the impact of mobile telephony on developing country micro

47

Abi JagunResearch FellowUniversity of StrathclydeUK

Richard Heeks*[email protected] of DevelopmentInfomaticsSchool of Environment &DevelopmentUniversity of ManchesterUK�44(0)161 275 2870

Jason WhalleySenior LecturerUniversity of StrathclydeUK

The Impact of Mobile Telephony on Developing Country Micro-Enterprise JAGUN, HEEKS, WHALLEY

Research Article

The Impact of MobileTelephony on DevelopingCountry Micro-Enterprise:A Nigerian Case StudyAbstract

Informational challenges—absence, uncertainty, asymmetry—shape the work-ing of markets and commerce in many developing countries. For developingcountry micro-enterprises, which form the bulk of all enterprises worldwide,these challenges shape the characteristics of their supply chains. They reducethe chances that business and trade will emerge. They keep supply chainslocalized and intermediated. They make trade within those supply chains slow,costly, and risky.

Mobile telephony may provide an opportunity to address the informationalchallenges and, hence, to alter the characteristics of trade within micro-enterprise supply chains. However, mobile telephony has only recentlypenetrated. This paper, therefore, presents one of the ªrst case studies of theimpact of mobile telephony on the numerically-dominant form of enterprise,based around a case study of the cloth-weaving sector in Nigeria.

It ªnds that there are ways in which costs and risks are being reduced andtime is saved, often by substitution of journeys. But it also ªnds a continuingneed for journeys and physical meetings due to issues of trust, designintensity, physical inspection and exchange, and interaction complexity. As aresult, there are few signs of the de-localization or disintermediation predictedby some commentators. An economizing effect of mobile phones on supplychain processes may therefore co-exist with the entrenchment of supply chainstructures and a growing “competitive divide” between those with andwithout access to telephony.

IntroductionThere has been a rapid growth in the spread of mobile telephony world-wide, including a particular growth in recent years in developing coun-tries. To take one comparative example, the average growth rate inmobile subscribers in Africa from 2002–2007 was 49% per annum whilethe ªgure for Europe was 17% (ITU, 2008). African mobile subscriberscomprised 89% of all phone subscriptions while the ªgure for Europe was73%. Yet, despite the fact that developing country citizens make up 80%of the world’s population and the majority of the world’s mobile phoneusers, research on mobile telephony in developing countries has been rel-atively limited to date (Donner, 2008).

Our understanding of mobile telephony is thus uneven and heavilyskewed toward those countries and users that are now in a global minor-

*Corresponding author.

© The MIT Press 2008. Published under Creative Commons Attribution NonCommercial-NoDerivativeWorks Unported 3.0 license. All rightsnot granted thereunder to the public are reserved to the publisher and may not be exercised without its express written permission.

Volume 4, Number 4, Fall/Winter 2008, 47–65

ity. As Castells et al. (2007, 4) illustrate: “we know agood deal about Norway because of the quality ofNorwegian research in this ªeld, while we know lit-tle about Nigeria because of the scant reliable evi-dence on this important country.”

Castells and others warn that we should not takea “year zero”-type approach to understanding mo-bile telephony, but we can build on pre-existing tele-communications research. In this case, within theliterature with a speciªc focus on telecommunica-tions and developing countries, one can identify twoparticular clusters of work. One set has taken an“upstream” perspective, focusing on diffusion oftelecommunications and attendant policies or strate-gies (e.g., Mureithi, 2003; Courtright, 2004;Rouvinen, 2006).

A second set has taken a “downstream” per-spective, focusing on the impact of telecommunica-tions. This literature has typically been economic andmacro-level. Following from the original ideas ofJipp (1963), such work has posited a positive rela-tionship between diffusion of telecommunicationsand national economic development (Bedi, 1999;Forestier et al., 2002; Waverman et al., 2005).

More micro-level analysis of telecommunicationsimpacts in developing countries has been less exten-sive. Some of it has been criticized for either extrap-olating from studies in industrialized countries and/or for relying on economic calculations of the bene-ªts that would accrue in theory, based on question-able assumptions (Saunders et al., 1994; Bedi,1999). What developing country ªeldwork there ishas tended to rely on survey data that provides in-sights into users and purposes of telephony, but notactual impacts (Saunders et al., 1994; Tucker, 2007).In addition, ªeld studies of telephony in developingcountries have tended to focus mainly on socialrather than business uses because they ªnd the for-mer dominates the latter (e.g., Bayes, 2001;Bertolini, 2002; Souter et al., 2005). Thus we mayªnd detailed anthropological studies of telephony’srole in social and political development (e.g., Rafael,2003; Ureta, 2004), but little work appears to havebeen done on telephony and micro-enterprise in de-veloping countries (Donner, 2008). This despite the

fact that, numerically, such enterprises (deªned asthose that employ up to 10 people (Devins et al.,2002) form by far the bulk of all enterprises world-wide, that they provide the most signiªcant part ofincome generation and employment in many devel-oping countries, and that they are “a key ingredientin poverty reduction” (Palmer, 2004, 31; see alsoAlbu & Scott, 2001; ILO, 2001). Hence, there havebeen calls for more research on this area (e.g.,Gamos, 2003; Jensen, 2007).

In part, the lack of research is predictable giventhe relatively limited access that such enterprises—the bulk of which are operated in the informal sec-tor by those from poor communities—have histori-cally had to telephony (Scott et al., 2004). Since theturn of the 21st century, though, this has beenchanging, largely thanks to the diffusion of mobiletelephony. This once-elite, but now mass-market,technology is intersecting with the organizationsthat make up the major form of income and em-ployment-generation in the “majority world” of de-veloping countries.

It is therefore an appropriate moment to investi-gate the gap in knowledge that has existed to date.This paper argues a need for greater understandingof the impact that mobile telephony is having onmicro-enterprise in developing countries. It answersthis need through an in-depth case study of the roleof mobile telephony in the supply chains of one mi-cro-enterprise sector: the cloth-weaving sector inNigeria.

The case study is preceded by a review of theway that information shapes micro-enterprise supplychain processes and structures, and a review ofideas and evidence to date about the potential im-pact of mobile telephony.1 Following an outline ofresearch methods, the focal case study sector is de-scribed and then analysed in terms of participants,processes, and structures. A similar pattern is thenemployed to describe the way in which mobile tele-phony is accessed by supply chain stakeholders, andto analyze its impact on supply chain processes andstructures. The ªnal section then draws a set ofconclusions.

48 Information Technologies and International Development

THE IMPACT OF MOBILE TELEPHONY ON DEVELOPING COUNTRY MICRO-ENTERPRISE

1. We see it as appropriate and necessary that mobile phone research should review literature not just on mobile tele-phony but on ªxed-line telephony, and on telecommunications more broadly, as we do in this and following sections.However, a question remains, as posed later, about the relation between ªxed and mobile telephony. Are mobiles justsmaller, cheaper versions of ªxed phones, or does their mobility add something new?

Literature Review and ResearchFocus

Information, Trade, and DevelopingCountry Micro-EnterpriseWe are seeking to understand the role of mobilephones in developing countries in micro-enterprisesupply chains: the inter-linkages of relations that runfrom the original supplier of raw materials throughto the ªnal customer. Identifying mobile phones astools for the communication of information, weneed to start from an information-based perspec-tive. Therefore, our literature starting point will beworks on information, trade, and enterprise; in par-ticular, the literature that moves beyond abstractmainstream/neoclassical economic views of trade tothe arguably more “real-world” views of new insti-tutional economics (Crow, 2004). From this perspec-tive, micro-enterprise supply chain relations can beunderstood as a series of trading activities that relyheavily on information in the three main steps oftrading (Norton, 1992; Casson, 1997):

• information acquired prior to trading (on theexistence of the other party, on their reputationand trustworthiness, on typical prices);

• information communicated during trading (onitems offered and money/other items sought,on quality of items offered, as part of negotia-tion);

• information acquired after trading (on whetheror not the terms of the agreed trade contracthave been fulªlled).

Availability, quality, cost and other characteristics ofinformation, and the ability to communicate that in-formation, are thus critical foundations for all tradeand all enterprise, including micro-enterprise (Porter& Millar, 1985; Stiglitz, 1988).

In practice, almost all real world commerce suf-fers from information failures of various kinds. Theseproblems are often particularly acute for micro-enterprise in developing countries (Albu & Scott,2001; Müller-Falcke, 2001). Those seeking to trade,whether buying or selling, may suffer from an ab-sence of information. For example, they may not beaware of whom they could trade with. They maysuffer from information uncertainties. For example,they may be uncertain about an appropriate pricefor an item they are seeking to trade. They may suf-

fer from information asymmetries, meaning thatthose they trade with have information that theylack or that they are uncertain about. For example,they may trade with someone who does know anappropriate price for an item when they do not.Finally, micro-enterprise supply chains in developingcountries also suffer problems because communica-tion has traditionally had to take place face-to-face,there being no other reliable means for the commu-nication of information.

Informational characteristics in turn shape boththe process and structure of commerce (Williamson,1975; Stiglitz, 1988). Thus the informational chal-lenges just described have led to a characteristicpattern in developing country micro-enterprise sup-ply chains (Fafchamps, 1996; Overå, 2006). In termsof the trading process, we can identify three typicalcharacteristics:

• Trading tends to be slow. Both trading itselfand gathering of background data requirephysical interaction, which may in turn requirejourneys. Journeys are often slow because ofrelatively poor-quality and/or lack of transportinfrastructure.

• Trading tends to be costly. There are highªnancial and time costs of gathering informa-tion necessary in order to trade. Journeys, inparticular, are costly both in terms of directcosts but also indirect costs: for most micro-entrepreneurs, a day spent journeying is a dayfor which income generation must be fore-gone.

• Trading tends to be risky. Micro-entrepreneursare subject to (or may subject other supplychain actors to) trading risks because of infor-mation asymmetries. These include opportun-ism such as overcharging for goods or agreeingto a contract knowing it cannot properly befulªlled, and adverse selection such as unwit-tingly selecting a trade partner or trade itemsof poor quality. For trading in a number of de-veloping country contexts, one should recog-nize the risks of commerce-related travel. Thesewould include the physical risks of both trafªcaccidents and crime.

One impact of these information-driven processchallenges is that the development of commerce, ofbusiness, and of markets in many developing coun-

Volume 4, Number 4, Fall/Winter 2008 49

JAGUN, HEEKS, WHALLEY

tries is constrained (Loasby, 2000; Albu & Scott,2001). Where commerce and supply chains do de-velop then, in part because of these informationalissues, they tend to have particular structural charac-teristics. One of these is that trading tends to belocalized (Duncombe & Heeks, 2002; Jensen, 2007).Trading or data-gathering with anyone at a distancerequires a potentially slow, costly, and risky journey.Since delay, cost, and risk tend to be proportional todistance, there are incentives to localisation of sup-ply chains.

A second structural characteristic is the presenceof intermediaries (Casson, 1997; Bedi, 1999;Chowdhury, 2002). Intermediaries are supply chainactors who are neither producers nor ªnal consum-ers, but who interpose themselves between a pro-ducer and a consumer. They buy from one and sellto the other, or they may otherwise handle the tradebetween the two. Intermediaries have come to existin supply chains where they address some of thenegative information-related characteristics of trad-ing. They hold both quantitative and qualitative in-formation on buyers, sellers, products and prices.They can thus reduce the informational costs and in-crease the communication speed of all three stagesof trading for buyers and sellers. Their broaderspread of contacts allows trade to become less local-ized. They can make trade less risky, or at leastmake it perceived to be less risky, because of theirinformational resources and reputation.

However, intermediaries can also have a negativeimpact on micro-entrepreneurs. They are typically ina more powerful position than other supply chainactors, particularly due to information asymmetries;they know things that micro-producers and custom-ers do not. As a result they are often seen to forceprices paid to producers down, well below marketvalues, resulting in reducing income for the micro-entrepreneurs (Bayes, 2001; Rahman, 2007). Theymay also, for example, be able to force loans on mi-cro-entrepreneurs that have to be repaid at high in-terest rates.

The Potential Impact of MobileTelephonyWhat, then, might be the impact on micro-enter-prise supply chains of mobile telephony? To initiallyrespond, of necessity, we draw on broader, oftentheoretical, literature on information and communi-cation technologies in development.

From this we could conceive the impacts of mo-bile telephony at different levels (see Figure 1). Atthe most micro level, mobiles could have a quantita-tive impact by increasing the speed of communica-tion (i.e., information ºow) and by reducing the costof communication (Norton, 1992). They could havea qualitative impact by increasing the quality of in-formation that is communicated for decision making(Bedi, 1999).

In turn, this would then be predicted to impactthe three trading process characteristics (Saunders etal., 1994; Müller-Falcke, 2001). Trading could be-come quicker as the information necessary for trad-ing can be gathered more quickly and as directtrading-related communication occurs more quickly.Trading could become less costly, especially if jour-neys can be avoided. And trading could become lessrisky as information uncertainties and asymmetriesare removed, and as travel is avoided.

The structure of supply chains could also be al-tered (Bedi, 1999; Eggleston et al., 2002). Tradingcould become less localized as telephonic communi-cation is relatively independent of geography.Equally, intermediaries could be removed as the in-formational advantages that they offer are under-mined or substituted by the mobile phone. Buyerscould pay less by dealing directly with producers,and the information asymmetries that beneªt inter-mediaries could be eroded. Micro-entrepreneurscould then be empowered. Finally, at the mostmacro level, all this should help to increase businessinvestment, allow new businesses and markets toemerge, and contribute overall to economicdevelopment.

These are the potentials, but what is the realityof mobile telephony in developing country micro-enterprise? As noted above, the base of literatureon this topic has so far been very limited—hence therationale for the study reported here. Entrepreneursusing mobiles do report a perception that trading in-creases in speed and reduces in cost, though there islimited detail on how this occurs (Donner, 2004)save Jensen’s (2007) detailed study of ªsh trading.There is some general sense that mobile phonesmay enable a greater locational spread of micro-enterprise activity (Overå, 2006; Jensen, 2007).

On the issue of intermediation, there are someindications that mobile phones are associated withdisintermediation (Bayes, 2001; Overå, 2006), butalso with ongoing intermediation (Duncombe &



Heeks, 2001; Molony, 2006). Likewise, there is someevidence that mobile phones substitute for travel(Duncombe & Heeks, 2001), but other research sug-gests a mixed picture in which some journeys aresubstituted but others are not (Souter et al., 2005;Overå, 2006). Trust may be a factor helping to ex-plain some of these outcomes (Molony, 2006). Over-all, then, we have limited ªeld evidence about theimpact of mobiles on micro-enterprise, and what ev-idence we do have points, in some cases, in slightlydifferent directions.

Finally, and stepping back to an even broaderperspective, there is an issue to investigate aroundthe generic role of mobile phones in developingcountries. There has been some tendency to assumethat role is global—much the same in industrializedas in developing countries—but other analysesquestion one-size-ªts-all perspectives (Hamilton,2003; Castells et al., 2007). They argue that usagemodels are different in developing countries. Formany in industrialized countries, mobile phones area supplement to ªxed-line telephony, and are valuedspeciªcally for their mobility. By contrast, there is ev-

idence for some developing country users that amobile phone is their ªrst link to the network. Itmay thus be valued for its connectivity and conve-nience, more than for its mobility, and its impactmay therefore be very much like that of a ªxed line.Similarly the “Northern” model of an individually-owned phone purchased by its one user may notapply in the global South, where there has been along history of shared ownership and access modelsin relation to information and communication tech-nologies (James, 2005).

Research MethodsIn seeking a better understanding of the impact ofmobile telephony on micro-enterprise in developingcountries, the research reported here focused on theaso oke (meaning “top cloth”) industry. This pro-duces clothing for ceremonial occasions by hand-weaving and is primarily associated with the Yorùbápeople of southwestern Nigeria (see Figure 2).

We wanted to choose a production-oriented sec-tor to study since such enterprises are crucial towealth creation and poverty alleviation. Production-oriented enterprises form up to 40% of all micro-enterprises in developing countries, and they consti-tute a core source of value addition (Albu & Scott,2001). Aso oke speciªcally has been a key economicactivity in rural and peri-urban areas of southwestNigeria, partly because its high quality and custom-ized design make it relatively resistant to the scale



Figure 1. Conceptualizing the Impact of Mobile Tele-phony on Commerce.

Figure 2. Aso Oke Clothing (Africa Styles, 2008).

economics and imports that have damaged othersmall-scale textile activities (Liedholm, 1982; Clarke,1999).

Aso oke was also chosen for three other reasons.It has a well-developed supply chain, from threadsuppliers through weavers and sub-weavers to ªnalbuyers. Intermediaries have traditionally played animportant role in the supply chain. And it is a sectorthat had seen some level of penetration of mobiletelephony in the year or two prior to plannedªeldwork.

A case study methodology was thus adopted, incontrast to the more generic survey-based approachthat has typiªed studies of telephony in developingcountries. This involved conducting in-depth, face-to-face, semi-structured interviews with representa-tives of the different groups of participants in thecase industry. A total of 16 interviews were docu-mented from seven intermediaries, six weavers, andthree buyers. These interviews covered not only theirown experiences but also their reports of prevalentpatterns of mobile phone use in the aso oke supplychain. Observations and personal reºections werealso documented in the form of ªeld notes, withphotographs collected to supplement explanationsof some product features and productiontechniques.

Interviews and the researcher’s observations andreºections were written up as descriptive text, andwere analyzed with the aid of the qualitative analy-sis software package NVivo. Analysis was an itera-tive process involving the segmentation of data intoclusters and the creation of matrices. Causal maps(Eden & Ackermann, 1998), also referred to as

causal networks (Miles & Huberman, 1994) wereused to integrate data into an explanatory frame-work of the phenomena being studied. In this man-ner, the circumstances that give rise to informationfailures in the industry, and the effect of such fail-ures on the process and structure of trade wereidentiªed. The analysis also allowed for thecontextualization of the use of mobile phones in ad-dressing information failures, and the causal mapshelped in ascertaining the opportunities and limita-tions associated with mobile phone use.

Analyzing the Case Industry SupplyChainAso oke involves the weaving of cloth on hand-looms (see Figure 3). The cloth can be used in theproduction of fashion accessories such as shoes orbags, and in the production of home furnishingssuch as throws and cushion covers. However, as il-lustrated above, its main market is in being sewn to-gether to create clothes for ceremonial occasions.

The aso oke industry is buyer-driven: transactionsbegin when a buyer approaches either a weaver or,much more often, an intermediary to place an order.Orders for the fabric are usually bespoke and plac-ing an order involves negotiating the buyer’s designrequirements: such things as the pattern and colorsof the fabric, its consistency, and ªnishing. This ne-gotiation will involve the weaver being called tomeet the intermediary and/or buyer.

Once the design has been agreed upon, a sampleof the ordered fabric is produced and presented tothe buyer for approval. Approval leads to the nego-tiation of the terms of the transaction, including or-der quantity, delivery dates, and price. A deposit isthen paid by the buyer that serves to both seal thetrade agreement and provide some initial capital forproducing the order. Payment of the deposit, there-fore, marks the beginning of the production stage.Raw materials are purchased either by the interme-diary or, infrequently, by the weaver and the fabric iswoven to the buyer’s speciªcations.

An aso oke order tends to be completed inbatches. These batches are delivered to the buyer asthey are completed and, depending on the size ofthe order, deposits for future batches are collectedat the time of each delivery. The balance paymentfor the order is collected when the ªnal batch offabric has been delivered to the buyer.



Figure 3. Male Weaver Using Horizontal Loom.

From this basic process description we can thendraw out the three main stakeholder roles related tothe industry:

• Buyers: the buyer is the individual who com-missions an order. They may be the ªnal indi-vidual consumer or, in the case of a groupwishing to wear similar clothes for a ceremony,a representative of those ªnal consumers. Theyalmost always deal with an intermediary ratherthan dealing with a weaver directly.

• Producers: like buyers and intermediaries,weavers were both men and women. Someweavers work on their own, but others aregrouped with a hierarchy of master weaver andsub-weavers. It is the master weaver who inter-acts with the intermediaries or buyers, andwho organizes fulªllment of orders via the sub-weavers. Sub-weavers have typically beentrained, or are being trained, by the masterweaver.

• Intermediaries: intermediaries act to promotetrade by providing access for buyers to produc-ers and vice versa, by generating alternativeswhen initial requests prove unworkable, and bydeveloping and negotiating trade agreements.They are normally responsible for paying forthe raw materials. They also act to monitor thecontract as it is fulªlled, particularly the prog-ress being made by the weaver, the quality ofcloth delivered, and its ªt to the originallyagreed design.

In addition, there are suppliers who provide the rawmaterial for aso oke thread. Occasionally, the weav-ers may buy directly from them. More often,though, the intermediary would purchase thread,sometimes allowing the weaver to pick it up ontheir behalf.

As discussed in more detail below, these stake-holders are geographically somewhat dispersed, andso travel is central to the aso oke supply chain.Weavers travel to intermediaries to see if they haveorders; intermediaries or their representatives travelto weavers to deliver orders or to summon weaversfor a meeting to discuss orders. Weavers and inter-mediaries travel to each other and to buyers tocheck design requirements and design approvals. In-termediaries and weavers travel to check availabilityof, and purchase, thread from suppliers. Intermedi-aries travel between weavers and buyers to check or

report on progress, and to communicate and resolveany emergent issues or changes during fulªllment ofan order. Journey distances were not great, normallywithin the boundaries of a single state and perhapsa maximum 200km return distance. However, theycould still be long in terms of time because of hightrafªc density in urban areas, infrequent taxi/minibusdeparture times, and poor state of the road surface.

As a result, trade within the aso oke sector hasdeveloped the characteristics that are typical of de-veloping country micro-enterprise supply chains. It isslow, requiring an order months ahead of theplanned ceremony and needing many days for anyinteractions regarding changes or problems to re-solve which, as one interviewee reported, was frus-trating: “There is little discipline in the industry anda general impatience; people seem to want the fastway out.” It is costly, with the buyer ultimately hav-ing to pay the cost of journeys and intermediation,and with income for weavers being squeezed down.

And it is risky. Actors were able to relate storiesof accidents or other misfortunes related to travel.But other, more intrinsic risks were also present. Thenature of information asymmetries, particularly thebuyers’ lack of information, and the knowledge thatthere was a low probability of repeat purchasesfrom buyers meant opportunistic behavior arose. In-terviewees cited examples that included overcharg-ing for an order, using poor quality thread (rawmaterials) in weaving the cloth, and making thecloth of shorter length and/or width than is stan-dard. However, there were also examples given ofbuyers or intermediaries under-paying for orders, re-lying on their greater power than weavers, and onthe lack of likely contract enforcement through law.

The intermittent nature of orders makes for a“feast or famine” type of model, which fell particu-larly hard on weavers because of their lack of capitalreserves. As a result, as one interviewed intermedi-ary saw it, “weavers never say no” and accepted or-ders even when they lacked the time and/or skills tosatisfactorily complete them. There were thus exam-ples mentioned of weavers missing their deliverydeadlines—highly problematic when the clotheswere for a speciªc occasion. At the most extreme,interviewees reported supply chain participants ab-sconding without delivering on their part of thecontract, weavers failing to deliver ordered textiles,and intermediaries or buyers failing to completepayment of orders placed.



The actual prevalence of such behavior was un-clear but, in any case, it was the perceptions of suchbehavior rather than their actuality that had two ef-fects. First, it increased the importance of trust andreputation, and the need for constant interactionalong the supply chain to both reassure and monitorthe parties involved. Second, the circulation of suchstories reduced the overall reputational capital of theaso oke sector. Combined with the slow and costlynature of trade, this perceived risk was seen to leadbuyers to turn to alternative sources, such as pur-chase of “off-the-shelf” ceremonial attire throughmore formal retail outlets.

The Structure of Trade

i. IntermediationThe aso oke supply chain is characterized by the im-portance of intermediaries. In part, intermediarieshave arisen because they have access to capital thatother players lack. They can obtain credit fromthread suppliers or can themselves pay the supplier,allowing a full order to get underway before thebuyer has paid. They thus can act as ªnancial buff-ers given the time delays during an individual orderbetween ªrst purchase of raw materials and ªnalpayment for the ªnished product. They also help byholding inventory until it can be sold, say, when ex-cess fabric has been mistakenly ordered by a buyeror mistakenly produced by a weaver. They thus helpthe market to function where it might otherwise notdue to shortages of working capital.

However, intermediaries have also emerged be-cause of the informational aspects of the aso okesupply chain. Aso oke is a heterogeneous occasionalgood deªned by idiosyncratic tastes. The majority ofbuyers/consumers therefore suffer from informationabsence or uncertainty. They do not know enoughabout the product or how it is traded to make whatthey feel are sound judgments on where to ªndweavers, how to differentiate weavers and theirproducts, what types of design are feasible to pro-duce, and on the terms of transaction, includingprice. As such, they will readily approach intermedi-aries who do hold this information. They will con-tinue to rely on intermediaries during thetransaction process because they cannot observe,without high cost, the actions of producers and,crucially, because even if they did observe those ac-tions they would not necessarily have the knowl-edge to be able to interpret them. Intermediaries

charge higher prices than weavers but buyers sawthis as worthwhile given the resultant lower transac-tion costs and greater certainties in trading includingthe greater certainty of a good-quality product.

Likewise, the majority of producers/weavers alsosuffer from information absence or uncertainty. Theydo not know enough about the location and designpreferences of potential consumers. Because of theassociation of the product with speciªc occasions,there is also a lack of formal marketing/sales chan-nels, such as shops, that might be approached. Thusproducers, too, will readily approach intermediariesand also rely on them during completion of a trans-action because the intermediaries can monitor theactions of the buyer; something that would other-wise be costly for the weaver.

Information failures have therefore shaped thestructure of commerce in this industry to favor theemergence of intermediaries. That emergence is re-inforced by the opportunistic behaviors and per-ceived risk of adverse selection that also arise partlydue to those information failures. This means trust,reputation and monitoring are all important, and allof these are factors conducive to the existence of in-termediaries who can act as the trust/reputationproxies for both weavers and buyers, and who canundertake knowledgeable monitoring of bothweaver and buyer behavior.

As a ªnal point, structuring within this supplychain has some self-reinforcing effect. Informationfailures and lack of trust between producers (weav-ers) and buyers lead to the existence of intermediar-ies. Existence of intermediaries reduces theopportunities for ºattening of asymmetries and cre-ation of trust between producers and buyers.

ii. LocationIn one sense, aso oke supply chains are localized;very few stretch across into a different Nigerian statebecause of the costs imposed by journeys. Withinthose states, though, the various actors are dis-persed.

Production of aso oke is largely centered on smallinformal groups that are family/kinship-oriented andcommunal in nature. This results from the passingdown of weaving skills to younger generationsthrough family or community ties; a practice thathas resulted in particular geographic areas in south-west Nigeria being associated with weaving.

Buyers are, as might be expected, distributed in



relation to centers of population. They tend to inter-act with intermediaries or weavers who are relativelycloser rather than relatively farther, but interactionwould typically still require a journey. Some orderscome from distant parts of Nigeria or even fromoverseas, making a journey by the buyer prohibi-tively costly. In such cases, they use kinship orfriendship networks to identify a representativenearby who acts on their behalf.

The geography of intermediary and weaver loca-tions appeared to relate to the level of trust and in-tegration in the intermediary-weaver relationship. Insome cases, weavers were found to work exclusivelyor predominantly for one intermediary. Those weav-ers were regarded by the intermediary as parts of anintegrated, but extended “organization” that theycontrolled. Trust tended to be high and the require-ment for physical journeys kept to a minimum. Insuch cases, the distance between intermediary andweaver could be 40–100km.

Where there was a looser or newer relationshipbetween intermediary and weavers, distance couldstill vary, but the preference was for it to be small.The extreme example was one intermediary whoalso designed clothes. She selected nearby weaverswhom she could sit with during the production pro-cess. Only in this way did she feel she could verifythe correct design, width and quality of cloth wasbeing woven. Something similar also occurred in the“sitting with Nellie” process of learning by sub-weavers from master-weavers, where trust was be-ing built through the learning process.

Despite variations, then, we can say generallythat the weaker and less integrated the relationshipbetween intermediaries and weavers that was ob-served, the greater was the use of physical veriªcat-ion as a monitoring mechanism, and the shorter thepreferred geographic distance between the interme-diary and his/her weavers. A summary is provided inFigure 4.

Findings on Mobile Telephony andthe Supply Chain

Access to Mobile TelephonesThe licensing and launch of GSM (Global System forMobile) mobile operators in Nigeria in 2001 repre-sented a signiªcant liberalization compared to theprevious domination of telecommunications provi-sion by the government-owned monopoly, NITEL

(Smith-Hillman & Braithwaite, 2004). The years since2001 have seen very strong growth in subscribernumbers and reach, particularly for mobile phones,along with falls in prices and improvements in ser-vice quality.

In the area under study, no interviewees hadªxed-line telephones, and access to functioningªxed-line public payphones was negligible. Instead,all accessible telephony was mobile—either usingGSM (location-independent) or using wireless localloop (WLL: where the mobile phone is restricted tothe area around one particular exchange). Therewere three access models found, listed in descend-ing order of reported prevalence.

i. Private Ownership of Mobile PhonesAll interviewed buyers and intermediaries ownedtheir own mobile phone, and this was regarded as anorm for the aso oke sector. Ownership of a mobilephone by the weavers was, by comparison, lesscommon; ªeld data suggested about one-quarter ofweavers had a phone. This occurred via one of twoobserved and reported models.

In some cases, an intermediary was operatingtheir own vertically-integrated supply chain, workingalways with one particular group of weavers whoproduced exclusively for that intermediary. These in-termediaries would provide a mobile handset com-plete with Subscriber Identity Module (SIM) card forthe master weaver of the group. The phone was stillowned by the intermediary, but the master weaverwas responsible for purchasing airtime.

Alternatively, the intermediary would sell a mo-bile phone to the weaver and then recoup the costby deducting an agreed amount from each com-pleted order. The intermediary was thus likely tokeep sending orders to that weaver until the debtwas repaid. However, the intermediary determinedthe price of the mobile phone and the deduction,and the debt was seen to increase their leverageover the weaver.

ii. Access to Commercial Third-Party MobilePhonesSince GSM licensing, a number of “phone shops”have sprung up around Nigeria. These may be physi-cal premises or so-called “umbrella people” who sitoutside under an umbrella, selling use of their mo-bile phone. They were particularly used by weavers.Outgoing calls were charged at the advertised tariffrate of the operator to whom the phone shop



owner subscribed. For incoming calls, the weaverwould have to pay a small one-time “registrationfee.” They could then give the phone shop numberto intermediaries or buyers. When a call arrived, themessage would be noted down by the phone shopowner. Either their employee would then go to tellthe weaver, or the weaver would periodically go tocheck for messages. Alternatively, the caller mightask for the weaver to be summoned to receive acall, in which case they would call back after a fewminutes while a message was sent to the weaver tocome to the shop to receive the call.

ii. Access to Non-Commercial Third-PartyMobile PhonesA few weavers gained access to a mobile phonethrough family or friends. This was not often usedfor outgoing calls (such weavers would more oftenuse a phone shop for this). Instead, the number wasgiven out for incoming calls. As with the phoneshop, either a message would be taken or theweaver would be summoned to receive a call-backafter a certain time interval. No ªnancial charge wasmade.



Figure 4. Pre-Mobile Geographic Distribution of Sectoral Stakeholders.

Supply Chain Process Impacts of MobileTelephonyTwo main process-related beneªts were reported formobile phones: their impact on the time and on theªnancial costs of transacting. Phone calls were par-ticularly used for the following elements of the trad-ing process: checking initial identity and possibilityof ordering (buyer � intermediary/weaver); seekingorders (weaver � intermediary); initial conªrmationof order (intermediary/buyer � weaver); searchingfor and conªrming presence of raw materials (inter-mediary/weaver � supplier); conªrming credit ar-rangements and pick up of raw materials by arepresentative (intermediary � supplier); checking ifchanges to order or delivery were possible (all mainactors); communication of minor amendments orminor issues related to order or production details(all main actors); checking and conªrming presenceof completed parts or whole of orders (all main ac-tors); setting up and conªrming presence for physi-cal meetings (all main actors).

The mobile phone calls saved time and money bysubstituting for journeys. Time saved per call wastypically several hours and, overall, this had meantthat the turnaround time between ªrst order andªnal fulªllment was reduced. Money saved was typi-cally understood by comparing call costs with trans-port costs: for example, interviewees talked about acall rate of N50 (c.US$0.4) per minute beingcheaper than a taxi cost for an average journey of,say, N1,000 (c.US$8), given that calls were normallycompleted in less than ªve minutes. There was someconsideration of the opportunity costs of travel thatcould be recouped through use of the phone. Forexample, weavers could invest the time they wouldspend travelling in producing cloth; intermediariescould invest the time seeking orders or engaging inother business. There seemed to be little consider-ation of the capital cost of the mobile phone, whichwas regarded as a sunk cost.

Mobile phones seemed particularly to be valuedbecause they were seen to substitute for unproduc-tive travel. Examples were journeys by weavers to anintermediary only to ªnd that there were no ordersavailable, or by an intermediary/weaver in search ofa particular color of thread that proved out of stock,or other journeys where the intended visitee wasabsent from home.

Partly as a result, mobile phones were seen tohave reduced some of the risks inherent in com-

merce. They had reduced the number of journeysrequired; journeys that were seen as sources ofphysical risk. They had reduced a number of infor-mation uncertainties: about the existence and ac-ceptance of new orders; about availability of rawmaterials; about the behavior of other actors, espe-cially progress in fulªlling an order. And, where ajourney was still needed, the mobile phone wouldgreatly reduce uncertainty about the potential valueand outcome of that journey. Thus, as one inter-viewee put it, “GSM gives me rest of mind.”

However, as just hinted, it would be a mistake tosee journeys and face-to-face interactions as havingdisappeared from the trading process. They werestill required because physical inspection was still re-quired. The need for inspection arose from a factorspeciªc to design-intensive sectors like aso oke—theneed to physically see particular items: the buyer’sideas (if any) for design; the types of cloth a weaverhad previously produced and their design ideas; theweaver’s design sample; the actual color of a thread;the ªt-to-design of cloth as delivered during anorder.

But the need for inspection also arose from amuch more generic factor—trust or, rather, the lackthereof—between key supply chain participants.The potential for opportunistic behaviors was de-scribed above; an especial difªculty for aso okegiven the staggered nature of the transaction. Mo-bile phone calls were used to monitor behavior ofother participants, but their value depended on vari-ous criteria, described by one intermediary:

‘Who you are’ in the industry and related to this,whether or not there already exists trust betweenyou and the person you are dealing with, andlastly ‘what you can produce’ as an indication ofthe quality of your output. If these things arepresent then having a telephone results in fasterorder production. It makes the process of gettingorders faster and also makes life easier in terms ofmovement.

But where these criteria were not met, phone callswould likely still leave information uncertainties.Monitoring of contract compliance, principally ofweavers’ progress in producing the cloth, thereforeoften continued to be conducted through a journeyand physical inspection. This was despite (or perhapsbecause of!) the fact that all calls, save sometimesthat of a buyer seeking a recommended intermedi-



ary in order to set up a pre-order meeting, weremade between parties who already knew each otherthrough physically meeting and transacting (oftenmany times) prior to the phone call.

Finally, journeys were required to allow for physi-cal movement of raw materials and goods and/orexchange of money, and sometimes because of thecomplexity of the interaction required, say, in orderto discuss and agree to the exact speciªcation of adesign and order. The relative “poverty” of commu-nication by phone, plus both parties’ constantawareness of the cost of the call, militated againstcomplex communication by phone.

In terms of risk, then, there has been a reduction,but not an elimination. There has also been sometransfer. Where previously, for example, intermediar-ies had to travel to weavers to see if they could ac-cept an order, now they summon the weaver byphone to come and meet them to discuss the order.Initial journey risk has thus shifted from intermediar-ies to weavers.

Supply Chain Structure Impacts of MobileTelephony

i. IntermediationFar from leading to disintermediation in the aso okesupply chain, the advent of mobile telephony seems,if anything, to have entrenched the role of interme-diaries.

We can break this down. First, mobile phoneshave done nothing to address buyer-side informa-tion absences or uncertainties. They do not helpbuyers in becoming aware of weavers’ identities, sothey do not substitute for the intermediaries’ role asa contact node. They do not help buyers understandkey aspects of the transaction such as price, qualityand design, so they do not substitute for the inter-mediaries’ role as a source of information andknowledge. They do not help buyers inspect keyitems such as design samples, ªnished cloth, and ex-tent of order completion, so they do not substitutefor the intermediaries’ role in undertaking or arrang-ing journeys and physical inspections. Overall, mo-bile telephony has not helped buyers know of, trust,manage or transact with weavers.

For the buyers, then, the uncertainties and therisks, including potential for opportunistic behaviorand adverse selection, remain much as they werevis-à-vis producers. However, personal 24/7 owner-ship of mobile phones by both buyers and interme-

diaries has made it easier for buyers to transact withintermediaries. Given that this is a buyer-driven sup-ply chain, and that mobile telephony has made it noeasier for buyers to deal with weavers, but easier forthem to deal with intermediaries, little disintermedi-ation can be expected from this direction.

Second, mobile phones have done little or noth-ing to rebalance the asymmetric relationship be-tween weavers and intermediaries. As with buyers,phones have not made it easier for weavers to iden-tify buyers, so weavers remain normally reliant onintermediaries for their orders. Indeed, those withphones reported they now had more contact withmore intermediaries than previously. Telephony hasnot changed the non-informational asymmetries,such as the ability of the intermediary to provideworking capital and to arrange credit lines. And, fora few weavers, provision to them of a mobile phoneby an intermediary had helped to embed their un-equal relationship with that intermediary.

Third, mobile phones had facilitated the emer-gence of a new type of intermediary: the “coordina-tor-weaver” (outlined alongside other supply chainstructures in Figure 5). In one case where a weaverhad been able to invest in a mobile phone, otherweavers had begun to align themselves with thephone-owning weaver. The latter would then coor-dinate the collection, distribution and managementof orders from different intermediaries. Althoughakin in some ways to the role of “master-weaver”,this was a new role within the supply chain that hadnot previously been seen. It pushed existing interme-diaries toward a demand-side role of identifyingbuyers and managing the buyer-intermediary rela-tionship. The new coordinator-weaver intermediarythen took a supply-side role of managing cloth pro-duction and the weaver-intermediary relationship.

Through use of their mobile phone, the coordina-tor-weaver was able to build up a larger network ofweavers than was possible for any master-weaver.They could therefore accept more and/or larger or-ders than had previously been possible, thus takingon a role for allocating work that had previouslybeen undertaken by the single, now buyer-sideintermediary.

Lastly, presence of a phone has made it easier forintermediaries to use their ªnancial power withthread suppliers. The earlier system of arrangingcredit with suppliers was seen as risky. It relied onwritten notes that were readily forged; as a result,



most suppliers would only operate on a cash-and-carry basis, slowing the thread-purchase transaction.Mobile telephony had changed this. Suppliers with apre-existing relationship with an intermediary wouldnow allow thread to be taken away (e.g., by aweaver) on the strength of a phone-based promisefrom the intermediary to pay at some short-term fu-ture date convenient to both intermediary andsupplier.

By contrast, no weavers were reported as havingestablished credit facilities with suppliers. Coupledwith their more limited access to mobile telephonycompared to the 24/7 access available to intermedi-

aries, this had, if anything, strengthened theposition of intermediaries.

ii. LocationThere was limited evidence that mobile telephoneswere signiªcantly changing the geography of supplychains in the aso oke sector. There were one or tworeports that telephony had enabled a broader geo-graphical spread in the search for raw materials,though this was constrained by a perceived need tophysically inspect the actual color and quality ofthread, and by the need for physical procurement.

Likewise, in one case, a master-weaver was able



Figure 5. Examples of Geographic and Structural Changes Following Introduction of Mobile Telephony.

to access a broader geographical spread of sub-weavers when a large order came in. Some whoworked for him were Ghanaian and, following theirapprenticeship, they had returned to Ghana. Wherepreviously they would not have been part of themaster-weaver’s “mental map” of sub-weavers todraw on, his access to mobile telephony hadchanged that. What it meant, though, was notoutsourcing to a distant location (Ghana). Instead, itmeant that he would call up the sub-weavers inGhana, and they would then travel to his workshopin Nigeria to help complete the order.

These examples, potential geographical extensionof relation with thread dealers and with sub-weavers, plus the emergence of weaver-coordinatorsjust described, are summarized in Figure 5. However,these were just individual cases and, save these ex-amples, the evidence was that—because they weremainly reinforcing existing relationships and existingstructures—mobile phones were also reinforcing ex-isting geographies within this micro-enterprisesector.

iii. Competitive AdvantageOne further structural consideration—not yet muchreported in discussion of micro-enterprise and mo-bile telephony—is the competitive advantage thatmobile phone access brings to those who have itover those who do not.2 This is likely to be a featureof micro-enterprise in developing countries in theshort-term as a signiªcant (albeit declining) propor-tion of the population lacks access to telephony(Overå, 2006). Given the widespread ownership ofmobile phones among buyers and intermediaries,they have become the preferred means of contactwherever feasible within the limits imposed by fac-tors such as trust, the need for physical veriªcationof information or physical exchange, and the needfor complex interactions around issues of design.

Weavers who lack phone access will thereforelose out on orders. This, indeed, had been the expe-rience of some weavers. They were able to recountincidents where they had travelled to an intermedi-ary’s premises in search of business only to learnthat an order had just been given out to another

weaver who had a mobile phone and who had beencalled as soon as the order arrived. This, of course,had acted as a strong incentive for weavers to ar-range mobile phone access, and can be interpretedas a growing barrier to entry into the aso oke trade.

It can also be interpreted as a sign of growing in-equality between weavers: a “competitive divide”deriving from the “digital divide.” At one end, thosewithout mobile phones were losing orders and in-come. At the other, one of those who had managedto obtain his own mobile phone was developinginto an intermediary through his role as acoordinator-weaver.

ConclusionsIn terms of both numbers and reach, mobile tele-phony is the dominant form of telephony, and mi-cro-enterprise is the dominant form of enterprise inthe “majority world” of developing countries. De-spite the global importance of both phenomena,few studies have so far investigated their intersec-tion, partly because mobile phones have only re-cently penetrated micro-enterprise supply chains indeveloping countries. The research reported here fo-cuses on this fast-growing trend, offering insightsinto something that has already, or will soon, impactthe livelihoods of tens and then hundreds of millionsof micro-entrepreneurs.

i. Mobiles and InformationIn conceptual terms, this study conªrms the need tounderstand mobile phones as devices for communi-cation of information. That may seem an absurdlynaïve statement of the obvious, but its implicationsare not always recognized—that one must thereforebuild analysis of a major part of mobile telephony’simpact on an informational foundation, ªrst under-standing the role of information in the phenomenonunder investigation, and only then moving on tostudy mobile telephony.

That was the approach used in this article. It be-gan by understanding how information and infor-mation failures have shaped the process of micro-enterprise commerce, and then by understanding



2. Ironically, the only other study found to mention this focuses on the opposite. Jensen (2007), in his study of theªshing industry in Kerala, talks of a “digital provide” because ªshermen without mobile phones beneªt from some ofthe spillover effects of improved market functioning created by those who do own mobile phones. However, he islooking at the glass half-full effect since he also reports that phones were a foundation for greater inequality. Thericher ªshermen who purchased phones found their proªtability increasing roughly twice as much as that of the poorerªshermen who did not own phones.

how they have shaped the structure of micro-enterprise commerce. The selected sector—the asooke cloth-making sector in Nigeria—exhibited theinformation, process, and structural traits identiªedfrom the literature. It can therefore be seen as em-blematic of the difªculties faced by traders withindeveloping country micro-enterprise supply chains(and, of course, was selected partly for this reason).

Our focus on supply chains has left us saying lit-tle directly about the micro-level impact of mobileson information. By substituting for some journeys,plus in-person meetings, we can see that phonecalls have reduced the time and ªnancial cost of in-formation-gathering, often by several hours and sev-eral U.S. dollars respectively per call (not to mentionthe opportunity cost gains). Improvements in thequality of information within any individual commu-nication were not evident, if we are considering in-formation quality in terms of accuracy andrelevance. Where mobile telephony did have a quali-tative impact was on completeness of information.Travellers could now know whether or not a journeywas needed before embarking on it. More sourcesof information—about orders, about thread, aboutcapacity to weave—could be investigated. To (only)this extent, then, the informational impact of mobiletelephony was helping make not just faster andcheaper, but also better, decisions.

ii. Mobiles and Supply Chain ProcessesThe research reported here partly supports the fewstudies that have been done before on mobile tele-phony and micro-enterprise. Based on intervieweeand other evidence, it ªnds that mobile phonesameliorate, but do not eliminate, the three processchallenges in micro-enterprise supply chains: speed,cost, and risk. In terms of objective evidence andalso in the perceptions of stakeholders, mobileswere seen to reduce the delays, reduce the ªnancialcosts, and reduce the personal risks of involvementin commerce in this sector.

That reduction, though, was by no means tozero, largely because journeys and in-person meet-ings remained an integral part of trade even post-mobile. Some of that can be explained because thiswas a manufacturing sector with physical materialsto be exchanged in trade. Much, though, was ex-plained by the nature of information and decisionsinvolved.

Some supply chain decisions are structured—

simple, standardized, and objective. In this case,they might revolve around questions such as “Doyou have an order for me?” or “Is your design sam-ple ready?” or “Are you at home tomorrow after-noon?” These are readily amenable to phone-basedinformation-gathering.

Other supply chain decisions are unstructured—complex, non-routine, and/or with degrees of sub-jectivity and uncertainty. In this case, they might re-volve around questions such as “Can you produce adesign that looks like this?” or “What would be theimplications of introducing a gold thread into thecloth?” or “How far have you got in weaving thenext part of the order?” These are not alwaysreadily amenable to phone-based information gath-ering, especially given the design-intensity and vari-able levels of trust found in the sector. One could,then, see support for Molony’s (2006) ªnding thatmobiles are not yet impacting some of the core de-cisions and interactions of micro-enterprise trade.

iii. Mobiles and Supply Chain StructuresSo, there is some, but bounded, support for earlierstudies on the economizing and travel-substitutioneffects of mobile telephony on supply chain pro-cesses. But there is as yet no support for those stud-ies that saw a disintermediating effect. Rather, itwas intermediaries who were driving the adoptionof new technology in this supply chain. And it wasintermediaries who found their roles consolidated,with a new form of intermediary even emerging.

In ªnancial terms, it is claimed that buyers shouldbe able to use telephony to reduce their costs bypurchasing direct from the producer. This could betrue of aso oke: weavers charge less than intermedi-aries. The problem is that any mobile-enabled reduc-tion in purchase price through disintermediation is,or is perceived to be, more than offset by an in-crease in transaction costs, an increase in uncer-tainty, and an increase in risk. Thus, unlike Jensen’s(2007) study, we did not ªnd strong evidence forprice effects of mobile usage.

A further key claim for mobile telephony is that,by reducing the time and cost of obtaining informa-tion, it will impact the information asymmetries thathave encouraged the emergence of intermediaries.Our ªnding was that mobile phones reduced thetime and cost of obtaining some information but, inthe main, not the type of information on which thevalue and existence of intermediaries is based such



as identities and reputations of buyers and produc-ers. Nor have mobile phones impacted the otherasymmetries on which intermediation in this sectoris based—unequal access to knowledge about de-sign, supply mechanisms, costs, trading processes,mechanisms of redress; and unequal access to capi-tal. Thus, by and large, asymmetries of information,knowledge, and capital—overall, asymmetries ofpower—between intermediaries and other stake-holders were at least maintained and in some casesstrengthened.

There were few signs, then, of mobile telephonylevelling the playing ªeld; and more signs that it hadbeen a technology of inequality. In comparing the“haves” and “have nots,” we ªnd a gradient of ac-cess. Those who were most-resourced prior to thearrival of mobiles now have 24/7 access to a person-ally-owned mobile phone. Those who were least-resourced still have no access to mobile. Those in-between have some access. As with access, so withimpacts. The most-resourced have gained throughmobiles in terms of more orders, larger orders, fasterturnaround, and better quality of ªnal product,leading to more customer satisfaction. The least-resourced are losing orders. Those in-between haveseen some beneªts, though they might also becharacterized as “running in order to stand still.”

In terms of other structural change, the picture isof a glass perhaps four-ªfths empty and one-ªfthfull. There were (only a) few signs of mobile tele-phony building new relationships and new supplychain geographies; and more signs that it had actedto strengthen existing relationships and existing ge-ographies. One or two examples of novelty—of call-ing on new, more distant thread suppliers or on far-off sub-weavers who otherwise would have beendropped from outsourcing networks—must be bal-anced against many more examples of a reinforcedstatus quo.

In some ways, then, we ªnd ourselves moving onfrom our conceptual starting point—the new insti-tutional economics view of information and trade—to support the heterodox institutional economicsview, which sees change (such as new technology)helping to reproduce pre-existing socio-econo-political relations (Rahman, 2007).

iv. Mobiles and DevelopmentAt the broadest level, we noted earlier that informa-tion failures in developing countries constrain the

emergence of markets, and constrain business activ-ity and investment. Our ªeldwork provided no directevidence on this. However, we have seen that mo-bile phones reduced some information failures andtheir related costs and risks. Accordingly, they didhelp to make trade and markets in this sector oper-ate somewhat more efªciently and effectively. Tothat extent, we may hypothesize that mobile pene-tration has encouraged business activity and invest-ment in this sector.

We can now turn to the last issue raised in theliterature review—our conceptualization of mobilesin developing as opposed to industrialized countries.The picture here is mixed. The majority of mobilesencountered in this study were owned by one indi-vidual, as is the norm assumed for industrializedcountries. But those mobiles were shared with oth-ers to allow more dispersed access, and the accessmodel used by most weavers was one of public orshared access to mobile telephony. We also foundnovel ownership models such as the loan or “hirepurchase”-type agreements between some interme-diaries and their weavers.

By and large, the mobile phones in this studywere valued for their connectivity—they representedthe ªrst accessible, reliable means of telecommuni-cations for most of the stakeholders. They were notsupplementary or complementary to existing ªxedlines. Hence, partially, conclusions drawn here mayalso apply to ªxed-line telephony and its delivery ofconnectivity. Nonetheless, at least for some, the mo-bility of the mobile phone was valued. Those whoowned, or had been given, a GSM mobile appreci-ated the ability to be in contact during those jour-neys they were still required to make. And eventhose with WLL mobiles felt in contact as theymoved about their local area. Thus, partially, conclu-sions drawn here are unique to the mobile form oftelephony.

v. Limitations and Future ResearchFinally, we should note this as “work in progress.”First, because it describes just one case study sector.Whether it is representative of production micro-enterprise more generally is an open question. Mostlikely, it does epitomize the type of production thatlies at the intersection of the cultural and the func-tional; production where local taste, culture and cus-tom still matter and, hence, where design matters(Molony, 2006 provides another example). As devel-



oping countries are driven to liberalize their importregimes, such relatively protected and design-intensive sectors—clothing, furniture and furnish-ings, handicrafts, even food processing—will likelybecome more important as sources of employmentand income. How far we can generalize, though, isunclear because in some ways our method arguesthe need for micro-level study that uncovers thespeciªc process, structure, context and impact inspeciªc sectors.

Second, we have monitored the impact of mobiletelephony in the early stages of its penetration intothis supply chain. So far, we ªnd, it has an econo-mizing effect on supply chain processes, but nosigniªcant restructuring effect on the organizationof supply chains. Developing countries, though,have been sites of much innovation in business usesof mobile telephony. Thus, future study may shownew patterns emerging in supply chain processesand structures. For example, intermediaries have sofar used the technology to maintain and even con-solidate their position. Further diffusion and familiar-ity with mobile phones may, however, changethis. ■

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