The role of mobile phone technology in creating a conduit for the transfer of funds in countries with emerging markets is not a technical surprise. As far back as the 1970s, prognosticators accurately described how someday home personal computers would allow online banking. Even the cheapest cell phone available today has more processing power than the first home PCs, integrated into a machine whose primary purpose is to exchange information over a network. The financial use case is obvious.
But there is a surprise in this scenario — a cultural surprise. We usually think of innovation in cell phone use being driven by customers in countries where fashion and technology intermingle, such as Finland. There’s no doubt that users in these places have blazed a trail that other developed countries have proceeded along at their own rates. But it may be that what we are seeing is the result of a long process of early adoption of technology at the national level.
In the early 90′s, as the developed world rapidly took to the Internet, France was often cited as a lesson in the risks of early adoption. In the 1980s the Direction Générale des Télécommunications (now France Télécom) began supporting the Minitel service, which supported advanced features like online reservations and purchases. According to Wikipedia current uses of mobile communication which Minitel predicted even included organizing protests, when the network was used in 1986 to coordinate a national strike. But Minitel’s protocols weren’t the same as the Internet’s protocols. Purposely built to use existing infrastructure rather than a dedicated network, Internet protocols had the advantage of being open and adaptable.
A new protocol like the Web’s HTTP could use the Internet without any changes to the underlying network architecture, but wasn’t supported by Minitel. As a result, Internet adoption in France lagged behind Western Europe for years, even though the French were arguably more prepared by experience to lead Internet adoption than any other nation’s population.
A longer term cycle can be seen in the developed countries’ adoption of mobile technology. In Finland, the difficulty of maintaining land lines in a harsh climate gave mobile phones an economic advantage, contributing to their early adoption and a proliferation of innovative uses. In the United States, where development of the land line network was close to 100%, mobile phone remained a high-priced luxury and to this day the US remains a follower of innovations from other countries although it has provided some significant refinements to the form factor, as demonstrated by the iPhone and its knockoffs.
If the lesson here is that innovation happens when new technology meets the absence of established infrastructure, then the move towards banking uses in lesser-developed countries is no longer a cultural surprise either. It may well be that, as has been seen with the industrialization of Asian countries from Japan to China, the introduction of a disruptive technology to a society where there is little to disrupt can set it on a fast track to development that will give the United State a real cultural surprise.
Post a Comment