Thirty Percent Online, Gasoline

Fareed Zarkaria's GPS website and TV program - Taking his world quiz, yesterday, I saw that one of the questions was what percentage of the people in the world have internet access?  Answer was 30%.

Unanswered questions... when 100 people sharing a single computer,  does each count as having access?  What about people with slow dial-up bandwidth who cannot even download photos?  What about people who have access but cannot read or write the languages the internet is written in?   What about people who live in nations that censor the internet, or which have intermittent electricity and blinky bandwidth?

Irregardless, it's an important statistic because, as I've mentioned many times, the rate of growth in developing nations (the 3B3K nations, those earning about $3K per capita in GDP) is ten times the rate of growth as OECD nations.  They are not achieving this rate of access with brand new $600 PCs and monitors (20% of annual income).

[Note:  I should have said "have not been achieving"... in the past decade.   Adam Minter just sent a link to this article - that per IDC, after a decade as the destination for old PCs - China now surpasses the USA in purchases of NEW PCs.  New PC sales to Chinese buyers surpassed 18.5 million in 2Q 2011]

Roughly 50% of the cost of an internet machine (PC, tablet, latpop, etc.) is the display device.  The 30% rate of internet access worldwide was built in large part on exports of used computers and, especially, used display devices.  There is indeed an environmental justice issue here.   But it is not the environmental justice issue being embraced by the anti-export watchdogs.



The environmental justice issue is that new raw materials (like copper from the OK Tedi Mine in Borneo and "leadfree" tin from Indonesian coral islands) are being mined in poor nations - less developed nations with rain forests.   They are mining to produce brand new stuff for people wealthy enough to throw LCDs (too small) and CRTs (too bulky) out like last year's campaign posters.  The environmental justice issue is that people in Indonesia are being allowed to mine and refine virgin material, at umpteen times the environmental cost and pollution and carbon, but are not allowed to repair, refurbish, or buy used.

The winners:

1) Dictators like Assad, Mubarak, and Gaddafi who don't want 30% internet access.
2) Mining companies digging to make new "Stuff"
3) Shredding companies building choppers to turn big display devices into little pieces
4) Environmental Watchdogs selling expensive "certification" packages which accuse exports of being illegal poisonous 80-90% toxic waste and label shredders as stewards
5) Display device manufacturerers (they think).

The losers:

1) Emerging democracy movements in developing nations
2) Sustainable environmental reuse hierarchy
3) Rich nations (whose unshredded display devices could be sold for 10 times the rate of shredded pieces)
4) Consumers (who are charged the cost of shredding working computers, a la CA SB20)
5) Endangered species

So a ban on trade in used computers is bad for the environment, bad for bandwidth investment, bad for the poor, bad for the rich economies (shredding is a net loss of added value), and bad for the internet.

And the people who sell brand new display devices are stupidly, moronically, assuming that the secondary market (exports to developing nations) is "market cannibalization".

In the growth of the auto market, used sales create access points for people to learn how to drive, and for people to pay for gasoline, creating a gasoline distribution infrastructure.   The same will be needed if we go to electric cars - if you shred all the used electric cars, fewer people will own an electric car (the used car market is about 7 times the size of the new car market) and distribution / charging points will rely on I guess government subsidy rather than economy of scale.

Laundromats, Gas Stations, Telephone, Internet pipelines... we have so many examples of bottlenecks  being surpassed based on economy of scale.  I've recomposed a song about it, the fifty nine street bridge over the troubled digital divide song.


China still buys used PCs and refurbishes and recycles them into new PCs, just as Japan still buys used automobile parts and auto scrap.  They refurbish them for sale in Africa, which is the next chapter in the story of development.