Moving Beyond the Base: Mobile Phones and the Expansion of Economic Networks in Morocco

Hsain Ilahiane, University of KentuckyHsain.ilahiane@uky.edu

John Sherry, Intel CorporationJohn.Sherry@Intel.com

June 1, 2009The Bottom of The Pyramid Workshop, UCI

Outline

1. Introduction

2. Theorizing the Poor Man’s Technology

3. The Global and Local Context of the Mobile Phone in Morocco

4. Research Questions, Methods, and Survey Results

5. Qualitative Analysis: Sources of Economic Advantage» Network expansion and activation» Bricolage» Reduction of Risk Associated with Employment Seeking» Comparing resource costs: why mobiles are so attractive» Mobile technology and economic stratification

6. Conclusion

Some theory to think with • Fisher argues that “the telephone did not radically alter American

ways of life; rather, Americans used it to more vigorously pursue their characteristic way of life.” (1992:5). Telephone calling solidified and deepened social relations, rather than replacing face-to-face relationships; engineered an expansion of talk.

• Ling (2004 and 2008) argues that the mobile phone functions to structure the rituals of daily routines, conversation, and the norms of family life. The mobile phone allows for personal security, organization of activities on the fly, micro-coordination as in mid-course adjustment iterative coordination, and flexibility and softening of schedules.

• Ito et al. (2005) stress the dynamics of freedom and surveillance btw children and parents, dissolving boundaries btw the public and the private sphere; texting implications for social networking—telecocooning.

More theory…• Miller and Slater (2000) argue that ICTs (the internet in Trinidad) allows for what

they call “expansive realization.” Use of technology to overcome spatial and temporal limitations.

• Miller and Horst (2005 and 2006) write that “the phone is used much less among low-income Jamaicans in connection with either jobs or entrepreneurship than we anticipated” (2005:761). They suggest that Jamaicans use the phone to maintain and refresh local and non-local networks and connections to cope with everyday economic uncertainty.

• Donner (2006) states that “micro-entrepreneurs use their mobile phones to increase the frequency of their contact with friends, family, and existing business contacts and to facilitate new contacts with business partners, suppliers, and customers” (2006:14).

• Townsend (2000) writes that “the mobile might lead to a dramatic increase in the size of the city, not necessarily in a physical sense, but in terms of activity and productivity. No massive new physical infrastructure will emerge; rather it is the intensification of urban activity, the speeding up of urban metabolism” (2000:14).

More theory and some• ICTs as tools for poverty alleviation and sustainable development in the

developing world.• • ICTs enable those in poor communities to better accomplish their own

economic goals, and possibly lift themselves out of poverty.

• Emphasis on “bottom-up” global market forces and has been regarded as critical for ICTs “to gain wide, robust and long-lived usage” (Best and Maclay 2002:76).

• New ways of rethinking the role and participation of multinational corporations (MNCs) and the state. Prahalad and Hammond assert that “prosperity can come to the poorest regions only through the direct and sustained involvement of multinational companies” (2002:49). Markets that were once either too difficult to reach or too poor and informal to be of interest can, so the thinking goes, be made accessible and profitably addressed through the use of information technology.

The Argument

• While these approaches to the use of telecommunications provide valuable insights to ethnographic questions on the uptake and use of mobile technology along the standard apparatus of social sciences categories, there is little work in anthropology on the actual economic impact of mobile phones on users.

• Our argument, supported by qualitative and quantitative evidence, suggests that:

1. Mobiles are a resource for human agency rather than an economic or social force in its own right.

2. mobile use expands the productive opportunities of certain types of activities by scaling up the circle of economic opportunities and enabling bricolage (freelance service work), resulting in income increases.

3. mobiles enable users to sustain and create new pockets of entrepreneurship and special social ties.

Why Morocco?

• Population: 31.1 Million• Ranks 125th on the Human Development Index (2003)• 50.7% Adult literacy rate (ages 15 and above)• 63.3% Adult literacy rate, male (ages 15 and above)• 38.3% Adult literacy rate, female (ages 15 and above)• 1 in 3 Moroccans has a mobile phone• What on earth are Moroccans doing with mobile

phones?• Are mobiles just another global fad or tools of

productivity?

• “Top 40” Berber music on Le Portable invasion!!

The context: Globalization in Morocco

• 1980s economic crisis• Washington

consensus/shock therapy

• Privatization• Telecom rapid

liberalization- FDI • Informal sector effects

Mobile Users 1995-2002

29,511 42,942 74,472 166,645369,174

2,550,000

4,200,000

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

1995 1996 1997 1998 1999 2000 2002

NUMBER OF MOBILE PHONE USERS IN MOROCCO 1995-2002

Introduction de Méditel

Introduction des cartesprépayées et des packs

Data from Bulletin Evonomique et Social du Maroc. 2001

Total number of ICTs users,1999-2004

338,000

4,200,000

7,364,125

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

1999 2002 2004

Cellular phone users

Teleboutiques

Cyber Cafes

Internet

Update on the Moroccan ICTs Scene--2007 • Morocco has 20.029 million mobile subscribers, up from 16.005 million at

the end of 2006 and 2.550 million in 2000.

• Mobile penetration reached 65.66% of the population versus 53.54 percent a year ago. Out of the total mobile user base, only about 4% use postpaid services, while the rest are prepaid.

• Number of mobiles has almost eclipsed landline accounts, the number of fixed-line users has grown to 2.394 million, up from 1.266 million at the end of 2006.

• By way of comparison, there are 520,080.00 internet users, equivalent to a penetration rate of 1.72%.

• Source: (http://www.anrt.ma/fr/admin/download/upload/file_fr1525.pdf, accessed July 28, 2008).

Research Questions

• Does cellular phone use affect income level?

• Does cellular phone use affect production strategies?

• Does cellular phone use transform traditional ways of doing business?

Methods and dataSummer 2003

• Secondary data

• Ethnography

• Questionnaire

• SPSS

Faces of the sample?

• Hrayfiya (skilled workers)

• Maids• Shanty town dwellers• “Professors of

Bricolage”• Fall within the $1-2 a

day people category• Urban poor• Arab/Berber Muslims

Summary characteristics

• Age: 31yrs (range: 21-58)• Sex: 78% male; 22% female• Years of education: 5.5 yrs avg.• Marital Status:

– Married: 38%– Single: 53%– Divorced: 9%

• Ethnicity:– Arab: 75%– Berber: 25%

Occupations Occupation Frequency Percent

Electrician 4 12.5

Carpenter 3 9.4

Artisan 1 3.1

Plumber 7 21.9

Painter 2 6.3

Maid 7 21.9

Mason 1 3.1

Builder 3 9.4

Welder 1 3.1

Tile maker 2 6.3

Telecom Technician

1 3.1

Total 32 100.0

N Minimum Maximum MeanStd.

Deviation

Number of video 32 0 1 .37 .492

Number of radios 32 1 5 1.41 .837

Number of TVs 32 0 3 1.25 .568

Number of satellite dishes

32 0 2 1.03 .538

Number of PCs 32 0 1 .03 .177

Number of Mobile Phones

32 1 3 1.28 .581

Number of Mobile Phones Acquired

32 1 4 2.97 .897

Internet Access 32 1 2 1.97 .177

Valid N32

Frequency of device ownership and use per respondent

Communication fees and calls

Minimum Maximum Mean % of income

Average Number of Personal Calls 4.00 95.00 38.0625

Average Number of Business Calls 8.00 330.00 101.9062

Mobile Phone Average Monthly Fees (dirhams) 45.00 500.00 129.0625 3.5%

Teleboutique Monthly fees (dirhams) 20.00 450.00 66.7188 1.3%

mobile and fix charges (dirhams) 80.00 555.00 195.7813 4.8%

N=32 subjects

Pre- and post cellular phone use income

Income before use 1836

Income after (w/o bricolage) 2866 (61% increase)

Bricolage 912

Total after mobile 3777 (105% increase)

Bricolage (informal supplementary economic activity) accounts for an average 25% of total income.

Made for Maids! Cellular phone use, fees, and Bricolage

Monthly communication fees 8% of monthly income

Bricolage income 31%

Business calls / month 28

Personal calls / month 43

Mobiles increase income

• “Bricolage”

• “Perpetual contact”

• Expanding the “circle of opportunity”

•Tata

•Errachidia

•Midelt

825 KM

600 KM

450 KM

565 KM

330 KM 350 KM

1790 KM

560 KM

30 KM

Expanding the circle

• “Socio-economic speed”• Micro-enterprise

development• 25% of respondents

employ btw 4 and 19 people, 69 jobs

• 1 mobile phone = 8.62 jobs

• 1 mobile phone travels about 404.06 km

Al-portable: The WD-40 of Place- and interest-based Networks

By virtue of the fact that he has a store-front, the plumber finds his place in the nexus of a network of places where professional and personal relationships are formed.

Old and new tech economic advantagessnowmobiles on the left graph and mobile phones on the right graph

(Pelto and Muller-Wille 1972; Ilahiane and Sherry 2004)

Old vs. new technology: a mobile phone is neither a tractor nor a snowmobile!

• Not a limited good—there is no single “resource” to be tapped, the network is the resource. The more participation, the greater the economic returns on the resource– this is not “the tragedy of the commons,” this is the victory of the commons!

• Network effects vs. diminishing comparative advantage (not a problem of scarcity).

• What’s important about mobile phones: technology is a resource for human agency rather than an economic or social force in its own right—Interpretive flexibility allowing many kinds of information uses and socio-economic speed.

• Low Capital requirements enables individuals, as opposed to corporate ownership (differentiation/distinction versus consolidation/ technology rents)

• Uses natural human ability: voice interaction. Highlights a relationship between knowledge and capital in decision-making.

“Le [al] Portable is the Sixth Pillar of Islam,” says one Berber Plumber.

Mobile phones Matter:– Generate more revenues– Bring work – Expand the Circle of

Opportunity and bricolage– Banish loneliness– Manage information– “Another worker, friend,

helper, and a saint!” – Mecca or Mechanization!!

What’s BOP got to do with IT?• They have just discovered the poor! What would Frank, Wallerstein,

Rostow, and the Millennium Village Project promoters and detractors say about development as a business proposition?

• MNCs can make huge fortunes by selling to the poor, and by selling to the poor, they will bring prosperity to them. In selling to them and extracting their untapped purchasing power, they can assist them in their fight against poverty (Prahalad and Hammond 2002; Prahalad 2004).

• Privatization of ICT sector + governmental regulation = employment and economic productivity and growth.

• Mobile users are enabled to expand productive and social ties leading to higher income and more opportunities.

What’s BOP got to do with IT?• This is what is called Employment Creation, and not selling products to the

poor. Employment leads to poverty alleviation.• Poverty is really poverty-in-employment and not a matter of selling to the

poor. • Selling in small sachets and providing tiny microcredit loans are too small to

have any effect on poverty alleviation (too much plastic in the air and too many unspecialized workers in the marketplace).

• The challenge then is to build on assets and capabilities of the poor.• Form partnerships and alliances among users, MNCs, NGOs, and

philanthropists, and so on. (Sen 2000; also Karnani 2007). • Examples: The M-Pesa and G Cash, and Wizzit stories; smart walls: snap,

grab, and dispatch.• The poor are not just consumers/customers, they are producers and

citizens. But citizens who are caught in intricate development traps. • For sure, it would take more than corporations to address in a meaningful

way their prosperity far beyond the simplistic, if not naïve, thinking of the BOP business approach to the complicated reality of development and underdevelopment in the Global South.

Special thanks go to:• Intel Corporation funding

(Applications, Interface, and Media Grants-AIM)

• Mohammedia’s Hrayfiya • L’Institut National des Postes

et Telecommunications• Maroc Telecom• Meditel Telecom• Secretariat d’Etat aupres du

Premier Ministre Charge de la poste et des technologies des telecommunications et de l’information-SEPTTI

• Agence nationale de reglementation des telecommunications-ARNT