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E-Development: Web-Based International Development Techniques R. D. Shelton* and George Mackiw

Abstract The World Wide Web offers an exciting new platform for helping developing areas access the resources of the developed world. E-commerce coupled with a reliable product delivery and a secure billing system can sell handicrafts from the most remote areas for good prices from collectors -- photos of products can be mailed to the regional town to be scanned. E-learning can deliver vital training in public health and farming techniques to the poorest village with only a satellite phone, a laptop computer, and a solar power supply -- bypassing poor infrastructure. E-mail can make isolated areas more hospitable to development volunteers by maintaining an affordable link with home. E-development is the process now being introduced by international development organizations to exploit the Web to make their efforts more effective. A survey of some of the many projects underway is made, including the cyber business incubator (CBI) concept being developed by the Loyola College Business Incubator Development (BID) Program in Ukraine.

Presented at the Sixth INRUDA International Symposium on the Role of Universities in Developing Areas, Paris, June 8-11, 1999. ----------* Loyola College, Baltimore, Maryland 21210 USA [email protected], At EDevelopment International, Inc. ( http://e-di.net ). Troitsk:\data\BIDpapers\INRUDA4A4.doc

E-Development: Web-Based International Development Techniques R. D. Shelton and George Mackiw

Introduction Like professionals in all fields, international development officers are intrigued by the opportunities offered by the Web to make their work more effective. The community has long been active in using earlier electronic means, including provision of the basic telecommunications infrastructure (Shelton, 1983). But while this latest medium is called the “World Wide Web,” the reality is that its coverage is usually weakest where it is needed most in the developing part of the world. There are several projects underway to extend basic Web connectivity to more of the poorest countries. But already there are many areas that both need economic development and also have decent access to the Web – including some of the poorer areas of industrialized nations. In a March 1999 keynote address to the Internet Commerce Expo in Boston, Nicholas Negroponte, a founder of the MIT Media Lab, forecasted that the next wave of e-commerce will impact the third world, particularly Africa and Latin America. He believes that the driving force in their adoption of this technology will be the need to leap over inadequate distribution, educational and telecommunications infrastructures. This paper will review some of the current efforts to extend the Web to developing areas, and list some of the Web clearinghouses that provide links to many more projects. The intersection of those countries that both need development assistance and have good Web connectivity will be identified, which includes several eastern European countries. The BID Program in Ukraine will be described, including its recent e-development efforts. One technique that shows promise is the

“cyber business incubator” that combines the proven techniques of business incubation and the Web.

The Web in the Developing World The Internet is growing rapidly to become the favored medium for information delivery. Figure 1 shows its recent growth to over 45 million host domain names, which are the top level addresses. While the exponential growth of Web usage is similar in most nations (Fig. 2), the vast majority of Web sites are in the industrialized nations, since they started this process earlier. (Lottnor, 1999) Only about 1% of the Web domains are in Central and South America, and only about 0.4% of them are in all of Africa – and over 95% of those are in South Africa. Industrialized nations are helping extend the Web to developing nations, because of its obvious benefits in connecting these regions to worldwide information resources. For example, President Clinton recently announced that the Secretary of State would initiate a program to promote growth of the Internet and e-commerce in developing nations at a White House event on the role of the U.S. Government in the Internet (Clinton, 1999). While these efforts are commendable and can make rapid advances in the poorer countries, there is already sufficient infrastructure in place in some countries to provide a platform for development projects. In Russia, for example, the Internet is already well-established, and the number of ISPs, Internet users, and their bandwidth are being rapidly increased. The 147,352 .ru Web domains are 0.3% of the total, and would be 0.4% if all the 19,475 old .su domains are added. According to a recent estimate by the Regional Public Centre of Internet Technologies, (ROCIT), there are 900,000 to 1 million Russian Internet users. Information compiled from daily surveys at the Russian InfoArt site though July 1998 suggest that use is concentrated in the

cities: 64 % of their Russian users live near Moscow, 9 % live near St. Petersburg, 11 % reside in the central and western regions of Russia and 16 % live in the Urals, Siberia and Far East. Those who wish to use the present infrastructure for Web development projects are faced with a triage problem to identify those developing countries with sufficient access now to provide a platform. One approach is shown in TABLE 1, which results from a (manual) query of the 1995 databases in the World Culture Report (UNESCO, 1998) to identify those nations with GDP / capita less than $3300 per year, but who still have at least 50 PCs per 10000 inhabitants. The Web hosts data is from the Network Wizards survey of January 1999. http://www.nw.com/zone/WWW/

TABLE 1. Current Candidates for E-Development Country

GDP / Capita (95)

PCs / 10,000 (95)

Web Hosts (99)

Senegal Philippines Bulgaria Romania Jordan Ukraine Tunisia Lithuania Columbia Russia Latvia Peru Lebanon Thailand Turkey Poland Estonia Slovakia Venezuela South Africa

$600 1050 1330 1480 1510 1630 1820 1900 1910 2240 2270 2310 2660 2740 2780 2790 2860 2950 3020 3160

72 114 215 53 80 56 67 65 162 177 79 59 125 153 125 285 67 410 167 265

194 9204 7425 16659 370 16652 67 9204 16200 147352 10147 4794 2348 20527 32496 108588 21969 17953 7912 144445

For comparison with the industrialized world, the figures for France are $24,990 per capita, 1343 PCs per 10,000 inhabitants, and 488,043 Web domains. In the U.S., the

GDP per capita is $26,980, and there are 3280 PCs per 10,000, but the largest top level domain, .com with 12,140,747, is also used by many foreign firms.

Innovative Projects Using the Present Web There are many projects underway to use the Web to help developing nations. Web clearinghouses that provide links to the projects are listed below. (Even those with a specialized focus have many general links.) •

Africa Online http://www.africaonline.com/AfricaOnline/covercomputing.html

•

Internet in the Southern Countries (in Spanish) http://funredes.org/funredes/link.html )

•

Clearinghouse on Africa and Information Technology http://www-sul.stanford.edu/depts/ssrg/africa/elecnet.html

•

Relief Web, sponsored by the UN Office for Humanitarian Affairs http://www.reliefweb.int

•

EnterWeb, on international small business development by Jean-Claude Lorin http://www.enterweb.org

•

Networks in Developing Nations http://som.csudh.edu/faculty/cis/lpress/devnet/

The last clearinghouse was established by Larry Press at the California State University at Dominguez Hills, who has contributed greatly to this subject. His papers (Press, 1995) and (Press, 1996) provide valuable surveys of the role of networks in developing nations, and he has also established a Web archive of related papers at GNET: http://www.sas.upenn.edu/African_Studies/Global_Comm/About_Global_11698.html A small sample of some of the many interesting projects underway will be presented here. In the Hewlett Packard Global Business Challenge, teams of corporate executives from the United States, Russia, Japan and many other countries sit over computers, making quarterly business decisions. While their conversations on

corporate strategy will influence their financial standings for years to come, these decision-makers are actually high school students participating in the 1999 HP contest, and their conversations are conducted via the Web from their schools in their home countries. Over 800 teams from 47 countries participate in this contest, where Junior Achievement students compete as managers of computer-simulated businesses. Teams having the best "bottom line results" will advance in the competition lasting several months. Several new countries participated in 1999 including Albania, Australia, Azerbaijan, Brunei, Ireland, Netherlands, South Africa, and Turkey. (Hyatt, 1999) The Leland Initiative is a five-year $15 million US Government effort to extend Internet connectivity to twenty or more African countries to promote sustainable development. The Initiative seeks to bring the global information revolution to people of Africa, through connection to the Internet, since the sponsors believe that the Internet is emerging as a low cost pathway that allows information to become the catalyst that transforms economic and social structures. The Initiative has now established pilot application projects to teach development partners how to take better advantage of the Internet. These include school-to-school partnerships, distance education, telemedicine, ag-business development, and democracy. www.info.usaid.gov/regions/afr/leland/ The well-known MIT Media Lab has an exciting project in Costa Rica in cooperation with the Foundation for Sustainable Development. This project bypasses the limited local telecommunications infrastructure to remote villages by using satellite wireless links to very inexpensive terminals – similar to the PalmPilot, but supporting a 1.5Mbps data rate, and only costing $40 or so. There are also plans to equip 25 villages with larger terminals housed in recycled shipping containers at a

total cost of $50,000. Additional information is available at http://www.media.mit.edu/unwired/ (Annon, 1999) The World Links for Development (WorLD) Program links students and teachers in secondary schools in developing nations with those in industrialized nations for collaborative research and learning programs via the Internet. During 1997-2000, the program aims to link 1,200 secondary schools in 40 developing countries with partner schools in Australia, Canada, Europe, Japan and the United States. WorLD is sponsored by the World Bank Institute. http://www.worldbank.org/worldlinks/english/

The Cyber Business Incubator for Small Business Development As seen, the E-Development approach offers an immediate opportunity in developing countries where there is already good Web access. One example to help small business development is the cyber business incubator approach now being implemented in Ukraine by the Loyola College in Maryland. Since 1997 Loyola has been operating the Business Incubator Development (BID) Program in Ukraine, and a brief review of that program is useful to set the context. (Shelton and Margenthaler, 1999) The project is funded by the United States Agency for International Development (USAID) to create and sustain small business incubators to help Ukrainians adapt to a free market economy. Since most clients already have abundant space in underutilized institutes, many are assisted in situ, instead of requiring them to move to a physical incubator – the “incubator without walls” approach. A much more extensive program of business training is provided to compensate for the relative inexperience of Ukrainians with the free market. The BID Program has established successful incubators in Kyiv and Kharkiv, and is now planning expansion to Odesa and Dnipropetrovsk. A Web-based cyber business incubator concept is now

being developed to reach to the hinterlands, otherwise out-of-reach of such business services. (Huger, 1998) These approaches are well suited to the former Soviet Union where there are many well-educated people who have access to decent communications and computer infrastructure, but who can profit from help in competing in a free market economy. http://itri.loyola.edu/BID/ Network applications that could be suitable for business development include distance learning, remote business information services, and the new cyber business incubator (CBI) concept. There are many Web sites that offer the world distance learning and information support for small business development, especially for English-speakers. The CBI concept differs in that it attempts to offer the virtual equivalent of the services of a comprehensive business incubator over the Web. (Shelton and Mackiw, 1999). The CBI is planned to have the following features: • • • • • • • • • • • •

It provides delivery of incubator-like services to the hinterlands It is another incubator created by the BID Program based on proven techniques It uses the incubator paradigm as best one can over the Web Entrepreneurs apply for services (register) to be accepted as clients Distance learning is provided with a business-plan theme Human consulting would be provided via email or phone Information would be provided on access to capital -- loans, venture capital, etc. A Web site would be created for each client as the cyber equivalent of physical space; like renting of physical space, this Web-hosting model can sustain the CBI E-commerce help is provided: posting of catalogs, shopping cart, credit cards Clerical services: phone answering, fax, forwarding of messages, change of media, packing of physical shipments, customs broker services. Physical meetings with consultants, teachers would be held occasionally When a critical mass of clients is achieved in a town, a branch physical incubator can be created there to carry the economic development further. These features are not unlike those of a physical incubator, and can now be

provided with standard Web hosting techniques. The BID Program is now designing such a CBI for Ukraine as shown in Fig. 3, which shows just the physical structure. If funds permit, the physical layer would ideally incorporate high speed satellite links

and routers for its network backbone shown in the heavy lines. The lines from regional cities to the outlining towns could be leased telephone lines that would provide inexpensive Internet Service Provider (ISP) services. The unused capacity of this CBI-backbone could be a resource for all international development projects in Ukraine, and the backbone could be later be turned over to a Ukrainian non-profit. If funds are not available for establishment of a custom high-speed network, the CBI could be hosted on existing Web providers in Ukraine -- including commercial ISPs in the regional cities.

Conclusion The rapid development of the Web offers many opportunities to assist developing areas. From the perspective of the network layered-model, one can provide physical devices at the bottom level, all the way to providing applications at the top level. But just as computer hardware is of limited use to the non-specialist without applications software, network applications are the key to providing appropriate technology to put the Web to use in improving people’s lives. This paper has reviewed some top level application approaches that use the existing Web structure in developing nations and areas to make immediate contributions.

References Anonymous, (1998), “MIT Media Lab Partnership in Costa Rica,” Science Magazine, 9 April 1999, p. 219. Clinton, William (1998), “Leading the World into the Information Age,” White House policy statement on the Internet, including its use in developing nations. http://www.whitehouse.gov/WH/Work/113098.html

Huger, Greg (1998) Address on the Delivery of USAID Services to Ukraine, Ukrainian-American Alliance, New York City. Hyatt, Jennifer O., (1999) “Cyber Teams Add Exciting Multi-National Aspect to Junior Achievement International 1999 Hewlett-Packard Global Business Challenge,” JA International Press Release, ( Email: [email protected] )

Lalkaka, Rustam, and Jack Bishop (1996) “Business Incubators in Economic Development: An Initial Assessment in Industrializing Countries,” UN Development Programme, NY. Lottor, Mark (1999) “Statistics on Internet Growth and Geographic Distribution,” Network Wizards, http://www.nw.com/zone/WWW/ Press, Larry (1995), “Developing Networks in Less Industrialized Nations,” IEEE Computer, Vol. 28, No. 6. pp. 66-71, June. Press, Larry (1996), “The Role of Computer Networks in Development,” CACM, Vol. 39, No. 2. pp. 23-29, Feb. Rutkowski, A. M., “Graphs on the Growth of the Internet.” http://www.genmagic.com/Internet/Trends/

Shelton, R. D. (1983). “The Role of Telecommunications in Economic Development in Africa,” An NSF Issue Paper based on a June 1983 workshop sponsored by NSF and USAID. Shelton, R. D. and C. R. Margenthaler (1999) “The Business Incubator Development (BID) Program in Ukraine,” Invited paper at the Expert Meeting on Best Practice in Business Incubation, UN Economic Commission for Europe, Geneva. http://justice.loyola.edu/~rds/UNpaper.html Figures from the presentation in English and Russian at http://justice.loyola.edu/~rds/UNEC/index.htm Shelton, R. D. and George Mackiw (1999) “The Cyber Business Incubator (CBI) Concept,” National Business Incubation Association, Thirteenth International Conference, Chicago, http://justice.loyola.edu/~rds/NBIA/ UNESCO (1998) World Culture Report 1998: Culture, Creativity, and Markets, UNESCO, Paris.

Figures Fig. 1. Growth of the Overall Internet (Lotter, 1999)

Fig. 2. Growth of the Internet, including some developing nations. (Rutkowski, 1997)

Fig. 3 Proposed Ukrainian Cyber Business Incubator

Bios Robert Duane Shelton has led international technology assessments since 1984, as science policy analyst at NSF, and now as ITRI Director. His degrees are from Texas Tech, MIT (as NSF Fellow), and the University of Houston. Dr. Shelton worked at Texas Instruments, Inc. on electronics R&D, and at NASA on the Apollo space communications system and on TDRSS. He has been a professor at the universities of Houston, Louisville, Texas Tech, and now Loyola College. He has chaired three departments including applied mathematics, computer science, and engineering degree programs. During 1995, he was an IEEE Congressional Fellow, serving as legislative assistant for Rep. Lloyd Doggett. His current research interests include international S&T assessment and E-Development. ([email protected]) George Mackiw is the Deputy Director of the International Technology Research Institute. He has a Ph.D. in mathematics from the University of Virginia and is Professor and former Chair of Mathematical Sciences. He also led Loyola College’s successful application for a Phi Beta Kappa chapter. A native speaker of Ukrainian, Mackiw spent the summer of 1998 in Ukraine directing the ITRI Kiev and Kharkiv small business incubators. He has made extensive use of the Internet in his research, teaching, and as a consultant to Exxon’s Project NeXt. ([email protected])