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What is the role of mobile phones in bringing about growth?

ABSTRACT: Mobile phones have been touted as one of the most transformative technologies to have brought about development by Jeffrey Sachs of Columbia University, Tom Standage, Digital Editor of The Economist magazine, the International Telecommunications Union (ITU), and others. Innovations especially in mobile banking such as Kenya’s M-Pesa system have enabled banking and payment services to those who would otherwise remain without banking services, are seen as some of the ways in which Information and Communication Technologies (ICTs) are enabling development. Morawczynski and Pickens (2009) show through their ethnographic study, how the lives of people are being transformed through their use of the M-Pesa mobile banking services. For better or for worse, these technologies are here to stay. The challenge faced when studying how ICTs bring about development is in understanding how does this relationship actually take place? For example, fishermen in Kerala, India, who are able to use mobile phones to search for the best market prices for their produce, see an increase in their incomes by 8%. Since the quantity of fish brought to the market increases with the rise in farmer’s income, consumer prices fall by 4% according to the Harvard economist Robert Jensen (2007). Does this mean that there could be a bi-directional relationship between ICTs and development? In that there could be a direct link between mobile phone coverage and the ability of farmers and businesses people to increase their incomes.

Keywords: Information and Communication Technologies, International Telecommunications Union, Mobile phones, Mobile banking, Gross Domestic Product