"Current market failures come in two varieties. The first is the decision to go after only consumers at the top of the economic pyramid. Intellectual property-based technology companies calculate their economic returns on the basis of pricing decisions, essentially on what prices they deem the market will bear. A given product may cost $3 in manufacturing costs to make, but may be sold at over $100. If the product provides enough value (for example, a drug that cures a deadly disease affecting many populations, including the affluent), there may be customers who can afford the price and willingly pay it. As a consequence, the product becomes unavailable to those communities that cannot afford the set price, and, therefore, their needs remain neglected.
"This is not to say that these companies make 97 percent profit margins. Often there are incredible sums risked in the creation of new technology, and those investors need their return. The costs of marketing and distributing to affluent customers typically far exceed the manufacturing costs. These marketing and distribution systems are unable to serve disadvantaged communities.
"The second market failure occurs with niche products: those that solve specific problems but lack lucrative markets. These products generally do not get built or brought to market. To continue the analogy, a drug that cures a deadly disease affecting only the poor in India will never be brought to market by a Western pharmaceutical company. It simply will never pay for the cost of the drug approval process. The company makes the responsible decision for its shareholders and drops the product, frustrating the potential users of the drug and the innovators who created it to save lives.
"Looking at the social sector from an information technology background brings some unusual insights. Dr. Patrick Ball, a leading human rights statistician, has outlined a view of the human rights movement as an information processing industry, also organized as a pyramid. Grassroots groups around the world are the base of the pyramid. They gather the raw materials of human rights: the stories of individual suffering and loss. National and issue groups are higher up the pyramid. They process this information into more refined products, building the larger case that there are patterns of human rights abuses that require reform, justice and change. Finally, at the top of the pyramid are the major international human rights groups like Human Rights Watch and Amnesty International. Human Rights Watch produces carefully crafted research reports that refine the work of the groups and activists in the field.
"The human rights field is therefore an information processing industry. Unlike information processing industries in business, mortgage processing for example, human rights is not enough of a market to drive the creation of products designed to meet industry specific needs. As a result, the information technology tools used are mainly the generic software applications such as e-mail, Web pages and word processors. Only the handful of groups at the top of the pyramid have their own IT departments to create mission-critical applications. Consequently, an entire sector processing critically important information makes do with tools that only do part of the job."
I was feeling that, man, right up until the end. "As a result, the information technology tools used are mainly the generic software applications such as e-mail, Web pages, and word processors. . . . An entire sector processing critically important information makes do with tools that only do part of the job." Huh? I can think of a *whole lot* of things that grassroots activists could use more than refined IT tools. But if someone could point out the error of my thinking, i'd be glad to hear it.