In May, 2006 the MIT Media Lab unveiled its first working prototype of the $100 laptop. The non-profit One Laptop per Child (OLPC) was spun out of the Media Lab to manage the design. The result is small, brightly-colored and rugged laptop that may cost as much as $140. Designed to the specifications of the world’s poorest children, they are the great hope for narrowing the global digital divide.
Before they ship the final product in 2007, OLPC will pilot prototypes in the six countries listed in the chart below. The plan is for the governments of developing nations to purchase millions of these laptops and distribute them to children through their schools.
While I applaud the goal of providing an ultra-affordable laptop to the bottom of the pyramid market, I do worry about the re-sale of these high-value items. OLPC has eventual plans to create a secondary market for the sale of $100 laptops in developed world. From the OLPC FAQs:
Will OLPC spin-off a commercial subsidiary?
The idea is that a commercial subsidiary could manufacture and sell a variation of the OLPC in the developed world. These units would be marked up so that there would be a significant profit which can be plowed into providing more units in countries who cannot afford the full cost of one million machines.
The discussions around this have talked about a retail price of 3× the cost price of the units.
$100 in Nigeria is the equal to nearly two months income. To give Americans a sense of how much $100 is to the average Nigerian, imagine sending your 8 year old to school with a $6,000 laptop. Now imagine living in a country with an epidemic of corruption, in a shanty with no electricity or running water. If laptops were selling for $300 in developed nations, it would provide a strong, and unfortunate, incentive for Nigerian parents to sell their children’s laptops.
Leapfrogging technologies is a worthy goal, but OLPC has to make sure that the social institutions in their target markets can support the landing. They must concentrate as hard on issues such as corruption and cyclical poverty as they do on the design of motherboard and screen brightness. We’ve seen before with the example of SCANWATER that good technology will fail without first addressing underlying problems.
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Sources: Statastic research, Wikipedia, IMF
Notes: PPP was not used because the calculation expresses $100 in an approximated nominal US income per capita. The statastic was calculated by dividing the nominal GDP per capita in these 7 countries by $100. That percentage was then multiplied by the nominal GDP per capita of the United States.
How Relative is $100 Dollars Per Laptop?…
While Satatic doesn’t have the latest prices, its $140, not $100 dollar laptops, they did do a very interesting comparison of $100 for different countries targeted by OLPC. Using per capita GDP, Statastic, made this handy-dandy chart to show how……
August 11th, 2006, at 9:32 am #The Unofficial One Laptop Per Child Website mentions that OLPC chief Nicholas Negroponte “said that theft was an acceptable distribution method” for the $140 laptops.
Corruption will certainly redistribute resources quickly, but it will not do so in a way that satisfies the mission of “an overall rise in educational outcomes in the countries where the OLPC is used.” Corruption (and theft) exacerbates income inequality by exploiting and reinforcing existing power structures. And corruption is a very real issue in the countries they expect to help. Transparency International has bestowed Nigeria with the dubious distinction of being the 3rd most corrupt country on earth (you’ve probably seen emails from their many princes).
Instead of creating a tiered pricing scheme that incentivizes poor Nigerians to sell their laptops for double or triple the local price, perhaps OLPC should flood the developed world markets with $300 laptops. The profits that they generate could help lay create the educational institutions that are needed to make the project a success in the developing world.
Introducing the laptops in the first world would also generate immediate interest from developers. With a proliferation of open source software and an easier physical environment for testing the hardware, the laptops would be more robust. In many of the target countries, these governments may only give these relatively expensive laptops one chance (if that). If they fail, it may be decades before we have another opportunity to narrow the digital divide.
August 11th, 2006, at 1:21 pm #[…] One is about the real price of the laptops for the target countries. The statement that “one image worth more than thousand words” is true, at least seeing this chart from Statastic, comparing the relative value of 100.00 USD for some countries. It is not only that the parents could sell the OLPC for feeding their families, but the potential danger for kids in case thieves decided to make a “business” from stealing and selling the OLPCs. […]
August 13th, 2006, at 1:22 pm #