Rural Informatization in China - World...

THE WORLD BANK

Christine Zhen-Wei QiangAsheeta BhavnaniNagy K. HannaKaoru KimuraRandeep Sudan

W O R L D B A N K W O R K I N G P A P E R N O . 1 7 2

Rural Informatizationin China

Rural Inform

atization in China

W O R L D B A N K W O R K I N G P A P E R N O . 1 7 2

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

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iii

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

iv 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

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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 �

v

Foreword�

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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1

CHAPTER �1 �

Introduction�

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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2 World Bank Working Paper

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Notes�1�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.��

3

CHAPTER �2 �

Development�of�China’s�Rural�Information�Infrastructure��

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:��

� 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.�

� 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.��

� Strengthening� delivery� of� social� and� public� services.� Government� information�support�systems�should�aim�to�capture� timely,�accurate,�comprehensive�data�

C�


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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 5

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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.��

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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

�

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.�

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

20082 Ministry of Information Industry, China Daily online


�

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

59.04

89.79

137.43

4.7216.92

48.74

89.43

134.8116.6

84.08

0

20

40

60

80

100

120

140

160

1990 1995 2000 2005 2006

year

per 1

00 h

ouse

hold

s

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).��


�

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

27.0%

7.0%

21.6%20.2%18.0%16.9%

5.1%3.1%3.0%2.6%

0%

5%

10%

15%

20%

25%

30%

2005.12 2006.6 2006.12 2007.6 2007.12

Urban 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.��


�

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

5.9

13.3

20.6

27.833.1

41.547.2

9.7

0.70.5 1.1 1.4 1.9 2.1 2.70

10

20

30

40

50

1999 2000 2001 2002 2003 2004 2005 2006

Year

per 1

00 h

ouse

hold

s

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

67.3%

33.9%

24.3%

55.2% 53.9%

13.7%

0%

20%

40%

60%

80%

Home Internet Café Work

National average Rural area�

Source:�CNNIC�2008.�


�

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 �1�www.china�embassy.org/eng/xw/t251756.htm�2�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.�

11

CHAPTER �3 �

Rural�Informatization�Initiatives�and�Organizational�Models�

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)��

G�


�

Table 3.1 (continued)


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

2005

Golden Agriculture Project 2007

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.

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

2007

Thousands of Villages and Townships Project

2005 Ministry of Commerce Responsible for formulating development strategies, guidelines and policies of domestic and foreign trade, investment, and international economic cooperation c

Xinfu Project (Commercial information services system for the countryside)

2006

National Cultural Information Resources Sharing Project

2002 Ministry of Culture In charge of public libraries and overall culture activities.

Comprehensive Culture Station Project

2006–2010

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

Distance learning project in rural primary and secondary schools

2003

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

2002 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 regulation e

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

2003

Extend Telephone Coverage to Every Village Project f

2004–2005

Ministry of Information Industry

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

Rural Comprehensive Agriculture Informatization Service Pilot Project

2006

State Agricultural Science and Technology Park Development Program

2007 Ministry of Science and Technology

Provides science and technology information for rural residents.

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

2005– 2010

(Table�continues�on�next�page)��


�

Table 3.1 (continued)


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 restructuring h

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 Village Project i

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 lessons acquired j

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�


�

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.�


�

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

- Government- Telecom carriers- Private sector- PPPs

- End user surveys- Impact evaluations

- Entrepreneurs- Government staff- Professional cooperatives

- Local intermediaries- Information agents- Training programs

- Government generated and aggregated- Information Services Vendor- Locally/user generated

Connectivity

Funding

Feedback &Evaluation

Management &Operation

CommunityAcceptance

ContentSupply

SharedUsageAccessPoints

�

�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.��


�

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:

� Capital: Fully government financed � 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 full-time 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 � 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

Weaknesses � 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


�

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


� Capital: Telecom carrier � Operating: Carrier-financed

operating costs; free broadband access from local governments; fee-based 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: � 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 � Expands telecom services in underserved

areas � Government partnership, with subsidy

only for free broadband access

Weaknesses � Smaller development impact—limited

efforts to provide relevant content. � Limited community buy-in and no

evaluation mechanism.

��


�

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


� Capital: Government subsidy � 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 � 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

Weaknesses � Targets a niche audience of users, which

limits its development impact on the broader range of rural citizens with more diverse information needs

��


�

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


� 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.

� 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, multi-software 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 � 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

Weaknesses � Dependent on franchise financial

resources for startup, and franchiser orientation and capacity to train franchisees

� May require startup subsidies

�


�

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:

� Capital: Private � 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 � 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

Weaknesses � 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 �1�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.�

22

CHAPTER �4 �

Lessons�from��International�Experiences�

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 micro-entrepreneurs 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.

78%

77%

96%

88%

How Chileans say BiblioRedes has affected them

They have greater access tocomputers and the Internet now.

Computers and Internet accesswill help them in their daily lives.

They are more informed thanthey were before.

Computers will improve thequality of life for all Chileans.

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�


�

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 e-Choupal 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 e-Choupal. 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.��

30

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.��

�


�

�

Figure 5.1. Population and Investment Segmentation in China

Income

Density / network utility

High

LowRemote Rural Near urban Urban

Public investment and PPP initiatives

Next attractive market for private investment

High

Frontier of private investment

�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.�


�

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:�� 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.�


�

� 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.��


�

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.��

35

CHAPTER �6 �

Recommendations�

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�

D�


�

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.��


�

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:�� Provide�basic�public�access�for�free�or�almost�free.�� Generate�and�maintain�relevant,�demand�driven�content.�� Adapt�ICT�to�provide�affordable�and�maintainable�products.�� 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�


�

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�


�

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.��

40

CHAPTER �7 � �

Conclusions�

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�

P�


�

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.�

42

�

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�

45

�

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

2007

1. Extend Telephone Coverage to Every Village Project � Extend telephone coverage to

every village � Speed up the construction of village

Internet connections

� 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

2001-2005

2. Initiative to Promote IT Applications in Agriculture � 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

� “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

2005

3. Rural Comprehensive Agriculture Informatization Services Pilot Projects � Develop affordable, easy to use

information terminals and corresponding information systems for farmers

� Integrate information resources of agriculture-related departments, scientific research institutes, and colleges to develop “three-dimensional rural issues” related to local information

� Form a market mechanism for rural comprehensive information services involving domestic enterprises

� Provide training and promote the application of informatization in rural areas

� 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


�

Ministry of Agriculture Year Strategy/Policy Statements

2007

Overall Framework of National Agriculture and Rural Informatization (2007–2015) � Greatly improve agricultural and rural integrated information infrastructure management � Develop information service organizations at township and village levels � 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 � Enlarge the rural market information dissemination dynamics by providing timely and

accurate information to the farmers in all levels (province, city, county, major villages) � Establish the rural information service platform � Set up interactive Intranet and website to stimulate comprehensive information

exchange among all stakeholders (province, city, county, village, etc.) � Strengthen the capacity of the rural information services by providing the

adequate training

Year Key Supporting Initiatives Progress Made

2007

1. Pilot Projects: Overall Framework of National Agriculture and Rural Informatization (2007–2015)2 � Build stations in 100,000 villages,

providing 1 million village officers and 10 million farmers with Internet access

� Extend the agricultural information services network to more than 90 percent of administrative villages

� Train one or two rural information assistants in every administrative village

� Listed in local development plans, and funding provided by local finance bureaus or self-collected.

� 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” e-government project) � Establish three major application

systems, for agriculture monitoring and warning, agricultural market information, and rural market service the technology information services

� Develop and integrate domestic and international information resources

� Standardize criteria and regulations; train information service teams

� 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 � Extend information services to “the

last mile” through computer (Internet information services), telephone (advisory call centers), and TV (local TV broadcasted agricultural information programs)

� Establish a long-term mechanism to provide timely, accurate agricultural information services

� Ministry of Agriculture provides the equipment, software, and support for the pilot areas of every province

� Central government funds 10 million RMB a year


�

2005

4. Demonstration Project for Extending Agricultural Science and Technology to Every Rural Household � Promote agricultural science and

technology to households in 100 pilot counties

� Formed a network of experts and a technical instruction and service system

� Promoted 20 kinds of technologies � Provided technical instruction to 92,000

demonstration households � Ministry of Agriculture is using IT to

develop rural economy e-map

2001– 2006

5. Rural Market Information Service Action Plan

� Agricultural information service organizations set up in 97 percent of districts (cities) and 80 percent of counties

� Agricultural information service stations set up in 64 percent of villages and towns

� More than 200,000 rural information assistants trained

State Administration of Radio, Film, and Television Year Key Supporting Initiatives Progress Made

1998-2006

1. Extend Telecommunications Coverage to Every Village Project � Extend telephone coverage to

every village

� Investment for administrative villages totaled 3.6 billion RMB

� About 117,000 administrative villages with electricity but no telecom (“blind” villages) covered

� About 100,000 natural blind villages with more than 50 households covered

� 15,000 villages that were “back to the blind” were repaired

� Provided nearly 100 million farmers with access to radio and TV

Ministry of Science and Technology


2. “Spark” Agricultural Science and Technology 110 Information Services Project (Spark 110) � Provide farmers with agriculture

technology services through a low-cost ICT platform, based on collaboration between the government science and technology sector and the telecommunications sector

� Integrate information resources with a service hotline

� Set up more than 23 unified regional hotlines, covering more than 900 counties and 7,500 towns and townships

� Governments in more than 20 provinces have set up cooperative relations with local agricultural universities, institutes, or research agencies

�


�

�Ministry of Culture


2002

1. National Cultural Information Resources Sharing Project � With Ministry of Finance, digitally

process and integrate China’s cultural resources

� Share digitized cultural resources nationwide

� Central authorities have invested 903million RMB, while local investment totaled more than 700 million RMB.

� Resources total about 60 terabytes (1 terabyte is equivalent to 250,000 e-books or 926 hour-long videos)

� 6,700 centers and basic service stops completed at all levels

2006–10

2. Comprehensive Culture Station Project � Implemented with State

Development and Reform Commission

� Sets up rural comprehensive culture stations in all villages and towns countrywide, and trains cultural laborers

� Develops a sound, effective rural culture management system

� Improves rural public culture service skills by 2010

� The funding has been provided by special project subsidy by the central government, as well as funding from local finance bureaus, or self collected.

� In 2007, the central government has invested 100 million RMB for piloting.

http://www.china.com.cn/culture/zhuanti/07ggwhfubg/2007-12/21/content_9416225.htm

Ministry of Education Year Key Supporting Initiatives Progress Made

2003

1. Modern Distance Learning Project in Rural Primary and Secondary Schools � Implemented with State

Development and Reform Commission and Ministry of Finance

� Covered by local governments and subsidized by central based on regional development

� 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.

� By end of 2006, established call centers to support services in rural primary and secondary schools

� Improved education quality and contributed to sharing of resources in rural areas

� More than 100 million students in central and western rural areas have benefited

�


�

�Ministry of Commerce


2006

1. Rural Commercial Information Service Project � Set up rural commercial information

service stations in 10,000 villages � Train 10,000 farmers to use the

Internet and improve their ability to incorporate supply and demand information in their business

� Establish an information resources system, with special databases on agricultural products and commercial information for farmers

� 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.

� Rural commercial information service stations were piloted in one county in each of 20 provinces.

2005

2. Thousands of Villages and Townships Project � 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 super-markets). This modern rural the information network can improve rural consumption environment and meet production and living demands by rural population.

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

Central Committee of Communist Party of China

Year Strategy/Policy Statements

2006–2010

1. 11th Five-Year Plan for National Economic and Social Development � Proposed strengthening agriculture service systems, promoting agricultural technology,

and building production safety standards. Also proposed integrating agriculture-related 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 � 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 � 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 � 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.”


�

2006

5. Opinions of the Committee and the State Council on Promoting the Construction of a New Socialist Countryside � “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 � “Strengthen the construction of Agriculture Informatization.”

2005 7. Opinions of the Committee and the State Council on Intensifying Rural Cultural Construction � “Provide rural digital culture and information services”


2003–06

1. Modern Distance Learning of National Party Cadres in Rural Areas � Build an information services

platform by 2010 with a batch of teaching resources for rural party members and peasants

� Build a batch of terminal receiving posts, including satellite receiving, broadcast and television transmission, broadband set-top-box or P2P transmission, etc. (Rural party members’ activity rooms, rural middle and primary schools, etc are usually built up as receiving posts)

� 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


2008

1. Pilot Project for Rural Informatization � Develop a public service platform

that consolidates different government service offerings

� Through innovative business models, pilot offerings in two or three provinces

� Under development

�


�

�State Council Leading Group Office of Poverty Alleviation and Development


2008

1. Pilot Project for Rural Informatization � Provide agricultural information on

demand; help farmers integrate with national and global markets

� Provide training for rural residents—such as distance education

� Improve connectivity options, such as video telephony

� Under development

Notes �1�http://news.xinhuanet.com/zhengfu/2001�09/30/content_84489.htm.�2�http://www.agri.gov.cn/jhgb/t20080321_1029943.htm.�

�

�

Appendix 2. Analysis of Eighteen Pilot Projects in China

Project Name

Organiza-tional

Model1 Province Province Category

Year Initiated

GovernmentAgency

Supporter

Other Institution Supported

Number of services offered2

Generating relevant content?

Content Generator/Aggregator3

ICT Training offered?

Technology Channels offered

Public Awareness

efforts?

Onsite service

assistance?

Informatization Experience

Center D Guangdong Eastern 2007

Local Information

Industry Department Lenovo 3 Y Y Internet Y Y

1000 Towns and 10,000 talents D Gansu Western 2002 2 Y Y Internet Baima Shop

F Sichuan Western Ministry of Commerce Intel 1 Internet

Farmers Internet Café F Shanxi Central

China Unicom 1 Internet

Informatization Farmer Family

Stores F Sichuan Western 2007 Ministry of Commerce Intel 1 Internet

Information Service Station G Shaanxi Western 2006

Local Agricultural Department 3 Y G

SMS & Internet & Multimedia Y Y

Rural Information Service Platform G Sichuan Western Local 4 Y G Y Internet

Rural Information Service System G Jiling Central

Local Agricultural Department 1 Y G

Internet & Voice Y

Community Information Court G Shanghai Eastern 2003 Local 4 Y G Y

Internet & Video

Farmer Internet Bar G Ningxia Western 2007 Local 7 Y G Y

Internet & Video & Voice Y Y

Chongqing Hotline G Chongqing Western Local 2 Y G SMS & Voice

52

�

�

Project Name

Organiza-tional

Model1 Province Province Category

Year Initiated

GovernmentAgency

Supporter

Other Institution Supported

Number of services offered2

Generating relevant content?

Content Generator/Aggregator3

ICT Training offered?

Technology Channels offered

Public Awareness

efforts?

Onsite service

assistance?

E-Family G Gansu Western Local Gansu

Telecom 1 Y G/U SMS & Voice

Jinta Model G Gansu Western Local 1 Y G Internet &

Print Y

Rural Information Agent G Jiangxi Central Local 1 Y G

Internet & Print Y Y

Panggezhuang Agri-Products Cooperative

P Beijing Eastern Local 4 Y P Y SMS & Internet

Agricultural Products

Association P Gansu Western 3 Y P Internet &

Print

Henan Netcom T Henan Central Henan

Telecom 5 Y T Internet

Farmers Mail Box T Zheijang Eastern Local Zheijang Mobile 4 Y G

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).��

53


�

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:�� Are�the�services�provided�making�any�real�difference�to�the�users?�� Are� the� communities� changing� as� a� direct� or� indirect� result� of� the� services�

provided?�� 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��

� 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�� 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.�

�� Providers�of�ICT�based�service:�

•� If�they�are�meeting�their�objectives�•� If�they�need�to�adapt�or�adjust�what�they�are�providing�and�how�


�

•� 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:�� may�be�positive�or�negative�� may�be�intended�or�accidental�� 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:��

� economic�circumstances�of�a� region�or� locality�e.g.�more� jobs�available,�reduction�in�local�poverty�

� educational� and� other� outcomes� e.g.� skills� acquired;� educational� attainment;�levels�of�knowledge�

� 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:�

�� What� infrastructure� need� to� be� put� in� place� to� meet� the� aims� and� what�

activities�will�help�realise�the�aims;�� 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.�

�


�

Figure A.3.1. Developing Performance and Impact Indicators

Overall purpose/mission

Service Infrastructure

Implement and monitor

Output/service performanceindicators

Process/performanceindicators

Review your indicators

TargetsGrounded in baseline data

Baseline dataCollected to ascertain

where the service is now

Processes that contribute torealising the aims/objectives

including activities and capacity building

Aims/objectivesWhat are you trying to achieve?

Areas where service is tryingto make a difference (not activities) Outcomes/impact/achievement

indicators/success criteriaHow will you know if you are

making a difference?

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


�

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 Outputs Outcomes

To improve living standards of rural farmers

Increased rural productivity

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

Reduced direct costs through use of on-line administration Farmers use Internet services for timely and relevant information to help increase quality and yield Farmers diversify production

Local staff competent and confident to give ICT support to farmers Proportion of farmers completing ICT courses

More relevant local content available Increased computer and internet skills amongst farmers Increased access to computers and the internet

Increased trade/sales Level of sales

Increased capacity for participating in new economic domains

Training materials and strategies developed

Farmers develop new products Farmers develop knowledge of prospective customers Levels of interest in new business development Farmers access credit/ financial resources on-line

Farmers’ co-operatives are convinced to support farmers’ use of ICT

Evidence presented to farmers about new business development

�


�

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

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

User satisfaction with services

Demand driven (such as feedback mechanism)

Income generation

Job opportunities

Economic impact

Disaster prevention/mitigation

Better-informed population (for example, on health and education)

Improved governance and transparency

Social impact

More social networks and participation in community activities

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)

Sustainability

Degree of scaling up experienced

�

Note �1�http://www.bridges.org/publications/94.��


�

Appendix 4. A Framework for Evaluation of Eighteen Pilot Projects

User Satisfaction

of Services Economic

Impact Social Impact Sustainability of Service

Project Name

Service Improve-

ment? More

services?

Income gene-

ration?

Employ ment

generation?

Increased awareness/ interest in

ICT?

Level of Public

Subsidy1

Add’l Loan/

Grant?User

fees2?

Project scaled

up?

Builds Service Centers/ Access Points?

Panggezhuang Agri-Products Cooperative Y n/a Information Service Station Y F Y Rural Information Service Platform F Y Henan Netcom P Y Baima Shop Y P L&G3 A/C Y Informatization Experience Center P C Y Rural Information Service System Y F Y Community Information Court F C Y Farmer Internet Bar Y F Y Y Chongqing Hotline Y Y F A/M 1000 Towns and 10,000 talents Y N Y E-Family F A Jinta Model Y Y F Agricultural Products Association Y P M/P Farmers Internet Café Y n/a A Y Informatization Farmer Family Stores Y P Loan4 A Y Rural Information Agent Y F Farmers Mail Box Y Y 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.��

�

�

��

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Gases�Total�Energy�

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Pounds� Gallons�Pounds�CO2�Equivalent�

BTUs�

�

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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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