UN warning to Silicon Valley over digital rift

Silicon Valley has been slow to develop technology and business approaches specifically suited to customers in the emerging world, according to representatives at a UN-sponsored gathering in the US technology heartland this week.

As a result, it risks missing out on one of the next big potential markets for its products, while also leaving a widening “digital divide” that is seeing the growing ranks of broadband users in the developed world leap even further ahead.

The warnings surfaced during a UN-backed meeting that brought officials from many developing countries to the valley this week to try to develop more systematic approaches from the many piecemeal experiments under way to boost the spread of information and communication technologies. For some of the valley’s biggest companies, which have long viewed this as an area for non-profit activity, the effort reflects a new business focus on the emerging world.

“We have around a billion users today – what we’re all interested in is where the next billion users are going to come from,” said Craig Barrett, chairman of Intel and head of the UN-backed committee leading the effort.

However, the valley’s focus on creating technology for the developed world, then trying to adapt it to poorer countries, has left it ill-suited to addressing the real technology needs of these countries, according to several observers.

“There is a bit of a challenge for Silicon Valley,” said Farrukh Qayyum, Pakistan’s IT and telecommunications minister. “While it is true that mature markets need new products, there is really a need to look at the needs of people who could be customers in the developing world.”

Thomas McCoy, chief administrative officer of AMD chipmaker, added: “The capability of Silicon Valley has yet to be fully deployed in focusing on
the innovation that is required in those huge markets. We can’t just build a Mercedes and then try to simplify it.”

IT companies needed to learn from the experience of the mobile communications industry, which now has more than 2bn users and has been far more successful at reaching emerging market users, according to several people at the event.

The mobile industry “meets a basic need, which is communication”, said Mr Barrett. For IT companies, technology adoption would take longer because its usefulness rested partly on the availability of local content on the internet and education to help people use the network, he added.

Others, however, said more work needed to be done to identify the basic needs of potential customers before the valley could adapt its technology and business approaches to developing markets.

“We don’t know what they need – we don’t have the intelligence about what poor farmers in Africa want,” said Mr McCoy. Without a clearer agreement on the most immediate needs that their technology is addressing, the big technology companies and development officials risked failing to agree on how to proceed, added Mary Smaragdis, director of the charitable foundation set up by Sun Microsystems.

“I don’t see a lot of alignment” among participants at this week’s meeting, she said. “We’re all taking on this problem through our own filter.”

In a sign of Silicon Valley’s slowness to address the emerging world’s technology needs more directly, one of the highest-profile efforts to make computing more affordable, the One Laptop Per Child initiative, was led by Nicholas Negroponte of Massachusetts Institute of Technology. None of the main companies behind the push is from the valley.