The surviving Kennedy uttered at the funeral ceremony of his brother Robert : "He dreamed things that never were and said.... why not?"

Nana Boakye Danquah 1 - as distinct from Nana Boakye Danquah of Nkyenkyire, father of a notable white collar "mining engineer", " Executive Director" of Transpomech International ('Ghana') Limited, and supplier of mining equipment to mining companies - is noted for sharing, as influential Principal of Kumasi Polytechnic, the Asante dream in which the people are neither impoverished, nor global gypsies.

Nana Boakye Danquah 1, in contrast with many of his contemporaries, saw the *opportunity*  presented by absence of effective Asante educational and technological infrastructures, as gateway to a 2nd millennium populated by 'digital natives', driving change in the local economic environment as recommended in 2001 for example by Ishmael Yamson Chairman & Chief Executive of Unilever and others at various times, who have called repeatedly for the means of rapid adaptation away from dependence on 'aid' and on the cocoa/gold neo-colonial unprocessed commodity economy.
 

Digital Natives, Digital Immigrants, Part I:

Digital Natives, Digital Immigrants
By Marc Prensky
From On the Horizon (NCB University Press, Vol. 9 No. 5, October 2001)

It is amazing to me how in all the hoopla and debate these days about the decline of education in the US we ignore the most fundamental of its causes. Our students have changed radically. Today’s students are no longer the people our educational system was designed to teach.

Today’s students have not just changed incrementally from those of the past, nor simply changed their slang, clothes, body adornments, or styles, as has happened between generations previously. A really big discontinuity has taken place. One might even call it a “singularity” – an event which changes things so fundamentally that there is absolutely no going back. This so-called “singularity” is the arrival and rapid dissemination of digital technology in the last decades of the 20th century.

Today’s students – K through college – represent the first generations to grow up with this new technology. They have spent their entire lives surrounded by and using
computers, videogames, digital music players, video cams, cell phones, and all the other toys and tools of the digital age. Today’s average college grads have spent less than 5,000 hours of their lives reading, but over 10,000 hours playing video games (not to mention 20,000 hours watching TV). Computer games, email, the Internet, cell phones and instant messaging are integral parts of their lives.
It is now clear that as a result of this ubiquitous environment and the sheer volume of their interaction with it, today’s students think and process information fundamentally differently from their predecessors. These differences go far further and deeper than most educators suspect or realize. “Different kinds of experiences lead to different brain structures, “ says Dr. Bruce D. Berry of Baylor College of Medicine. As we shall see in the next installment, it is very likely that our students’ brains have physically changed – and are different from ours – as a result of how they grew up. But whether or not this is literally true, we can say with certainty that their thinking patterns have changed. I will get to how they have changed in a minute.
What should we call these “new” students of today? Some refer to them as the N-[for Net]-gen or D-[for digital]-gen. But the most useful designation I have found for them is Digital Natives. Our students today are all “native speakers” of the digital language of computers, video games and the Internet.
So what does that make the rest of us? Those of us who were not born into the digital world but have, at some later point in our lives, become fascinated by and adopted many r most aspects of the new technology are, and always will be compared to them,

Digital Immigrants.
The importance of the distinction is this: As Digital Immigrants learn – like all
immigrants, some better than others – to adapt to their environment, they always retain, to some degree, their "accent," that is, their foot in the past. The “digital immigrant accent” can be seen in such things as turning to the Internet for information second rather than first, or in reading the manual for a program rather than assuming that the program itself will teach us to use it. Today’s older folk were "socialized" differently from their kids, and are now in the process of learning a new language. And a language learned later in life, scientists tell us, goes into a different part of the brain.
There are hundreds of examples of the digital immigrant accent. They include printing out your email (or having your secretary print it out for you – an even “thicker” accent); needing to print out a document written on the computer in order to edit it (rather than just editing on the screen); and bringing people physically into your office to see an interesting web site (rather than just sending them the URL). I’m sure you can think of one or two examples of your own without much effort. My own favorite example is the “Did you get my email?” phone call. Those of us who are Digital Immigrants can, and should, laugh at ourselves and our “accent.”
But this is not just a joke. It’s very serious, because the single biggest problem facing education today is that our Digital Immigrant instructors, who speak an outdated language (that of the pre-digital age), are struggling to teach a population that speaks an entirely new language.
This is obvious to the Digital Natives – school often feels pretty much as if we’ve
brought in a population of heavily accented, unintelligible foreigners to lecture them.
They often can’t understand what the Immigrants are saying. What does “dial” a number mean, anyway?
Lest this perspective appear radical, rather than just descriptive, let me highlight some of the issues. Digital Natives are used to receiving information really fast. They like to parallel process and multi-task. They prefer their graphics before their text rather than the opposite. They prefer random access (like hypertext). They function best when networked. They thrive on instant gratification and frequent rewards. They prefer games to “serious” work. (Does any of this sound familiar?)
But Digital Immigrants typically have very little appreciation for these new skills that the Natives have acquired and perfected through years of interaction and practice. These skills are almost totally foreign to the Immigrants, who themselves learned – and so choose to teach – slowly, step-by-step, one thing at a time, individually, and above all, seriously. “My students just don’t _____ like they used to,” Digital Immigrant educators grouse. I can’t get them to ____ or to ____. They have no appreciation for _____ or _____ . (Fill in the blanks, there are a wide variety of choices.)
Digital Immigrants don’t believe their students can learn successfully while watching TV or listening to music, because they (the Immigrants) can’t. Of course not – they didn’t practice this skill constantly for all of their formative years. Digital Immigrants think learning can’t (or shouldn’t) be fun. Why should they – they didn’t spend their formative years learning with Sesame Street.
Unfortunately for our Digital Immigrant teachers, the people sitting in their classes grew up on the “twitch speed” of video games and MTV. They are used to the instantaneity of hypertext, downloaded music, phones in their pockets, a library on their laptops, beamed messages and instant messaging. They’ve been networked most or all of their lives. They have little patience for lectures, step-by-step logic, and “tell-test” instruction.
Digital Immigrant teachers assume that learners are the same as they have always been, and that the same methods that worked for the teachers when they were students will work for their students now. But that assumption is no longer valid. Today’s learners are different. “Www.hungry.com” said a kindergarten student recently at lunchtime. “Every time I go to school I have to power down,” complains a high-school student. Is it that Digital Natives can’t pay attention, or that they choose not to? Often from the Natives’ point of view their Digital Immigrant instructors make their education not worth paying attention to compared to everything else they experience – and then they blame them for not paying attention!
And, more and more, they won’t take it. “I went to a highly ranked college where all the professors came from MIT,” says a former student. “But all they did was read from their textbooks. I quit.” In the giddy internet bubble of a only a short while ago – when jobs were plentiful, especially in the areas where school offered little help – this was a real possibility. But the dot-com dropouts are now returning to school. They will have to confront once again the Immigrant/Native divide, and have even more trouble given their recent experiences. And that will make it even harder to teach them – and all the Digital Natives already in the system – in the traditional fashion.
So what should happen? Should the Digital Native students learn the old ways, or should their Digital Immigrant educators learn the new? Unfortunately, no matter how much the Immigrants may wish it, it is highly unlikely the Digital Natives will go backwards. In the first place, it may be impossible – their brains may already be different. It also flies in the face of everything we know about cultural migration. Kids born into any new culture learn the new language easily, and forcefully resist using the old. Smart adult immigrants accept that they don’t know about their new world and take advantage of their kids to help them learn and integrate. Not-so-smart (or not-so-flexible) immigrants spend most of their time grousing about how good things were in the “old country.”
So unless we want to just forget about educating Digital Natives until they grow up and do it themselves, we had better confront this issue. And in so doing we need to
reconsider both our methodology and our content.
First, our methodology. Today’s teachers have to learn to communicate in the language and style of their students. This doesn’t mean changing the meaning of what is important, or of good thinking skills. But it does mean going faster, less step-by step, more in parallel, with more random access, among other things. Educators might ask “But how do we teach logic in this fashion?” While it’s not immediately clear, we do need to figure it out.
Second, our content. It seems to me that after the digital “singularity” there are now two kinds of content: “Legacy” content (to borrow the computer term for old systems) and “Future” content.
“Legacy” content includes reading, writing, arithmetic, logical thinking, understanding the writings and ideas of the past, etc – all of our “traditional” curriculum. It is of course still important, but it is from a different era. Some of it (such as logical thinking) will continue to be important, but some (perhaps like Euclidean geometry) will become less so, as did Latin and Greek.
“Future” content is to a large extent, not surprisingly, digital and technological. But
while it includes software, hardware, robotics, nanotechnology, genomics, etc. it also includes the ethics, politics, sociology, languages and other things that go with them.
This “Future” content is extremely interesting to today’s students. But how many Digital Immigrants are prepared to teach it? Someone once suggested to me that kids should only be allowed to use computers in school that they have built themselves. It’s a brilliant idea that is very doable from the point of view of the students’ capabilities. But who could teach it?
As educators, we need to be thinking about how to teach both Legacy and Future content in the language of the Digital Natives. The first involves a major translation and change of methodology; the second involves all that PLUS new content and thinking. It’s not actually clear to me which is harder – “learning new stuff” or “learning new ways to do old stuff.” I suspect it’s the latter.
So we have to invent, but not necessarily from scratch. Adapting materials to the
language of Digital Natives has already been done successfully. My own preference form teaching Digital Natives is to invent computer games to do the job, even for the most serious content. After all, it’s an idiom with which most of them are totally familiar.
Not long ago a group of professors showed up at my company with new computer-aided design (CAD) software they had developed for mechanical engineers. Their creation was so much better than what people were currently using that they had assumed the entire engineering world would quickly adopt it. But instead they encountered a lot of resistance, due in large part to the product’s extremely steep learning curve – the software contained hundreds of new buttons, options and approaches to master.
Their marketers, however, had a brilliant idea. Observing that the users of CAD software were almost exclusively male engineers between 20 and 30, they said “Why not make the learning into a video game!”
So we invented and created for them a computer game in the “first person shooter” style of the consumer games Doom and Quake, called The Monkey Wrench Conspiracy. Its player becomes an intergalactic secret agent who has to save a
space station from an attack by the evil Dr. Monkey Wrench. The only way to defeat him ,is to use the CAD software, which the learner must employ to build tools, fix weapons, and defeat booby traps. There is one hour of game time, plus 30 “tasks,” which can take from 15 minutes to several hours depending on one’s experience level.
Monkey Wrench has been phenomenally successful in getting young people interested in learning the software. It is widely used by engineering students around the world, with over 1 million copies of the game in print in several languages. But while the game was easy for my Digital Native staff to invent, creating the content turned out to be more difficult for the professors, who were used to teaching courses that started with “Lesson 1 – the Interface.” We asked them instead to create a series of graded tasks into which the skills to be learned were embedded. The professors had made 5-10 minute movies to illustrate key concepts; we asked them to cut them to under 30 seconds. The professors insisted that the learners to do all the tasks in order; we asked them to allow random access. They wanted a slow academic pace, we wanted speed and urgency (we hired a Hollywood script writer to provide this.) They wanted written instructions; we wanted computer movies. They wanted the traditional pedagogical language of “learning objectives,” “mastery”, etc. (e.g. “in this exercise you will learn…”); our goal was to completely eliminate any language that even smacked of education.
In the end the professors and their staff came through brilliantly, but because of the large mind-shift required it took them twice as long as we had expected. As they saw the approach working, though, the new “Digital Native” methodology became their model for more and more teaching – both in and out of games – and their development speed increased dramatically.
Similar rethinking needs to be applied to all subjects at all levels. Although most attempts at “edutainment” to date have essentially failed from both the education and entertainment perspective, we can – and will, I predict – do much better.
In math, for example, the debate must no longer be about whether to use calculators and computers – they are a part of the Digital Natives’ world – but rather how to use them to instill the things that are useful to have internalized, from key skills and concepts to the multiplication tables. We should be focusing on “future math” – approximation, statistics, binary thinking.
In geography – which is all but ignored these days – there is no reason that a generation that can memorize over 100 Pokémon characters with all their characteristics, history and evolution can’t learn the names, populations, capitals and relationships of all the 101 nations in the world. It just depends on how it is presented.
We need to invent Digital Native methodologies for all subjects, at all levels, using our students to guide us.
The process has already begun – I know college professors inventing games for teaching subjects ranging from math to engineering to the Spanish Inquisition. We need to find ways of publicizing and spreading their successes.
A frequent objection I hear from Digital Immigrant educators is “this approach is great for facts, but it wouldn’t work for ‘my subject.’” Nonsense. This is just rationalization and lack of imagination. In my talks I now include “thought experiments” where I invite professors and teachers to suggest a subject or topic, and I attempt– on the spot – to invent a game or other Digital Native method for learning it. Classical philosophy?
Create a game in which the philosophers debate and the learners have to pick out what each would say. The Holocaust? Create a simulation where students role-play the meeting at Wannsee, or one where they can experience the true horror of the camps, as opposed to the films like Schindler’s List. It’s just dumb (and lazy) of educators – not to mention ineffective – to presume that (despite their traditions) the Digital Immigrant way is the only way to teach, and that the Digital Natives’ “language” is not as capable as their own of encompassing any and every idea.
So if Digital Immigrant educators really want to reach Digital Natives – i.e. all their
students – they will have to change. It’s high time for them to stop their grousing, and as the Nike motto of the Digital Native generation says, “Just do it!” They will succeed in the long run – and their successes will come that much sooner if their administrators support them.
See also: Digital Natives, Digital Immigrants Part 2: The scientific evidence behind the Digital Native’s thinking changes, and the evidence that Digital Native-style learning works!
 

Marc Prensky is an internationally acclaimed thought leader, speaker, writer, consultant, and game designer in the critical areas of education and learning. He is the author of Digital Game-Based Learning (McGraw-Hill, 2001), founder and CEO of Games2train, a game-based learning company, and founder of The Digital Multiplier, an organization dedicated to eliminating the digital divide in learning worldwide. He is also the creator of the sites <www.SocialImpactGames.com>, <www.DoDGameCommunity.com> and <www.GamesParentsTeachers.com> . Marc holds an MBA from Harvard and a Masters in Teaching from Yale. .
 

Our children today are being socialized in a way that is vastly different from their parents.  The numbers are overwhelming: over 10,000 hours playing videogames, over 200,000 emails and instant messages sent and received; over 10,000 hours talking on digital cell phones; over 20,000 hours watching TV (a high percentage fast speed MTV), over 500,000 commercials seen—all before the kids leave college. And, maybe, at the very most, 5,000 hours of book reading.  These are today’s "Digital Native" students. 

 

In Digital Natives, Digital Immigrants: Part 1, I discussed how the differences between our Digital Native students and their Digital Immigrant teachers lie at the root of a great many of today's educational problems. I suggested that Digital Natives’ brains are likely physically different as a result of the digital input they received growing up.  And I submitted that learning via digital games is one good way to reach Digital Natives in their "native language." 

 

Here I present evidence for why I think this is so.  It comes from neurobiology, social psychology, and from studies done on children using games for learning.

Neuroplasticity

Although the vast majority of today’s educators and teachers grew up with the understanding that the human brain doesn’t physically change based on stimulation it receives from the outside - especially after the age of 3 - it turns out that that view is, in fact, incorrect. 

Based on the latest research in neurobiology, there is no longer any question that stimulation of various kinds actually changes brain structures and affects the way people think, and that these transformations go on throughout life.  The brain is, to an extent not at all understood or believed to be when Baby Boomers were growing up, massively plastic. It can be, and is, constantly reorganized. (Although the popular term rewired is somewhat misleading, the overall idea is right—the brain changes and organizes itself differently based on the inputs it receives.) The old idea that we have a fixed number of brain cells that die off one by one has been replaced by research showing that our supply of brain cells is replenished constantly.  The brain constantly reorganizes itself all our child and adult lives, a phenomenon technically known as neuroplasticity.

 

One of the earliest pioneers in this field of neurological research found that rats in “enriched” environments showed brain changes compared with those in “impoverished” environments after as little as two weeks.   Sensory areas of their brains were thicker, other layers heavier. Changes showed consistent overall growth, leading to the conclusion that the brain maintains its plasticity for life. ³ 

 

Other experiments leading to similar conclusions include the following:

 

·    Ferrets’ brains were physically rewired, with inputs from the eyes switched to where the hearing nerves went and vice versa.  Their brains changed to accommodate the new inputs.

·        Imaging experiments have shown that when bind people learn Braille, “visual” areas of their brains lit up.  Similarly, deaf people use their auditory cortex to read signs.

·        Scans of brains of people who tapped their fingers in a complicated sequence that they had practiced for weeks showed a larger area of motor cortex becoming activated then when they performed sequences they hadn’t practiced.

·        Japanese subjects were able learn to “reprogram” their circuitry for distinguishing “ra” from “la,” a skill they “forget” soon after birth because their language doesn’t require it.

·        Researchers found that an additional language learned later in life goes into a different place in the brain than the language or languages learned as children.

·        Intensive reading instruction experiments with students aged 10 and up appeared to create lasting chemical changes in key areas of the subjects’ brains.

·        A comparison of musicians versus nonplayers brains via magnetic resonance imaging showed a 5 percent greater volume in the musicians’ cerebellums, ascribed to adaptations in the brain’s structure resulting from intensive musical training and practice.

 

We are only at the very beginning of understanding and applying brain plasticity research.  The goal of many who are—such as the company Scientific Learning—is “neuroscience-based education.”

 

Malleability

 

Social psychology also provides strong evidence that one’s thinking patterns change depending on one’s experiences.  Until very recently Western philosophers and psychologists took it for granted that the same basic processes underlie all human thought.  While cultural differences might dictate what people think about, the strategies and processes of thought, which include logical reasoning and a desire to understand situations and events in linear terms of cause and effect, were assumed to be the same for everyone.   However this, too, appears to be wrong. 

 

Research by social psychologists  shows that people who grow up in different cultures do not just think about different things, they actually think differently. The environment and culture in which people are raised affects and even determines many of their thought processes.

 
“We used to think that everybody uses categories in the same way, that logic plays the same kind of role for everyone in the understanding of everyday life, that memory, perception, rule application and so on are the same,” says one. “But we’re now arguing that cognitive processes themselves are just far more malleable than mainstream psychology assumed.”

 

We now know that brains that undergo different developmental experiences develop differently, and that people who undergo different inputs from the culture that surrounds them think differently. And while we haven’t yet directly observed Digital Natives’ brains to see whether they are physically different (such as musicians’ appear to be) the indirect evidence for this is extremely strong.

 

However, brains and thinking patterns do not just change overnight.  A key finding of brain plasticity research is that brains do not reorganize casually, easily, or arbitrarily. “Brain reorganization takes place only when the animal pays attention to the sensory input and to the task.”    “It requires very hard work.” Biofeedback requires upwards of 50 sessions to produce results.   Scientific Learning’s Fast ForWard program requires students to spend 100 minutes a day, 5 days a week, for 5 to 10 weeks to create desired changes, because “it takes sharply focused attention to rewire a brain.”

 

Several hours a day, five days a week, sharply focused attention—does that remind you of anything?  Oh, yes—video games!  That is exactly what kids have been doing ever since Pong arrived in 1974.  They have been adjusting or programming their brains to the speed, interactivity, and other factors in the games, much as boomers’ brains were programmed to accommodate television, and literate man’s brains were reprogrammed to deal with the invention of written language and reading (where the brain had to be retrained to deal with things in a highly linear way.)  “Reading does not just happen, it is a terrible struggle.”   “Reading [has] a different neurology to it than the things that are built into our brain, like spoken language.”  One of the main focuses of schools for the hundreds of years since reading became a mass phenomenon has been retraining our speech-oriented brains to be able to read.  Again, the training involves several hours a day, five days a week, and sharply focused attention.

 

Of course just when we’d figured out (more or less) how to retrain brains for reading, they were retrained again by television.  And now things have changed yet again, and our children are furiously retraining their brains in even newer ways, many of which are antithetical to our older ways of thinking. 

 

Children raised with the computer “think differently from the rest of us. They develop hypertext minds.  They leap around.  It’s as though their cognitive structures were parallel, not sequential.” ²¹  “Linear thought processes that dominate educational systems now can actually retard learning for brains developed through game and Web-surfing processes on the computer.”

 

Some have surmised that teenagers use different parts of their brain and think in different ways than adults when at the computer. ²³  We now know that it goes even further—their brains are almost certainly physiologically different.  But these differences, most observers agree, are less a matter of kind than a difference of degree.  For example as a result of repeated experiences, particular brain areas are larger and more highly developed, and others are less so. 

 

For example, thinking skills enhanced by repeated exposure to computer games and other digital media include reading visual images as representations of three-dimensional space (representational competence), multidimensional visual-spatial skills, mental maps, “mental paper folding” (i.e. picturing the results of various origami-like folds in your mind without actually doing them), “inductive discovery” (i.e.  making observations, formulating hypotheses and figuring out the rules governing the behavior of a dynamic representation), “attentional deployment” (such as monitoring multiple locations simultaneously), and responding faster to expected and unexpected stimuli.

 

While these individual cognitive skills may not be new, the particular combination and intensity is.  We now have a new generation with a very different blend of cognitive skills than its predecessors—the Digital Natives.

 

What About Attention Spans?

 

We hear teachers complain so often about the Digital Natives’ attention spans that the phrase "the attention span of a gnat" has become a cliché.  But is it really true? 

 

"Sure they have short attention spans - for the old ways of learning," says a professor. ²⁵ Their attention spans are not short for games, for example, or for anything else that actually interests them. As a result of their experiences Digital Natives crave interactivity—an immediate response to their each and every action. Traditional schooling provides very little of this compared to the rest of their world (one study showed that students in class get to ask a question every 10 hours) ²⁶  So it generally isn’t that Digital Natives can’t pay attention, it’s that they choose not to.

[

Research done for Sesame Street reveals that children do not actually watch television continuously, but “in bursts.” They tune in just enough to get the gist and be sure it makes sense.  In one key experiment, half the children were shown the program in a room filled with toys.  As expected, the group with toys was distracted and watched the show only about 47 percent of the time as opposed to 87 percent in the group without toys.  But when the children were tested for how much of the show they remembered and understood, the scores were exactly the same.  “We were led to the conclusion that the 5-year-olds in the toys group were attending quite strategically, distributing their attention between toy play and viewing so that they looked at what was for them the most informative part of the program.  The strategy was so effective that the children could gain no more from increased attention.” ²⁷ 

 

What Have We Lost?

 

Still, we often hear from teachers about increasing problems their students have with reading and thinking. What about this?  Has anything been lost in the Digital Natives’ “reprogramming” process?

 

One key area that appears to have been affected is reflection.  Reflection is what enables us, according to many theorists, to generalize, as we create “mental models” from our experience.   It is, in many ways, the process of “learning from experience.”  In our twitch-speed world, there is less and less time and opportunity for reflection, and this development concerns many people.  One of the most interesting challenges and opportunities in teaching Digital Natives is to figure out and invent ways to include reflection and critical thinking in the learning (either built into the instruction or through a process of instructor-led debriefing) but still do it in the Digital Native language.  We can and must do more in this area.

 

Digital Natives accustomed to the twitch-speed, multitasking, random-access, graphics-first, active, connected, fun, fantasy, quick-payoff world of their video games, MTV, and Internet are bored by most of today’s education, well meaning as it may be.  But worse, the many skills that new technologies have actually enhanced (e.g., parallel processing, graphics awareness, and random access)—which have profound implications for their learning—are almost totally ignored by educators.

 

The cognitive differences of the Digital Natives cry out for new approaches to education with a better “fit.”  And, interestingly enough, it turns out that one of the few structures capable of meeting the Digital Natives’ changing learning needs and requirements is the very video and computer games they so enjoy.  This is why “Digital Game-Based Learning” is beginning to emerge and thrive.

But Does It Work?

 

Of course many criticize today’s learning games, and there is much to criticize.  But if some of these games don’t produce learning it is not because they are games, or because the concept of “game-based learning” is faulty.  It’s because those particular games are badly designed.  There is a great deal of evidence that children’s learning games that are well designed do produce learning, and lots of it — by and while engaging kids.

 

While some educators refer to games as “sugar coating,” giving that a strongly negative connotation - and often a sneer - it is a big help to the Digital Natives.  After all, this is a medium they are very familiar with and really enjoy.

 

Elementary school, when you strip out the recesses and the lunch and the in-between times, actually consists of about three hours of instruction time in a typical 9 to 3 day. So assuming, for example, that learning games were only 50% educational, if you could get kids to play them for six hours over a weekend, you’d effectively add a day a week to their schooling!  Six hours is far less than a Digital Native would typically spend over a weekend watching TV and playing videogames. The trick, though, is to make the learning games compelling enough to actually be used in their place.  They must be real games, not just drill with eye-candy, combined creatively with real content.

 

The numbers back this up.  The Lightspan Partnership, which created PlayStation games for curricular reinforcement, conducted studies in over 400 individual school districts and a “meta-analysis” as well. Their findings were increases in vocabulary and language arts of 24 and 25 percent respectively over the control groups, while the math problem solving and math procedures and algorithms scores were 51 and 30 percent higher.

 

Click Health, which makes games to help kids self-manage their health issues, did clinical trials funded by the National Institutes of Health. They found, in the case of diabetes, that kids playing their games (as compared to a control group playing a pinball game) showed measurable gains in self-efficacy, communication with parents and diabetes self-care.  And more importantly, urgent doctor visits for diabetes-related problems declined 77 percent in the treatment group.

 

Scientific Learning’s Fast ForWard game-based program for retraining kids with reading problems conducted National Field Trials using 60 independent professionals at 35 sites across the US and Canada. Using standardized tests, each of the 35 sites reported conclusive validation of the program’s effectiveness, with 90 percent of the children achieving significant gains in one or more tested areas.  ³¹

 

Again and again it’s the same simple story.  Practice—time spent on learning—works.  Kid’s don’t like to practice. Games capture their attention and make it happen. And of course they must be practicing the right things, so design is important.

 

The US military, which has a quarter of a million 18-year-olds to educate every year, is a big believer in learning games as a way to reach their Digital Natives. They know their volunteers expect this: “If we don’t do things that way, they’re not going to want to be in our environment.”

 

What’s more,  they've observed it working operationally in the field.  “We’ve seen it time and time again in flying airplanes, in our mission simulators.”  Practical-minded Department of Defence trainers are perplexed by educators who say “We don’t know that educational technology works—we need to do some more studies.”  “We KNOW the technology works,” they retort.  We just want to get on with using it

 

So, today’s neurobiologists and social psychologists agree that brains can and do change with new input.  And today’s educators with the most crucial learning missions—teaching the handicapped and the military—are already using custom designed computer and video games as an effective way of reaching Digital Natives.  But the bulk of today’s tradition-bound educational establishment seem in no hurry to follow their lead. 

 

Yet these educators know something is wrong, because they are not reaching their Digital Native students as well as they reached students in the past.  So they face an important choice. 

 

On the one hand, they can choose to ignore their eyes, ears and intuition, pretend the Digital Native/Digital Immigrant issue does not exist, and continue to use their suddenly-much-less-effective traditional methods until they retire and the Digital Natives take over. 

 

Or they can chose instead to accept the fact that they have become Immigrants into a new Digital world, and to look to their own creativity, their Digital Native students, their sympathetic administrators and other sources to help them communicate their still-valuable knowledge and wisdom in that world’s new language. 

 

The route they ultimately choose - and the education of their Digital Native students - depends very much on us.

 

Marc Prensky is the author of Digital Game-Based Learning (McGraw-Hill 2001) and Founder and CEO of Games2Train. The Monkey Wrench Conspiracy CD can be purchased for $10 (from the US only) at www.games2train.com/site/html/tutor.html.

 

Notes

 

1. These numbers are intended purely as “order of magnitude” approximations;  they obviously vary widely  for individuals.  They were arrived at in the following ways ( Note: I am very interested in any additional data anyone has on this):

 

Videogames:  Average play time: 1.5 hours/day (Source: “Interactive Videogames, Mediascope, June 1966.)  It is likely to be higher five years later, so 1.8 x 365 x 15 years = 9,855 hours.

 

E-mails and Instant Messages: Average 40 per day x 365 x 15 years = 219, 000.  This is not unrealistic even for pre-teens – in just one instant messaging connection there may be over 100 exchanges per day – and most people do multiple connections. 

 

TV: “Television in the Home, 1998: Third Annual Survey of Parent and Children, Annenburg Policy Center, June 22, 1998, gives the number of TV hours watched per day as 2.55.  M. Chen, in the Smart Parents Guide to Kid’s TV, (1994) gives the number as 4 hours/day. Taking the average,  3.3 hrs/day x 365 days x 18 years = 21,681.

 

Commercials:  There are roughly 18 30-second commercials during a TV hour.  18 commercials/hour x 3.3 hours/day x 365 days x 20 years (infants love commercials) = 433,620.

 

Reading:  Eric Leuliette, a voracious (and meticulous) reader who has listed online every book he has ever read (www.csr.utexas.edu/personal/leuliette/fw_table_home.html), read about 1300 books through college. If we take 1300 books x 200 pages per book x 400 words per page, we get 10,400,000,000 words. Read at 400 words/that gives 260,000 minutes, or 4,333 hours.  This represents a little over 3 hours/book.  Although others may read more slowly, most have read far fewer books than Leuliette.

 

2.  Paul Perry in American Way, May 15, 2000.

 

3.  Renate Numella Caine and Geoffrey Caine, Making Connections: Teaching and the Human Brain, Addison-Wesley, 1991, p.31.

 

4. Dr. Mriganka Sur, Nature, April 20, 2000.

 

5. Sandra Blakeslee, New York Times, April 24, 2000.

 

6. Leslie Ungerlieder, National Institutes of Health.

 

7. James McLelland, University of Pittsburgh.

 

8. Cited in Inferential Focus Briefing, September 30, 1997.

 

9. Virginia Berninger, University of Washington, American Journal of Neuroradiology, May 2000.

 

10. Dr. Mark Jude Tramano of Harvard. Reported in USA Today December 10, 1998.

 

11.     Newsweek, January 1, 2000.

 

12.     They include Alexandr Romanovich Luria (1902-1977), Soviet pioneer in neuropsychology, author of The Human Brain and Psychological Processes (1963), and, more recently,  Dr. Richard Nisbett of the University of Michigan.

 

13.     Quoted in Erica Goode, “How Culture Molds Habits of Thought,” New York Times, August 8, 2000.

 

14.     John T. Bruer, The Myth of the First Three Years, The Free Press, 1999, p. 155.

 

15.     G. Ried Lyon, a neuropsychologist who directs reading research funded by the National Institutes of Health, quoted in Frank D. Roylance “Intensive Teaching Changes Brain,” SunSpot, Maryland’s Online Community, May 27, 2000.

 

16.     Alan T. Pope, research psychologist, Human Engineering Methods, NASA.  Private communication.

 

17.     Time, July 5, 1999.

 

18.     The Economist, December 6, 1997.

 

19.     Kathleen Baynes, neurology researcher, University of California – Davis, quoted in Robert Lee Hotz “In Art of Language, the Brain Matters “ Los Angeles Times, October 18, 1998.

 

20.     Dr. Michael S. Gazzaniga, neuroscientist at Dartmouth College quoted in Robert Lee Hotz “In Art of Language, the Brain Matters “ Los Angeles Times, October 18, 1998.

 

21.     William D. Winn, Director of the Learning Center, Human Interface Technology Laboratory, University of Washington, quoted in Moore, Inferential Focus Briefing (see 22).

 

22.     span style="font-size: 10pt;">Peter Moore, Inferential Focus Briefing, September 30, 1997.

 

23.     Ibid.

 

24.     Patricia Marks Greenfield,  Mind and Media, The Effects of Television, Video Games and Computers, Harvard University Press, 1984.

 

25.     Dr. Edward Westhead, professor of biochemistry (retired), University of Massachusetts.

 

26.     Reported by Michael Parmentier, Director,  Office of Readiness and Training, Department of Defense, The Pentagon, in a private briefing.  ( The Readiness and Training Unit reports to the Assistant Secretary of Defense for Personnel and Readiness).

 

27.     Elizabeth Lorch, psychologist, Amherst College, quoted in Malcolm Gladwell, The Tipping Point: How Little Things Can Make a Big Difference, Little Brown & Company, 2000, p. 101.

 

28.     John Kernan, President, The Lightspan Partnership. Personal communication.

 

29.     “Evaluation of Lightspan. Research Results from 403 schools and over 14,580 students,” February 2000, CD ROM.

 

30.     Debra A. Lieberman, “Health Education Video Games for Children and Adolescents: Theory, Design and Research Findings,” paper presented at the annual meeting of the International Communications Association, Jerusalem, 1998.

 

31.     Scientific Learning Corporation, National Field Trial Results (pamphlet.)  See also Merzenich et al., “Temporal Processing Deficits of language-Learning Impaired Children Ameliorated by Training” and Tallal, et al., “Language Comprehension in Language Learning Impaired Children Improved with Acoustically Modified Speech,” in Science, Vol. 271, January 5, 1996, pp 27-28 & 77-84. 

 

32.     Michael Parmentier, Director,  Office of Readiness and Training, Department of Defense, The Pentagon. Private briefing.

                                               

33.     Don Johnson,  Office of Readiness and Training, Department of Defense, The Pentagon. Private briefing.

This paper was written as part of the course Business Strategy for Emerging Markets taught by Raymond J. Fisman, the Meyer Feldberg Associate Professor of Business, at Columbia Business School in fall 2003. The authors are grateful for his invaluable feedback. Unfortunately the author overlooks the fact that you don't enable a generation or critical mass of "digital natives" with one capital intensive center at KNUST for the enjoyment of a few of the privileged, you achieve the critical mass be distributing all of your available resources in the form of inexpensive wireless broadband and basic environment resistant terminals to all Asante schools and villages - it also helps to add and distribute appropriate content to that already available via the net. A posh capital intensive air-conditioned facility for the privileged aggravates already deeply embedded 'Acquired Aid Dependence Syndrome' and actually subverts indigenous development of critical mass of "Digital Natives" (Ed.)

During the last 10 years, the Ghanaian government has made a serious effort to increase foreign direct investment (FDI) and to use that as a vehicle for export-led growth. Much of the emphasis has been on using technology to fuel the growth engine and as a means of diversifying from Ghana’s traditional staple exports, cocoa, gold and timber. The need for improvement is greater now than ever: cocoa prices have tumbled due to global overcapacity, timber production has become increasingly unsustainable and gold has fallen in value (and risen again, sharply by 2005, to resume the upward trend - but who profits? Shareholders in South Africa, London, and Wall Street, Ed.). As a result, the country’s GDP per capita has stagnated.

Ghana believes technological investments are the answer to its export and employment problems and that it has a number of advantages over its West African neighbors. It is seeking to increase investment to make an early push into the sector and, ultimately, to turn itself into a major information and communications technology (ICT) and business process outsourcing (BPO) services player. Some have suggested since 1986 when Nana Boakye Danquah 1 was Principal of K-Poly - Ed. ) that 'Ghana' could in time become the “Bangalore of West Africa.”

This paper examines Ghanaian efforts to grow its investment in the ICT and BPO sectors and attempts to determine whether Ghana can be successful. The authors base their conclusions on an analysis of the current investment environment, the labor market and the country’s infrastructure, as well as the rule of law and government policies and incentives. The authors, who interviewed entrepreneurs and conducted a survey to inform their views, also present a breakdown analysis on the different BPO areas. The authors conclude that while Ghana cannot compete effectively with India in the foreseeable future, the country is competitive in such low-skill, low-margin areas as transcription
services, account activation, surveys and basic customer care. They conclude, too, that current government efforts are justified, since Ghana needs only to be moderately successful to have a
positive impact on its economy.

Ghanaian Economic History

Ghana was the first African country to gain independence from Great Britain. At the time—1960—Ghana was one of the leading producers of cocoa in the world, and it soon formed the Ghana Cocoa Board, Cocobod, to oversee the aggregation, transportation, welfare and marketing of its cocoa beans abroad. This effort, along with the government’s subsidies to help farmers grow cocoa and coffee, made Ghana one of the three largest exporters of cocoa in the world, and the small African economy was soon on par with much of Southeast Asia in terms of income per capita (Beim and Calomiris 2001).

Unfortunately, mismanagement, over-reliance on cocoa and coffee, government corruption and military coups, and a drop in commodity prices due to excess supply resulted in ever decreasing revenues and stunted growth (Lamb 1987). The result was that Ghana’s income per capita in 2003 was no higher than it had been in 1960 (exhibit 1). In contrast, GDP per capita of the Southeast Asian “tigers” is now as much as 30 times that of Ghana’s (UNDP 2002).

Since 1970, Ghana’s economy has also been devastated by high levels of inflation, due in part to the missteps of its leadership. After a military coup led by Flight Lieutenant Gerry Rawlings, inflation reached 120 percent from 1979 to 1983 (exhibit 2). High dollar interest rates led to high interest payments on sovereign debt. This prompted Ghana to accept structural adjustment measures from the International Monetary Fund (IMF) and reined in government spending and inflation, earning admiration from the West (Farmer and Talbot 2001).

Washington Consensus was coined by John Williamson to refer to the lowest common denominator of policy advice being addressed by the Washington-based institutions to Latin American countries as of 1989 (see S. Venkitaramanan, Washington Consensus revisited, Hindu Business Line, June 4, 2001). The term now refers to the whole developing world and encapsulates the experience of the 1990s. The original version of the Washington Consensus is now extended to the rest of the world and advocates fiscal discipline; redirection of public-expenditure priorities toward fields offering both high economic returns and the potential to improve income distribution; lowering taxes; and a raft of neoclassical reforms that include interest-rate liberalization, a competitive exchange rate, trade liberalization, liberalization of capital controls, privatization, deregulation and property rights. Most economists agree with the need for the first three, but there is controversy over the others. Stiglitz (2002),  for example, has criticised the Washington Consensus for its failure to pay attention to sequencing, or local factors and the  need to increase government spending during economic down cycles—the significance of which is often understated by neoclassical economists and the Washington Consensus. The developing world also has been critical, as these countries find
themselves pushed to pursue policies that tend to relegate the jobs or development agenda to a secondary consideration, and the rewards for pursuing the policies do not always justify the pain.

As the leader of Ghana, Rawlings ran the country as a benevolent despot. In 1983, he initiated a concerted liberalisation of the economy and efforts to increase his country’s share of FDI. Despite this, FDI remained minimal: $70 million in 1999, compared to a sovereign debt of $7 billion. Debt levels were so high that servicing them consumed 51 percent of the national budget.

The economy grew modestly in the 1980s and 1990s, registering a compound annual growth rate (CAGR) of 4.5 percent between 1992 and 2002 and a GDP per capita of $300 in 2002 ($6 billion).

Growth is forecast to be sustained at about 7 percent for the next few years, but all this cannot mask the fact that Ghana remains one of the poorest countries in the world. Agriculture accounts for 40 percent of GDP (and 60 percent of employment), services 31 percent and industry 29 percent. Though the industrial base is fairly diverse—it includes aluminum smelting, oil refining, textiles, pharmaceuticals, brewing, cement fabrication and mining—capacity utilization has been low due to maintenance and infrastructure issues. Recently the country has experienced lower inflation owing to tighter fiscal policy. 

World Bank. Data are available at http://www.worldbank.org/privatesector/ic/ic_ica_resources.htm.
Ghana Ministry of Trade and Industry (MOTI), http://www.moti-ghana.com.
Economist Intelligence Unit, 200

Growth Initiatives

Many factors can affect the attractiveness of a country for private FDI, including the following: infrastructure; labor laws; special tax provisions; the rule of law; legal provisions to protect investments, such as intellectual property rights (IPR); the tariff structure; the size and skill level of the labor force; and political stability.

The Ghanaian government has used a combination of incentives to improve its investment climate. This section discusses their impact as measured by the number of companies investing. The authors also use the results of a survey to gauge the impact of these incentives and conclude by evaluating the proposed technology park (GCG 2003).  The government has also attempted to attract FDI through aggressive changes in business law, privatization of state-owned companies and other related initiatives, including the formation of a free-trade zone:

1. The Companies Code, 1963, established the right of overseas firms to establish and register a place of business in Ghana and to invite the general public to subscribe to their shares. These companies can be private limited, public limited or unlimited—and indeed the Partnership Act, 1962, established rules for the formation of partnerships.

2. The Companies Code, 1963, was further liberalized by the Ghana Investments Promotion Centre (GIPC) Act, 1994, which eased rules for the establishment of companies. Under the act, foreign investors in Ghana are required by law to register with the GIPC. The GIPC provides to all enterprises guarantees of “free transferability through any authorized dealer bank in free convertible currency of dividends or net profits attributable to a foreign investment.” Additionally, Ghana is a member of the Multilateral Investment Guarantee Agency (MIGA) of the World Bank, which
provides some protection against noncommercial risk for investment in developing countries.

3. Beginning in 1988 as part of Ghana’s recovery program, the government has implemented an aggressive divestiture of state-owned enterprises (SOEs). To date, more than 250 of the 300 SOEs have been divested. The rationale for privatization is to improve company incentives, increase the size of the private sector (which is now 10 percent, up from 4.5 percent), inject entrepreneurial direction into the SOEs and increase investment in plant and equipment to foster increased productivity and growth. Although mismanagement and a shortage of trained managers have been
issues, the divestiture program has met some of the success criteria set out in 1988 (Dzakpasu 2000).

4. The Trade and Investment Reform Program (TIRP) is a four-and-a-half-year—1998–2003—USAID program designed to offer $50 million in assistance to boost such key economic sectors as agriculture, marketing, industry, small-scale enterprise development and trade. The program and its predecessor succeeded in expanding international sales from $1,072 million (1995) to $1,480 and increasing private investment as a share of GDP from 5.3 percent (1995) to more than 10 percent.

5. The government has also established a Ghana Free Zones Scheme managed by the Free Zone Board. Companies can be engaged in the production of any type of goods or services for export, including BPO, telemarketing and other call-center operations, and IT services. The scheme has a large number of generous incentives, including the following:
• exemption from the payment of income tax on profits for the first 10 years and a maximum tax rate of 8% thereafter.
• exemption of shareholders from the payment of withholding tax on dividends.
• the right of foreign investors to take and hold 100 percent of the shares in any free-zone enterprise.
• guarantees of unconditional transfers through authorized dealer banks.
• freedom to contract with local labor under terms set by the employer only.
• in cases in which people may be subject to double taxation, the option of paying income tax in the country of origin.
• the right of citizens of (OECD) member countries and of South Africa to apply for visas at ports.

6. IPR Considerations: Ghana is a signatory of the Universal Copyright Convention and a member of the World Intellectual Property Organization, the African Regional Industrial Property Organization and the WTO (USTR 2001, 140). Unfortunately, anyone who feels that these rights have been infringed must seek recourse in local courts, although few infringements have been brought before the court in recent years. As in other emerging financial markets, there is some misappropriation of trademarks and music piracy, but the data are somewhat patchy (USTR 2001, 140). The TIRP replaced the U.S.-Ghana Trade and Investment program funded by the United States, which ran from 1992 to 1997 and provided $80 million in assistance to increase nontraditional export earnings. For more details, see Ghana MOTI, “Trade and Investment Reform Programme,” http://www.moti-ghana.com/trade_invest_prog.htm. Private foreign and national companies serve on the program’s board, including TechnoServe, a multinational business working with local entrepreneurs in more than 20 emerging markets.

7. The government of President John Kufuor that took office in 2001 recently declared that the private sector is the “engine of growth” and the current decade the “Golden Age of Business.” The government expects to achieve its mission by working closely with the private sector and providing “assistance through the divestiture program, financial support and streamlining of government bureaucracy” (DMFA 2003). Some of the initiatives are designed to increase educational output, develop incubators and business advisory services and provide financial assistance for micro, small and medium industries. These have come under fire of late from religious leaders who believe that the pronouncements have not been backed up with concrete proposals (AllAfrica 2003).

8. A large number of donor institutions, both multilateral and bilateral, are engaged in the private sector in Ghana. Others, including the Danish Government, are working both with private businesses and directly with the Ghanaian government to reform the legal and judicial systems, strengthen the business culture, provide business-support instruments and enhance access to markets (DMFA 2003).

Evaluation of Ghana’s BPO/ICT Suitability:

Infrastructure:

The stability of the power grid is an issue. Power is currently supplied by the national monopoly, the Electricity
Company of Ghana. The company’s record is poor. It is often the subject of legislation intended to protect the
consumer and improve service. Power failures are common, and businesses that require high uptime often need a private generator to ensure uninterrupted supply. This adds significantly to the cost of business and is inefficient. The government is aware of this issue, but it is unlikely to be solved through privatization alone
(Laryea 1999).

The main telecommunications provider is Ghana Telecommunications Company Ltd (Ghana Telecom). It was incorporated in 1995 as a successor to the telecommunications division of the Ghana Posts and Telecommunications Corporation (GPTC), which was established in 1974 to operate and license telecom services. In 1996, Ghana Telecom privatized its mainline operations by awarding a Malaysian-led consortium (Telecom Malaysia) a 30 percent stake in the company, with full management control. The government plans to sell an additional 21 percent to the public.

Ghana’s cities are connected by microwave radio, and there is another telecom operator, Western Telesystems Ghana Ltd (WESTEL). Still, there is a backlog of 30,000 people currently waiting for telephone lines. Cellular telephony is growing quickly to meet this demand. Millicom Ghana Ltd (Mobitel), which began in 1991, now has more than 300,000 subscribers, and CellTel Ltd (CellTel), which began in 1993, has 200,000 subscribers (Addy-Nayo 2001).

M. Phillips, “Entrepreneur betting on Internet phone calls,” Wall Street Journal, May 22, 2002. Phillips reports, “[E]lectricity in Accra cuts out at least once a week, so they need a $30,000 backup generator and a huge battery to keep the computers up and running for 11 minutes until the generator kicks in. Then there is the $18,000 transformer out back; at times the 240 volts power can surge to 290 volts. The computers require frequent cleaning because of the dust that blows down from the Sahara.”

Telephone subscribers are now approaching 750,000, roughly 250,000 of which have land connectivity. PC and phone usage have grown significantly over the past five years. Currently, there are a growing number of Internet service providers (ISPs), most of which pay between $2,000 and $5,000 per month for their connection. A growing number are using Internet telephony to facilitate phone calls via the Internet for customers who would otherwise use the more expensive land or cellular technologies. This can reduce significantly revenues for Ghana Telecom. In
some cases, Ghana Telecom has responded by shutting down the ISPs (as they are still banned by law), but more and more people are taking their chances with this.

Since charges for international calls are so high, and given the fact that the queue for land lines is 30,000 long, the government will need to introduce additional legislation deregulating the sector, especially to allow for the use of
Internet phones. Until that happens, the telephony infrastructure will remain inadequate.

Labor Laws and the Labor Force

It is difficult to obtain reliable information on the labor market, but there are a few sources. The total labor force is 9.3 million, and unemployment is currently estimated at 7 percent. A recent census showed that 80 percent of the economically active population is engaged in the private informal economic sector, 6 percent in the public sector and 8 percent in the private formal sector. Ghana is a signatory of the International Labor Organization (ILO), and there is a considerable amount of labor union activity in the country. The workforce is unionized, and some of the unions are closely affiliated with international movements and are quite powerful. This affects mainly the formal sector.

The unions include the Trade Union Congress, the Ghana National Association of Teachers, the Civil Servants Association, the Judicial Service Staff Association and the Public Utility Workers Union, among others. There has been a history of these unions vigorously defending the rights of their members. However, some of the laws passed in support of the free-trade zones have had the effect of weakening the unions’ power, as they allow employers to hire and fire at will. This has tended to affect women and children more than men, especially in rural industries, where companies often use children as cheap labor in insecure employment conditions (DMFA 2003).

The minimum wage is set at $0.75 per day. This gives Ghana a significant cost advantage in industries, such as the services business, in which the labor force is a key component of cost.

However, the number of students graduating from universities in Ghana each year is less than 10,000, compared to more than 350,000 in the Philippines or more than 500,000 in India.

This would suggest that although Ghana has a cost advantage over India and the Philippines, the relatively small number of trained workers represents a significant competitive disadvantage. However, as labor costs increase in India and the Philippines owing to the high demand for their workers’ skills, the Ghanaian labor cost advantage will become more pronounced.
 

Political, Regulatory and Financial Environment

Despite the military rule that characterized its postindependence years, Ghana has experienced relative peace and stability compared with its West African neighbors, and its democratic institutions are now becoming entrenched following three successive elections. It has enjoyed a smooth third-term election following the introduction of the new constitution in 1992, and the country—despite its mix of multiple ethnic groups—enjoys complete religious freedom (Addy-Nayo 2001). In the 2000 World Business Environment Survey (WBES) 2000, Ghana was rated “favorable” for government intervention in employment and investment decisions and “moderate” for the helpfulness of the central government today.
Ghana inherited an Anglo-Saxon legal system. However many of the laws are in need of modernization. In spite of the positive findings of the survey regarding Ghana, it is still a very difficult environment in which to do business. A recent report from the Danish government has highlighted the problems faced by businesses (DMFA 2003):
• Many laws and regulations are outdated, complex, overlapping or conflicting with one another.
• Administration of the laws is inadequate, caused by bureaucratic systems and administrative constraints.
• Lack of access to credit and capital is hindering growth, particularly of micro and small enterprises.
• Venture capital is difficult to obtain, hampering the further expansion of medium and large companies.
• Ghanaian enterprises find it difficult to penetrate international and regional markets due to unfavorable international trade conditions and poor product quality.
• An inadequate infrastructure, especially unreliable service from public utilities, results in production losses and high production costs.
• An inefficient system for the resolution of commercial disputes causes prolonged disagreements and uncertain settlements of disputes.
• Insufficient attention is given to research and development, training and retraining, and cost control.

This analysis is broadly in line with the findings of the WBES, although in the survey the government scores high (about 5 on a scale of 1 to 6 on such issues as taxes, government intervention in business and employment decisions). In spite of the government’s efforts, its officials are perceived to be only moderately helpful. The courts’ proceedings are slow, and their decisions can only be moderately trusted. The postal and telephone systems are rated only average. The good news is that these ratings are all higher than they were three years ago.

Corruption

The WBES 2000 is a survey of over 10,000 firms in 80 countries that examines a wide range of interactions between firms and the state.  WBES suggests that there is moderate corruption. This is consistent with Ghana’s ranking in the Corruption Perceptions Index published by Transparency International (TI 2003). Ghana dropped 20 places to 70th out of 132 in 2003, having come in at a credible 50th in 2002. Even at 70th, Ghana compares favorably with its neighbors Nigeria (132), Senegal (76) and The Gambia (92), who are  potential competitors for FDI within the region. The government recognizes these shortcomings and has accepted assistance from the Danish government for dealing with the legal and regulatory aspects of the issues (DMFA 2003). Ghanaians are increasingly finding ways of breaking into the export market and raising capital for Ghanaian projects from international capital markets. One recent example is the raising of about $10 million in the United States for a cocoa processing plant in Ghana (E. Poku, personal communication).

Survey

The authors conducted a survey to examine the thoughts of potential investors and Ghanaians living abroad about the suitability of Ghana for ICT investments and the factors that might limit that expansion. Although the sample of responses is small, the insight provided is instructive:
• Those interviewed expressed unanimous confidence in Ghana as an investment location for ICT/BPO. Given that some of them are entrepreneurs already vested in Ghana, one would be tempted to discount the self-selection. However, the fact that businesspeople are voting with their feet cannot be dismissed lightly.
• The government’s efforts to attract investment were thought to be good, particularly the export promotion initiatives as well as the direct policy framework on ICT, the “Golden Age of Business” initiative as well as the provision of project financing through the Agricultural Development Bank.
• There was unanimous agreement that the government needs to do more to improve its infrastructure—improve electricity delivery, modernize the university and improve the telephone system.
• There was unanimous agreement that political stability gives Ghana an advantage, but this was always in comparison with its neighbours, which have had greater relative political uncertainty.
• There was unanimous agreement that low labor costs gave Ghana an advantage over its competitors, including India, where costs are now beginning to rise.
• A key obstacle to development of the call-center and Internet-café business in Ghana is the high cost of telephone service and the fact that voice-over-Internet protocol (VoIP), which enables a call to be placed to a long-distance location using the Internet (so that the charge is always at the local-call rate), is a controversial issue. The government appears reluctant to allow VoIP for fear of cannibalizing revenues that currently go to Ghana Telecom and other operators, but it has made a concession for business use.
• The issue of VoIP was critical in the minds of some of those interviewed, and it is obvious why.

Voip and Kumasi

Some of the most successful IT businesses in Africa are Internet cafés, many of which would like to expand their services to include telephony. VoIP would cut down significantly on their operating costs and allow them to offer a cheaper service and win market share from the incumbent government-controlled telecom company. This would represent an even bigger cost savings if the technology could also be used in outsourced call centers. VoIP has been held back mainly because of quality-of-service (QoS) issues associated with a new technology, particularly
transmission of voice over a medium that was designed for asynchronous communication. Over the years, there have been significant improvements, and at the end of 2003 Cablevision in the United States became the first major telecom company to offer VoIP services—unlimited long- distance and local calls for a monthly fee—to customers (Joyce 2003). This is a clear declaration that the QoS issues have been resolved.
• Given problems with the telephone network and the resistance to VoIP, some respondents felt that Ghana may be a long way from running large-scale voice services; however, it is in a position to benefit from data services right away.
• Some respondents felt that the government is not doing nearly enough to market Ghana or specific areas like Kumasi, as a brand that can be associated with BPO activity—as India, for example, has done successfully with Bangalore.

Ghana’s IT/BPO Sweet Spot

The global BPO/IT services opportunity is projected to grow from about $2 trillion in 2000 to $5 trillion in 2003.
The market in India has grown by as much as 40 percent CAGR (over the past five years). Given the government’s initiatives, the cost advantages and the fact that Ghana (like India) is an English-speaking country, this presents an attractive opportunity for Ghana.

Currently, there are 10 U.S. IT/BPO firms in Ghana, the 7 most important of which have made
small but significant investments in Ghana since 2000:
•
Global Response Ghana MG — contact center and fulfillment services.
•
Rising Data Solutions — established the first English-speaking call center in West Africa in 2001; mainly involved in medical billing.
•
BusyInternet — Africa’s largest technology incubator, with a 100-PC Internet café, high-tech-serviced offices for rent and a 24-hour digital copy center. It provides businesses and the public with affordable state-of-the-art ICT services. The company became cash flow positive after seven months (GCG 2003). The facilities are currently used by 1,800 people per day and have incubated 10 companies.
•
AQ Solutions — specializes in application design, programming and software database development.
•
Data Management International — with 40 workers, processes environmental fines for New York City (NYC). Recently signed a two-year, $910,000 contract with NYC to continue to provide these services.
•
Supra Telecom — provides data-processing services for export; established in Ghana with 65 employees and currently has a 900-seat call center that is expected to be expanded to more than 1,000 seats by the end of 2004.
•
Affiliated Computer Services (ACS) — established in Ghana in November 2000 with 85 workers; currently employs more than 1,400 people, with the number expected to reach 2,000 employees by the end of 2004, and with an average employee salary of $1,000 per year, compared to $20,000–$25,000 in the United States (GCG 2003). ACS is a major global player, with a presence in nearly 100 countries, including India. Up to 20 percent of its business comes from investments made abroad.

In the space of a few years, the firms together invested tens of millions of dollars, partly because of their confidence in the government’s policies and partly because they expect the BPO space to continue to grow in Ghana. The space will almost certainly grow, but since Ghana is competing with other countries for these services, such growth will be difficult. Other countries saw the need earlier

Times News Network, “Outsourcers look beyond cost advantage,” Indiatimes.com, October 16, 2003,
http://infotech.indiatimes.com/articleshow/236503.cms.

Given India’s more advanced economy and the increasing demand for higher-skilled work due to its success with
outsourcing, one would expect the wage differential to increase as competition for higher-skilled workers drives up the price of Indian labor (Feenstra and Hanson 1996). GCG reports that annual Ghanaian wages for IT specialists can be as lower than $1,000 per year. In India, the figure for IT specialists is closer to $6,000 per year.

Only two African countries are in either the “Rookie” or the “Up-and-comer” category; the rest are not even on the map. The BPO pyramid shows that Ghana can grow its BPO activities in areas that constitute low-margin, low-skill work, such as data-transcription services, document-management services, archiving of paper documents and expense-claims-management services. Ghana should be competitive, owing to the large labor cost arbitrage. Additionally, it can also enter the call-center space, but this would need to be limited to such tasks as surveys, help desk (e.g., password reset or lost card reporting) and basic customer services. It is interesting that Rising Data Solutions, which was the first company to set up a call center in Ghana, later switched its business after only four
months to concentrate on medical billing. Sambou Makalou, CEO of the company, believes that the Ghanaian temperament is more suited for customer care (because of patience) than for telemarketing, which requires a bit more aggressive approach.

If this is the case, then focusing on back-office-intensive operations or service rather than sales and marketing call-center operations would play to Ghana’s strengths. Call-center work requires a considerable telephony and Internet infrastructure as well as reliable and uninterrupted power supply—both problems in Ghana. The former can be minimized through the use of VoIP technology, which should become mainstream over the next few years. The lack of existing infrastructure gives Ghana an opportunity to leapfrog into the most cost-effective technologies from their low starting position. However, as mentioned earlier, the government has approved VoIP for business operations but restricts its private use. In principle, this should not prevent companies from using the technology, but the business community would benefit from government clarification in this regard, especially considering that the QoS issues—once a real obstacle (Hardy 2003)—are now largely resolved.

Ghana can participate in the higher-level segments on the BPO pyramid (exhibit 7) only after the infrastructural issues are resolved. Higher-level work (segments 3 to 5) comes with much higher margins but requires more advanced technical and professional skills. This is an area in which Ghana lacks a competitive advantage—at least in the near term, given the lead of such countries as the Philippines and India. In fact, although Ghana has a cost advantage, it is not the most important factor that companies consider in offshoring. The business environment as a whole needs to be right, giving the host nation not only a wage but also a total cost advantage.

The authors’ research suggests that segment-1 activities are within reach. Transcription services, for example, present a good opportunity. Transcription does require a reasonable amount of skill, but a number of courses are provided through various institutions, and there is a relatively active industry association, the American Association for Medical Transcription (AAMT). Much of transcription work can be done offshore at a significantly lower cost than the $31,400 average salary the AAMT reported following a survey of its members in May 2002.

There are several other job categories that fall in segment 1 for which Ghana would have a distinct advantage in terms of cost and service; for a small increase in salary in Ghana above the average wage, the motivational impact can be significant, even while the salary remains a fraction of the U.S. wage for comparable work.

(enjoyed by the usual suspects as privileged neocolonial class absolutely determined not to allow the spread of free education - that's being irrefutably confirmed by a current action research cycle - Ed.)

To be contd.