Rural Informatization in China

W O R L D

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W O R K I N G

Rural Informatization in China Christine Zhen-Wei Qiang Asheeta Bhavnani Nagy K. Hanna Kaoru Kimura Randeep Sudan

THE WORLD BANK

P A P E R

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W O R L D

B A N K

W O R K I N G

P A P E R

Rural Informatization in China Christine Zhen Wei Qiang Asheeta Bhavnani Nagy K. Hanna Kaoru Kimura Randeep Sudan

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Contents Foreword ..................................................................................................................................... v 1. Introduction............................................................................................................................ 1 Notes..................................................................................................................................... 2 2. Development of China’s Rural Information Infrastructure .......................................... 3 Fixed Line Telephony......................................................................................................... 6 Mobile Telephony ............................................................................................................... 6 Radio and Television .......................................................................................................... 7 Internet ................................................................................................................................. 7 Notes................................................................................................................................... 10 3. Rural Informatization Initiatives and Organizational Models................................... 11 Key Rural Informatization Actors and Initiatives........................................................... 11 Organizational Models for Rural Informatization.......................................................... 14 Notes................................................................................................................................... 21 4. Lessons from International Experiences ........................................................................ 22 Government and Donor driven Initiatives and Sustainability.................................. 22 Private Sector Participation ............................................................................................. 24 The Appeal of the Franchise Model ............................................................................... 25 Hybrid Organizational Models....................................................................................... 28 5. Challenges for Rural Informatization in China............................................................. 30 Lack of a Coherent Strategy............................................................................................. 30 Weak Coordination across Ministries and Integration at the Provincial Level........ 30 Unsustainable Business Models and Over reliance on Government Financing ...... 32 Lack of Demand Driven, Locally Relevant Information Resources........................... 32 Low Levels of Public Awareness and Capacity Building............................................ 33 Weak Links to Domestic ICT Industry and Research and Development for Rural Applications ............................................................................................................... 34 Lack of Systematic Learning and Impact Evaluation................................................... 34 6. Recommendations ............................................................................................................... 35 Formulate a Comprehensive and Coherent Strategy................................................... 35 Support Innovative Business Models............................................................................. 36 Consolidate and Share Resources................................................................................... 37 Raise Public Awareness and Build Capacity................................................................. 38 Develop Intermediary Institutions and Networks ....................................................... 38 Ensure Learning, Monitoring, and Evaluation ............................................................. 39 iii

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Contents

7. Conclusions .......................................................................................................................... 40 References................................................................................................................................. 42 Appendixes............................................................................................................................... 45 Appendix 1. Central Government Strategies and Initiatives for Rural Informatization ............................................................................................................ 45 Notes................................................................................................................................... 51 Appendix 2. Analysis of Eighteen Pilot Projects in China........................................... 52 Appendix 3. Impact Evaluation: Rationale, Definitions and Framework for Rural Informatization Pilots.................................................................................................. 54 Note .................................................................................................................................... 58 Appendix 4. A Framework for Evaluation of Eighteen Pilot Projects ....................... 59

Tables Table 2.1. Information Infrastructure Coverage in China, 2007 .......................................... 6 Table 3.1. Rural Informatization Initiatives by Central Ministries and Agencies ............. 11 Table 3.2. Rural Informatization Problems and Attempted Solutions................................ 15 Table A.3.1. A Framework to Evaluate Project Impact....................................................... 57 Table A.3.2. Indicators to Assess Project Impact ................................................................. 58

Figures Figure 2.1. Ownership of Television in Urban and Rural Households, 1990–2006 .......... 7 Figure 2.2. Internet Penetration in Urban and Rural China, 2005–07................................. 8 Figure 2.3. Personal Computer Ownership in Urban and Rural Households, 1999– 2006 ...................................................................................................................................... 9 Figure 2.4. Place of Internet Access, 2007 ............................................................................... 9 Figure 3.1. Key Elements of Rural Informatization Pilot Initiatives ................................... 15 Figure 5.1. Population and Investment Segmentation in China ....................................... 31 Figure A.3.1. Developing Performance and Impact Indicators......................................... 56

Boxes Box 2.1. Central Government Strategies for Rural Informatization, 2001 to Present ....... 5 Box 3.1. Government Model .................................................................................................. 16 Box 3.2. Telecommunications Provider Model.................................................................... 17 Box 3.3. Professional Association/Cooperative Model ....................................................... 18 Box 3.4. Franchise/Entrepreneurial Model........................................................................... 19 Box 3.5. Private Sector Model ................................................................................................ 20 Box 4.1. Public Programs of Access Centers in Chile ......................................................... 23 Box 4.2. E Choupal: An Evolving Infrastructure for Rural Transformation ................... 25 Box 4.3. CDI: A Social Franchise Targeting Disadvantaged Urban Youth ...................... 28 Box 4.4. Gyandoot Program in India .................................................................................... 29

Foreword

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ver the last decade, informatization—the transformation of an economy and society through the effective deployment of information and communication technologies in business, social, and public functions—has been a significant phenomenon in China.

Launched in the coastal urban areas, the process of informatization has rapidly expanded to the inner rural areas, where over half of the country’s population lives.

This means that over 700 million previously unserved rural consumers can now access public services and information.

The Government of China continues to advance the informatization process as part of its strategy to reduce rural poverty and improve the living conditions of farmers.

Finding sustainable models that can be scaled will be critical for China to achieve equitable development across regions, and to reduce the rural urban divide.

The Government of China and the World Bank share a long history of collaboration. It is my hope that this working paper will serve to deepen the understanding of the role of informatization in meeting China’s economic and social needs, particularly with regards to improving livelihoods and creating opportunities for the rural population. We also hope that the experience and lessons discussed here will be useful to other countries.

I would like to express our most sincere thanks to the Advisory Committee for State Information in China for its dedicated support throughout the preparation of this study.

Mohsen A. Khalil Director, Global Information and Communication Technologies Department The World Bank Group

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CHAPTER 1

Introduction

C

hina’s recent economic growth has expanded industrialization and urbanization, upgraded consumption, increased social mobility, and initiated a shift from an economy based on agriculture to one based on industry and services. Still, more than half of China’s people still live in rural areas—where average income per capita is less than a third of the urban average1, a gap that is among the largest in the world.

Reducing these differences is critical to building a harmonious, inclusive society.

In its 11th Five Year Plan (covering 2006–2011), China has adopted a new development paradigm that emphasizes the building of a Harmonious Society (he xie she hui) with more balanced development across regions. The new development paradigm adopts a “scientific view of the development process” that emphasizes sustainable growth and “people centered.” Accordingly, the government has substantially increased its commitment to pro poor, pro rural programs. This new approach is reflected in numerous official statements and many new programs introduced in recent years.

The government is exploring new ways of reducing rural poverty and improving the living conditions of farmers. Until recently China’s poverty alleviation efforts had focused on tackling absolute poverty, but with attention now being turned toward relative poverty reduction and narrowing the rural urban income divide, informatization2—defined as the transformation of an economy and society driven by information and communications technology (ICT)—is increasingly being explored as a way of helping poor people.

Rural populations have dramatically increased their demand for new technologies, policies, and market information, and obtaining useful information in a timely manner has become critical to the rural economy and society. With the arrival of the information age, the market economy in rural areas has been growing, and competition in the expanding economy necessitates access to information—especially in agriculture, which is particularly reliant on information. ICT is being perceived as an effective tool for disseminating information resources widely and cost effectively.

This report draws from background research conducted by the Advisory Committee for State Informatization, and attempts to provide an overview of China’s rural ICT development primarily in the past 15 years. The report first describes the status of China’s rural informatization infrastructure. It then reviews existing rural ICT initiatives in China and summarizes them by organizational models. International examples are included to draw lessons from. Finally, the challenges of rural informatization are examined, and policy recommendations identified to address them.

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Notes

China urban rural income gap continues to widen http://in.reuters.com/article/asiaCompanyAndMarkets/idINPEK1715020080124 2 The term “informatisation” was coined by Simon Nora and Alain Minc in their publication L’Informatisation de la société: Rapport à M. le Président de la République which was translated in English in 1980 as The Computerization of Society: A report to the President of France. However, in an article published in 1987—”The Informatisation of Society” in Evolution of an Information Society, edited by A.E. Cawkell (London: ASLIB)—Minc preferred to use informatisation and not computerization. This publication uses the Americanized spelling, “informatization” and italicizes all general usages as a borrowed “foreign” word.

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CHAPTER 2

Development of China’s Rural Information Infrastructure

C

hina has identified rural informatization as key to achieving nationwide growth and improving people’s capacity for participating in new economic domains. In addition to specific informatization goals in the 11th Five Year Plan, the related deployment of strategies such as the State Informatization Development Strategy, 2006–2020 underscore the importance the government has accorded to rural informatization. Thus the growing digital gap between rural and urban areas has been a mounting area of concern, encouraging the development of numerous policies and initiatives to promote rural informatization and better equip all citizens for participation in the new global order.

Key development objectives of rural informatization in China include:

ɶ Catching up with more advanced regions. Informatization could facilitate contacts and exchanges between China’s central and western regions and more developed regions, allowing farmers and agro businesses to obtain technologies and market information that enable them to make full use of their comparative advantages in developing new products and increasing trade, market share, and ultimately incomes. Furthermore, leading agro businesses in developed regions can show small and low value industries in less advanced regions how to improve their management and technological skills and market competitiveness, reducing regional gaps. ɶ Integrating and modernizing the rural market economy. Most rural enterprises in rural China are small and private. Given their isolation and weak financial foundation, the market economy in rural areas remains underdeveloped.

Better rural information infrastructure can provide market information, communication channels, and financial resources to farmers and rural enterprises, enabling these key players in the rural economy to enter markets and increase their diversification and competitiveness. Such infrastructure can do so by facilitating better farming techniques, helping to choose crops to plant in response to market information, improving production and resource management (for example, through geographic information systems), and reducing marketing costs and exploitation by intermediaries. ɶ Strengthening delivery of social and public services. Government information support systems should aim to capture timely, accurate, comprehensive data 3

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ɶ

ɶ

ɶ

on local economies and social activities. One approach to improving public service delivery is to integrate information on rural economies, science and technology, education, health, social protection, and other areas. The resulting common infrastructure and databases can then be shared across ministries and regions in support of rural service delivery.

Augmenting income and nonagricultural employment through diversification and increased productivity. With information, farmers are better equipped to make important decisions and learn about diversified employment opportunities.

With the growing dependence on the services sector, rural economies could benefit from diversifying into providing local ICT enabled extension services.

Increasing the quality and relevance of information and the human capacity of the rural population. Access to relevant information can transform economic opportunities and improve livelihoods for rural households—especially the poor population and young people. Rural informatization not only direct affects economic development, but it also brings in modern ideas and forward looking mindsets from more advanced regions. This can pave the way for transformative ideas and beliefs, increasing rural, social, and cultural capacities in rural areas.

Enabling participation in formulating agricultural policies and strategies. National development strategies and policies try to involve key stakeholders and the broader public. But it is not easy to involve organizations that represent the rural poor. In recent years, ICT has been used to engage thousands of rural people in developing countries to deliberate policies. The spread of ICT in rural areas makes this type of participatory approach more feasible for dialogue on agricultural policy.

The Chinese government has been promoting rural informatization since the mid 1970s. This process has fallen into three stages. During the first stage, from the mid 1970s to the early 1990s, the initial concept of agricultural informatization emerged from the planned economy’s requirements for agricultural statistics. In the 1980s computers began to be introduced, but it was not until the early 1990s that informatization grew.

During the second stage, from the early 1990s to 2000, computerization of agricultural data was introduced and several systems were developed as part of efforts to establish and improve the socialist market economic system. In 1992 the Ministry of Agriculture issued a plan to strengthen the rural economy’s information system. In addition to promoting rural economic development, construction began on an agricultural information system. Networks developed rapidly and agriculture entered a fast track for informatization, with scattered information becoming more networked.

In 1994 a new department was set up through the institutional reform of the Ministry of Agriculture, and every province created an information department for agriculture.

During the third stage, since 2001, the government has attached even more importance to informatization, taking it to a new level, as Box 2.1. Rapid progress has been made in improving services (from simple one way delivery of government information or services to two way, interactive delivery), content (from the production of basic statistics to comprehensive information on production, markets, and technology), and service models (from simple, traditional service models delivered by

Rural Informatization in China

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individual government departments to innovative partnerships cutting across departments, the private sector, and civil society). With opening markets, nascent efforts are being made to expedite informatization, supported by partnerships and greater investments by the government, telecommunications companies, and the domestic private sector.

Box 2.1. Central Government Strategies for Rural Informatization, 2001 to Present

In 2001 implementation began on the 10th Five-Year Plan of Action for rural market information services. In 2003 a “rural economic information release calendar” was introduced as the main system for disseminating agricultural information, supported by two national conferences. These initiatives had positive impacts inside and outside the agricultural system, leading to a surge in the provision of information systems.

In 2006 the 11th National Economic and Social Development Five-Year Plan proposed to “integrate agriculture-related information resources, strengthen the rural economic information application system construction, promote agriculture service organization and mechanism innovation, encourage and guide farmers to develop different types of specialized cooperative economic organizations and improve the organization of agriculture.”

The related deployment of agriculture informatization in the State Informatization Development Strategy, 2006–2020 (issued in 2006 by General Office of the CPC Central Committee and General Office of the State Council1) aims “to use the public network with a variety of access methods and affordable prices for farmers, improve rural network coverage, integrate agricultural information resources, standardize and complete the public information intermediary services, build the urban-rural information service system in a concerted manner, provide farmers with appropriate information applications such as market, science and technology, education, healthcare, etc. and advocate a reasonable and orderly flow of surplus rural labor.”

In 2007 the Ministry of Agriculture proposed the Overall Framework for National Agriculture and Rural Informatization Construction, 2007–2015. The strategic goal of this framework is to greatly improve agricultural and rural integrated information infrastructure; enhance modern agriculture, rural public services, and social management; fully develop information service organizations at the township and village levels; and gradually complete a sustainable development mechanism for agricultural and rural informatization—which would fulfill the development needs of modern agriculture and the construction of a new socialist countryside.

Sources: Ministry of Agriculture Web sites: http://agri.gov.cn/gdxw/t20071207_933887.htm http://www.agri.gov.cn/xztz/t20071129_929804.htm

With the increasing priority accorded to informatization by the Chinese government, numerous initiatives by the government and by telecom providers have resulted in a steady increase in the coverage of information infrastructure—including fixed line telephony, mobile telephony, radio and television, and the Internet as seen in Table 2.1. Such initiatives provide an adequate foundation for informatization, especially in rural areas.

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Table 2.1. Information Infrastructure Coverage in China, 2007

Category

Coverage

Year Referenced

Source

Fixed line telephony

• 99.5 percent of administrative villages covered • 29 provinces covered (all administrative villages)

2007 (Lit Review paper)

Ministry of Information Industry: Rural Informatization construction column

Mobile telephony

• China Mobile’s rural information network to improve services to 800 million farmers

Initiated in 2006

China Daily online

Radio and television

• 117,000 “blind” administrative villages covered (those with electricity but no telecommunications) • 100,000 “blind” villages with more than 50 households covered • 15,000 “back to blind” (villages that had once, but lost telecom service) villages repaired

End of June 2006 (Lit Review paper)

State Administration of Radio, Film and Television: related statistics

Internet

• 97 percent of townships and villages have Internet coverage • 92 percent of townships and towns have broadband coverage • Government aims to provide every village Internet access by 2010 • Initiatives under way for fiber optics to reach every village and household

2008

2

Ministry of Information Industry, China Daily online

Fixed Line Telephony The Ministry of Information Industry has been active in encouraging the spread of fixed line telephony under its initiative to extend telephone coverage to every village.

Under this project, in 2007 the six main telecommunications providers shared obligations based on geographic divisions and extended telephone services to 3,759 administrative villages that previously had no access. Today 99.5 percent of administrative villages have fixed line coverage.

Mobile Telephony By 2007 China Mobile launched a rural information network in 20063 in which it has invested 350 million RMB (equivalent of US$51 million) The company will enhance this network through further construction in Chongqing, turning it from the center of the western region into the national center, and raise the network’s operation supporting ability to promote its sustainable development. By 2009 China Mobile plan to invest 450 million RMB (equivalent of US$66 million) to optimize the functions of the network, which offers better services to 800 million farmers across China.

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Radio and Television Efforts to extend radio and television coverage have been led by the State Administration of Radio, Film, and Television, which in 2002 launched a project to extend telecommunications to every village as part of the 10th Five Year Plan. By June 2006 investment in covering administrative villages totaled about 3.64 billion RMB (US$532 million). This project has reached about 117,000 administrative villages with electricity but no telecommunications—known as “blind” villages—and repaired services in 15,000 “back to the blind” villages (those had had telecommunication services once, but later lost the services) providing nearly 100 million farmers with access to radio and television. As a result rural ownership of personal televisions has steadily increased, reaching 89 percent of households in 2006 (Figure 2.1).

Figure 2.1. Ownership of Television in Urban and Rural Households, 1990–2006

160 per 100 households

140 134.8

120

116.6

100

89.79

80 60

89.43 84.08

59.04 48.74

40 20 0

137.43

16.92 4.72 1990

1995

2000

2005

2006

year Urban

Rural

Source: National Bureau of Statistics. 2007.

Internet China’s Internet market is migrating from narrowband to broadband access. China Telecom and China Netcom, the two main fixed line operators, have laid out plans for extending broadband access under an initiative to reach every household with fiber optics and started to replace copper cables. China Netcom will invest 15 billion RMB (US$2.2 Billion) to replace the copper cables with fiber optics in the new network, which will launch in 2008 and is expected to be completed in three to five years (Sina 2007).

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In 2008 China Netcom planned to implement this initiative in the medium size and large cities of 10 selected provinces (regions, metropolitans) in northern China, the company’s territory. Henan, Shandong, Tianjin have already begun implementing a pilot project to reach every village with fiber optics.

The number of broadband users in China has grown rapidly in recent years.

According to data from the China Internet Network Information Center, the country has 210 million Internet users by the end of 2007—lagging the United States by just 5 million. At that time 78 percent of China’s Internet users were broadband users (CNNIC 2008).

Still, significant differences remain between urban and rural Internet development.

By the end of 2007 there were 157 million urban Internet users in China, accounting for 27 percent of the urban population. By contrast, the 53 million rural Internet users accounted for just 7 percent of the rural population (Figure 2.2).

Figure 2.2. Internet Penetration in Urban and Rural China, 2005–07

30% 27.0% 25% 20.2% 20%

16.9%

21.6%

18.0%

15% 10% 5.1% 5%

2.6%

3.0%

7.0%

3.1%

0% 2005.12

2006.6

2006.12 Urban

2007.6

2007.12

Rural

Source: CNNIC 2007, 2008.

Internet access depends on ownership of personal computers (PCs). In 2000 about 10 percent of urban Chinese households owned a PC, compared with less than 0.5 percent of rural households. By 2005 that gap had widened (Figure 2.3). Access charges are one of the main reasons for lack of Internet access (CNNIC 2008). Internet access costs average 900 RMB a year per household. Given that China’s per capita income is still very low—especially in rural areas, at about 3,600 RMB a year—rural household access to the Internet is unlikely to expand anytime soon.

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Figure 2.3. Personal Computer Ownership in Urban and Rural Households, 1999–2006

per 100 households

50

47.2 41.5

40 33.1

30

27.8 20.6

20 13.3

10

9.7

5.9 1999

2000

2001

2002

2003

2.1

1.9

1.4

1.1

0.7

0.5

0

2004

2005

2.7 2006

Year Urban

Rural

Source: National Bureau of Statistics. 2007.

About 54 percent of rural Internet users access it from Internet cafes—a very high share relative to the national average of users accessing the Internet from Internet cafes (33.9 percent). Lower rural incomes4 explain the lower possession of home computers in rural areas (Figure 2.4).

Figure 2.4. Place of Internet Access, 2007

80% 67.3% 60%

55.2%

40%

53.9%

33.9% 24.3%

20%

13.7%

0% Home

Internet Café National average

Work

Rural area

Source: CNNIC 2008.

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There is also a large gap in connection times, with rural users averaging 13.7 hours a week compared with 20 hours a week for urban users. Because of their shorter connection times, rural Internet users focus on basic applications such as e mail and instant messaging, and tend not to make full use of more advanced and integrated applications such as Internet news and e services (including online banking, shopping, and stock exchanges). That disparity may widen the information gap between urban and rural areas even though basic voice infrastructure in rural areas has improved over the past decade. Thus, analyzing the public access business model in rural areas is crucial in terms of Internet development and deployment.

Notes

www.china embassy.org/eng/xw/t251756.htm http://www.chinadaily.com.cn/bizchina/2008 02/10/content_6447433.htm 3 http://www.chinadaily.net/bizchina/2008 03/03/content_6502654.htm 4 According to 2006 census by the National Bureau of Statistics, per capita income in rural areas was 4140 RMB (US$580) per year, which is a third of incomes in urban areas.

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CHAPTER 3

Rural Informatization Initiatives and Organizational Models

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iven the priority that China’s government has placed on building the socialist countryside, a growing range of actors have become involved in rural informatization. These activities have involved an array of organizational models—and, to succeed, should draw on the wide range of related international experiences.

Key Rural Informatization Actors and Initiatives Government agencies

Many government ministries and agencies at all levels (from central to local) are involved in rural informatization projects and are pursuing similar goals. But these efforts are pursued under each organization’s individual mandate and with little apparent coordination (Table 3.1). Every ministry has initiated its own informatization program, such as the Ministry of Agriculture’s Golden Agriculture Project and the Ministry of Culture’s National Cultural Information Resources Sharing Project. Other key players include the Ministries of Commerce, Education, Information Industry, and Science and Technology (see Appendix 1). Agencies with primary policy and coordination functions have also engaged in national and provincial pilot projects, including the Central Committee of the Communist Party of China, National Development Reform Commission, State Administration of Radio, Film, and Television, State Council Leading Group Office of Poverty Alleviation and Development, and Ministry of Finance.

Table 3.1. Rural Informatization Initiatives by Central Ministries and Agencies Ministry/Agency

Mandate

Key Projects

Year(s)

Central Committee of the Communist Party of China (CCCPC)

China’s central strategic body, with members selected by election. The committee’s main focus is improving agricultural productivity and increasing the income of farmers.

Modern Distance Learning of National Party Cadres in Rural Areas Project

2003– 2006

(Table continues on next page)

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Table 3.1 (continued) Ministry/Agency

Mandate

Key Projects

Year(s)

Ministry of Agriculture

First player to launch rural informatization projects to improve the agricultural and rural integrated information platform, and adopt informatization to support modern agriculture, rural public service, and social management.

Three in One (Telephone, Television, and Computer) Agriculture Information b Services Project

2005

Golden Agriculture Project

2007

Overall Framework of National Agriculture and Rural Informatization, 2007–2015, a and pilot projects

2007

Responsible for formulating development strategies, guidelines and policies of domestic and foreign trade, investment, and international c economic cooperation

Thousands of Villages and Townships Project

2005

Xinfu Project (Commercial information services system for the countryside)

2006

In charge of public libraries and overall culture activities.

National Cultural Information Resources Sharing Project

2002

Comprehensive Culture Station Project

2006– 2010

Ministry of Commerce

Ministry of Culture

Ministry of Education

Central government agency under the State Council, responsible for China’s educational undertakings and d language work

Distance learning project in rural primary and secondary schools

2003

Ministry of Finance

Formulates and implements strategies, policies and medium-and-long-term development plans and reform programs of public finance and taxation; participates in macroeconomic policy making; provides policy advice on macroeconomic e regulation

National Cultural Information Resources Sharing Project (In collaboration with Ministry of Culture)

2002

Distance learning project in rural primary and secondary schools (In collaboration with Ministry of Education)

2003

Extend Telephone Coverage f to Every Village Project

2004– 2005

Rural Comprehensive Agriculture Informatization Service Pilot Project

2006

State Agricultural Science and Technology Park Development Program

2007

“Spark” Agricultural Science and Technology 110 g Information Services Project

2005– 2010

Ministry of Information Industry

Ministry of Science and Technology

Focuses on building network infrastructure, expanding telecommunications coverage in rural areas, and promoting information technology applications in agriculture.

Provides science and technology information for rural residents.

(Table continues on next page)

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Table 3.1 (continued) Ministry/Agency

Mandate

Key Projects

Year(s)

National Development Reform Commission

Macroeconomic management agency under the State Council, which studies and formulates policies for economic and social development, maintains a balance of economic aggregates and guides the overall economic system h restructuring

Pilot Project for Rural Informatization

Under development

State Administration of Radio, Film, and Television

In charge of regulating the broadcasting industry and administering radio spectrum for broadcasting.

Extend Broadcasting (TV, and Radio) Coverage to Every i Village Project

2006–2010 (phase 2)

State Council Leading Group Office of Poverty Alleviation and Development

A deliberative and coordinating organ, tasked with organizing investigation and subsequent research; formulating guidelines, policies and plans for developing the economy in backward areas; coordinating the efforts to tackle the key issues arising from development initiatives; supervising, inspecting development projects and facilitating the exchange of j lessons acquired

Pilot Project for Rural Informatization in 1,000 Villages

Under development

Source: Authors analysis.

Notes: a. http://www.agri.gov.cn/jhgb/t20080321_1029943.htm b. http://www.agri.gov.cn/jhgb/t20080321_1029944.htm c. http://english.mofcom.gov.cn/mission.shtml d. http://www.moe.edu.cn/english/ministry_f.htm e. http://www.mof.gov.cn/english/english.htm# f. http://www.miit.gov.cn/col/col4586/ g. http://www.most.gov.cn/zfwj/zfwj2004/zf04wj/zf04bfw/200412/t20041228_31393.htm h. http://en.ndrc.gov.cn/brief/default.htm i. http://news.xinhuanet.com/misc/2007 03/06/content_5806935.htm j. http://en.cpad.gov.cn/organ/index.html

In addition to centrally driven programs, every province considers rural informatization an important part of local socioeconomic development plans.

Telecommunications providers

China does not have a universal access policy for telecommunications, such as a fund for financing infrastructure expansion in underserved and unserved areas. As part of complementary goals to assume social obligations and develop rural markets, China’s telecommunications operators actively participate in expanding rural informatization. In 2004, the Ministry of Information Industry initiated a project to make telephone services available to all villages, requiring the six main state owned telecommunications

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providers1 to share universal access obligations based on geographic divisions. These operators increasingly view rural informatization as a strategic move, as urban markets reach saturation.

Private information technology firms

Multinational corporations like Intel and Microsoft also play a role in rural informatization—particularly in promoting innovation and research and development (R&D) in partnership with domestic public and private actors. Intel, for example, is interested in building business in rural China. It has two rural projects: a joint venture to build a “farmer PC” and a partnership to provide computers and Internet access through rural chain stores.

The farmer PC, adapted to meet the low costs and simple needs of farmers, is built locally in a joint venture with two local companies. Research on farmer needs is conducted in partnership with the Ministry of Information Industry. The rural chain store project is done in partnership with local providers and delivers ICT, training, and information services to farmers through standardized stores in several provinces (discussed further in the next section). In addition, Microsoft has supported not only the creation of 30 community technology learning centers, working with nongovernmental organizations (NGOs) and sometimes local governments in 14 provinces and conducting outreach to disadvantaged groups, also rural computing initiatives. In Xinjiang, Microsoft provided digital literacy content and training in libraries and Internet Cafes across the area.2 Although these pilots are relatively small, they have the potential of providing opportunities for R&D and access to global best practices.

Nongovernmental organizations and professional cooperatives

NGOs take bottom up approaches to rural informatization, typically targeting the poorest rural areas. For example, the Poverty Alleviation and Development Association of China launched the Village Net Project in December 2006, and has already set up three pilot projects in Yang gao County of Shanxi Province, a typical underdeveloped agricultural production area; Wu yi shan City of Fujian Province, which has represented the county level city with featured economy; and Peng jie Town in Tai zhou City of Zhejiang Province, which is the representative of more developed areas.

Organizational Models for Rural Informatization A growing number of pilot projects have emerged in recent years under the direction of the actors noted above—working individually or in partnership with other members engaged in rural ICT development efforts—to address the problems of rural informatization in China using innovative service offerings and business models. Key elements of the business models for these pilot projects are described in Table 3.2. See also Figure 3.1.

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Table 3.2. Rural Informatization Problems and Attempted Solutions Problem

Attempted Solutions

Poor residents and limited affordability of ICT access

Shared usage and service access points such as telecenters—for example, information stations that serve large numbers of potential users at low or no access cost

Limited sustainability of funding and excess reliance on government support

Diversified funding, with a mix of government, private sector, telecom carrier, and other sources

Low ICT penetration

Varied connectivity options to address last mile needs and user preferences

Unmet local information needs (such as agricultural information for farmers, education for youth, and health care guidance)

Efforts to develop and integrate domestic and international information resources, improve information gathering channels, and increase timely content supply

Poor maintenance of ICT initiatives, limiting their sustainability

Better operation, management and maintenance

Limited ICT skills, experience or awareness

Public awareness initiatives and efforts to generate community acceptance—for example, through information agents and training of information service teams to form rural information service networks and extend coverage of information services to grassroots levels

Inadequate efforts to tailor initiatives to user needs, often top-down in nature

Efforts to collect user feedback and evaluations of initiatives to make offerings more relevant

Figure 3.1. Key Elements of Rural Informatization Pilot Initiatives - ADSL Broadband - Satellite - SMS, voice (call center) - Telecom/computing bundle

Connectivity

- Government - Telecom carriers - Private sector - PPPs

- End user surveys - Impact evaluations

Funding

Feedback & Evaluation

Shared Usage Access Points

Content Supply

Community Acceptance

- Government generated and aggregated - Information Services Vendor - Locally/user generated - Local intermediaries - Information agents - Training programs

Management & Operation

- Entrepreneurs - Government staff - Professional cooperatives

These rural informatization pilots range from fully government initiated and financed initiatives to those involving partnerships with schools, cultural centers, and rural cooperatives. A sample of 18 pilots spanning provinces across China has been analyzed in some depth (Appendix 2), within a framework that encompasses the elements mentioned above. The discussion that follows provides an overview of the various organizational models for these projects.

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Government-led model

This model aims to improve information and service access among rural consumers and improve the condition of rural farmers. In recent years, as provinces have begun to attach more importance to informatization, local governments have set up public access points to expand information and service access among rural consumers and raise the living standards of rural farmers. Most of these centers provide the basic requirements of Internet public access points—that is, a house, a computer, a special line linked to the Internet, and management and service systems. In addition, information services targeted at rural consumers are being developed and offered through these access points.

Box 3.1. Government Model Business Model Breakdown 1. Funding: x Capital: Fully government financed x Operating: Government-subsidized free access, with fees levied for some entertainment services 2. Connectivity: Basic Internet, with some projects offering call center advisory services and SMS services targeted at farmers as well.

3. Content supply: Generated and aggregated by government agencies.

Projects offer a range of information services targeted at rural consumers, usually rural farmers, as well as distance education offerings.

4. Management and operations: Stations are usually staffed with one or two fulltime or part-time assistants.

5. Community acceptance: Rural information agents are recruited and trained to encourage use of ICT resources (the Ministry of Agriculture has trained 200,000 such agents).

6. Feedback and evaluation: No feedback or evaluation.

Example: Ningxia Provincial Government Ningxia’s provincial government plans to finish building information service stations in its 2,332 administrative villages by August 2008. Key features of Ningxia’s rural informatization construction include the sharing and integration of resources. Ningxia has established a unified provincial platform that combines into one agricultural information services, tele-education services, National Cultural Information Resources, digital libraries, rural television networks, and other network service applications. To avoid redundant investments, all the service terminals are integrated in the new rural information service stations.

Ningxia addresses funding and economies of scale issues by using government guidance and society participation, and by replacing subsidies with awards. Since September 2007 the province’s rural informatization services have released more than 10,000 pieces of information on supply and demand for agricultural products. And the network has made more than 80 million RMB in online sales of agricultural products, offered 3,000 sessions of Internet films for farmers, and 2,500 sessions of Internet training for Party members.

Overall Assessment Strengths

Weaknesses

x

x x

x x x

Links to other public programs, information resources Public good, development focus Reaches the poor and targets the broadest swath of rural consumers Invests in community acceptance and capacity building

x x x

Sustainability—depends on public funding Slow response to diverse contexts and opportunities Weak incentives for quality service and accountability. No monitoring and evaluation Duplication among departments Market distortions from subsidies

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Telecommunications provider model

This model aims to develop new users of telecommunication services in less saturated rural areas. Every Chinese telecommunications firm has initiated programs to construct rural public access points that, in many cases, include information and service offerings. This model involves government partnerships in terms of financing and general support, because in some cases the locations of village information service stations are determined by local governments, telecommunication companies, and village committees—using existing buildings of village committees and other public places as much as possible.

Box 3.2. Telecommunications Provider Model Business Model Breakdown 1. Funding: x Capital: Telecom carrier x Operating: Carrier-financed operating costs; free broadband access from local governments; feebased entertainment services 2. Connectivity: Basic Internet, ADSL broadband.

3. Content supply: Provided by telecom carrier directly or in some cases through hired information services vendor.

Carriers cooperate with others in the information service chain to develop relevant information websites for farmers, connect with experts, and so on.

4. Management and operations: Staff at these service stations are also telecommunications business agents, and receive fees or other incentives from telecom providers.

5. Community acceptance: Staffed service points to help new and non-users; training offered.

6. Feedback and evaluation: No feedback or evaluation.

Examples: x

x x

China Telecom piloted projects in Anhui, Jiangxi, and Zhejiang provinces and has launched a nationwide informatization demonstration project to build 1,000 township-level and 10,000 village-level information demonstration pilots.

China Unicom has created new agricultural information workstations.

China Mobile has set up agricultural information and communication service stations and will further enhance its rural information network. It has invested 350 million RMB to build the rural information network, and by 2009 plans to invest another 450 million RMB to increase the functions and operation-supporting ability of the platform and improve services for China’s 800 million farmers.

Overall Assessment Strengths

Weaknesses

x

x

x

Expands telecom services in underserved areas Government partnership, with subsidy only for free broadband access

x

Smaller development impact—limited efforts to provide relevant content.

Limited community buy-in and no evaluation mechanism.

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Professional association/cooperative model

This model aims to improve rural production and the rural supply chain for agricultural commodities. Given their small scale and high vulnerability, farmer households face many difficulties in producing and marketing their products. Thus it is inevitable for scattered farmers under the market economic system to organize themselves to face market risks together. An important organizational form is a farmers’ professional cooperative or association, which plays an active role in agricultural and rural informatization. Some professional cooperatives are now equipped with computers and offer Internet services. Farmers who pay a membership fee get access to the Internet and receive information services and technical training.

Box 3.3. Professional Association/Cooperative Model Business Model Breakdown 1. Funding: x Capital: Government subsidy x Operating: Membership fees, shares of profits 2. Connectivity: Basic Internet, SMS, and voice services 3. Content supply: Developed and maintained by association staff, targeting specific member information needs.

4. Management and operations: Professional association management 5. Community acceptance: Niche target audience of cooperative farmers; training also offered.

6. Feedback and evaluation: Service enhancements based on user feedback.

Example: Panggezhuang Watermelon Professional Cooperative, Daxing District, Beijing The Panggezhuang Watermelon Production and Marketing Cooperative was set up as early as 1997, but now utilizes modern ICT to organize farmer households to produce watermelon according to orders. The cooperative relies on an internal management information system, product tracking system, and production and implementation system to more efficiently plant and produce the necessary quantity of watermelon. It also has a computer classroom through which it offers agricultural training. The cooperative has also explored effective ways of increasing production, such as through agricultural messages and diaries, quality tracking, and so on. The cooperative plays an important role in leading farmers to the market and increasing their revenue.

Overall Assessment Strengths

Weaknesses

x

x

x x

High potential impact on targeted users (cooperative farmers); community centered Operators have a strong incentive to maintain and improve services because they are dependent on member fees Mobilizes local resources and local content

Targets a niche audience of users, which limits its development impact on the broader range of rural citizens with more diverse information needs

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Franchise/entrepreneurial model

This model promotes standardized “chain stores” with basic information services and encourages entrepreneurship among rural citizens. Local entrepreneurs can establish information center franchises or “farmer shops” with investment support from local governments, private firms, and/or telecom providers, equipping them with computers, printers, copiers, scanners, and other technology that enables residents to access needed information and services.

Box 3.4. Franchise/Entrepreneurial Model Business Model Breakdown 1. Funding: x Capital: Government subsidy for the standardization of farmer shops and for the purchase of computers and broadband access. Telecom providers, rural credit cooperatives, and local agricultural associations often provide combined loans to farmers to cover the costs of computers. x Operating: Commercial fees, store sales.

2. Connectivity: ADSL broadband or telecom bundle that includes hardware, broadband, and software systems.

3. Content supply: From packaged telecom bundle maintained by information services vendor.

4. Management and operations: Franchise owner.

5. Community acceptance: Staffed service points also offer training. Telecom bundle often has a television output through which information and entertainment programs are broadcast to villagers.

6. Feedback and evaluation: Limited feedback and evaluation.

Example: Intel, Sichuan Telecom, and Ministry of Commerce The franchise model has been used under the Ministry of Commerce’s Thousand Villages Market Project, an initiative that brought together a private sector actor (Intel) and a telecom carrier (Sichuan Telecom). To combat obstacles related to costs, connections, computer literacy, and lack of content and application, Intel and Sichuan Telecom encouraged manufacturers to develop low-cost computers that could still meet farmers’ needs.

These computers provided all needed functions as well as built-in ADSL ports, multisoftware platforms, and user-friendly features.

Farmers could post advertisements, track market information, and search for information about issues such as plant growing and pest control. The all-in-one package from Sichuan Telecom cost chain store owners a one-time fee of 800 RMB and a monthly fee of 80 RMB over a three-year contract term. In addition, Sichuan Telecom introduced a leasing company to subsidize computer terminals, which was a great help in getting the project started. In less than a year Sichuan Telecom has installed more than 5,000 computers.

Overall Assessment Strengths

Weaknesses

x

x

x x

Exploits economies of scope and scale— has a network effect, with one-farmer store encouraging several more, generating a rural information network at the grassroots level.

High sustainability Encourages innovation and diversification of services

x

Dependent on franchise financial resources for startup, and franchiser orientation and capacity to train franchisees May require startup subsidies

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Private sector model: informatization experience centers

This model aims to develop the rural ICT market while fulfilling corporate and social responsibility requirements. To support these goals, some domestic enterprises actively participate in agricultural informatization pilots. A typical initiative is the informatization experience center set up in Guangdong in 2003, when the province launched a five year informatization project in its mountain areas. The government invested 35 million RMB a year to promote the informatization development of 51 mountain counties. From the start the project relied on the market based model of public private cooperation and used the informatization experience centers as vehicles to attract strong enterprises to participate in this project together. The project has attracted enterprises such as China Telecom, Lenovo, and TCL. Today 60 percent of the informatization experience centers in Guangdong’s towns and villages use the public private cooperation model.

Box 3.5. Private Sector Model Business Model Breakdown 1. Funding: x Capital: Private x Operating: Partial government subsidy, in some cases for broadband costs; store sales and after-sales services of computer products 2. Connectivity: Basic Internet 3. Content supply: Various rural information services—not limited to specific content.

4. Management and operations: Professional store management.

5. Community acceptance: Free informatization training services may be offered to improve acceptance.

6. Feedback and evaluation: No apparent feedback or evaluation.

Example: Lenovo’s Informatization Experience Centers in Guangdong In 2007 Lenovo signed an agreement with the Information Industry Department of Guangdong province to build up 300 county- and town-level rural informatization experience centers and stations, train 50,000 rural information assistants and farmers over the next three years, enhance the information knowledge of local farmers, and popularize rural informatization applications. Lenovo will design, develop, and produce computer terminals and products to satisfy rural demands, set up corresponding applications, and offer services to farmers. In addition, it will build 300 informatization experience centers in Guangdong that offer one-stop information services. Lenovo will also open 500 shops of its own in Guangdong to publicize and provide services and to offer training, experience, and other services to farmers together with the province’s Information Industry Department.

Finally, Lenovo will strengthen the commercial networks of villages and small towns, initially building about 500 sales agents in Guangdong and then delivering after-sale services to 10,000–30,000 administrative villages.

Overall Assessment Strengths

Weaknesses

x

x

x x x x

No or limited financial burden on public sector Improved accountability Demonstration effects Innovate new services and businesses Facilitates moving to value added services such as e-commerce and microfinance

x x x

The development impact and sustainability of such service centers is uncertain Weak links to other government services and databases Limited reach to the poorest rural people and regions Sole focus on commercial services

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Notes

China Telecom, China Netcom, China Mobile, China Unicom, China Railcom, and China Satcom.

2 http://www.microsoft.com/presspass/features/2008/may08/05 29upchina.mspx.

1

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CHAPTER 4

Lessons from International Experiences

S

hared access points have become the dominant model for providing ICT services to poor rural people in developing countries. Efforts to create shared access centers are evolving into an international movement—one of particular importance and relevance to the conditions in developing countries. There have been some successes at the pilot level but many failures in scaling up these centers, broadening their impact, and achieving sustainability.

Many countries, developing and developed, are facing common challenges with shared access points and experimenting with multiple business models in search of long term impact and sustainability, particularly in poor and rural areas. For example, Canada developed public access points early on, reflecting its extensive rural areas and commitment to avoid a digital divide. Brazil, India, and many other developing countries with large rural populations and diverse territories have also pursued multipurpose programs to deliver both government and private services over the Internet and shared public access points. China can learn much from these efforts. In turn, China’s experiences can be captured and shared with the international community.

Government- and Donor-driven Initiatives and Sustainability International experiences indicate that sustainability remains a key concern in shared access initiatives, particularly for government led models. Most public centers that were launched in the first wave of government and donor driven initiatives have not been financially sustainable without ongoing government or external funding. This many not be a problem if public support is affordable and justifiable in terms of development priorities, and if institutional and social sustainability are secured. These shared access centers can be viewed as a public good—like education, health, and water and transportation systems—and may have legitimate claim for continuous government or donor support (see Box 4.1).

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Box 4.1. Public Programs of Access Centers in Chile Chile is a vast land of great geographical diversity. Most of Chile’s 16 million inhabitants live in cities like the capital, Santiago, but a significant percentage live in remote rural regions with little access to the outside world. In the past 10 years, three different public programs have been implemented. A network of 70–80 youth telecenters was established. Infocenters (“nfocentros”) run by microentrepreneurs were established throughout the country. Those that are still running often belong to civil society networks such as the Asociacíon de Telecentros Activos de Chile (ATACH), demonstrating the importance of networking among telecenter operators. The latest government project, “200 Barrios,” is also going to be implemented through ATACH. BiblioRedes, funded in part by a grant from the Bill and Melinda Gates Foundation (from 2002 to 2005) and in part by Chile’s municipal governments, is perhaps the most successful of the three. The main objective of this project is to give Chile’s residents—70 percent of whom did not know how to use a computer in 2002—the technology access and skills they need to succeed in the new digital world.

In just a few years, BiblioRedes has made remarkable progress toward that vision. Between 2002 and 2005, the project established more than 370 Internet access points with more than 2,000 public access computers in municipal libraries and provided computer literacy training to more than 200,000 people.

During the first year of operation alone, library use increased 53 percent among adults and 28 percent among children. The users felt that they had greater access to useful information that improved their daily lives. Most importantly, the project has enabled residents of remote communities to connect and communicate with the outside world.

How Chileans say BiblioRedes has affected them They have greater access to computers and the Internet now.

88%

Computers and Internet access will help them in their daily lives.

78%

They are more informed than they were before.

77%

Computers will improve the quality of life for all Chileans.

96%

The rollout of information technology to Chile’s public libraries was not without its challenges. Due to the extreme geographical isolation of some libraries, the project had to install satellite Internet connections in one third of the libraries. Perhaps the biggest challenge was the huge discrepancy in connectivity costs among various communities. Unfortunately, the poorest communities often had the highest costs. This challenge was overcome with the creation of a national Digital Equity Fund to subsidize the cost of Internet connections in poorer communities.

There was also understandable fear among many Chileans about using technology for the first time.

The BiblioRedes project overcame this fear with creative communications and outreach programs. The project also focused on delivering high-quality training. Training materials were provided to all libraries and a Help Desk to provide technical support to library staff via a toll-free telephone hotline, e-mail, or instant messaging was established. The project also developed guides and Web site courses for users who wanted to learn at their own pace. The free computer training resources have been invaluable.

Beneficiaries included users who were in their 80s and finished their first computer course through this project.

Starting in 2006, BiblioRedes became an established government program, which means its budget is entirely financed with government funds. Various Chilean municipalities have been motivated by the achievements of the BiblioRedes project to make additional investments in their public libraries. Many libraries are renovating, moving to new buildings, and hiring new staff—all enticements to draw in more patrons. BiblioRedes also has received funding from private institutions and enterprises to carry out specific projects.

Source: http://connection.aed.org/main.htm; Bill and Melinda Gates Foundation, 2008; authors’ analysis.

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The challenge with the public goods approach is that there are no implicit mechanisms connecting the supply and quality of services to community demand; and it is often used as an excuse for poor management and planning. Without financial incentives to perform well, management of public access centers can become unresponsive to community needs. Subsidized centers may also create market distortions and prevent commercial enterprises from entering the field. Furthermore, beyond the initial capital investment, there are significant ongoing operational costs to maintain public internet access, including connectivity, maintenance, training, and periodic hardware and software upgrades. Thus many countries have recently opted for increased private sector participation in development of shared access centers.

Private Sector Participation Innovative mechanisms can encourage private sector participation and improve the sustainability of access initiatives. For example, governments can raise money to develop public access centers by creating universal access funds that channel a percentage of income from telecommunications operators. Some Latin American governments have narrowed the access gap by providing “smart subsidies” to privately owned telecenters using this approach. Because the level of demand for telecenter services in rural and disadvantaged communities is often lower than that required for financial sustainability, smart subsidies aim to cover the difference while still encouraging private investment, competition, and entrepreneurship in service provision.

Under this scenario the government specifies minimum service requirements for a certain period and allocates the subsidy to the lowest bidder. Actual disbursement of the subsidy is linked to predefined performance indicators. Smart subsidies have been demonstrated as a cost effective way of encouraging provision of basic ICT services in disadvantaged communities. For example, Canada’s community access program helped establish 8,000 telecenters by mobilizing civil society and awarding grants to telecenter initiatives led by NGOs that agreed to provide certain levels of service and to match grant funding with local resources (Proenza 2002).

Private sector models for rural ICT development can benefit from government involvement—especially in terms of building the capacity of the public access centers, many of which lack customer service and marketing experience suited to the needs of poor rural people. The state can also provide cost sharing, relevant content, channel its services through the centers, and stimulate the development of Internet content providers. The centers in the Akshaya project in Kerala each took on approximately 1,000 learners and collected the equivalent of US$3.26 per learner for providing a basic computer course developed by the state’s IT mission. The local government covered part of the cost (US$2.79), as did the learners (US$0.47). In about a year, the private entrepreneurs had recovered their initial investment. Subsequently e Government services have been contributing to part of the revenues for private operators.

Still, public access centers should be free to change their service packages beyond the minimum agreed requirements for smart subsidies. But the commercial model has its downside: it often focuses on commercial services and tends to have limited social and development impacts. ICT education and vocational training, e health, and similar services may have low commercial appeal for entrepreneurs in poor regions. One of

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the biggest challenges for the commercial model is to find an ownership and management structure with the benefits of both worlds—the social impact and development focus of the government or NGO, and the flexibility and financial viability.

The Appeal of the Franchise Model Franchise approaches appear most promising for augmenting the sustainability of the government and NGO led model, as well as the development impact of the commercial model. In this approach the umbrella organization or support institution (franchiser) may be a public or private organization or a public private partnership.

The franchiser’s role is to set standards for technology and services. Franchisees— private companies or community organizations operating public access centers— comply with those standards as part of their licensing agreements with the franchiser.

Support from the franchiser can take many forms, including training, content, and service development, technical support, special telecommunications access rates, and revenue sharing arrangements for provision of e government and e business services.

For public led franchise programs, this support may be in the form of smart subsidies.

The Committee for Democratization of Information Technology, a Brazilian NGO, has pioneered a social franchise approach to provide access to ICT and develop marketable skills and community leaders among poor urban youth. The committee— which obtains financing from partnerships with the government and the private sector—works with communities to develop information technology and citizenship schools that are managed by community members and focuses on ICT themes important to the community. The committee provides schools with necessary startup resources, but schools must generate resources to sustain their activities through fees.

This is essentially a social franchise model that targets disadvantaged urban youth, and has proven to be replicable.

E Choupal is an interesting example of a private led franchise model that has created a vast network of rural kiosks reaching 3.5 million farmers in 31,000 villages in six Indian states. It provides access to agricultural information, aggregates demand for farm inputs, helps sell produce from farmers’ doorsteps, and reduces transaction costs and wasteful intermediation to farmers, among other achievements (Box 4.2).

Box 4.2. E-Choupal: An Evolving Infrastructure for Rural Transformation Agriculture accounts for the livelihoods of 66 percent of India’s population and 23 percent of GDP, and most of the country’s poor people live in rural areas. Any remedy to opportunity asymmetries must provide farmers with both knowledge of opportunities and abilities to pursue them. The eChoupal initiative began by deploying ICT to reengineer procurement of soya—a fundamental source of Indian diet and food security—from rural India.

Before e-Choupal was introduced, most marketing of produce went through traders and government-mandated marketplaces controlled by brokers or commission agents. These agents controlled inbound logistics, information on sale pricing and timing, inspection and grading processes, auction practices, bagging and weighing, and, ultimately, payments and outbound logistics. Every step in the marketing system involved inefficiencies, inequities, and information asymmetries between farmers, intermediaries, and buyers. The market was created, manipulated, and managed by the agents.

(Box continues on next page)

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Box 4.2 (continued) This setup led the Indian Tobacco Company (ITC)—a multibillion-dollar firm with a diversified presence in commodities, agribusiness, and agricultural trade—to reengineer the entire value chain by deploying e-Choupal. The initiative enabled the company to break agents’ stranglehold over the process and communicate directly with farmers, extract value chain efficiencies, improve risk management, and leverage ICT to maintain international competitiveness.

E-Choupals were created to act as e-commerce hubs and social gathering places. Each has just one computer with an Internet connection and is located in selected villages to minimize travel distances for farmers and maximize traffic to the center. Each is coordinated by a local farmer recruited from the community served. The Indian Tobacco Company selects each coordinator based on criteria that engender village trust and trains him in basic business skills. The coordinator (farmer) receives a commission for every transaction processed through the local eChoupal. At the same time, the old commission agents have been co-opted into the new system by allowing them to profit from value-added logistical services.

Virtual vertical integration is served by continuous flows of information between e-Choupals and the Indian Tobacco Company—initiated by the local coordinators. The company keeps revenue flowing through e-Choupals by intelligently sequencing purchases of produce and sales of agricultural inputs year-round.

The e-Choupal process has transformed the traditional system, providing substantial gains to both farmers and the firm. It allows farmers to access nearby information outlets, as well as external pricing indicators and global trends. It also introduces efficiencies and transparencies in weighing and transaction durations. In addition, the Indian Tobacco Company gains in disintermediation savings, quality control, risk management, and long-term supplier relationships with its farmers.

The e-Choupal model provides inaccessible villages with windows to the world, with broad social impact. It provides access to a system for large-scale, low-cost dissemination of knowledge. Its website provides weather information at the district level and agricultural best practices from agricultural research centers and universities. In addition, the ITC conducts lab testing and provides customized feedback to farmers on how to improve the quality and yield of their crops.

Moreover, children are using computers for schoolwork and villagers are accessing global knowledge on agriculture.

E-Choupal has enabled farmers to become sources of innovation, deriving products and services that the Indian Tobacco Company can use to improve their operations. E-Choupal also provides an alternative channel for the distribution of goods and services in rural India—providing an ICT infrastructure that the company can use to enhance customer knowledge, market intelligence, cross-selling, and business decision making. The Indian Tobacco Company proposes to partner with financial institutions to improve access to credit by monitoring credit risks, reducing transaction and administrative costs in servicing rural markets, and tailoring financial products to rural India.

Future generations of e-Choupals are expected to evolve into a two-way exchange of goods and services between rural India and the world. One wave is to move to higher-value crops such as wheat, where the grade of the grain determines its end use and price premium. A second wave will cover perishables and address food safety concerns, because the Indian Tobacco Company can set standards and trace quality and so command traceability premiums. A further wave would bring knowledge of customers and of the business, company-deployed infrastructure, and an organization of processes and partners, to deliver value-added services to rural India. An ambitious vision would extend to sourcing IT-enabled services from rural India—such as telemedicine, ecotourism, and traditional crafts.

Source: Adapted from Prahalad 2005, pp. 319–357.

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Transnational franchise models are also emerging to provide cross country experiences with franchises. OneRoof is a pioneering model of such a franchise started in Mexico, with a focus on the needs of low income individuals. It is a nonprofit organization that is moving to a business or for profit enterprise to secure scale and self sustainability.

OneRoof’s role is to help local partners scale up good programs and achieve greater impact in changing how essential services are delivered to the world’s rural poor people. It develops and shares a delivery platform that provides rural communities with essential services, including ICT/Internet services, education, financial services, health, energy, clean water, sanitation, agricultural technologies, and employment generation.

OneRoof collaborates with local partners and local communities to search for the best entrepreneurs in each village with the highest desire of improving the community’s lives by the power of running a successful business. In turn, their operators and franchisees, who have met rigorous criteria for content, local quality, and business integrity, are encouraged to learn from their clients and co create services. Their service pricing strategies are tailored to serve the poor. They also broker to mobilize funding so that certain services can be paid from third parties or subsidized.

OneRoof’s overall strategy for making public access centers self reliant and financially sustainable is to provide a large variety of products and services. Each of them should answer local demand at the right quality and price. Within the areas under the OneRoof model, it is believed that there is plenty of room for new service development. OneRoof works with companies in co developing new market opportunities in rural areas.

OneRoof does not rely on government handouts or subsidies, is covering operational costs from fees for services, and has been able to scale up in Mexico. It currently has 10 stores open for business in India’s Tamil Nadu state, and expected to extend to other countries. It receives some donations from multinationals and foundations. Although it is not yet tested everywhere, and still striving for financial sustainability, it is a promising model.

Another more established transnational franchise example is the Comitê para Democratização da Informática (Committee for Democratization of Information Technology, or CDI) in Brazil (see Box 4.3). CDI is a nongovernmental, nonprofit organization that has pioneered bringing ICT to underprivileged groups in Brazil.

Through its Information Technology and Citizenship (Escola de Informatica e Cidadania, or EIC) schools—the first was established in 1995, CDI develops educational and vocational programs in Brazil and throughout the world to integrate marginalized groups, especially children and youth, into their communities. The model has proven to be replicable—at least under similar circumstances.

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Box 4.3. CDI: A Social Franchise Targeting Disadvantaged Urban Youth CDI obtains financial resources for its projects through partnerships with government and the private sector and through funding from national and international organizations such as Brazilian Development Bank (BNDES), Microsoft, Xerox, Exxon, Starmedia Foundation, IBM, AVINA Foundation, Global Partnerships, and others.

Each EIC is a result of a partnership between CDI and the community, typically via a community center or some other social organization active in the community. Communities prepare a project proposal detailing why they want the EIC and how they will use the computers. Setting up a new CDI requires a community to demonstrate a certain level of organizational readiness, including links to private sector and other institutions within the community as well as its own resources.

Once a community is selected as a site for an EIC school, CDI helps with the initial organization of the school (hardware, software, wiring, training, etc.) and provides technical, pedagogical, and administrative assistance. The community is responsible for EIC management and maintenance.

Each school has a coordinator who maintains contact with CDI and makes sure that the EIC is well integrated into other community activities. Each school also has two or three teachers who receive training in basic computer skills and pedagogy and attend periodic staff development workshops to learn about new tools and discuss common challenges.

CDI provides schools with everything necessary for start-up. Beyond this initial investment, the EICs must generate resources to sustain their activities. To do this, schools charge US$5– US$15/month for a three-hour per-week course. Each school is equipped with five computers and can train 10 students per session, yielding revenues of about US$500–US$800/month. This amount typically covers EIC expenses. Students who cannot afford to pay can help with EIC activities (cleaning, maintenance, etc.). EICs offer classes in basic computer skills as well as some more advanced skills, such as Internet (browsing, e-mail, and web page development), database development, computer graphics, and hardware maintenance. Training, consisting of introductory classes and word processing, is also offered to community members outside of normal school hours. All materials used by CDI integrate computer literacy with other themes relevant to the community with a focus on democracy and citizenship.

Source: Fillip and Foote 2007.

Currently there are 840 EIC Schools in 19 Brazilian states and eight countries (e.g.

Japan, Colombia, Uruguay, and Mexico). It tends to target underprivileged youths in urban areas, so its applicability is yet to see in more rural areas facing a different range of challenges. But it could serve as a model for public centers targeting migrants at township level in China.

Hybrid Organizational Models In the context of scaling up to national programs, covering a broad range of areas with varying e readiness and market maturity, a flexible approach or multiple models may be needed—as was adopted in the Gyandoot program (see Box 4.4). Many programs are moving to a middle ground between purely commercial and purely subsidized models, or to hybrid organizational models—social enterprise approaches—that combine social objectives with a market approach. The social enterprise model tries to balance social needs and economic realities to maximize both sustainability and development impact.

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Box 4.4. Gyandoot Program in India India’s Gyandoot program is a government-to-citizen service delivery portal and multipurpose telekiosk that provides ICT-enabled services to poor rural areas. It is a hybrid model involving significant government leadership, local government involvement, and private sector participation through local entrepreneurs. There are two organizational models: one led by village committees and the other by local entrepreneurs. In the village model, committees invest in providing the physical space and hardware. Kiosk operators are selected from three nominees proposed by the community. Operators are not paid a salary, but given 10 percent of their earnings to the village.

District councils train nominees. In the entrepreneur model, local entrepreneurs register as owners, assume all expenses, and pay licensing fees. But the top-down approach used in this program has led to limited fit of the services offered and limited involvement by NGOs and community organizations. Services did not attract popular demand among the rural poor, leading to sustainability problems.

Drishtee, a private sector-led initiative, is trying to scale up Gyandoot to the national level, adding and adapting services and transforming the model in the process. Drishtee has shown encouraging results. The main difference may be the more flexible approach to service provision.

Drishtee positions itself not as a rural service provider, but as a platform for integrating and delivering a wide range of services to Indian villagers. The initiative offers its network platform to any service provider that wants to market its services in rural India. Intranets between villages and district centers provide access to various services, including online land records and registration, applications for income and domicile certificates, market information on cereal crops, and government health and education benefits.

Source: Fillip and Foote 2007; and authors’ analysis.

Whatever organizational model is chosen, evidence suggests that public access centers are most effective when they are run and managed by local entrepreneurs and communities, as opposed to donors and central government agencies (Proenza 2002).

One variation is to combine NGO or government ownership with the private sector in day to day management of centers. This organizational model has been used in Hungarian telecenters, many of which are owned by civil society organizations, hosted by local governments, and operated as private companies (Wormland and Gaspar 2003). The primary role of governments and donors should be to help create an enabling policy and institutional environment for various models to become sustainable.

CHAPTER 5

Challenges for Rural Informatization in China Lack of a Coherent Strategy Rural informatization in China lacks an overall strategy and integrated approach. This is not surprising given the country’s size and diversity and the need to involve many stakeholders. To their credit, many ministries and provinces have taken ownership of the informatization agenda and initiated their own programs. But, lacking a coherent strategy and coordination mechanisms at the national and provincial levels, these programs do not benefit from an overall sense of priorities and thus optimal allocation of resources. There are no mechanisms to ensure complementarities and build on the comparative advantages among the various ministries.

Lacking a coherent strategy, centrally funded programs do not take into account the diverse geographic and socioeconomic conditions of rural China. Varying geographic conditions in rural areas pose a challenge to uniform standards and regional programs. Thus it is important to segment the rural market and take different implementation approaches for each. For example, the frontier of private investment covers segments—such as urban high and medium income, and increasingly rural high and medium income—that could be attractive for private investment or innovative private private partnerships (Figure 5.1). At the same time, a national strategy needs to direct public resources to financially less viable and less attractive rural and near rural low income segments, where low population density, nonexistent infrastructure, and low literacy may not result in financially sustainable projects.

Weak Coordination across Ministries and Integration at the Provincial Level Given China’s scale, diversity, and multiplicity of stakeholders, challenges of duplications and inconsistencies are bound to arise. But the phenomenon of each ministry or each province doing things its own way has led to duplicated efforts and wasted resources. Redundant investments and scattered resources raise serious problems of affordability, sustainability, and scalability. No policy and institutional mechanisms are in place to raise awareness, overcome interdepartmental rivalries, and foster close coordination and collaboration at any administrative level.

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Figure 5.1. Population and Investment Segmentation in China Income

Frontier of private investment

High Next attractive market for private investment

Public investment and PPP initiatives High

Low Remote

Rural

Near urban

Urban

Density / network utility

Source: World Bank 2006.

Successful rural ICT development programs require collaboration and partnership among stakeholders. Thus specific measures are needed to raise awareness, overcome interdepartmental rivalries, foster close collaboration, and provide incentives for horizontal resource sharing and network integration. A March 2008 government reorganization—establishing a new Ministry of Industry and Informatization that incorporates several ICT related agencies—aims to eliminate overlapping responsibilities, improve coordination, and realize economies of scale in this cross cutting area. Whether the new ministry can achieve these goals will be determined only by the passage of time.

In addition to centrally driven programs, every province considers rural informatization a crucial element of local socioeconomic development. Collaboration practices vary by province. In one province a government department in charge of monitoring the safety of roads, bridges, and utility infrastructure had to pay another department a lot of money to acquire electronic maps and management information system updates. This contrasts with another province where the Department of Industry and Commerce (in charge of issuing business licenses and registration) and the Tax Bureau decided to share information on registered companies. The agreement led to better enterprise management and increased tax collections. This collaboration was based on good relationships between these two units, not as part of a structured process established at all levels of government. In addition to the establishment of a cross functional department to promote collaborative actions, new policies on access to government and public information are urgently needed to ensure proper sharing of information among government departments, for the interests of the general public.

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Unsustainable Business Models and Over-reliance on Government Financing The Chinese government does not want farmers to bear the brunt of the financial burden required to access needed information. The business models used for delivering content and services rely heavily on government subsidies. Thus the long term operations of such services in townships and villages often depend on local governments’ continued financial support—an unsustainable financial burden.

Various business models need to be explored to support the government’s long term informatization goals. Government agencies are looking at new models for providing services, with the goal of providing some support rather than complete subsidization. Partnerships with domestic enterprises are also being pursued. China’s large telecom providers are keen to increase their coverage in rural areas as urban markets reach saturation. An example is Chongqing, where the government signed a profit sharing agreement giving 40 percent of profits to the telecom carrier and 60 percent to the Department of Agriculture of Chongqing.

Rural informatization initiatives have had a narrow focus, with limited service offerings focusing primarily on agriculture—undermining their sustainability. Most information service providers provide only single information and low level services, which cannot satisfy the practical demands of farmers and directly affect the overall sustainability of the initiative. There is little acquisition of global knowledge and experience in providing sustainable, shared access to ICT (as with multipurpose telecenters) and adapting these models to China’s diverse rural areas.

Some examples such as Grameen and n Logue (Fillip and Foote 2007) are enlightening because they leverage existing telecommunications networks and maximize their efficiency by providing a wide range of services. Such public and social services make the economic case for deploying ICT networks in rural areas more possible and compelling. Furthermore, additional services can be delivered that otherwise would not be possible (such as rural education).

Maintenance and operation of services have also proven problematic. Many local governments have invested in hardware and equipment projects, but failed to make adequate arrangements for maintenance. As a result such projects often go to waste.

Similarly, pilots by foreign donors and multinational corporations often suffer from lack of attention to ongoing upgrading and maintenance. The challenge is to consider the lifecycle of ICT products. If sustainable mechanisms are not in place for regular upgrading of systems, initial investments will be ineffective.

Lack of Demand-Driven, Locally Relevant Information Resources Content has always been a key challenge in China’s rural informatization efforts.

Though many information resources have been developed in recent years, farmers often cannot find urgently needed information. Among the reasons:

ɶ Lack of practical, localized content. There is a lack of relevant, contextualized information on the Internet for farmers. With no substantive discussions of local examples, farmers do not believe in abstract solutions and have little motivation to adopt them.

Rural Informatization in China

ɶ ɶ ɶ

ɶ ɶ ɶ

33

Limited efforts to assess local needs or to involve stakeholders in participatory processes to define their information needs.

Weak capacity for collecting and disseminating information resources and developing region specific and customized information services.

Information is distributed in a disorderly way and is difficult to search. There is no mechanism for integrating agriculture related information resources.

Agricultural information resources are scattered, distributed in every department, province, city, and even enterprise.

Narrowly focused agricultural content, with little diversification to other ICT enabled rural services such as rural education and rural finance.

Farmers prefer to get information through information agents or intermediaries, rather than through their own direct search on the Internet.

Weak integration of informatization programs with locally driven community development initiatives.

Low Levels of Public Awareness and Capacity Building Community acceptance of new technologies needs to be encouraged with capacity building. The Ministry of Information Industry has implemented several projects to extend telephony in rural areas. Though this was a simple goal, the ministry found that people in isolated areas do not have a strong demand for communications and that their use of basic phone service did not increase. Thus the key challenges are to raise awareness, mobilize demand, and educate potential beneficiaries about the benefits of telephony—and so ensure adequate returns and maximum impact from such investments.

Because Internet literacy is often similarly lacking, the Ministry of Information Industry has focused on delivering Internet access to all towns. But in some poor and rural areas the Internet is considered a luxury, and efforts are needed to ensure that users have the training needed to use computers. Such training is more complicated than training in the use of telephony, and helps explain why non users of the Internet require more extensive awareness and training (CNNIC 2008). More effective measures should be made to encourage these non users. In addition, grassroots party administrators often do not fully comprehend the potential benefits of informatization.

Low Internet literacy is a major challenge to deriving tangible benefits and real impacts from rural informatization programs. Thus programs should include well designed services, easy to use interfaces, and public access points where professional help is available. Achieving long term sustainability will depend on local partnerships, hands on training of local IT technicians, and services that are in real demand from farmers and local businesses. Shared access models can aggregate demand for information services.

Awarding telecenter operation rights to local IT technicians—using, for example, the franchise model—can provide incentives to local technicians and entrepreneurs to stay in the area. In addition, training should be developed in partnership with local governments and NGOs. This approach is particularly suitable in China, where provincial governments have dedicated informatization departments to perform such tasks.

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Weak Links to Domestic ICT Industry and Research and Development for Rural Applications China’s ICT industry is supported by the Ministry of Information Industry and the Ministry of Science and Technology, which have initiated a few projects to encourage the development of innovative, localized rural informatization services and products.

More efforts are needed to promote the development of ICT applications tailored to agricultural and rural development, and to extend IT knowledge to rural areas. The central government should formulate policies that promote IT use and services for agriculture, rural areas, and farmers. The Ministry of Information Industry is already shifting its focus from building infrastructure to developing ICT applications. But it is still gathering information on best practices in R&D to support rural application and diffusion.

The lack of maturity in technology offerings limits agricultural transformation.

Although technologies such as website development and platform establishment have matured; IT for agricultural production is inadequate and unable to transform traditional agriculture. Yet China is home to a major ICT industry with substantial technological, export, and competitive capabilities. These capabilities have yet to be tapped to meet the challenges of modernizing the rural sector. Thus it is essential to engage the domestic ICT industry, NGOs, and other partners in practical R&D to modernize agriculture, adapt new technologies to rural conditions, and develop affordable and sustainable solutions to enhance the quality of rural life.

Lack of Systematic Learning and Impact Evaluation As a large and diverse country, China presents a laboratory for innovation and learning about different business models, technologies, services, and partnerships.

Substantial resources are being invested in rural informatization, yet evidence is lacking on how these investments are affecting growth, employment, and poverty reduction.

Most initiatives are piloted, then scaled up without the benefit of clear evidence as to whether they are achieving their goals. Without common frameworks for monitoring and evaluation, and institutional mechanisms to promote learning and share experiences, resources are wasted with similar operational models attempted again and again.

Monitoring and evaluation are crucial to coordination, collaboration, learning, adaptation, and resource sharing. Yet they are often neglected in many countries, including China. For example, redundancies and waste arising from the lack of a monitoring and evaluation plan were observed in the Cultural Information Resource Sharing Project—a nationwide project aimed at scaling up the communications network and enriching national networks to share cultural information. By the end of 2007 the project had built more than 8,000 subcenters. But misunderstanding of the project’s goals and the absence of a unified standard and implementation plan resulted in extensive redundant construction.

CHAPTER 6

Recommendations

D

eveloping countries face common challenges in providing affordable ICT services in rural areas. Geographically sparse populations raise the costs of rolling out ICT infrastructure. At the same time, low rural income levels make investments less attractive for ICT service providers. As noted, the scale and diversity of China and its rural population also pose unique challenges.

Based on this preliminary study of rural informatization development efforts in China, combined with lessons from around the world, the following priority areas are recommended for developing rural informatization.

Formulate a Comprehensive and Coherent Strategy Formulate a coherent strategy for rural informatization that promotes regional differentiation, resource sharing, innovation, partnerships among ministries and the private sector, and strengthening of the entire system.

China should draw on its own rich experiences and those of the global community to scale up and maximize the impact of informatization on rural development. As a first step, China needs to take stock of its experiences and devise a shared vision and strategy for the next phase. Such a strategy may start by segmenting the rural market in terms of e readiness or connectivity, remoteness, e literacy, and socioeconomic development. Levels of subsidies and business models can then be tailored to these differentiated segments or local environments. The success or failure of various business models and informatization initiatives depends on the local context, so these assessments are essential to tailoring national programs, service models, and subsidies to these broadly differentiated local contexts.

A key issue that the strategy must address is the need to reach poor people in rural areas. As the State Council Leading Group Office of Poverty Alleviation and Development acknowledges, rural ICT programs have focused on building basic infrastructure and bridging the connectivity divide between rural and urban areas.

They have also focused on relatively developed rural areas and those with certain skills. But using ICT for rural development is not the same as using ICT for poverty reduction. If poorly designed, rural informatization can even widen the connectivity divide. Thus the strategy should aim to define basic approaches for reaching remote regions and poor communities and farmers through targeted subsidies, vouchers, low cost technologies, information intermediaries, community development, and capacity building.

The proposed strategy should also address enabling policies and governance mechanisms that encourage joint investments in infrastructure, the development of 35

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common databases and government wide enterprise architecture, and issues of privacy and security to promote trust in e government services. It should define clear roles and responsibilities for central ministries, provincial governments, and other stakeholders to promote joint investments in and use of common information infrastructure and to exploit comparative advantages and complementarities among the various stakeholders.

The proposed rural informatization strategy should also take into account growing urbanization, particularly the significant migration of rural people from villages to townships and adjacent cities. This shift will have implications for the locations and services of information access centers. Many of the clients of these centers will be less sophisticated and may require infomediaries and different mixes of services. These target groups may also require training in e literacy and support in searching for off farm employment opportunities. These population and employment shifts and the corresponding changes in client and service mixes will also have implications for the sustainability and impact of the different business models adopted by access centers in receiving townships and peri urban areas. These implications should be anticipated and planned for. At the same time, the informatization program should be agile, flexible, and sufficiently decentralized and learning oriented to remain responsive to the changing rural context.

The proposed strategy should also balance current top down, centrally driven approaches to rural informatization with bottom up initiatives that promote local ownership, innovation, adaptation, and learning. It should start with assessments of local information needs to emphasize the development of demand driven services. It should ensure learning from the diverse models piloted so far and build on the most promising ones. And it should emphasize partnerships with the local ICT industry, telecommunications operators, community organizations, agriculture extension services, cooperatives, professional associations, academic institutions, and the media.

The township is the optimal level of integration for national programs. This is the level where bottom up efforts are linked to top down programs and where capacity building and monitoring and evaluation can be promoted. The township should become the locus for coordination, collaboration, local content development, and ICT integration with regional development strategies and programs.

Support Innovative Business Models Support innovative business models for public access service centers to reduce rural urban gaps and develop more affordable, scalable, sustainable approaches to service delivery—drawing on local and international experiences.

Access is the key to successful rural informatization. Public facilities with ICT access are needed for people without access at home, school, or work—a common phenomenon in China’s rural areas. Although various ministries have established many public access points—such as cultural stations, rural information service stations, and informatization experience centers—most are heavily dependent on government subsidies and are not sustainable. Moreover, rural areas often lack the subscriber density to make ICT deployment economically viable for the private sector to invest on its own. The main challenge is ensuring rural ICT access without imposing a financial burden on poor people.

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Important global trends and lessons are accumulating in this area. One trend is toward moving from purely bottom up pilots and organic models to the use of programmatic approaches and intermediary institutions for scaling up to the state and national levels. Countries are also moving from single purpose, government driven models to public private partnerships, multipurpose telecenters, and multiple business models. Countries are learning that different models can serve different contexts and different development needs. In principle, the model follows the purpose. Countries are also learning how critical monitoring and evaluation are to the effective selection and use of business and institutional models and to the adaptation or innovation of these models to fit changing priorities, socioeconomic contexts, and communications technologies.

A few developing countries have seen the emergence of innovative business models involving public private partnerships. They use private sector contributions to:

ɶ Provide basic public access for free or almost free. ɶ Generate and maintain relevant, demand driven content. ɶ Adapt ICT to provide affordable and maintainable products. ɶ Provide training and capacity building for rural residents.

These approaches, among others, ease the burden on government to fully finance such initiatives and can be adapted to the Chinese context.

International experiences suggest that engaging NGOs, communities, and targeted user groups (such as rural youth or women) can also promote community learning and innovation in service and business models. Some NGOs have used the franchise model and been able to achieve scale. Some have engaged in community development and reached out to the poorest in the rural areas and other vulnerable groups. Some have partnered with the private sector, ICT multinationals, foundations, and donors. The national strategy should accommodate these diverse models and encourage local hybrids.

Consolidate and Share Resources Consolidate and share information resources and aggregate service offerings to support multipurpose service centers and one stop shops.

Many government projects have been initiated with the goal of providing needed information and services for rural consumers. “Golden” projects that offer access to key government services (tax, registration, payments), coupled with distance learning and initiatives providing agricultural information, would offer a basket of services relevant to rural users and encourage the long term sustainability of service centers.

International experiences indicate that aggregation of services at the access or service center level may produce sufficient income for these multipurpose centers to become financially sustainable in many rural contexts.

Aggregation of government information and services at one stop shops can also reduce the transaction costs for farmers and rural enterprises when dealing with various government departments through a single window. Such centers may also be able to provide cross subsidies between the most profitable, high demand services and

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new services that may require demand mobilization, market development, or capacity building for the poor.

In China developing such comprehensive public service platforms at the township or village levels—to consolidate these government efforts—would be a step toward better service offerings and government coordination.

Raise Public Awareness and Build Capacity Raise public awareness and build capacity at all levels—particularly the provincial level.

Efforts to raise awareness and build capacity building must span many levels: policymakers and administrators of departments such as the ministries of agriculture, commerce, and information industry; provincial decision makers and administrators; managers, owners, and entrepreneurs of individual service centers; central and local content and service providers; rural communities and farmer groups; rural commercial and agriculture related enterprises; professional cooperatives of farmers and professional associations; and ICT technical staff and information intermediaries. The poorest, most remote areas may be targeted for specially tailored awareness campaigns and Internet literacy.

Center managers and entrepreneurs are at the heart of ensuring sustainability and impact through selecting and adapting appropriate services and content, developing viable business plans, mobilizing resources, developing the market, and building partnerships with various sources for content and support services. Telecenter networks around the world and various educational institutions have been developing training programs tailored to these local pioneers. India has developed a consortium of partners, including NASSCOM Foundation and WorldCorps, to develop common training modules covering entrepreneurship, community development, grassroots marketing, service development, and infomediary skills.

Capacity building should also cover traditional and potential information intermediaries. In rural areas where literacy (including IT literacy) is low, the growing sophistication of ICT tools and Internet search methods may intimidate users.

Increasingly, ICT intermediaries (or “agents of change”)—such as head farmers, agriculture product associations, and NGOs—are actively involved in providing information, explanations, and demonstrations to rural populations.

Develop Intermediary Institutions and Networks Develop intermediary institutions and networks to develop local content and services, train center managers and local entrepreneurs, promote partnerships, provide technical support for operations and maintenance, and share experiences and resources among centers.

Intermediary or support institutions can help support individual service centers as well as groups of them to exploit economies of scale and scope. These networks, associations, and support institutions can offer common services and day to day support for business management, technical troubleshooting, product and content development, and the like. A common thread is that these intermediary institutions work with the centers to make them more effective, sustainable, and valuable to the

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communities they serve. In China such horizontal and grassroots networks have not been encouraged because most initiatives have been vertical and supply driven, and local centers have been looking upward and not locally or regionally for direction and support.

Library institutions such as the China Society for Library Science and the National Library of China are one example of existing institutional structures that might support the development and coordination of relevant local content or professional training for telecenter managers to serve as information intermediaries.

These networks and support institutions can also provide training, mentoring, support, and coaching on management issues, and about services and techniques used in other centers. Peer learning and knowledge sharing should be a critical feature of the new strategy. These networks can also provide peer support email lists, onsite maintenance, and monitoring and evaluation services. Finally, these networks may provide advocacy and policy related activities, and thus provide valuable feedback to provincial and central policymakers and ongoing support to rural informatization efforts.

Ensure Learning, Monitoring, and Evaluation Ensure learning, monitoring, and evaluation mechanisms are integrated in the program design and implementation. Their absence can result in misunderstanding of program goals among implementers, poor outcomes, and, in some cases, failure to meet the program goals. Efforts should be made to raise awareness and understanding of the importance of monitoring and evaluation, with relevant input from, and training provided to, all potential users of the system. The results of evaluation should be shared broadly among all stakeholders to ensure for learning, accountability, and sustainability. It can be especially valuable to share failures.

A learning, monitoring, and evaluation culture in which data and information guide decision making in rural informatization is critical to assessing impact and sustainability. In this culture, using data to inform strategy development and set goals and targets is the first step. Tracking progress toward outcomes and impact and ongoing refinement and adjustment of strategies and programs is the next important piece. Finally, assessment of the difference that strategies and programs in terms of their benefits to people and communities, and sharing that learning among stakeholders, is essential for efficient and effective investments in informatization with deep and long term impact.

Thus China’s informatization strategy should invest in learning and research, monitoring and evaluation, reflection and sharing of knowledge and experiences.

When designing ICT strategies and programs, governments and businesses should bear in mind that informatization is not the ultimate goal, but an enabling tool for achieving economic growth and alleviating poverty. Thus it is important for governments and businesses to define the goals that need to be achieved as well as the indicators and measures of progress. Otherwise, there is a danger that ICT development programs could be abandoned once the original hype is over. A monitoring and evaluation framework is proposed in Appendix 3 to assess the impacts experienced in pilot informatization projects, and their potential for scaling up.

CHAPTER 7

Conclusions

P

roviding public access points for information services is a particularly critical element for rural informatization. They are needed for people without access at home, school, or work. China’s government should consider a wide scale program that would ensure access to relevant information resources and essential services— including training and assistance—through a network of public facilities.

Although various government ministries have built up many public access points such as cultural stations, rural information service stations, and informatization “experience” centers through their own projects, most are heavily dependent on government subsidies and suffer from low sustainability. In addition, rural areas in China often lack the subscriber density to make ICT deployment economically viable for private investment. The key issue is how to ensure that rural ICT projects eventually generate reasonable returns to cover at least their operating costs (after one off initial capital investments).

Innovative business models have emerged involving PPPs in some developing and developed countries. They use private sector contributions to provide basic public access for free or nearly free, generate and maintain relevant, demand driven content, adapt ICT to provide affordable and maintainable products, and provide training and capacity building for rural residents. These approaches, among others, ease the burden on government for fully financing such initiatives and can be adapted to the Chinese context.

International experiences also suggest that engaging NGOs and local communities or targeted user groups (such as women or rural youth) can promote community learning and innovation in services and business models. Some NGOs have used the franchise model and been able to achieve scale. Some have engaged in community development and reached out to the poorest groups in rural areas and other vulnerable groups. Still others have partnered with the private sector, multinational ICT organizations, foundations, and aid agencies. China’s rural informatization strategy should accommodate these diverse models and encourage local hybrids.

Many government projects in China have already been initiated with the goal of providing needed information and services for rural consumers. The Golden projects offer access to key government services (tax, registration, payments, and so on), coupled with ongoing distance education and initiatives providing agricultural information, offer a variety of services relevant to rural users. Aggregating government information and services at one stop shops can reduce transaction costs for farmers and rural enterprises. Such centers may also be able to provide cross subsidies between the most profitable, high demand services and new services that may require demand 40

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mobilization, market development, or capacity building for the poor. In China the development of such comprehensive public service platforms at the township or village level would be a step toward improving service offerings and government coordination.

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State Council Informatization Office. 2008. “Research on the Construction and Operation Mechanism of Non profit Information Resources.” Mimeo.

Wang, Angen. 2005. “Let Farmers Benefit from Informatization.” Sichuan. http://www.scol.com.cn.

Wang, Taihua. 2006. “Extend Telecommunication to Every Village in the New Era.” Speech at the national Conference of Television and Telephone. October 16, Beijing.

Wormland, Tom and Gaspar, Matyas. 2003. “ Hungarian Telecottages.” In Connected for Development. New York: United Nations Information and Communications Technologies Task Force, pp 191–198.

World Bank. 2006. “China ICT Level and Investment Needs Assessment Survey.”

World Bank, Washington, DC. Xie, Ding. 2006. “System reform and innovation in the Agriculture Informatization Construction management.” Journal of Central China Normal University’s Graduate School, Issue 1.

Zhao, Xiaohong. 2006. “The Construction of a New Countryside Needs Service type Agriculture E government.” China E government Website. November 29. http://www.e gov.org.cn/.

Zhao, Yanlan.2007. “On Problems in Agriculture Informatization in the New Situation and Countermeasures.” Sci/Tech Information Development & Economy 32: pp 84.

Zhu, Jinzhou. 2007. “Using information technology to stimulate the construction of new rural areas.” CTTL net, June 27. Website. http://www.cnii.com.cn/20070520/ ca418124.htm.

Appendixes Appendix 1. Central Government Strategies and Initiatives for Rural Informatization Ministry of Information Industry Year

Strategy/Policy Statements

2006

“Suggestion on Promoting the Construction of the New Socialist Countryside”

Year

Key Supporting Initiatives

Progress Made x

2007

1. Extend Telephone Coverage to Every Village Project x Extend telephone coverage to every village x Speed up the construction of village Internet connections 2. Initiative to Promote IT Applications in Agriculture x Guide the ICT industry in developing appropriate agricultural IT products and systems to serve “three-dimensional rural issues” (i.e farmers, countryside and agriculture) and promote agricultural modernization

x

3. Rural Comprehensive Agriculture Informatization Services Pilot Projects x Develop affordable, easy to use information terminals and corresponding information systems for farmers x Integrate information resources of agriculture-related departments, scientific research institutes, and colleges to develop “threedimensional rural issues” related to local information x Form a market mechanism for rural comprehensive information services involving domestic enterprises x Provide training and promote the application of informatization in rural areas

x

20012005

2005

45

x x

x

x

x

99.5 percent of administrative villages have telephone coverage More than 97 percent of townships and villages have Internet access 92 percent of townships and villages have broadband access “Farmer computers” developed in collaboration with Haier and Intel.

National organization of computer and IT application “multiplier plan” resulted in 113 agriculture-related projects with total investment of around 1.7 billion RMB. Direct economic benefit was more than 110 billion RMB The pilot projects in Anhui Province yielded substantial economic impacts.

Xuanzhou District built a comprehensive information platform that provides timely agricultural information to prevent the paddy rice disease-carrying insect, saving 22,000 tons of food and 1,400 tons of cotton.

Jingde County stabilized the poultry production during SARS by disseminating useful information through TV broadcasting after receiving inquiry telephone calls at the information center. New agricultural technologies, also broadcast on TV increased annual farmer income by 3.1 million yuan.

http://www.tzag.gov.cn/documents/ docdetail.asp?documentid=134382& sub_menuid=101 http://www.mxwz.com/yxcz/inside.aspx?xl =%B4%F3%C1%AC&NewsId=100041

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World Bank Working Paper

Ministry of Agriculture Year

Strategy/Policy Statements

2007

Overall Framework of National Agriculture and Rural Informatization (2007–2015) x Greatly improve agricultural and rural integrated information infrastructure management x Develop information service organizations at township and village levels x Complete a sustainable development mechanism for agricultural and rural informatization, to meet the needs of modern agriculture and the construction of a new socialist countryside

2001

10th Five-Year Plan: Action of Rural Market Information Service1 x Enlarge the rural market information dissemination dynamics by providing timely and accurate information to the farmers in all levels (province, city, county, major villages) x Establish the rural information service platform x Set up interactive Intranet and website to stimulate comprehensive information exchange among all stakeholders (province, city, county, village, etc.) x Strengthen the capacity of the rural information services by providing the adequate training

Year

Key Supporting Initiatives

2007

1. Pilot Projects: Overall Framework of National Agriculture and Rural Informatization (2007–2015)2 x Build stations in 100,000 villages, providing 1 million village officers and 10 million farmers with Internet access x Extend the agricultural information services network to more than 90 percent of administrative villages x Train one or two rural information assistants in every administrative village

Progress Made x Listed in local development plans, and funding provided by local finance bureaus or self-collected. x Ministry of Agriculture is piloting information service stations in all new countryside construction demonstration villages. http://www.gov.cn/ztzl/yzn/content_ 479462.htm

2007

2. “Jinnong” Project (“Golden” egovernment project) x Establish three major application systems, for agriculture monitoring and warning, agricultural market information, and rural market service the technology information services x Develop and integrate domestic and international information resources x Standardize criteria and regulations; train information service teams

x Construction period of the project is ongoing, from August 2007 to July 2009

2005

3. Three in One (Telephone, TV, and Computer) Agriculture Information Service Pilot Project x Extend information services to “the last mile” through computer (Internet information services), telephone (advisory call centers), and TV (local TV broadcasted agricultural information programs) x Establish a long-term mechanism to provide timely, accurate agricultural information services

x Ministry of Agriculture provides the equipment, software, and support for the pilot areas of every province x Central government funds 10 million RMB a year

Rural Informatization in China

2005

47

4. Demonstration Project for Extending Agricultural Science and Technology to Every Rural Household x Promote agricultural science and technology to households in 100 pilot counties

x Formed a network of experts and a technical instruction and service system x Promoted 20 kinds of technologies x Provided technical instruction to 92,000 demonstration households x Ministry of Agriculture is using IT to develop rural economy e-map

5. Rural Market Information Service Action Plan

x Agricultural information service organizations set up in 97 percent of districts (cities) and 80 percent of counties x Agricultural information service stations set up in 64 percent of villages and towns x More than 200,000 rural information assistants trained

2001– 2006

State Administration of Radio, Film, and Television Year

Key Supporting Initiatives

Progress Made

1. Extend Telecommunications Coverage to Every Village Project x Extend telephone coverage to every village

x Investment for administrative villages totaled 3.6 billion RMB x About 117,000 administrative villages with electricity but no telecom (“blind” villages) covered x About 100,000 natural blind villages with more than 50 households covered x 15,000 villages that were “back to the blind” were repaired x Provided nearly 100 million farmers with access to radio and TV

19982006

Ministry of Science and Technology Year

Key Supporting Initiatives

Progress Made

2. “Spark” Agricultural Science and Technology 110 Information Services Project (Spark 110) x Provide farmers with agriculture technology services through a lowcost ICT platform, based on collaboration between the government science and technology sector and the telecommunications sector x Integrate information resources with a service hotline

x Set up more than 23 unified regional hotlines, covering more than 900 counties and 7,500 towns and townships x Governments in more than 20 provinces have set up cooperative relations with local agricultural universities, institutes, or research agencies

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World Bank Working Paper

Ministry of Culture Year

2002

2006– 10

Key Supporting Initiatives

Progress Made

1. National Cultural Information Resources Sharing Project x With Ministry of Finance, digitally process and integrate China’s cultural resources x Share digitized cultural resources nationwide

x Central authorities have invested 903million RMB, while local investment totaled more than 700 million RMB. x Resources total about 60 terabytes (1 terabyte is equivalent to 250,000 ebooks or 926 hour-long videos) x 6,700 centers and basic service stops completed at all levels

2. Comprehensive Culture Station Project x Implemented with State Development and Reform Commission x Sets up rural comprehensive culture stations in all villages and towns countrywide, and trains cultural laborers x Develops a sound, effective rural culture management system x Improves rural public culture service skills by 2010

x The funding has been provided by special project subsidy by the central government, as well as funding from local finance bureaus, or self collected. x In 2007, the central government has invested 100 million RMB for piloting. http://www.china.com.cn/culture/zhuanti/0 7ggwhfubg/200712/21/content_9416225.htm

Ministry of Education Year

Key Supporting Initiatives

Progress Made

2003

1. Modern Distance Learning Project in Rural Primary and Secondary Schools x Implemented with State Development and Reform Commission and Ministry of Finance x Covered by local governments and subsidized by central based on regional development x Each rural junior high school equipped with a 30-computer classroom and a multimedia classroom with CD players and satellite teaching posts. Each post needs an average investment of 150,000 RMB.

x By end of 2006, established call centers to support services in rural primary and secondary schools x Improved education quality and contributed to sharing of resources in rural areas x More than 100 million students in central and western rural areas have benefited

Rural Informatization in China

49

Ministry of Commerce Year

Key Supporting Initiatives

Progress Made

2006

1. Rural Commercial Information Service Project x Set up rural commercial information service stations in 10,000 villages x Train 10,000 farmers to use the Internet and improve their ability to incorporate supply and demand information in their business x Establish an information resources system, with special databases on agricultural products and commercial information for farmers

x The New Countryside Commercial Website was launched in August 2006.

It organized 6 times online trading.

About 5 billion tons of agricultural products, worth 10.9 billion RMB, were traded. x Rural commercial information service stations were piloted in one county in each of 20 provinces.

2005

2. Thousands of Villages and Townships Project x The project aimed to establish 25,000 “rural shops” from 2005 to 2007 as extensions of the urban commercial distribution network (e.g. chain stores and supermarkets). This modern rural the information network can improve rural consumption environment and meet production and living demands by rural population.

x 160,000 “rural shops” and 480 extensions of urban commercial distribution network were subsidized by the government in 2005 and 2006.

Year

Strategy/Policy Statements

2006– 2010

1. 11th Five-Year Plan for National Economic and Social Development x Proposed strengthening agriculture service systems, promoting agricultural technology, and building production safety standards. Also proposed integrating agriculturerelated information resources, strengthening construction of the rural economic information application system, promoting agricultural service organizations and mechanism innovation, encouraging and guiding farmers in developing specialized economic cooperatives, and improving the organization of agriculture.

2007

2. Opinions of the Committee and the State Council on Developing Modern Agriculture and Promoting the Construction of a New Socialist Countryside x Made clear that informatization is one of the three main goals for agriculture, along with mechanization and irrigation.

2007

3. 17th National Congress of the Communist Party of China x Set modernized agriculture and a reinvigorated rural economy as primary tasks.

Proposed to strengthen rural infrastructure, improve rural markets and agriculture service systems, and promote advances in agriculture-related science and technology to increase agricultural production capacity.

2006

4. 2006–2020, State Informatization Development Strategy x Proposed to “use the public network with a variety of access methods and affordable prices for farmers, improve rural network coverage, integrate agricultural information resources, standardize and complete the public information intermediary services, build urban-rural information service system in a concerted manner, provide farmers with the applicable information services such as market, science and technology, education, health care etc, and advocate a reasonable and orderly flow of the surplus rural labor.”

Central Committee of Communist Party of China

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World Bank Working Paper

2006

5. Opinions of the Committee and the State Council on Promoting the Construction of a New Socialist Countryside x “Actively promote the construction of Agriculture Informatization, integrate and make full use of agriculture-related information resources, strengthen the information services of radio and television broadcasting and telecommunications in rural areas and focus on ‘Golden Agriculture’ project and comprehensive agriculture information service platform construction.”

2005

6. Opinions of the Committee and the State Council on Several Policies Relating to Intensifying Rural Work and Improving Agricultural Comprehensive Production Capacity x “Strengthen the construction of Agriculture Informatization.”

2005

7. Opinions of the Committee and the State Council on Intensifying Rural Cultural Construction x “Provide rural digital culture and information services”

Year

Key Supporting Initiatives

Progress Made x

2003– 06

1. Modern Distance Learning of National Party Cadres in Rural Areas x Build an information services platform by 2010 with a batch of teaching resources for rural party members and peasants x Build a batch of terminal receiving posts, including satellite receiving, broadcast and television transmission, broadband set-topbox or P2P transmission, etc.

(Rural party members’ activity rooms, rural middle and primary schools, etc are usually built up as receiving posts)

x x

Initiated with pilot experiments in three provinces, it will extend to nine provinces by 2008. Another 19 provinces will be covered by 2010.

Provinces have built up 197,320 terminal receiving posts in villages and towns.

7,073 IP course-wares delivered. The IP information channel has sent 53.7 billion bytes of information. The teaching center website has published 22,678 pieces of information. The total click rate was around 4.4 million, and the daily visits were over 6,000.

National Development Reform Commission Year

Strategy/Policy Statements

2008

Document for Informatization for the New Rural Countryside

Year

Key Supporting Initiatives

Progress Made

2008

1. Pilot Project for Rural Informatization x Develop a public service platform that consolidates different government service offerings x Through innovative business models, pilot offerings in two or three provinces

x

Under development

Rural Informatization in China

State Council Leading Group Office of Poverty Alleviation and Development Year

Key Supporting Initiatives

2008

1. Pilot Project for Rural Informatization x Provide agricultural information on demand; help farmers integrate with national and global markets x Provide training for rural residents—such as distance education x Improve connectivity options, such as video telephony

Progress Made

x

Under development

Notes

1 2

http://news.xinhuanet.com/zhengfu/2001 09/30/content_84489.htm. http://www.agri.gov.cn/jhgb/t20080321_1029943.htm.

51

Appendix 2. Analysis of Eighteen Pilot Projects in China

Project Name

Organizational Model1

Informatization Experience Center 1000 Towns and 10,000 talents Baima Shop

Province

Province Category

Year Initiated

D

Guangdong

Eastern

2007

D

Gansu

Western

2002

Sichuan

Western

F

Shanxi

Central

Informatization Farmer Family Stores

F

Sichuan

Western

52

F Farmers Internet CafĂŠ

Government Agency Supporter Local Information Industry Department

Ministry of Commerce

Other Institution Supported

Lenovo

Number of Generating services relevant offered2 content?

Content Generator/ Aggregator3

ICT Training offered?

Technology Channels offered

Public Awareness efforts?

Onsite service assistance?

Y

Y

Y

Y

3

Y

Y

Internet

2

Y

Y

Internet

Intel China Unicom

1

Internet

1

Internet

Intel

2007

Ministry of Commerce

1

Internet

2006

Local Agricultural Department

3

Y

G

SMS & Internet & Multimedia

Information Service Station

G

Shaanxi

Western

Rural Information Service Platform

G

Sichuan

Western

Local

4

Y

G

Local Agricultural Department

1

Y

G

Y

Internet & Voice

Rural Information Service System

G

Jiling

Central

Community Information Court

G

Shanghai

Eastern

2003

Local

4

Y

G

Y

Farmer Internet Bar

G

Ningxia

Western

2007

Local

7

Y

G

Y

Chongqing Hotline

G

Chongqing

Western

Local

2

Y

G

Internet

Internet & Video Internet & Video & Voice SMS & Voice

Y

Y

Y

Project Name

Organizational Model1

Province

Province Category

Government Agency Supporter

Other Institution Supported

E-Family

G

Gansu

Western

Local

Gansu Telecom

Jinta Model

G

Gansu

Western

G

Jiangxi

P Agricultural Products Association Henan Netcom

Rural Information Agent Panggezhuang Agri-Products Cooperative

53

Farmers Mail Box

Year Initiated

Number of Generating services relevant offered2 content?

Content Generator/ Aggregator3

ICT Training offered?

Technology Channels offered

Public Awareness efforts?

1

Y

G/U

SMS & Voice

Local

1

Y

G

Internet & Print

Y

Central

Local

1

Y

G

Internet & Print

Y

Beijing

Eastern

Local

4

Y

P

P

Gansu

Western

3

Y

P

Internet & Print

T

Henan

Central

Henan Telecom

5

Y

T

Internet

Eastern

Zheijang Mobile

4

Y

G

SMS & Internet

T

Zheijang

Local

Y

SMS & Internet

Notes: 1 Organizational Model include: D (Domestic private sector); F (Franchise); G (Government); P (Professional Association /Cooperative); T (Telecom Provider).

2 Service offered include: Educational Service; Entertainment Service; Agricultural market expansion & e commerce service; Supply management service (basing supply on demand); Rural & agricultural information service/ facilitating consultation with experts; e Government service; Employment generation service; Additional commercial services (printing, faxing, multi media service, purchasing); Training.

3 Content Generator/Aggregator include: G (Government); P (Professional Association); T (Telecom Provider); U (User).

Onsite service assistance?

Y

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World Bank Working Paper

Appendix 3. Impact Evaluation: Rationale, Definitions and Framework for Rural Informatization Pilots Rationale

Monitoring and evaluation are essential components of informatization initiatives, providing needed information to project implementers on a project’s success in achieving its development goals and alerting them to potential complications in implementation.

When people evaluate ICT based services they usually focus on functionality, access, or user satisfaction. This translates into such questions as “Has the technology been installed and is it working properly?”; “Is access to electronic information being provided for a wider range of people?” or “Are different groups of people happy with the service they are getting?”

These types of information are useful but they do not tell you:

ɶ Are the services provided making any real difference to the users? ɶ Are the communities changing as a direct or indirect result of the services provided? ɶ Is there any difference in the implementing organisation as a result of providing these services?

Impact evaluation focuses on answering these questions, and can inform key stakeholders

ɶ Strategists and policy makers: • If ICT based services contribute to achieving program goals • If the services make any real difference to communities and to reducing poverty • If the services provide value for money • What can be done, and how, to be more effective in meeting program goals • How to make evidence based decisions about scaling and replicating programs ɶ Managers of ICT based services: • If they are meeting their goals and objectives • If they are making effective use of resources (time, money, expertise) • If the services make any real difference to individuals, to their community or to the organisations providing the services • If there are any (good or bad) consequences that they did not expect • What they can do to improve how they meet their goals and objectives • Evidence for advocacy to engage support from key stakeholders.

ɶ Providers of ICT based service: • If they are meeting their objectives • If they need to adapt or adjust what they are providing and how

Rural Informatization in China

• •

55

If the service makes any real difference to users What they can do to improve and develop the service

Impact planning and assessment should be an integral part of any program with a goal of social change. Without it, programs run the risk of engaging in lots of activity and providing new services without making a difference to people’s lives.

Definitions

Impact—can be defined as any effect of a service/project or initiative on an individual, group, organisation or community. This effect:

ɶ may be positive or negative ɶ may be intended or accidental ɶ may affect service providers, service managers, users/customers or other people

The impact can show itself in individual cases or through more generally discernible changes, such as shifts in:

ɶ economic circumstances of a region or locality e.g. more jobs available, reduction in local poverty ɶ educational and other outcomes e.g. skills acquired; educational attainment; levels of knowledge ɶ quality of life e.g. self confidence; social inclusion; work or social prospects

Impact assessment—is collecting, analysing and reporting evidence to show whether the service makes any difference to people, groups, organisations or communities.

(Impact assessment is sometimes called impact evaluation.)

Program goals—the overarching stated purposes of the program and/or of the organisations providing the ICT based services (e.g. to reduce poverty in the communities served by the organisations).

Objectives—refinement of the program goals into more specifically achievable terms, usually expressed as what can be achieved in one, three or five years.

The chart below shows the planning process that underpins impact evaluation. It begins with the impact aims and indicators and then shows two parallel lines of activity deciding on:

ɶ What infrastructure need to be put in place to meet the aims and what activities will help realise the aims; ɶ What indicators of impact linked to your aims and on output and process indicators to ensure that your activities are helping you move toward your aims.

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World Bank Working Paper

Figure A.3.1. Developing Performance and Impact Indicators Overall purpose/mission

Aims/objectives What are you trying to achieve?

Areas where service is trying to make a difference (not activities)

Outcomes/impact/achievement indicators/success criteria How will you know if you are making a difference?

Service Infrastructure Output/service performance indicators Processes that contribute to realising the aims/objectives including activities and capacity building

Review your indicators

Process/performance indicators

Baseline data Collected to ascertain where the service is now

Targets Grounded in baseline data

Implement and monitor

Source: Markless, S. and Streatfield, D.R. 2006.

Rural Informatization in China

57

Examples of Evaluation Framework

One example of how impact evaluation has been applied to informatization is the Real Access/Real Impact framework developed in South Africa. This framework sets out the determining factors in whether there is real access to ICT that goes beyond computers and connections so that technology use makes a real impact on socio economic development.1 If the overall mission of a rural informatization project is to improve the living standard of rural farmers, a framework to evaluate the impact might look like the example below.

Table A.3.1. A Framework to Evaluate Project Impact Impact aim

Impact objectives

Activity/ processes

Impact indicators

To improve living standards of rural farmers

Increased rural productivity

Computers installed

Reduced direct costs through use of on-line administration

Experts recruited to develop local content Local staff trained in ICT Local staff run ICT courses for local farmers

Increased trade/sales Increased capacity for participating in new economic domains

Farmers use Internet services for timely and relevant information to help increase quality and yield

Local staff competent and confident to give ICT support to farmers

More relevant local content available

Proportion of farmers completing ICT courses

Increased computer and internet skills amongst farmers Increased access to computers and the internet

Level of sales Training materials and strategies developed

Farmers develop new products Farmers develop knowledge of prospective customers

Farmers access credit/ financial resources on-line

Outcomes

Farmers diversify production

Levels of interest in new business development

Outputs

Farmers’ cooperatives are convinced to support farmers’ use of ICT

Evidence presented to farmers about new business development

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World Bank Working Paper

For the pilot projects highlighted in Appendix 2, the following are some of the indicators that could be pursued, to assess impact, a framework is proposed for evaluating their impact as well as their sustainability and readiness for scaling up.

Table A.3.2. Indicators to Assess Project Impact Impact Category

High-level Indicators

User satisfaction with services

Reduced direct costs (such as travel time, service delivery time, bribe payment) More and better-quality services (such as single-window access, convenience, quality of problem resolution0 Demand driven (such as feedback mechanism)

Economic impact

Income generation Job opportunities Disaster prevention/mitigation

Social impact

Better-informed population (for example, on health and education) Improved governance and transparency More social networks and participation in community activities

Sustainability

Level of subsidy required (fully funded, partial funding) Timeframe of subsidy(throughout project life vs. initial stages) Revenue sources Capital costs required (such as for infrastructure building) Degree of scaling up experienced

Note

1

http://www.bridges.org/publications/94.

Rural Informatization in China

59

Appendix 4. A Framework for Evaluation of Eighteen Pilot Projects User Satisfaction of Services

Project Name

Economic Impact

Social Impact

Sustainability of Service

Builds Increased Service Service Income Employ awareness/ Level of Add’l Project Centers/ ImproveMore genement interest in Public Loan/ User scaled Access 1 2 ment? services? ration? generation?

ICT? Subsidy Grant? fees ? up? Points?

Panggezhuang AgriProducts Cooperative

Y

n/a

Information Service Station

Y

F

Y

Rural Information Service Platform

F

Y

Henan Netcom

P

Baima Shop

Y

Informatization Experience Center Rural Information Service System

Y L&G3

P Y

Y

C

Y Y

F

Farmer Internet Bar

Y

Chongqing Hotline

A/C

F

Community Information Court Y

Y

1000 Towns and 10,000 talents

C

F

Y

N Y

Y A

F

Agricultural Products Association

Y

P

M/P

Farmers Internet CafĂŠ

Y

n/a

A

Y

A

Y

Informatization Farmer Family Stores

Y

Rural Information Agent Farmers Mail Box

Y Y

Y

P

Loan4

F P

A

Notes: 1 Level of public subsidy include: F (Fully); P (Partially); N (No subsidy).

2 User fees include: A (Access fees to use the Internet, SMS, voice service); C (Commercial service fees, e.g. printing, faxing, multi media, etc); M (Membership charges for regular services, e.g. professional cooperatives); P (Profit percentage); and combinations of each.

3 Loans provided by rural credit cooperatives, local agricultural associations; Grant from Intel for farmer computers.

4 China Telecom, rural credit cooperatives, local agricultural association.

Y

A/M

F Y

Y Y

F

E-Family Jinta Model

P

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Rural Informatization in China is part of the World Bank Working Paper series. These papers are published to communicate the results of the Bank’s ongoing research and to stimulate public discussion.

China’s recent economic growth has expanded industrialization and urbanization, upgraded consumption, increased social mobility, and initiated a shift from an agricultural-based economy to one based on services and industry. However, more than half of China’s population still lives in rural areas, where the average per capital income is less than a third of the urban average. The government of China has increased its commitment to rural development and poverty-reduction programs, with attention to narrowing the rural-urban divide. Informatization—defined as the transformation of an economy and society driven by information and communications technology (ICT)—is increasingly being explored as a way of helping poor people. Rural Informatization in China presents an overview and in-depth analysis of rural ICT initiatives in China. This study reviews the present-day status of China’s rural informatization infrastructure, examines and summarizes by organizational model the key initiatives in the past decade, and provides policy recommendations to address current challenges. Case studies of different financing models of rural ICT initiatives from China and other countries are included.

World Bank Working Papers are available individually or on standing order.

This World Bank Working Paper series is also available by subscription to the World Bank e-Library (www.worldbank.org/newelibrary).

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