Bridging the Global Digital Divide, One Laptop at a Time

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On May 20, the non-profit One Laptop per Child (OLPC) program unveiled the second version of its XO laptop, which is designed to bring affordable, modern technology to children in developing countries. IOne month earlier, Intel had announced its next-generation Classmate PC, which targets the same market. Meanwhile, Microsoft has been tweaking its Windows XP operating system for these educational devices, which also run on the open source Linux operating system. Experts at Wharton say that the focus on third world countries is promising, but they question whether these efforts will be effective.

One thing is certain, however: The third world is the next frontier for technology companies and non-profit organizations alike. The goal: Bridge the global digital divide that separates wealthy and poor countries. Non-profits such as One Laptop per Child see technology as a way to improve education. Meanwhile, technology companies see a good cause and billions of potential customers. But questions abound. Are laptops more important than other needs, such as clean water? At what price are these laptops “affordable” in the developing world? What are the total costs associated with supporting these devices and connecting them to the Internet? And do these devices improve learning?

The answers to these questions aren’t readily available since these efforts are just getting started, and opinions about the potential outcome vary. Gerald Faulhaber, a business and public policy professor at Wharton, says he is “dubious” about whether laptops can improve education in third-world countries, which favor wireless phones as the device of choice. Wharton operations and information management professor Karl Ulrich and legal studies professor Andrea Matwyshyn say that inexpensive computing can lead to economic development. Meanwhile, operations and information management professor Eric Clemons questions whether a $100 device — the initial target price for the OLPC — is cheap enough. And Daniel Wagner, a professor at the University of Pennsylvania’s Graduate School of Education, adds that there is little research linking laptops in the classroom to educational advancement.

While many believe that taking technology to the developing world is worthwhile, the movement hasn’t been conflict free. The OLPC was initiated by MIT professor Nicholas Negroponte and others from the MIT Media Lab in January 2005, when Negroponte first outlined the concept of a $100 laptop and began recruiting corporate sponsors. (The concept is rooted in the research of Seymour Papert, an emeritus professor of education and media technology at MIT.) In November 2005, Negroponte unveiled a prototype of the laptop — called the “XO” — which went into production in November 2007. The lowest price achieved thus far for the XO is $188. OLPC partnered with various companies including semiconductor manufacturer Advanced Micro Devices, Linux software vendor Red Hat and others to make the laptop. Along the way, Negroponte became embroiled in a public spat with Intel, which was briefly a partner of OLPC but was then accused of trying to derail the project by Negroponte in an interview on “60 Minutes” broadcast in May 2007. Thus far, OLPC has orders for 600,000 laptops through 2008 and half of that sum has shipped to date.

On May 20, Negroponte announced a cheaper prototype of the XO with touch-screen monitors and better power management for a target price of $75. “Based on feedback from governments, educators and most important, from the children themselves, we are aggressively working to lower the cost, power and size of the XO laptop so that it is more affordable and useable by the world’s poorest children,” said Negroponte in a press statement. OLPC hopes to deliver the next version of its laptop — called the XO-2 — in 2010.

Meanwhile, Intel has an educational device called the Classmate PC, which competes with the XO from OLPC. The Classmate falls under Intel’s World Ahead Program, which “aims to enhance lives by accelerating access to uncompromised technology for everyone, anywhere in the world.”

“Only 5% of the world’s children today have access to a PC or to the Internet,” said Andrew Chien, Intel vice president of corporate technology and director of Intel Research in a statement. “Education is one of the best examples of how technology improves our lives. We have seen how technology helps teachers create fun learning experiences more efficiently.”

Ulrich believes that, ultimately, the competition between Intel and the OLPC could be beneficial to emerging markets. “I think competition is really valuable. Having OLPC and Intel competing is likely to result in a lot of innovation and a better outcome than if there were just one player. I think the OLPC deserves a lot of credit for capturing the imagination of the world. They did this with a stretch objective, clever branding, a credible institutional backer and a charismatic pitchman [Negroponte].”

On the software side of the equation, there’s also competition between Linux-based systems and Microsoft’s Windows. Microsoft has been distributing “starter editions” of Windows and Office in emerging markets via a program called Unlimited Potential, whose mission “is to enable sustained social and economic opportunity for those at the middle and bottom of the world’s economic pyramid — the next 5 billion people,” according to Microsoft. A Linux-based operating system called Sugar powered the OLPC’s first XO laptop.

No Quick Fix

While this competition could improve education in the developing world, it won’t happen overnight. In addition, there will be numerous hurdles due to a lack of infrastructure, funding and technical support. “Of course [Intel, OLPC and other players] won’t get this right the first time, but eventually some compelling solutions will emerge,” says Ulrich.

Faulhaber notes that one question surrounding the efforts of Intel and OLPC is whether they are pushing the right devices into these emerging markets. He argues that a PC-based device is simply the wrong choice in developing markets. Africa, for example, doesn’t have the infrastructure to connect laptops to the web, and where Internet access is available, service may be poor at best. A recent survey by Akamai, a Cambridge, Mass.-based company which provides web infrastructure to deliver content globally,ranked numerous African countries, such as Rwanda, Ethiopia, Uganda and Zambia, among the slowest in Internet access speeds.

“In India, China and Africa, the issue is that the PC is not the relevant technology. The relevant technology is wireless technology — cell phones. Cellular technology is far more ubiquitous than broadband or PC penetration. We are not going to see PCs there for a long time,” says Faulhaber.

Cost is another key issue. Even if these devices get to the $100 price target, they still may not be cheap enough because the per capita income lags in emerging markets. Technology research firm Gartner estimates that there are 619 PCs per 1,000 people in mature markets and 812 per 1,000 people in the U.S. In emerging markets, PC penetration falls dramatically: In China, for example, the figure is 111 per 1,000 people. In the Middle East and Africa, the firm estimates, there are only 21 PCs per 1,000 people.

Even if governments purchase these laptops, the expenses are steep relative to GDP in some countries. According to the CIA Factbook, a country such as Somalia has a GDP per capita of $600. It’s unclear whether these laptops can ever get to an affordable price in countries such as this. In a presentation in April, Gartner analyst Annette Jump said that she was optimistic that all the players bringing technology to emerging markets can learn the best practices over time, but a large question looms: Can PC manufacturers cut costs enough to produce a $100 laptop and still provide a rich experience for students?

“One hundred dollars may not be cheap enough,” says Clemons. “It is cheap enough for some parts of the world, of course. But there are regions where $100 is a substantial fraction of the annual per capita GDP, and in those places the machine should, legitimately, have only limited impact.”

Negroponte has acknowledged such concerns. OLPC said in a recent press statement that its goal with the next generation of its laptop is to “further drive down the cost … so that it is affordable for volume purchase by developing nations.”

“I think the cost and price will be a moving target based on demand, feasibility, technological change and user needs,” says Ulrich. “The suppliers and customers will converge on a solution that works. It may be that stationary computing stations shared across several students or families will be a better solution in some situations. However, this will not be resolved based on theory and forecasts. It will be resolved based on experience in the market.” 

NComputing, a for-profit company that connects PCs to centralized networks in emerging markets, doesn’t try to give one device per student, but creates labs where PCs are available. Chief marketing officer Raj Shah notes that the actual cost of the device is just a small proportion of the total expenditures for laptops in the emerging market; the costs for Internet access, support and maintenance of these laptops easily eclipse the initial purchase price.

“One student and one PC is a good goal to go after, but the U.S. doesn’t even have that,” explains Shah. “Laptops are much more expensive to maintain. They get stolen. They get crushed. And they need infrastructure. It’s not like there are 20,000 Starbucks around with Wi-Fi. How will they connect?”

Improving Lives?

While expenses are one concern, another problem is opportunity costs. Should governments buy laptops, or pursue other initiatives such as improving infrastructure and health care?

Wagner is skeptical that new hardware — notably laptops for students in developing countries — can solve societal issues. “This is not the first technology that has claimed to resolve problems for poor people,” he says. “There are opportunity costs because these decisions are financially large. In many respects, you are trading off one thing for another because these purchases are a huge part of discretionary income. The only good price [for these laptops] is neutral to low, and the best price is zero.”

Wagner notes that his position would change if there was proof that OLPC — and similar efforts — could “make a dramatic improvement in human development.” There’s no data that confirms that laptops can improve learning or economic standing, he says, but he is “sympathetic” to the notion that technology can be useful. “I’m a believer that it [can be helpful], but the answer right now is we don’t know.”

Matwyshyn says that waiting for definitive proof that technology can improve education wouldn’t make sense. “These initiatives … could open another world to students in the developing world. The goal is to build marketable skills and open doors to technology skills. These kids have a completely different life. Food and other donations are important, but it’s not a zero sum game.”

According to Matwyshyn, creative donation programs are needed to bring the cost of a laptop down to about $20. “The cost per unit is still too high for an average developing world parent,” she says. Currently, OLPC has a donation program that allows individuals or organizations to purchase laptops for children in developing countries, allowing those who buy 100 or more to indicate where they’d like the laptops to be sent.  

Don’t Forget the U.S.

The issues surrounding the deployment of inexpensive laptops wouldn’t be as big of a hurdle in the United States, Matwyshyn notes. Programs such as OLPC could have a larger impact on inner city schools in the U.S., because Internet infrastructure is already in place and the price would be less of a hurdle.  

“I hope people realize the potential of expanding these approaches into low-income areas in our own country,” says Matwyshyn. “Domestically, we still have a digital divide and haven’t solved it.”

Faulhaber, however, isn’t convinced. “At $100, a laptop would be less than a pair of high-end sneakers,” he says, but it’s unclear that there would be any demand among low-income people.

Nevertheless, the experiment is worth conducting, says Matwyshyn. “These programs could get a kid in an underfunded inner city school to realize technology is cool. There’s a long-term benefit to that,” she says.

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