The economics of educational nonconsumption in the developing world

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May 4, 2015

Many of the conversations around education technology focus on improving classrooms in the developed world. Yet the greatest gains in improved education and the greatest opportunities for disruptive innovation likely exist farther down the economic ladder. There are roughly one billion children across the world living in poverty—from Malawi to Madagascar to Mongolia—who are nonconsumers of the types of education available to children in developed countries. Although the circumstances of nonconsumption are unfortunate, they provide ripe prospects for disruptive innovations that can address this lack of access. In recent years, we’ve seen a number of organizations—including Zaya, Enova, Khan Academy International, and Bridge International Academies—working to develop solutions that address these challenges.

One group that is attempting to make educational materials and technology accessible to schools in developing countries is a nonprofit called the Rumie Initiative. Rumie’s founder, Tariq Fancy, observed that one of the main difficulties that education leaders in developing countries wrestle with is a lack of funding and resources. These leaders often want to provide their students with a quality education similar to what is available in developed countries, but they do not have $10,000 per student to spend on salaries, teacher training, textbooks, and other educational materials. As a result of these funding challenges, even basic educational materials, such as textbooks, are difficult for schools in developing countries to come by.

To help address this resource-constraint problem, the Rumie Initiative has developed an educational tablet. This low-cost tablet offers at least three advantages relative to textbooks. First, with a price tag of $50, the Rumie is much cheaper than a collection of textbooks each costing roughly $62 in the United States and which are heavy and therefore expensive to ship to these countries (a problem that remains even when the textbooks are donated). Secondly, updating the online content on a tablet via monthly synchronization with the cloud is much cheaper and easier than purchasing updated versions of textbooks. Furthermore, the usage data that can be automatically collected on a tablet can be used to improve the devices and content in ways that have never been possible with printed textbooks. Lastly, tablets can be loaded with other free online content—including encyclopedias, quizzes, exercises, and reference materials—that provide educational value far beyond that of the learning materials found in a typical textbook. Just as mobile phones leapfrogged the adoption of land-based telephone lines in emerging markets once handset prices dropped to $50, Fancy suspects that tablets such as Rumie’s will allow schools in the developing world to leapfrog the market for expensive textbooks and other print-based educational materials.

When developing their business model, the Rumie tablet’s developers chose strategically not to build the device with cutting-edge technology. The Rumie tablet doesn’t have near the functionality of an iPad. And unlike One Laptop per Child, which attempted to build a brand new laptop specially engineered for poor communities, Rumie’s device has very few new hardware innovations. Instead, it takes advantage of the fact that at this point in the evolution of mobile devices, many of the components in a basic tablet have become commoditized. This allows the Rumie Initiative to assemble its tablets at a much lower cost than the tablets made by organizations trying to develop cutting-edge, proprietary designs. Granted, the Rumie tablet offers only basic functionality compared to tablets commonly purchased in developed countries, but its value is more than good enough for children whose alternative is nothing at all.

The sources of funding that are driving the Rumie tablet’s adoption also provide an interesting insight into the device’s value. During its first implementation pilot, the Rumie Initiative provided the Rumie tablets for free to communities in Haiti. Then, after the pilot had finished, one of the local communities requested to buy additional devices for its students. Foundations and aid agencies usually have compelling reasons for purchasing resources for poor communities. But too often, philanthropic purchases are driven more by the priorities of the funders than by the needs of the actual users. In contrast, when local consumers indicate a willingness to pool their limited savings together to buy additional tablets, this is a compelling indicator that the devices are actually meeting their needs.

As the economics of innovation and commoditization continue to drive down the cost of both content and devices, it will be interesting to see the larger effects that low-cost tablets, such as the Rumie tablet, could have on education in developing countries. The most powerful innovations for education in the developing world will likely come from blended-learning models that expand the reach and augment the effectiveness of the teaching force. Tablets such as Rumie’s device may prove to be important enablers of such blended-learning models.

Thomas’ research focuses on the changing roles of teachers in blended-learning environments and other innovative educational models. He also examines how teacher education and professional development are shifting to support the evolving needs of teachers and school systems.