Meaningful Broadband: Bangladesh

A few years ago, after DDI’s Craig Warren Smith lectured in Dhaka, we were invited by Bangladesh’s prime minister to bring our Meaningful Broadband framework to that country. But we were not ready. We needed to go further in Indonesia where were testing our model in Indonesia’s regions and, quite frankly we did not have the right person to work with to drive Meaningful Broadband-Bangladesh.

But here in Seattle we began working with a bright young economics grad student in “development economics” named Dipanwita Barai, pictured above. She is DDI’s latest researcher with the right ideas and passion needed to do the job. She spent August 2018 in Bangladesh to consult with Bangladeshi stakeholders on the design and activation of test-market activity for Meaningful Broadband.


How Jeff Bezos Could Remake Philanthropy

The news from Forbes that Jeff Bezos is officially the world’s richest person reminded me immediately of a chat I had decades ago with my first mentor, a brilliant economist named Kenneth E Boulding, nominated repeatedly for the Nobel Prize in economics. As his research assistant 50 years ago, he made an off-handed comment that changed my life.

“As capitalism matures, it will reach a crisis when just a few of the richest business leaders will own most of the world’s wealth.” He said. “At that point, the key to the very survival of capitalism and to democratic societies will rest with the philanthropic foundations created by the these wealthiest of these individuals.”

His comment led me to the ambitious decision to become an adviser to philanthropists, a career that culminated in a consulting role in the l990s when my role was to design Microsoft’s corporate philanthropy and create the strategy framework that led to the Bill and Melinda Gates Foundation. Back then, I was doing a lot of networking among Seattle’s up and coming digital philanthropists. One of them was Jackie Bezos, whose son Jeff had just put her and her husband Mike in charge of the family foundation. “It allowed our son to focus their energies strictly on his business agenda. After all, he is trying to leverage his position as an online bookseller to become a player in all of retail,” she said, sighing. A concerned mom, Ms. Bezos told me, “I really do think that Jeff is trying to do too much.”

Well, since then, Jeff Bezos did a lot. He made more money more quickly than any other human in history. Warren Buffet says he’s got the smartest business mind of our era. With 17% ownership of Amazon stock, his current fortune seems only to be the beginning of his personal fortune.

And yes Boulding’s prediction has come true. According to Oxfam, just eight persons own wealth equal to the combined wealth of the bottom half of the world’s economy. So it makes sense to inquire what sort of philanthropy concepts are emerging from the top of the heap and what sort of incentives are encouraging and shaping their donations.

We should begin by considering the incentives that are likely to shape Bezos’ future donations.

One incentive, to be sure, is to maintain the essentially deregulated nature of telecommunications in the digital era. Amazon is considered target number one by those who would seek to reign in the “winner-takes-all” economy. Even the Bezos-owned Washington Post published an article questioning whether Amazon is getting too big. In the wake of its big charge against Google, the EU has a far lower bar than the US for anti-trust violations. In the past, Amazon’s chief counsel, David Zapolsky has been keeping litigators at bay by arguing that the company benefits consumers by their lowering prices. But now in the Trump era, economic nationalism is the new cause.

Interestingly, that matter relates to philanthropy. The real question is how Amazon’s wealth — even the amount in Bezos personal bank accounts– could be put to optimal use.

If it could be used to restore balance as the economy that Bezos himself is disrupting through ecommerce, his outsized wealth (and Amazon’s big market share in many industries) may well be justifiable.

So here’s DDI’s recommendation. For Amazon’s own good and the good of society. Bezos should be as bold in philanthropy as he has been recently in his invasion of the grocery business in the World Foods purchase. Well, bigger actually. Our recommendation is that he should announce a big personal philanthropic foundation that outpaces Bill and Melinda Gates Foundation in size and scope. His cause? It should be the same cause as his business: to transform the Internet. He could use his cash, his expertise and his passion to fix the global internet so that reaches every one and helps everyone.

It may seem shocking that we propose that he link his personal giving with his business interests. Isn’t that a no-no? After all, no direct relationship is legally permissible between a CEO’s personal giving and his or her business. But an indirect relationship is fair game and it is safe to say that a philanthropist does the most good for society by doing what he knows best. In Bezos case what he knows best is how to bend the internet to meet specific purposes – which could be social as well as economic.

A good example is George Soros, whose Open Society Institute, is the philanthropic correlate of the philosophy he used to reap billions in business. There is no reason that itself could not or should not reap a dividend as a result of the impact of its founder’s own philanthropy.

If there is any doubt about this, we need only look to the very successful example of Bill Gates, whose philanthropy had a very positive – but appropriately indirect – effect on his business that did not raise eyebrows in the legal community. In the year, 2000 the US Department of Justice ordered the break up of Microsoft on the grounds that it was an illegal monopoly and guilty of antitrust violations.

After Microsoft’s legal strategy was frustrated, its PR firm went to work, convincing Gates to pursue a “soft path” to success” by announcing the debut of the world’s largest philanthropic foundation: The Melinda Gates Foundation established in that same year, focused on fixing health care among the world’s poor. Though his philanthropy was personal not corporate, his hero image created a kind of golden halo around Microsoft. The breakup of his company eventually became politically untenable and the US. Department of Justice backed off.
With antitrust concerns out of the way, Microsoft’s stock value continued its steady climb, increasing many times in value till. Gates became the richest person in the world by 1994, a status that he held for 21 years till now, despite (or perhaps because of) his big giveaways.

Bezos has even more reason now to follow the same path. With 17% of Amazon’s stock portfolio now worth about $500 billion. Of that, Bezos owns 15% of Amazon, while Gates owns just 4% of Microsoft. World governments are alarmed. For good reason. Bezos wealth jumped $43.5 billion in just the past two years.

Beyond these macroeconomic concerns is the Trump factor. Every day the opinion pages of the Bezos-owned Washington Post gives a poke in the eye to the President of the United States who put “raising Amazon’s taxes” on his to do-list for this first 100 days. It is only a matter of time. In Asia, where Alibaba is Amazon’s big competitor, Bezos’ personal leadership could shape public/private partnerships that will be welcomed from Delhi to Jakarta.

With his inspiration clearly tied to the space-travel plans of Blue Origin, Bezos seems not yet to have given serious consideration to how his insights and resources could combine to solve big problems here on earth.

Can This Guy Regulate Tech?

The mood among telecom regulators worldwide is to reign in tech companies so that they optimally serve the public interest. How to do that? Check out this guy.

One answer is to get ideas from a US Congressman named Ko Kannon. He is filling a void in Washington, helping lawmakers consider what do about Facebook after CEO Zuckerberg’s hearing embarrassed lawmakers who didn’t even understand how facebook works. The most significant aspect of his views is that tech companies shouldn’t just lower costs or improve services to consumers. They should support community and economic development. He may be the key to “smart regulation” of ICTs in developing nations.

Can Asia’s villages benefit from the spread of Ecommerce into the countryside?

This brief blog post announces Digital Divide Institute’s newest initiative: “Ecommerce for All.” This is an economic modeling exercise which brings together stakeholders from around the world to consider the socioeconomic impact of ecommerce as it spreads into developing nations. Rather than stress the dangers or benefits of ecommerce we are simply going to predict outcomes of ecommerce under various regulatory and market conditions in a number of key emerging-market nations. This is intended to advise governments seeking to regulate ecommerce. We aim to show that ecommerce could dramatically benefit or harm nations depending the nature of business-government interactions and the pattern and timing of investments.

The initiative comes at a tender moment. As ecommerce growth tapers in advanced nations, its fastest growth is now in developing nations, particularly those in Asia. One must note the enormous benefits that can be brought to their “digital economies.”

Asian ecommerce markets are quickly being saturated in urban middle class enclaves. From India to Brazil, most citizens are shut out of ecommerce and are not able to receive its many benefits unless governments step in. The problem is not a new one. It is called the “Digital Divide” which separates those able to benefit from digital technology from those who cannot. After 25 years of efforts, governments have failed to establish the complex menu of policies and campaigns to close the Digital Divide.

Among these nations, the ecommerce boom has outpaced the ability of governments to consider what policies should be in place to make ecommerce work optimally for their citizens and small businesses. Chief among their concerns is the matter of “digital divide.” Though educated middle class consumers who share Western lifestyles are able to benefit, they are zooming ahead of three 2.5 billion less fortunate Asians, mostly located outside major cities who lack access to the logistics, finance and distribution systems.

Facing political fallout as gaps between rich and poor accelerate, many developing nations are rapidly struggling to revamp

Digital Divide Institute Activates New Partnership with Indonesia

After 10 years as an advisor for Indonesia, Digital Divide Institute has inked a formal agreement that went into effect July 1, 2017. Funded by the government’s ICT ministry, it activates DDI’s role in recommending financial innovations and partnership arrangements tied to legal and regulatory reforms. “The aim of our new partnership with DDI chairman Prof. Craig Warren Smith is to jump-start ‘meaningful broadband ecosystems’ for those who are likely to remain unserved by market forces unless we adopt this innovative approach to finance,” says Ilham A Habibie, Executive Lead of the National ICT Coordinating Council (“Wantiknas”). DDI’s upcoming report submitted to the government will produce the financial modeling for 2018 through 2030 that shows how multiple instruments of finance – domestic and foreign investments, loan guarantees, budgetary and extra budgetary funding by government agencies at national, provincial and district levels can be combined for the first time. DDI will add to this mix other unusual sources of finance such as venture philanthropy, social venture capital and a role for intergovernmental agencies such as World Bank, Islamic Development Bank and China’s new “Belt and Road Intiative,” also called New Silk Road. When joined with regulatory and legal incentives and sources of subsidy, DDI will reveal choices that can be made by the Republic of Indonesia to catch up with China and India as revved up digital economies.

Moreover, DDI will add to this mix a role for the $200 million-a-year Universal Services Obligation (USO) Fund, which is designed to augment the social impact of the nation’s telecommunications sector. Rather than view this fund as a stand-alone pot of money, DDI will show how USO could serve have an economic multiplier impact which drive investments to low income zones.

Here’s the most important point that so far China and India have missed:

Rather than focusing on serving urban markets first and then eventually “trickling down” to Indonesia low income population later, the agreement for broadband development aims to produce financial arrangements that jump-starts fixed and mobile supply and app-development for the nation’s “lower middle class” of 160 million citizens who earn less than $10 per day and who mostly live outside the crowded urban corridors of the vast Indonesian archipelago of 17,000 islands.

The agreement will result in a series of policy recommendations and specific project proposals b

Amazon Meets Indonesia in Seattle

Digital Divide Institute has been facilitating interaction between Indonesia’s government officials and officials at their Seattle headquarters. The meetings considered the possible role that Amazon might eventually play in closing the Digital Divide through meaningful broadband in Indonesia. An outcome of these meetings is that Amazon CEO Jeff Bezos was informally invited to serve as an advisor to the Meaningful Broadband initiative by Wantiknas Executive, Ilham A. Habibie.

The following photo was taken after one of these meetings at headquarters, when officials from Indonesia’s ICT ministry and the government’s ICT coordinating council (Wantiknas) met with’s public affairs manager, Tom Sullivan, to consider Indonesia’s path in eCommerce. DDI’s Craig Smith facilitated the meeting in Seattle.