You Can Hear Me Now
Book: Nicholas P. Sullivan. You Can Hear Me Now: How Microloans and Cell Phones are Connecting the World’s Poor to the Global Economy.
From the APC website at http://www.apc.org/english/news/index.shtml?x=5059870
"Sullivan's book, published in February 2007, uses GrameenPhone to illustrate inclusive capitalism – an economic model that in his own words, “is sweeping the developing world”. As Sullivan explains in his book, this form of capitalism “spreads wealth as it creates wealth” and “empowers the poor as it generates returns for investors.” Information technology is particularly hospitable to inclusive capitalism because people at all levels of society can use it to heighten productivity, and it creates income opportunities as it spreads, this book explains. GrameenPhone alone has created, directly and indirectly, approximately 325,000 income opportunities, lifting those at the bottom of the pyramid out of poverty while bridging the digital divide. And it is still growing.
GrameenPhone is the starkest example of inclusive capitalism, and Sullivan devotes just under half of his book to its story.
The second part of the book reports on how the external combustion engine is being successfully replicated in other areas of the global south. In Africa, for example, the sale of prepaid calling cards is a USD 3 billion business employing more than 200,000 indigenous entrepreneurs. Sullivan also explores the growing mobile-banking, or m-banking, industry, and the symbiotic relationship between cell phones and personal finance. And, he moves beyond cell phones by outlining Quadir’s current efforts to bring electricity to rural Bangladesh, suggesting the vast possibilities of applying the external combustion engine to promote inclusive capitalism while addressing unmet human needs.
You Can Hear Me Now is a well researched, engaging, and compelling account of a an entrepreneurial approach to business and development. Sullivan succeeds in balancing economic theory, history, humour, and personal experiences in a volume that is equally informative and inspiring. While Sullivan focuses mainly on the benefits of spreading information technology through the external combustion engine at the expense of potential drawbacks, such as electronic waste, his book showcases a development model that makes the future in some areas seem a little brighter." (http://www.apc.org/english/news/index.shtml?x=5059870)
Interview with the author at http://www.apc.org/english/news/index.shtml?x=5059914
"APCNews: What inspired you to write You Can Hear Me Now?
I was writing about business and entrepreneurship in the U.S. Then I worked for Inc.com, which attracted a lot of foreign interest, and I began looking at ways to export American-style entrepreneurship. I then met Iqbal Quadir at the International Conference on Financing for Development in Mexico and heard the GrameenPhone story. I got to know Quadir over a couple of years while he was teaching at Harvard before deciding to do the book.
APCNews: The book is very well researched. Can you briefly talk about the steps that you took in conducting research?
I went to Bangladesh twice, both for ten to fourteen days, and talked with many at Grameen Bank and GrameenPhone, went to the villages, and basically got a sense of how important phones had become in such a poor country. I also spent a lot of time researching the impact of cell phones. The book took about eighteen months to complete.
APCNews: How much time did you spend in rural areas, speaking to the poor about how cell phones were affecting their lives and livelihoods?
With the assistance of an interpreter, I made three or four trips to the villages and met with several “phone ladies” who were certainly benefiting from the phone business. However, my story focused on the level of the foreign investors coming into a country dominated by foreign aid and starting a large-scale business that was creating wealth and income opportunities.
APCNews: Can you explain your metaphor of the “external combustion engine” and why it is particularly important for developing economies?
It is in contrast with the “internal combustion engine”. That is, in say, the Silicon Valley, California, where a local entrepreneur might get local money to develop or apply a technology. In a country like Bangladesh, there is not this culture of entrepreneurship, the ease of starting a business, the local capital markets, or the technology for internal combustion. The forces of combustion come from the outside. But, as capital markets develop and business spawns business, you begin to see the creation of an internal combustion engine, as in India now. For me, the external combustion engine was a way to model the difference between private investment and foreign aid.
APCNews: Yes, a major theme of your book is that “private enterprise creates wealth and job opportunities and is a quicker route to a poor country’s economic development than aid.” Why? And, why is this particularly true in a country like Bangladesh?
Because aid has been concentrated in the hands of a few – primarily government officials – who use it for projects in the capital city, but don’t distribute the funds to the countryside. Also, much foreign aid is actually recycled back to donor countries in the form of contracts for engineers and consultants, for example, rather than being used to create jobs in the receiving country. Bangladesh has long been dependent on aid, and the government has done little to promote business development.
APCNews: How do you feel about the role of NGOs and non-profit organisations in promoting economic and social development?
They are generally quite effective because a) they are not government by definition; b) they are very focused on specific problems; and c) they are usually on the ground rather than running operations from afar. The only issue with NGOs and non-profits is that they have no accountability to the bottom line. They should act as catalysts to unleash markets and local entrepreneurs who can keep solving the problems without the need to raise money. There is nothing like the idea of going out of business if something is not working to make people develop more efficient models for long-term sustainable social and economic development.
APCNews: The second major theme is that “information technology is the best product that foreign money can import.” Why is IT such a promising sector for foreign investment and economic development?
Technology in particular has been effective in creating job opportunities because it spreads so quickly. It is in high demand and the way to distribute it engages local populations as part of the supply chain, thus creating income opportunities as well as distributing an empowering tool of production. It also improves all the time, getting faster and cheaper, and is used in increasingly creative ways. But the number one reason is that IT spreads throughout society at all levels, and is not concentrated in the hands of a few." (http://www.apc.org/english/news/index.shtml?x=5059914)