Impact of Mobile Phones on Kerala Fishing Communities

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Key Thesis

“ Farmers, forever at the mercy of the weather, insects and crop blights, suffered from ‘informational asymmetry’ in the marketplace: the buyers have always known more than the sellers, using that information to their advantage.  Hyperconnectivity has disrupted that informational arbitrage.”


Case study

Excerpt from the Next Billion Seconds, the book by Mark Pesce: the Impact of Mobile Phones on Kerala Fishing Communities

Mark Pesce:

“For thousands of years, fishermen from the Indian state of Kerala, sailed their sturdy boats into the Indian ocean, dropped their nets, said their prayers, then pulled the sea’s bounty aboard their craft.  Once they’d filled their hold, the fishermen would head back to the mainland.  At this point, they’d be faced with a choice: where should they sell their fish?  The Kerala coastline, dotted with ports and markets, offers fishermen numerous choices, and the markets need fish every day.  Working from instinct and memory, the fishermen would pick a port, and sail into it.

Inevitably, other fishermen would have had the same idea, would dock at the same port, at near the same time, their holds also filled with freshly-caught fish.  Suddenly there’s a problem of oversupply: Too many fish for sale means low prices in the fish market.  A fisherman might just barely cover their costs, no matter how hard they worked, or how many fish they caught.  Meanwhile, just a few kilometers up or down the coastline, another fishing port had been forgotten by the fishermen that day.  No fish for sale in that fish markets, at any price.  The Kerala fishermen had grown used to their subsistence lifestyle, and Keralan fishmongers to their inconstant supply.  It’s just the way things were, the way they’d always been.

In the 1990s, the Indian government auctioned radio spectrum to telecommunications companies, and in 1997, mobiles came to Kerala.  As is the case everywhere, the first mobiles were expensive to own and use, so only the wealthy could afford them.  The cheapest mobile cost a month of an average fisherman’s income.  (In Australian terms, that would be around $4000 for a mobile, or about the cost of five top-of-the-line smartphones.)

Cell towers began to spring up all over Kerala (no government paperwork required, just raise a mast and plug it in) including the coastline.  This gave the beaches of Kerala excellent mobile coverage, and, because radio signals travel in straight lines, it also extended that coverage out to sea for over twenty kilometers.  Anyone could make a call from the middle of the Indian ocean, almost out of sight of land – if they had a reason to make a call.

The most prosperous Kerala fishermen owned more than one boat.  Proceeds from that fishing fleet gave one fisherman enough spare cash that he could purchase a mobile.  The mobile went out to sea with that fisherman, and at some point – no one knows precisely who, or where, or when – someone called the fisherman while out to sea.  Over the course of that conversation, the fisherman learned about a fish market going without fish that day.  The fisherman immediately set his sails for that port, and made a tidy profit from his eagerly awaited fish.

The next day, while still at sea, the fisherman phoned around, calling each fish market in succession, learning which markets most needed fish.  That day the fisherman made another excellent return on his catch.  The same thing happened the day after that, and the one after that.  With his mobile to check the markets, every day brought a very nice profit. The fishermen of Kerala are a community, and although they may not reveal to one another their favorite fishing spots, news of the mobile fish market spread quickly throughout the length of the state.  Within a few months, every fisherman, from the poorest to the most well-off, owned a mobile, using it to check prices at several markets before selecting a port of call.  Three things happened as a result: every fish market now had a supply of fish; the price of fish at one market matched the price of fish in every other market; and the fishermen now got the best possible price for their fish, every day.  That mobile, which had cost them a month’s income, paid for itself in just two months.

All of the inefficiencies and friction in human communication (markets are one aspect of communication) fell away as the Kerala fishermen used their mobiles to extend their reach, improving  circumstances for both sellers and buyers, a true win-win.  The friction that kept the fishermen poor and poorly informed melted under the heat of connectivity, and the dross of market inefficiencies boiled away, leaving only the gold of commerce.  This happened not because of some top-down mandate, but from a bottom-up process in which people connect, share what they know, learn from one another, then put that learning into practice.

Kerala was an early example, but far from the only one.  Farmers, forever at the mercy of the weather, insects and crop blights, suffered from ‘informational asymmetry’ in the marketplace: the buyers have always known more than the sellers, using that information to their advantage.  Hyperconnectivity has disrupted that informational arbitrage.” (http://blog.futurestreetconsulting.com/2011/10/06/hypereconomics/)

Source

Book: The Next Billion Seconds. Mark Pesce.

URL = http://thenextbillionseconds.com/