I recently spent three weeks in South Africa, primarily in the rural Limpopo Province bordering Mozambique, Botswana, and Zimbabwe. While the Republic of South Africa is the 25th richest country in the world, I was struck by the extent to which first-world lifestyles co-exist with endemic poverty. For instance, I stayed in Sewale with a former ANC councilor named Patricia who owned a pickup truck, two televisions and a surround sound system. Around the councilor's home, in all directions, were mud huts.

In my opinion, the fundamental difference between the elite movers and shakers of this rural community and those who had resigned themselves to charity was empowerment. At first, I thought that this empowerment was derived from exposure to the wider world. But after having read Francisco's blog post this morning, I can see the conspicuous applicability of the Bee Sting Effect.

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The article that appeared in The Washington Post last Sunday titled "Our Cells, Ourselves" talks extensively about the growth of cell phone technology. According to that article, we have on a global scale reached yet another tipping point. As Malcolm Gladwell might say, the cell phone has become a social epidemic. Depending on who you ask, we have either just passed, or are about to pass the point in time in which there are half as many cell phones in use as there are people on the planet. It is notable that Eric Schmidt, chairman of the board and enlightened CEO of Google has said that the trend "will end with 5 billion out of the 6 billion with cell phones," a figure that reaches well into the Base of the Pyramid.

In fact, as we are seeing more and more with the BoP, a cell phone is the ideal tool in an informal economy, a network in which there is little more than ipso facto social infrastructure. Suddenly, a fisherman can call ahead to see which port will offer the highest price on the day's catch, while at the same time, people who have never had access to financial services are being taken out of the somewhat insecure cash economy through value stored in prepaid networks. Network time is traded as a stable form of currency, and money is "wired" from a man working in the mines of South Africa to where his family can use it in Botswana. Cell phones are a more prevalent sign of "development" in Tibet than toilets are.

While iphones and hotmail might be touted as the epitome of the "idea economy" of the developed world, they also represent a departure from the "developmental" mode of making people more secure by making societies independent. Instead, as we can observe in our everyday lives, the cell phone and everything that one can do with it represents a way of making people more secure by facilitating their growing interdependence. In this way, cell phones are a tool of social system creation and community cohesion rather than social system destruction, which is too often attributable to development efforts. Because of the web-like structure of electronic social networks, a global community is emerging at the rate of 1,000 new cell phones every minute!

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Talk about an exciting time to be involved with the BoP. Since the world’s wealthiest philanthropist Bill Gates gave his speech about "creative capitalism" in Davos last Thursday, the development world has been abuzz with its interpretations and implications. But Switzerland is not the only place where headway is being made.

A spin off panel discussion entitled "Creative Capitalism: Can It Meet the Needs of the World's Poor?," was held in Washington this past Wednesday, at the Hudson Institute. The panelists present included William Easterly, author of The White Man's Burden: How the West's Efforts to Aid the Rest Have Done so Much Ill and So Little Good; Al Hammond, WRI's Vice President for Innovation and Special Projects as well as one of our writers at NextBillion.net; and Eugene Steuerle of The Urban Institute. Abigail attended the discussion and according to her most recent blog posting,

All three speakers contributed something here. Easterly reinforced the idea that BoP market-based solutions must be driven by capitalistic mechanisms if they are truly going to scale and lift people out of poverty, permanently. Hammond illustrates cases where markets exist but are not operating under the competitive forces that make capitalism an effective and self-perpetuating driver of development. Steuerle's comments opened the discussion more broadly to question how each sector can spend better and engage with each other, whether they be driven by capitalistic motivations or not.

Capitalism as a whole is a mechanism, a tool. While it is and has always been easy to point out examples of capitalism causing social imbalance, panels such as the one which took place at the Hudson Institute are generally optimistic that capitalism - employed with the correct series of caveats - has the potential to bring even the most disenfranchised out of poverty. As Abigail noted, "Gates did an admirable job of reminding everyone that ‘the genius of capitalism lies in its ability to make self-interest serve the wider interest.’"

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