'm anti-technology in the sense of we have to get rid of it I am not that the interesting thing about technology is that there's a great private sector industry that is pushing as hard as it can to get this stuff out there anyway so the real question is do we want to spend public funds and donor funds so as to help these private sector companies that are going to do it anyway do it even faster and I think if we're going to use public funds for anything it should really be for attending to the human intending capacity side so in the case of financial inclusion I would say you know let's spend all of this money that you guys are trying to figure out how to get the technology right look the companies will figure it out instead let's spend it on financial education we are trying to get the technology right we are trying to there's $750 million sitting in country accounts that are universal service funds to extend the cell network to outside of the areas that's profitable for them now that's sitting in bank accounts not used we're interested in helping countries figure out how to use that in a smart way so I do think that it's important at least from my perspective that one be careful about what characterizes what's being characterizes what the development agencies are funding or aren't funding we're not funding putting a mobile phone in everybody's hand we're not funding just the diffusion of technology we are focused on is there access at the bottom of the pyramid or in more rural areas much like frankly we made a decision in the U.S. to extend electricity to the farms in the U.S. when it wasn't profitable thing and that has been enormously valuable so we can disagree on whether M4D is overhyped or worked but I do think we need to be careful about characterizing what we are and are not spending money on let me jump in here real quick so we're going to turn it over to you guys for questions I have like eight here I've gotten through one but I'm going to switch switch the topic a little bit because there was a a data point that Michael brought up that really intrigued me which was this M banking being 19% cheaper than comparable bank transfers or bank services and on the one hand I thought like this is great right I mean 20% cheaper is a good thing on the other hand if I was like the Visigas pillage 19% less than the Vikings we'd probably say like we should probably stop pillaging are you comparing bank accounts to pillaging? I'm saying that the resource extraction from the poorest of the poor is incredibly high and that the business models behind this really are sort of the long tail of resource extraction and so my question is just what are the responsibilities of businesses the telcos on the one hand regulators on the other look at how because there's a percentage of people's disposable incomes the amount that the poorest of the poor are paying is incredibly high I'm a little bit taken aback by the question because it's the first time I've come into an environment where it seems as though access to financial services is actually a bad thing for poor people or could be a bad thing for poor people and I guess I don't mean to sound naive I obviously am well aware of how the micro credit sector has matured over the years and how there have been definitely some problems along the way particularly in India over the last year but from our angle we take our cue from what our target audience tells us they want and we talk to them and say what is it you need what are your services what are the services you need why do you need that money how do you use that money and you know what services are you lacking and very early on we discovered they want to be banked but the keys obstacles were there was no bank in their area or it was too expensive you had to have a minimum amount in your bank account or you had to pay a monthly fee for your bank account and we see that here in the United States and we almost had to pay a fee just to use our debit card not too long ago so it was too expensive and it was too far away and mobile banking overcame those two chief obstacles and that's why they used it did I not answer your question as far as it goes I think we're actually in agreement I'm saying do we not declare a mission accomplished or is there something next like are we still not because to me it seems like even with mobile banking we still have a problem it's not as bad a problem as it was before sure sure and there's did you want to get in? I think there's always I mean is this the panacea is this the one thing that's going to have direct and immediate alleviation of poverty will this reach everybody know if they don't have a mobile phone it's not going to reach everybody but again we get back to that 1.2 to 1.7 billion that we're focused on which have that mobile and use that mobile phone to access financial services that they don't already have so my question was what are the responsibilities then of the telcos or regulators to do what's next right if this is where we are today I do think consumer protection I completely agree with the concern about data privacy and like we're just beginning to really understand and pay attention to that as a society I mean not on mobile phones so I do think that that is huge so I think that rather than regulate prices I think protecting consumers on privacy on scams on all sorts of things is pretty critical as this mobile revolution begins to develop all right do we have a microphone ready let's go right here to the front it's the benefit of coming up front thank you very much for a very dynamic and and at times I thought people were going to come to fisticuffs there for a second I was hoping you were going to come to fisticuffs you don't understand we need some entertainment here to the point of the billions of people that have the access as you're pointing to Michael I'm really interested in possibly looking at public private partnering banking institutions that could be providing the service and then the people could get interest for their money and at the same time it would be a structure in which the funding could be tap accounted for because this is a big problem I've seen in development over the last 20 years lack of accountability it's very difficult to deal with the accountability issues and this would be the old saying follow the money so this would be a way of following the money at the same time providing the very point you were making do you see that so the question is how feasible is such a potential structure to be pursued it's quite feasible and it's actually what's happening now as I mentioned earlier it's only a handful of countries that allow non-banks to actually engage in this and it's not just a bank partner who is the one who's technically licensed and responsible to the end consumer for that financial service the problem with that is that the more people you have in there the more difficult the business model becomes and the roles they play and how do they cut the profit and there's more hands to have to hand over some profit to so it does become a little bit more complicated but not to say that it's not as effective as those accounts I don't know that they do but they are permitted to and Pakistan is one of those countries where it's about to enter that second generation of payment systems where they start becoming interoperable we hope and that could really cause the system to take off so I'm going to take three questions and wrap it actually looks like there's three right over here so we're going to take these three please be pithy I'll let you guys answer them anyone you want on the macro level there's a lot of talk about increasing in mobile infrastructure having an impact on GDP in various countries and so looking at poverty through that lens and so just wanted to get your thoughts in terms of the causal relationships are these studies well structured well designed and is that the entry point and is it not necessarily just through the individual types of development ish activities that are going on we were actually talking about this earlier let me get these three three questions sorry no answer get back to you my question I just want to relate a small story because we are talking about macro a pithy small story it's very short like not story situation we are talking about can mobile phone and global poverty and I think I worked in the tribal area in India long back and I saw a woman I was very impressed like she was a tribal woman but she had developed a nursery and she was making money and she was going to the women's development women's conference at Beijing and she went to the district collector to ask him to take care of her family now because she was so empowered she could go to the district but the way I see is if she had a mobile phone she could actually talk to her family on a daily basis and make sure that her children are going to school or so I do think that the impact that mobile phones can have at that level is not we are not seeing in the larger discussion because similarly about health lot of women in India don't even have access to doctors they can't even talk to doctors without the consent of the male partner or the males of the family it becomes a family issue even if you have to go to the doctor so I think having access to mobile phone to be able to talk to another woman or a doctor who is a woman can greatly benefit and so I do think that thank you for that and then this gentleman right here back to the panel. I'm Neil Murphy and I work for the US Treasury and I should say that what my views do not necessarily represent those of the US Treasury I find some of this first of all I think there is a little bit that Mike left out in terms of the success of the MNO and that is the agent model and the cost savings come from the fact that the agent is very low cost and in Kenya they now have a regulatory environment that allows the banks to have agents as well which is probably what it should be I'm very concerned about infrastructure and payment system infrastructure is an area that I work a lot in and if it's not in MNO it's just a regular bank I'm sorry that's running the service where the liability is that of the phone company then I see that this is no different than ATMs or internet banking it's just another technology and the way the financial infrastructure works for payment systems is that there is central companies and that there is a competitive structure where the qualified competitive producers access the central counterparty which allows and that's now going across border as well I can basically pay people in Europe over the ACH so what concerns me is among other things that there is no that the MNO is basically running a systemic payment system systemically important payment system in Kenya outside even though the central bank does watch it it's outside the normal infrastructure and I think that could be a problem over time and also the question of risk management I'm also very concerned as other people are about consumer protection deposit insurance couple of other things as well but I've talked enough thank you sir I only tell you work for treasury also there you go so here's the three we've got impacts on GDP and the causal relationships between these technologies and GDP you have the on the ground empowerment that women in particular but I think many other constituencies feel from these technologies in their everyday lives and you've got the notion of risk management consumer protections the notion of we don't want another bail out kind of scenario if things go awry because there's no oversight of these systems in the same way that there are over banks so I think I can address the first two kind of in one shot so to answer Patty's question about macro level so in economics there's this thing called the COBS Douglas function where basically they say productivity is the product of financial capital and technology I think they're missing energy in there but that's a separate story and so basically if you leave out the financial capital and hold that study it comes down to technology multiplies human capital and at that point I go back to okay so what should public funds, donor funds and other funds that aren't going to be invested by the private sector what should they be focusing on well the private sector hates to invest so I believe that's the side that needs to get more attention whenever possible the other thing is that anytime you have a multiplication you get the greatest gains when you're using the resources in such a way that you end up with a square so in environments where the human capital is very very low and in the case of information technology human capital in the form of education is the critical factor you need to expand that side dramatically before the technology becomes useful, which is not to say that it's never useful just that that should be the emphasis and I think a similar thing I would say for the micro level empowerment which is what you're talking about is exactly a situation where the technology amplified this woman's overall ability the real problem is not that everyone doesn't have a mobile phone the real problem is not everybody is like that woman if you could get that if you could get that change to happen then you would have to worry less about the phone I'm not saying that they all need to be the same but ideally they would have the same educational opportunities that some level of human capital is built up beyond what's reasonably necessary to live and have a good job let's move on but this is a perfect discussion to have once we close out so let me go to Katrin, Michael, Mara if you want to take a time off the only point that I would make in addition to what you said was that in many countries the teleco sector is actually the largest employer in the country so there are some interesting economic benefits that is not to say that the jobs the teleco sector produces agents namely are great jobs or extremely high paying jobs but they do contribute significantly to the GDP in a variety of different ways although I don't think I haven't seen any recent studies and Kintaro was mentioning the earlier study, who was it? Waverman Waverman was somewhat compromised in terms of its methodology and so I think it would be really interesting to do a little more rigorous research on that area on social cohesion and the issue around women in particular there's very recent women research, ethnographic research that is actually showing the exact same thing so it's brand new just off the presses and will be released in full at the mobile congress in Barcelona in a couple of weeks in a week that shows for particularly women at the bottom of the pyramid the social safety net that is often the only safety net that exists is actually critically enhanced by mobile telecommunications because it allows women often sometimes against the wishes of their male partners to be able to build relatively cheap kind of a social network and a connective tissue if you will that allows for some degree of safety net insufficient as it may be Michael Laura I could just address the question from the gentleman from Treasury you're absolutely correct this definitely relies on agent banking in a way as well this was the slide that I flipped through very quickly unfortunately but you know the basic model is that these poor people don't have access to a bank in their neighborhood so the mobile network company or the bank whoever is providing the service is contracted with their local butcher baker pharmacist and that's where they go on a daily basis and that's where they use for their cash in and cash out function a bit like a human ATM and that's exactly why you're lowering the cost the bank doesn't have to build a bricks and mortars branch and that's where they're able to save expenses in that way but one of the things though that I have to stress is that even when a mobile network operator like Safari common M-Pesa is the provider of the service in all cases where that is permitted there is still a bank or several banks involved M-Pesa doesn't take that money and put it in their working capital account they have to put that money 100% banked into the potentially regulated financial institutions of that country and that's where that money has to be held so that it's always protected to the extent any deposits are protected and as Kintara pointed out we didn't do so well here in the United States and then it's just a question of how you extend deposit insurance to those accounts we have a great example here and I'm sure you're familiar with the opinion 8 from the FDIC that allows pooled accounts and I want to get into the details but I would love to see that be extended to some of these other pooled accounts that we see in mobile network mobile payment schemes and then just lastly in terms of systemic importance as I said it's already in the potentially regulated system but the amount of money that transfers that goes through this is not deemed systemically important by the regulators for example in Brazil they think it's about 16% of all money is going through agents and yet they don't consider that to be systemically important to go actually out and supervise those agents and we have a new publication on that as well and we'll see more afterwards it's my understanding more wrapping up so I'd just like to say that I think this has been pithy and interesting and despite the fact that we may not have all agreed I think it's a very timely and important conversation so hats off to my panelists and to the New America Foundation for hosting this thank you so I hope you all stick around if you have other questions for the panelists I hope you guys will stick around if you're able to and please join me in thanking them for coming up here and giving us a great great panel