Monday, October 02, 2006

Mobile phones and sardines in Kerala

A really exciting piece in Liberation today, written by a professor from the Massachussets Insitute of Technology, about the digital divide between developed and developing countries.

Should developing countries try to reduce the technology gap or focus on getting the essentials (water, health...) right first? Both sides have good arguments, and here, Esther Duflo tells a story showing the unexpected advantages of introducing mobile phones on the Kerala coastline (South India).

Mobile phones have helped sardines fishermen increase their profits by 8%, at the same time as reducing the price of sardines by 4% and avoiding wastage all together. Now how is that possible?

Fishermen go to sea, along the coast (max 25km), early in the morning, and by 8am are back on beaches to sell their catch. Those beaches are quite far apart, so they were unable to move from one beach to another if there was too much competition on one beach. The same for fish buyers: if there was not enough fish to buy, they sometimes went home empty handed.

Now, with mobile phones, fishermen can decide before coming ashore who they are selling the sardines to, or what price they will sell them to. All the fishermen have access to all the buyers, and vice versa. Results: reduced volatily of prices, no wastage, better prices and better profits for all.

Good no?