Economic Leap Frogging through Trading Information via the Internet

Note: The development of this concept has moved to the Effective Education Project. This page is being left for archive purposes.

This is a research project about how selling intellectual property via the Internet can allow people in less economically developed countries to reach beyond their mostly closed economic system into the international economic system. By doing so, individuals will gain a better standard of living and the economy and stability of the nation will ultimately improve.

The Problem and a Solution

Many less developed nations face a problem of having an internal cycle that consists of corruption, poor infrastructure, debt, poor education, low skills and inequality. Each of these components contribute to the other components within the system. Since the economic system is primarily a closed system, the average person only has the capability of having economic trades with others who are trapped in the system. Because of this it is difficult and generally highly unlikely that an average citizen can significantly increase their standard of living.

There is foreign aid that comes to many countries, but unfortunately this often goes to corrupt leaders (who often use it to buy imported goods), and does not directly benefit the poor. Even when it does, rarely does the aid help build systems that allow the people to help themselves in the future. Physical goods can be manufactured in less developed countries, but this generally requires a large start-up cost and capitol. Due to corruption, and the lack of infrastructure, this is often difficult to do, and rarely can it be done by an entrepreneurial individual.

A solution to this conundrum lies in the potential of the Internet. The Internet allows trade of intellectual property with very little influence of the government or internal systems of the country. It also brings in foreign money directly to citizens in their closed system. It also can be done by individuals with a relatively low startup cost (if enough infrastructure exists), such that a micro-loan could potentially fund an individual. Further, the very nature of the Internet helps expose people in closed systems to other systems of government, culture, etc, which helps open their minds and educates them.

While technology has been heralded as a method for countries to "leap frog" cycles of growth, it can fail if it is put to use in the wrong way. This project attempts to put technology to use in a logical way that can truly help people help themselves. Further, it is unlikely that technology will truly help people leap frog stages of development, it is much more likely to change the order and method that societies will develop.

It is also important to realize that high technology and money in the hands of someone with a lower consciousness (lacking ethics, empathy, critical thinking and a broad view of the world) can be very dangerous. This has been evidenced by the many terrible wars that have existed on the African continent, and in other less developed areas of the world. (Although, those of us in higher developed nations should not think that we too do not have have people of lower consciousness that utilize tools of technology and money in destructive manners.) That is why the goal of this project is not only to help people gain the skills they need to make and trade intellectual property, but to also help them learn higher order knowledge and skills such as system thinking, economics, etc. In this way, this project is closely tied with the Extraordinary School Project.

Infrastructure & Systems Requirements

While this project can greatly benefit people in less developed nations, there needs to exist at least a certain level of technological and financial infrastructure for people to be able to sell Intellectual Property over the Internet.

Technological Systems Requirements

Computer Systems

Computers have become the standard method of creating and transmitting intellectual property. These computers must be capable of creating the specific intellectual property that is to traded via the Internet. All computers should be capable of handling USB devices. Other specific requirements will be based upon the type of intellectual property that will be traded. (See Appropriate Section)

Electricity

There must be a method that can power any computer system. Preferably this exists through power lines that carry either 110, 220, or 230 Volts. If an electrical infrastructure does not exist, it may be possible to power the system through alternative generating means, such as human based power, solar or local turbines on rivers or windmills. The cost of the electricity must be calculated into the business plan.

Internet Connectivity

The Internet is now the standard method used to transfer intellectual property, and is generally the most cost effective method. Connectivity must exist within the community that the intellectual property will be traded from. This may be something that the users can access from the computers they use for development, or if there is only limited place where connectivity exists, such as Internet Cafes, the intellectual property products can be batched up and sent as needed.

Economic and Financial Systems Requirement

Reliable Banking System

In order to be able to collect money from international customers it is critical to be able to have access to a bank that is reliable and that can work with foreign banks, and be able to have money deposited into them from systems such as PayPal, etc.

Standard Accounting Training & Procedures

It is important that internally to the organization selling the intellectual property, that they have good accounting abilities, and follow standard accounting practices. Further accounting procedures need to be in place, to help ensure the honesty and integrity of all who are involved in the process.

Educational Requirements

Language & Literacy

It is important that the creators of the intellectual property are able to create it in a language that is appropriate for their audience. For example, someone wishing to sell information to Americans, needs to have the information written in English. Further the English needs to be of such a quality that it can be easily understood by Americans. If someone is wishing to sell intellectual property to the French market, then it will be important to create it in French, etc.

Specific Product Training

Depending upon the type of intellectual property traded, will determine what other types of education someone must have.

Social and Governmental Stability, Human Freedoms

It is highly unlikely that the less developed nations where these leap frogging tactics are attempting to be used will have perfect stability, and freedom for its citizens. But a minimum amount of stability must exist for economic systems of trade to occur. If a war is occurring or other highly damaging or dangerous issues are occurring, there is no possibility for the economic leap frogging to occur.

One of the good points about Economic Leapfrogging being done on the individual scale, is it should raise the standard of living for the masses, and hence increase long term stability for the nation.

Potential Intellectual Property Products

There is a whole range of intellectual property that can be sold on the Internet. There are several key requirements for the intellectual property to be succesful:

1. The person in the less developed nation must be capable of making a quality product
2. The product should be something that can be done with a low start up cost
3. The product must be capable of being made with the technology, infrastructure, etc available to the person
4. The product must cost equal or less than it would cost from a person in a more developed nation
5. The person must be able to earn more selling the product than the other options they have available
6. There must be a demand for the product in more developed nations
7. The person making the product must be able to communicate their potential wares to people who may want the product
8. All actions taken should be ethical on all sides
9. Competition and current markets for products must always be considered when developing a product.

Transcription Services

Users could transcribe sound files to word processing files. There are many organizations that produce sound files that may wish to have them converted to text so they could be placed on a website and be in a searchable format.

Technical Details

Assuming that radio programs have approximately 200 Words Per Minute , then 1 hour of audio has approximately 12,000 words. If a typist can type 40 Words Per Minute, then it would take about 5 hours to type. A typist who can type 80 Words Per minute could do it in 2.5 hours.

The original audio files being received would need to be small enough in size that they could be transmitted to the person in the lesser developed nation. This is especially important because often these people will have lower speed connections. Using mono MP3 encoding with a constant bit rate of 16 Kbps and 11025 Hz, the audio is still legible and can be fit into about 1.1 MB per 10 minutes of audio. The finished transcribed files will generally be negligible in size, being less than 100 KB.

Market Viability

Given a low enough cost, this service could be marketed to churches, schools, and radio stations. Churches could have their sermons transcribed, schools could have lectures transcribed, and radio stations could have talk radio shows transcribed.

Most current transcription services do not go after this market, as the costs they charge, which is generally a minimum of f $1.50 per minute or $90 per hour of audio, is prohibitive. Further, the standard market for transcription is usually for business meetings, legal matters and medical matters. It is not recommended that a leap frog entrepreneur attempt to enter into the traditional transcription market due to specialized knowledge required, and high liability risks.

Imprinted Clothing & Products

Websites such as Cafe Press and Zazzle allow anyone to sell clothing or other products with customized pictures which may be artwork or text. To be able to utilize these sites the user must have a computer able to handle the creation of pictures.

Paid Web Research

Some forms of web research simply require a fair amount of time to accomplish. For example, many statistical things could be discovered about the web, but either software needs to be written, or things need to be counted by hand. Someone with a continual Internet connection could do part of this research.

OCR Cleanup

Many documents are in a graphical format, and while OCR software has become very commonly used to convert these documents to text, they often have troubles with specific areas. Users in developing communities could take these documents and clean them up, turning out a quality product in the end.

Programming

There are a wide range of programs that can be created. Database programming generally is not an option due to legal and privacy reasons. Further, depending upon what the program will do, determines the system requirements to create the program. Also, specialized training must occur for anyone wishing to write a computer program. But even given these issues, programming can be very lucrative as India has demonstrated.

Web Design

Similar to programming, web design has different specialized knowledge that is required to be successful. But it can be done anywhere in the world.

Customer Support

Many companies have been outsourcing their customer support to other countries. Excellent language skills are required to be able to do this, and a fairly high startup cost, as well as good infrastructure, as batch processing is not generally an option, except potentially for written support (email support, or text messaging support). This also requires more dependence upon another company.

MMORPG Products

It may be possible for users to play in MMORPGs such as Everquest, etc, and build up a character that they can then sell on the Internet, thus converting money from a virtual economy to the real economy. This could only be done if the specific MMORPG allows for such things. Also, it requires the up front capitol of paying for an account, and a computer system capable of handling the game, and a reliable on going Internet connection.

General System Requirements

Each type of intellectual property will generally fit into one of these categories, although specifics will vary.

Minimum Suggested System Requirements for Different Forms of Intellectual Property

Media/Requirements	CPU	RAM	Hard Disk	Other
Text	100 MHz	32 MB	500 MB	USB
Pictures	300 MHz	128 MB	1 GB	USB & Potentially a Digital Camera or Scanner
Sound	1 GHz	256 MB	10 GB	USB or Firewire, Sound Cards & Recording Equipment
Video	2 Ghz	1 GB	100 GB	USB or Firewire & Video Camera & Capture Capability

As can be seen from this chart, generally text and pictures can be produced on the lowest capable machines, and hence generally have a lower startup cost. Since the difference in income is not greatly more significant with Sound or Video, it is generally better to start with selling intellectual property that only incorporates text and or pictures. The requirements to only receive a particular media, without editing that media, is approximately 1/2 of the system requirements for editing that form of media.

Specific Implementation of this Theory

Extraordinary School Project/Northern Computer Center, Ghana

Influences on Research

This research project has been influenced by the following people, organizations, and works:

• Muhammad Yunus & the Grameen Bank
• The World Is Flat written by Thomas Friedman
• W. Edwards Deming and others influential in Total Quality Management
• Bono and his work with the ONE Campaign