Study: Mobile is making a difference in developing markets

July 24, 2012

Three-quarters of the world’s population now has access to mobile communications and the number is continuing to rise quickly. What's more, the spread of mobile technology is bringing new opportunities for financial inclusion and entrepreneurship to some of the world's poorest developing regions. This is according to a new report published by the World Bank and its technology entrepreneurship and innovation program, InfoDev.

The report, titled "Information and Communications for Development 2012: Maximizing Mobile," said that there are now more than 6 billion mobile subscriptions worldwide, up from fewer than 1 billion in 2000. This explosion of mobile phones is unprecedented for any technology, the report said.

Additonally, as consumers use multiple devices, the number of mobile phone subscriptions worldwide is on pace to exceed the entire population of the planet very soon, the report said.

The developing app econonomy in the developing world

The World Bank's report analyzed the growth and evolution of mobile communications and data-based services such as mobile applications. More than 30 billion mobile applications were downloaded to mobile devices in 2011, the report said. The report also examined how the developing global "app economy" is playing out in the developing economies of emerging nations. It described how new uses for mobile technology in financial services, health and government are impacting entrepreneurship and employment.

"Mobile communications offer major opportunities to advance human and economic development — from providing basic access to health information to making cash payments, spurring job creation, and stimulating citizen involvement in democratic processes," said World Bank Vice President for Sustainable Development, Rachel Kyte, in a statement about the report.

Kyte said the challenge now is to enable people, businesses, and governments in developing countries to create locally-relevant mobile applications so they can take full advantage of these opportunities.

The World Bank's report looked at some of the local mobile programs being implemented worldwide to spread investment, entrepreneurship and financial inclusion. The report said that 74 nations, most of them in Africa, currently have in place mobile money programs of some type.

For instance, in Kenya, with its popular M-PESA mobile money program, mobile-facilitated payments now equal more than one-fifth of the country's gross domestic product, the report said. A mobile service in the West Bank and Gaza helps young workers find employment. Users have reported that the time spent looking for a job has dropped dramatically, and wages have increased as much as 50 percent.

The tip of the mobile iceberg

What may be most surprising about the report is that all this development represents only the beginning of what's to come — and what's possible. 

"The mobile revolution is right at the start of its growth curve," said Tim Kelly, a co-author of the report and lead policy specialist at the World Bank, in a statement. Mobile devices are becoming cheaper and more powerful while networks are doubling in bandwidth every 18 months and expanding into rural areas, Kelly said.

To make sure mobile devices are meeting their potential as tools for financial inclusion, Kelly said, the World Bank is working to expand the use of mobile phones as tools in development projects. For example, it's working on programs for data collection and analysis, for effecting cash transfers, or as a mechanism for delivering healthcare advice.

Kelly also said governments will play a significant role in enabling mobile application development, from actually funding programs to providing infrastructure. 

"Government support is needed to develop sound business models, foster [information and communication technology] skills, and ensure that the infrastructure is in place and affordable," Kelly said. He added that governments will need to make more bandwidth available for mobile broadband use to cope with the impending data deluge, which threatens to swamp mobile broadband networks.

For more stories like this, visit the Trends/Statistics research center.

Topics: Mobile Banking , Mobile Payments , Money Transfer / P2P , Trends / Statistics

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