Silicon Valley is not the only source of innovation. Especially post-covid, people can work on anything from anywhere: geography is no longer a constraint. Most people think that technology starts in Paulo Alto, spreads across the States, and into Europe, then (perhaps) to China, India, and finally into emerging markets. It's the trajectory that's been commonplace. However, for some technologies, in some environments, whole generations of innovation are skipped. This means we should look elsewhere, in non-obvious places, for the fastest (or most impactful) adoption of technologies.
It's Saturday morning: I've just had my beard trimmed and paid with M-Pesa. I then had a post-workout shake (yes, I work out) and paid with M-Pesa. Safaricom introduced the magnificent and now ubiquitous technology in 2007. It has replaced cash in almost all of the transactions I do daily (even my rent). I pay with Kenyan Shillings but send it through the Mpesa app to a mobile number.
M-Pesa demonstrates a technological leap from cash to mobile money: a leap over bank cards. While I see the odd visa or MasterCard adverts, it's much easier to pay using M-Pesa. The cost is tiny, and it is contactless; I can be in the same room as the recipient or on the other side of the country. I type in their phone number (and it works with iPhones and Nokia 3310s via SMS). Going back to the UK, it feels crazy to return to digging out my wallet, flicking past the Queen's face to my Lloyd's debit, and plugging it into a machine.
Remarkably, the penetration of mobile money accounts is 10 per cent or more in 13 countries around the world. All 13 are in Sub-Saharan Africa. From a World Bank report in 2015:
Mobile money accounts are especially widespread in East Africa, where 20 percent of adults reported having a mobile money account and 10 percent a mobile money account only (map 1). But these figures mask wide variations within the sub-region. Kenya has the world's highest share of adults with a mobile money account, at 58 percent, followed by Somalia, Tanzania, and Uganda, each with about 35 percent. In southern Africa, penetration of mobile money accounts is also relatively high, at 14 percent.
Similarly, few people in Kenya have landlines, and there is no widely used national postal service (there is no junk mail delivered every day, unlike in the UK). The explosion in mobile phone access (see smartphone use here) meant that neither is needed, as WhatsApp and email have stunted the development of their analogue counterparts.
Globalisation is rarely consistent. It's the spread of technologies and innovations that disrupt markets to a greater or lesser extent. Uber is a disruptive technology, and it globalised quickly; many tech companies (basically from Groupon onwards) globalise remarkably fast.
Last week I quoted Carla Perez's five 'Techno-Economic Paradigms' (TEP). These, listed below, each of these paradigms started somewhere and spread. From Cromford to Michigan, these TEPs globalised.
The Industrial Revolution began in Great Britain in 1771, with the opening of Arkwright's mill in Cromford
The Age of Steam and Railways began in the United Kingdom in 1829, with the test of the 'Rocket' steam engine for the Liverpool-Manchester railway
The Age of Steel, Electricity and Heavy Engineering began in the United States in 1875, with the opening of the Carnegie Bessemer steel plant in Pittsburgh, Pennsylvania
The Age of Oil, the Automobile, and Mass Production began in the United States in 1908, with the production of the first Ford Model-T in Detroit, Michigan
The Age of Information and Telecommunications began in the United States in 1971, with the announcement of the Intel microprocessor in Santa Clara, California
Not everything globalises at the same speed. Today, because of the Age we live in, new technology globalises faster—tech enables it. 'Most books about the future are really books about the present', said Lord Rees-Mogg, in 1995. The future, today, may not be here (in Kenya, or in London for that matter), but it will get here at some point soon.
The decentralised, trust-less, Web3 world is bound to be disruptive. Money, and assets, will move beyond the reach of the state; their monopolistic control of their wealthiest citizens will begin to wane. The returns to having flabby institutions with standing armies will diminish. Although I doubt we will see the end of the state, we'll undoubtedly see a growth in the use of blockchain technologies.
With Bitcoin, it was not obvious for the first country to adopt the technology to be El Salvador. But, on reflection, it will likely be the countries with the weakest exchange rates that align themselves with the deflationary Bitcoin. The US, with its global reserve currency, will likely be the last to adopt.
Moreover, Web3 allows people to own the voting system they participate in. The system would be fully decentralised and evolved by its members voting (a utopian democratic system without the legacy of First Past the Post or the House of Lords)
Web2 services are broadly satisfactory in the UK, America and Europe. Their weaker penetration in other markets (specifically those in emerging markets) may mean that their Web3 successors make the jump to widespread adoption there, first. I bet the most exciting applications of Web3 will grow fastest in emerging economies (or dictatorships, which dictate 53% of the worlds population), where there is a greater need for trust.
Live well,
Hector