‘Leapfrogging’ describes the idea that developing economies could find new paths to higher standards of living. Using technology can bypass the mistakes and limitations of the slow route to development that other nations have had to take.

Innovation is the cornerstone of leapfrogging - not just identifying new technologies but finding new ways to apply existing ideas. A different context, like a developing nation, requires a different way of thinking - technology may be used in different ways, for different reasons. Texting on mobile phones is unlikely to take off in a place where literacy is low – but making phone calls to keep up connection in communities, to talk to people, may be a much more vibrant function.

It’s good to talk – on a mobile

Communications technology is one method that is making leapfrogging possible. It's easier and faster to put in cellular towers in rural areas than to put in landlines, so cellular use is exploding in the developing world. Mobile phone use already exceeds landline use in India,¹ and by 2007, 150 million out of the 200 million phones there will be mobiles.² According to investment bank Morgan Stanley, India's cellular market is expected to grow at a compound average rate of 40% until 2007. It is also claimed that mobile phone use is growing faster in Africa than anywhere else in the world, and that those countries in Africa with the greatest use of mobile phones also see higher economic growth rates. Only 6% of African citizens owned a mobile phone in 2004, so there’s major business market growth potential. Income, gender, age, education and even absence of electricity don’t slow down growth in mobile use.³

There seems to be an interesting 'social halo' effect in the statistics on mobile phone use in the developing world. Over half the mobile owners in South Africa allow family members to use their handset for free and a third do the same for friends. There are 28 million mobile phones in Africa, but there are now more than 82 million mobile users. Eighty five percent of people in Tanzania and 79% in South Africa said they had greater contact and improved relationships with families and friends as a result of mobiles. Over 85% of small businesses run by black individuals in South Africa rely solely on a mobile phone for telecommunications.³

The provision of health services is one area where communications technology is making a significant difference to human well-being. In the developing world, the barriers to implementing high quality health care include limited infrastructure and isolated and demotivated health workers. ICT can help public health care by improving working conditions and infrastructure – a subject we explore in more detail in this month’s briefing paper.

Generating the Energy to Leapfrog

Generation and distribution of energy is vital for development. But why should developing nations mimic the West’s big power stations, expensive distribution infrastructure and fossil fuel dependency? It is understandable when they have access to cheap sources of fossil fuels like China and India, but there are often more suitable alternatives. Afghanistan has sunny skies about 300 days per year, making it an ideal location for solar power systems. The rugged and remote geography of Afghanistan makes centralised systems very difficult to install and operate, so the Asian Development Bank has given a $750,000 grant to develop solar energy supply in rural areas.⁴ Solar power will be used for lighting, water pumping and water heating for hospitals, schools and more. Conditions in much of Africa are ideal for the deployment of solar power.

Some governments are building the idea of leapfrog energy technologies into their forward plans. Pakistan's goal is to have 10% of national electricity generation from alternative sources by 2010.⁵ It seems that this will not be achieved through big central investment but through projects like the one near Islamabad where, in 2004, 100 homes were converted over to solar power.⁶

Transport: leapfrogging the queue

Applying energy to power transport is, of course, only one application, but mobility is an important factor in development. Some technology-driven businesses are finding buyers in emerging economies before they are being adopted in mature markets. Maglev trains, which ‘float’ above narrow magnetic rails and move very fast, are in the early stages of operation in Shanghai, after the Maglev team spent decades trying to sell their technology in Europe and the US.

Hydrogen fuel cells are more energy efficient and less polluting than internal combustion engines, and potentially cheaper in the long run. However, any country seriously contemplating a leap to fuel cells needs to invest many billions of dollars in its domestic automotive industry, or await investments from foreign companies.

At a more fundamental level, leapfrog technology is needed in cars. Cars are the largest consumer of the world's petroleum supplies, and an increasing source of the greenhouse gas (GHG) emissions contributing to climate change; they also impose costs through air and noise pollution and after life disposal. Worldwide, GHGs are rising faster from transport than in any other sector. There is a big financial reward for the enterprise that manages to apply low energy technology to affordable personal mobility, leapfrogging the internal combustion engine.

And we could easily see leapfrogging in manufacturing too. You don't need a 19th or 20th century industrial base to build a 21st century economy based on biotechnology or nanotechnology or ICT. Anyone who thinks the future is being created only in the labs of the richest nations is going to be surprised by the investments being made in nanotechnology in Costa Rica, or genomics in South Africa, Jordan, Pakistan, India or Tanzania.⁷

Being fit enough to leapfrog

How does a business get itself into shape to benefit from deploying leapfrog technology? Two of the most challenging ideas are that free-to-use knowledge is key and that monopolies are likely to fail in the long-term, whatever their short-term returns. A monolith monopoly is easily left behind by leapfrogging entrepreneurs.

Linux will be an interesting product to watch. Linux is an operating system for personal computers. Its open source code is available for free, maintained for free by its ever-growing community of users, and is probably the closest thing that Microsoft has to a competitor! Use of Linux and other open source software projects continues to grow steadily in the developing world. In Brazil, the ‘PC Conectado’ plan will make Internet-connected PCs, running Linux, affordable to poor households.⁸ The Brazilian government expects up to a million participants by the end of 2005. How does a business respond to the challenge of a competitor providing leapfrog technology at virtually no cost? At the very least, it needs to mimic the functionality of its free competitor: Microsoft sells a feature-reduced "Windows Starter Edition" for the developing world.

Regulation is another major challenge. Regulations can create obstacles to market development and regulations that work in developed markets may not be the optimal solution for developing markets.⁹ Regulation needs to ensure that the outcomes are right for that region and context, not defining processes so tightly that leapfrogging becomes impossible.

Leapfrogging into the future

Developing regions can experiment with emerging ideas. Businesses that aim to build profit from this experimentation need to be alert to issues like social equity. Less than 10% of the world’s population is connected to the internet, and 80% of internet users are in the developed world, so leapfrog technologies that use phones and TV will be more egalitarian and reach further.

Note that the "leapfrog" isn't in the specific technologies themselves, but in the infrastructure. Leapfrog technologies are largely those which don't require an existing grid – mobile phones, wireless communications, distributed power supply like solar power, and so on. It's easier for developing nations to adopt small, distributed power sources than for most places in the West, since they don't have to worry about integration with sprawling existing power systems. It may be easier for China to shift to fuel cell vehicles than the West, as they'll have a much smaller existing network of gas stations needing conversion from petrol/diesel to hydrogen.

There isn't a single path to leapfrogging. Regions will adopt technologies that fit their needs and resources. Leapfrogging can happen accidentally when the only systems around for adoption are better; it can happen because a particular setting limits options, like decentralised communication for inaccessible rural areas; or it can happen deliberately, where government develops targeted policies, like promoting the installation of Wi-Fi (ie ‘wireless fidelity’) and free computers in poor urban areas. Responsible business will work with the same flexibility, applying products and services where they offer the best fit with social benefits, and ensuring that the triple bottom line is sound.

References:

1. "Indian mobiles overtake land lines", Business Report website, 26 October 2004
2. TRAI (Telecom Regulatory Authority Of India)
3. "Africa: the Impact of Mobile Phones", Vodafone policy paper, 2004
4. Asian Development Bank, 2005
5. "Alternative Energy in Pakistan", World Changing website, 22 December 2003
6. "Pakistan: Alternative Energy to boost power generation", Integrated Regional Information Networks (IRIN) website, part of the UN Office for the Coordination of Humanitarian Affairs (OCHA), 18 December 2003
7. “A Leapfrog Panopoly", World Changing website, September 2004
8. “Brazil: Free software’s biggest and best friend”, New York Times, 26 March 2005
9. EU Information Society Technologies Programme, ‘IST Results’

Also in this feature:

• Global Information Technology report 2004-2005
• Bumrungrad Hospital - Thailand's all-digital hospital 

© Article 13 - September 2005

See also:

• Does too small to see mean too small to manage? 
• Poverty and climate change: protecting vulnerable communities