Strategy for Digital Inclusion: Lessons from Developing World Subhash Bhatnagar As part of the Capacity Building Workshop under the Joint Economic Research Program (JERP)

This session will focus on strategies for digital inclusion. Traditionally e-government applications have served urban areas. A variety of infrastructure and other problems prevent rural areas from benefiting from access to ICTs. A number of pilots in in different countries in which rural areas were impacted in some way through information technology will be described. Some examples of large scale use of ICT in rural India would also be discussed, as these examples may provide a template for Kazakhstan. Challenges in scaling up will be identified and a few approaches that are likely to be successful would be discussed.

Presentation Outline Development goals and Information Society Demonstrated potential from pilots in many countries Few examples of large scale use: Bhoomi, eChaupal, nLogue, Akshaya and milk collection centers Key role for creativity and innovation Challenges in scaling up, replication

Information Society and Development Goals More freedom and greater possibility of self- realization for individuals Comparative advantage for countries based on application of knowledge, NOT cheap labor Empowering the poor Building scientific and technical capacity in society Use of new technologies for democratic decision- making, effective governance and lifelong learning

Development info projects, programs, schemes & feedback Procurement of Produce Supply of inputs Supply of consumer produce & services Knowledge & info useful for economic activities Entertainment & info for social needs Issue of Certificates and Licenses Delivery of health & educational services Education, training to enhance employment & economic opportunity Access to Markets Rural Citizen Where can ICT help?

Globally Demonstrated Opportunities Education: World Links, Akshaya (Kerala), Sub Titles on TV Health: Webhealthcenter.com,Virtual Delivery Room, Sri Lanka, MIS in AP,SA, nLogue-Arvind Hospital Economic Opportunities: eChaupal, GPS by fisherman, Kyrgyz Style crafts, Tortas Peru, Tara Haat, Drishtee, NDDB E-Government: Bhoomi, eSeva, Drishtee, Bahia (Brazil), Gyandoot, Lokvani Inclusion: Women Information and Communication Technology (WICT) Kenya, Women’s Net in South Africa Advocacy and Empowerment: Modemmujer, women activists’ network in Mexico, Association of Female Mussel Pickers (Esmeraldas), Urban Ecuador

Land Record Computerization 20 million records, 6.7 mln farmers, 9000 villages. VAs issued RTCs and processed mutation in earlier system RTC issue took 3-30 days and a bribe of Rs Mutation can take up to 2 years (30 days) 180 centers where RTCs are issued on-line for a fee of Rs 15. Mutation request filed on line 5.2 million users, Rs. 80 mln fee goes to dept. Investment of Rs 180 million Operational expenses: Rs 40 million at 5 million

Further Enhancements Linking of Kaveri to Bhoomi: Data sent daily as XML files. Mutations are initiated automatically on FIFO. Integrated mutation process : Earlier new survey number assigned by survey department to purchaser post mutation. Now 2000 licensed surveyors issue a pre mutation sketch. Now survey unit of Bhoomi assigns new survey number. Provision of scanned maps as part of Bhoomi Crop updation using Tele Centres: Pilot at 50 centres. Web enabled for citizens to verify records on Internet. Setting up of State Data Centre : connected to all taluks by VSAT links. Centralized management to distribute new application software. Issue of land records from 800 Tele Centres : thru a private agency which can down load land records from State data center with 2 dimensional bar code embedding digital signature for distribution to the citizens.

2002 Report Card on Bhoomi A Survey of 240 users/nonusers from 12 kiosks in 2002 : Ease of Use: 78% of users who had used both systems found Bhoomi simpler; 66% used Bhoomi without help Vs 28% in manual Complexity of Procedures: 80% did not have to meet any one other than at kiosk. In manual, 19% met one officer and 61% met 2-4 officials Errors in documents: Bhoomi 8% Vs manual 64% Rectification of errors: Sought correction: 93 % Vs 49%, Timely response: 50% Vs 4% Cost of service: 84% one visit to Bhoomi center at Taluk HQ Corruption: 66% paid bribes very often Vs 3% in Bhoomi Staff behavior: Bhoomi Good (84%) Vs manual Average (63%)

2006 Report Card on Bhoomi Survey of 240 users of Bhoomi and manual system in 2006 has revealed: 0.5 trips saved per transaction, 34 minutes of waiting time saved per transaction. 19% fewer people paid bribes, Rs 66 million/ year bribes saved 80 % prefer BHOOMI over the manual system Improvement of 1.6 (rating of manual system 2.86 and rating of Bhoomi 4.46) on a 5 point scale over the manual system in a composite score where each project was rated on 16 attributes of a service delivery system. Improvement of 0.85 on a 5 point scale over the manual system in the service quality score.

ITC’s eChoupal

eChoupal Infrastructure and Services Internet kiosk in the house of a trained farmer within walking distance of target farmers Warehousing hub managed by the erstwhile middleman, within tractorable distance of target farmers Customised knowledge on farm and risk management Better supply chain for ITC for farm inputs --lower transaction costs, better value through traceability Relevant real-time information results in higher income –Commodity prices, local weather, news, customized knowledge despite heterogeneity, reduced transaction costs Direct marketing channel for farm produce –Screened for quality, demand aggregation for competitive prices and efficient logistics

eChoupal Scale, Scope and Plans 3,500 eChoupals in 5 states of India covering 21,000 villages, servicing 2.0 million farmers, sourcing oilseeds, grains, coffee, aquaculture Marketing a variety of goods and services (agri-inputs, consumer goods, insurance, market research) transactions US$ 100 million Plan for 20,000 Choupals in 15 states covering 100,000 villages, servicing 25 million farmers by 2010 with projected transactions of US$ 2.5 billion Higher incomes through-better yields and prices Power of scale to the small farmer

nLogue Example: Help to Farmers Spray recommended by agricultural college Saving of Rs 140,000 ($3000) for the farmers Cost of information Rs 20 ($0.42) Before treatment After treatment

nLogue Example -Tele-medicine

Computerized Milk Collection Centers in India

Akshaya Telecentre Project, Kerala 630 centres by early 2003 e-literacy – subsidized by village council Strong grassroots campaigning 500,000 people trained by Dec 2003 Indicators of Success 100% family e-literacy achieved Provided livelihood to entrepreneurs Project accepted by local community as ‘legitimate

Bridging the Digital Divide NGOs and grass root organizations that catalyze and mange the community building process Applications that draw a large clientele that pays for the service, ensuring economic viability of the kiosk Content that empowers rural citizens and enables formation of communities Technology that makes rural access inexpensive and robust

Innovations and Creativity: Key to Success Making a market despite many missing links Creative use of technology in places or for a purpose not originally intended. Organizational design- coming together of partners with specific value proposition, incentives and rules to cooperate. Combining emerging and traditional technologies to overcome constraints Adapting business models to local contexts Role of network orchestrators

Enablers of Innovation in ICT Use Political will Technology infrastructure Funding and enabling policy environment Human capacity Partnerships Creativity, entrepreneurship and management Awareness in citizens Technology Innovation Process People Funds

Challenges in Replication and Scale Up Poor infrastructure in rural areas--high installation and maintenance costs Entrepreneurial capacity of the rural community-great acumen, but needs plenty of training Management capability to execute complex business models and to manage scale Understanding economic value chain in rural society to figure out the value addition of ICT A large number of pilots, most are economically unviable. Limited revenue generating potential Reluctant donors-lack of evidence of macro impact and experience of failed projects

Successful Scaling Up Requires: Success is likely in organisations with financial resources, leadership, strong project management and ability to discover valued services. Three models have emerged: –Large private/public/cooperative sector companies operating in rural markets may be able to derive sufficient value by improving business processes. to make such centers viable and scalable. –Government services that are valuable can charge a user fee for electronic delivery through privately owned telecenters. –Intermediary organizations partner with providers of valued service as well as rural entrepreneurs who create access points to orchestrate the operations of a large network of kiosks.

Role of Government/Private Sector/NGOs and Donors Big Small Size of Villages High Low Economic potential

Survey of 2000 Respondents Citizens Favor More e-Government The Knowledge SocietyMeanSD E-gov makes an impact on the knowledge of society E-gov makes an impact on the literacy level of society Improvement in Governance Enhances citizens convenience in availing govennmet services Reduces corruption in delivery of public services Increases accountability & transparency of government E-gov has helped to improve the image of government More investment in e-Government Government should make more investment on E-gov More govt department/ public agencies should be computerised Computerization of government departments is a waste of resources Investments in Development Schemes versus e-Government Money spent in e-gov should be used for other government activities Building schools, roads, dispensaries is more useful than E-gov projects Digital Inclusion E-gov services puts the poor at disadvantage E-gov services benefits only the rich and influential E-gov services benefits only the urban people Rural citizens benefit greatly from e-Government services Rural and urban poverty level have changed

Enabling Policy Framework Policies to encourage competition in telecom sector Incentives to enhance rural telecom access Promote appropriate mix of ICTs Right to information Promote eGovernment Scale up successful rural access projects Involve NGOs and grass root organizations in creation and diffusion Protection of IP: Balance between public and private domain.