How to Bring Prosperity to Smaller Town and Rural Areas?

How to Bring Prosperity to Smaller Town and Rural Areas?

Half of global population already lives in cities. By 2050, the number will rise to 70%. However, we witness the widening differences between ever more prosperous large cities, that are winners of globalization, and the rest – small towns and rural areas that are often overlooked and called “flyover country”.

Global extreme poverty is a phenomenon mostly situated in the rural areas and disproportionally affects small farmers. They have to fight with climate change that affects their yields and more extreme weather conditions. Also the quality of public services and infrastructure like electricity and tarmacked roads is a major challenge. Without novel approaches, exponential technologies and out-of-the-box thinking, we might not reach full electrification of rural households in another hundred years.

Mobile banking came from Kenyan country side to the cities in Europe

One of the success stories of development cooperation in the past decade is the invention of mobile banking in Kenya. At the beginning there was a CSR team at Vodafone and a relatively small 1 million matching grant by British development agency, DFID. But the result, a service called M-Pesa that was launched by Safaricom in 2007 revolutionized a whole sector and brought banking and cashless payments to tens of millions of people around the world. Now M-Pesa signs can be seen for example in the Albanian capital, Tirana.

M-Pesa was one of the inventions that helped to change the perspective and narrative about development and innovation – now we accept that social innovations flow both ways – from richer and more developed countries to developing countries, but increasingly also in a reversed direction.

It’s time we make the same paradigm shift between rural towns, villages and bigger cities. In the past two years we can’t stop reading and talking about the threat of automation to the jobs of even white collar workers. The current unease about the future of jobs started in 2016, after the AI software AlphaGo by a British company called DeepMind beaten the Korean champion in the ancient game of Go.

Since then every month brings news about this or that app powered by a machine learning algorithm that has beaten radiologists in diagnosis of cancer, or resolved thousands of parking ticket fines in seconds.

The bright future of dark factories

We now can watch videos of 3D printed houses or 3D printed shoes, and also a race to create the first dark factory in China – called dark, because the owner doesn’t need to install any lighting – because there will be no people in it. This create a strange new world full of paradoxes – automation threatens poorer countries more, as the factories might come back “on shore”, to the rich countries. As we can see with the new high tech factory of Adidas in Germany.

Another trend is miniaturization of exponential technologies, including digital factories and vertical urban farms, and cutting out the middlemen completely. So the food retail chains might soon grow their own vegetables and herbs inside their stores. Clothing retailers may soon sell most of their merchandise online, but produce the clothes themselves in the back of their designer concept stores, only after the customer paid for the custom design he created.

Over the past 20 years we have witnessed only meager improvements in the fashion industry that is still riddled by numerous scandals with stories about sweatshops, child labor and collapsing factories. This might all be over soon, but the future might not be bright for manufacturing workers in the West either – the future might look like a dark factory in the back of some minimalistic concept stores, that sell slow fashion and technical clothing, with social and ecological mission.

Back to the off-grid future

The sci-fi writer William Gibson famously said that “The future is already here – it's just not evenly distributed”. This is often used to describe the differences between infrastructure of rich countries and poor countries. Or the lifestyle of the upper one billion of people, that Swedish statistician Hans Rosling called the flying class. Most of the people within the flying class live in the West and own multiple appliances like washing machines, drive to work and fly once a year to holiday destinations.

But there are strange things happening at the bottom of the pyramid – the five billion people that don’t have washing machines yet. Two billion of the poorest people don’t have even electricity and they cook with open fire. But increasingly they get connected not to the electric grid but to off-grid solar solutions like M-Kopa in Kenya. They pay each month using their mobile phones and M-Pesa. They are also increasingly likely to own smartphones and browse online.

People in the bottom of the pyramid have never worked in manufacturing and probably never will. But paradoxically, they might be the future that is already here but is unevenly distributed. People in the cities, even people in the slums need to work somewhere, otherwise they wouldn’t be able to afford rent on their semi-permanent humble settlements. Most of the poor people are self-employed or work for family businesses, including family farms, – often small shops, restaurants or create and sell craftwork on the streets.

We see the current attention and passion of urban hipsters for everything hand-made and crafted, from beers to soups. It might as well be the shadow of the future that might resemble something that rural youth in global south lives today – they might be crafting something original and artsy for work and chat during leisure time with friends on WhatsApp or watch YouTube videos on their smartphones.

Digital abundance or analog riots?

The strangeness of the economic and social inequalities transcends geographical space. It is not merely the difference between whole cities and the rest – rural areas and small towns. It is also a kind of fractal nature of vast inequalities between two city parts that might be divided by just a tall wall. The richest neighborhoods in some cities might be next to the ever growing slums that were originally places for housing gardeners and other domestic workers that worked in those rich villa mansions.

So we might witness two future scenarios – a further ghettoization and rising inequalities of some urban spaces and gentrification of others.

The question remains if digital technologies will continue to decrease exponentially and reach levels that can transform also the lives of the poorest people – imagine a world with a 10-euro smartphone, 100-euro laptop and 1000-euro personal digital factory. Such price levels and progress in miniaturization of various machines can help rural areas and e.g. their schools to rapidly increase manufacturing capacities and give the tools of digital fabrication also to the hands of artisans.

But many questions remain unresolved and the future is open. If automation displaces labor and economic inequalities grow, we might experience also an increase of political and social turbulence and the growth of differences between large cities and the rest. 

Author: Jakub Šimek / Pontis Foundation


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