Want to connect the next billion? Think economics, not heroics Pascal-Emmanuel Gobry

One of the dominant themes in this column is the idea that the “next billion” and the “next next billion” will determine the future of technology, and especially mobile technology.

Africa leapfrogged the rich world in mobile adoption and mobile payments, and could leapfrog everything else. The next dominant mobile platform could very well come from the emerging markets or,like Firefox OS, be geared towards the emerging markets.

One big piece of this mobile puzzle is connectivity. For this to happen (and many other good things besides), the next billions of mobile phone owners must have connectivity.

Many people in Silicon Valley are well aware of this. Two of the most important Silicon Valley companies, Google and Facebook, have big projects at hand trying to bring connectivity to these next billions.

Facebook’s Internet.org is an industry consortium with telcos, networking equipment providers, and phone manufacturers designed to bring the prices of connectivity down to the next billion and striking “zero-rate” deals with carriers to let users access a limited version of the internet (naturally, including Facebook) for free.
Google’s project, Google Loon, is a lot more exciting: Google is building high-altitude, solar-powered balloons which will roam above the atmosphere and beam Wi-Fi signals down to small and sturdy reception stations, so that anyone everywhere can access wireless internet.
These are worthy projects. But as the blogger Blair Reeves, at Bullish Data, points out in an excellent post, they’re kind of beside the point.
There is a lot of enthusiasm in tech circles for whiz-bang technology that will solve the problems of poverty in one stroke. The obvious problem is twofold: Poverty is actually an enormously complex phenomenon, combining not just technological, but also cultural, social, economic, political and environmental issues; and most techno-utopian übergeeks are actually often clueless about these issues.

Connectivity in the emerging and poor worlds is already skyrocketing, with no indication of slowing — indeed, only accelerating. And this is happening in the most boring way imaginable: Because demand for connectivity is very high, companies are building up networks and other infrastructure, and prices are going down as scale increases.

Telcos in Africa and India are already expanding coverage and adding broadband because ustomers are demanding it. And they can do it cheaply through one of the best-known economic phenomenons: As scale increases and as technology becomes commoditized, prices drop like a rock.

The other big barrier to poor people accessing the internet is the cost of the device itself, especially since most of these markets are pre-paid. But prices of smartphones are also dropping like a rock, and also for the very same reason: The smartphone market now has enormous scale, and all of the components you need to make a smartphone (not a top-of-the-line smartphone, but a smartphone) have become commoditized. The reason why Xiaomi and ZTE (and other Chinese companies you haven’t heard of) are making cheaper smartphones every day isn’t because of some high-flying philanthropic drive to connect the world; it’s because of good old-fashioned profit-driven motives.

This isn’t to say that Google Loon and Internet.org are hopeless or useless. To the contrary — any effort towards increasing connectivity is good, and they might do real good.

But it just serves to highlight that increasing connectivity is coming one way or another, and probably sooner than you think. And when it does, the change will be felt not just in Lagos and Mumbai, but in Paris and New York.