Amid the cow pastures and potato fields of San Joaquin Cutris, a remote Costa Rican village with 500 residents, one telephone line, and neither a doctor nor post office, sits what some Hewlett-Packard Co. (HWP ) executives believe may be the Information Age's Next Big Thing. It is a white, recycled shipping container with a satellite dish and screen doors and windows on the ends. A giant tent-like tarp shields it from the blazing sun and seasonal rains. Inside are six PCs, a digital scanner, and a TV that faces outside.
The structure is one of the more than dozen telecenters HP has helped set up in impoverished areas of Costa Rica, the Dominican Republic, and Senegal with the help of nonprofit groups. Since the San Joaquin Cutris center opened Apr. 29, dozens of villagers have been surfing the Internet, swapping e-mails with overseas relatives or searching for information, and watching health and agricultural training videos. Equipment for sending electronic medical and soil data to labs will arrive soon. "Already we're less isolated," says Freddy Murillo, a dairy farmer who persuaded the Costa Rica Foundation for Sustainable Development to put a center in the village. "This project is going to bring many benefits to our community."
Such efforts won't make a dent on HP's bottom line for a while. But the company insists the project isn't charity. The computer equipment giant has a two-tiered plan for making money from the far edge of emerging markets. First, it hopes to profit by selling equipment for these hardy info-tech centers, most of which are funded by governments and private foundations. The company says it is also landing multimillion-dollar IT contracts from African, Asian, and Latin governments, which now know and trust HP because of its involvement in development programs.
SEED CAPITAL. What happens next is anyone's guess. But HP's managers hope that spreading IT throughout the Third World will result in new businesses no one had imagined, and trigger huge demand for simple and economical computer products. If anyone can turn this vision into reality, it's HP. A pioneer in nations like China, Brazil, and Singapore for decades, it derives 60% of its $41 billion in sales overseas. Now, HP hopes to develop what may be the great marketing frontier of the coming decades. "The wealthiest 1 billion people in the world are pretty well served by IT companies," says Lyle Hurst, director of a year-old HP program called world e-inclusion. "We're targeting the next 4 billion."
HP has worked with grassroots social groups, aid agencies, and local governments to learn what consumers in low-income nations need. The research revealed demand for low-price, simple IT devices and ways to connect them to the Net. That's where the telecenter comes in. If it wins enough orders, Lyle says, HP will be able to provide fully equipped centers with computers, satellite hookups, and solar generators if needed. HP picked Senegal, a regional commercial hub, as a showcase in Africa. It joined forces there with Joko, a group founded by the popular musician Youssou N'Dour to use IT to create jobs for the poor. HP gave seed capital and staff for a program that has trained 600 Senegalese to use the Net. Thousands are on the waiting list. "There is a huge market of people who want skills," says Abdoul Aziz Mbaye, president of the Youssou N'Dour Foundation, which funds Joko.
Long term, HP wants to spawn a number of profitable businesses from these projects. Centers in Costa Rica already are starting a newspaper and coffee-trading business. In Senegal, Joko will try to help entrepreneurs start e-businesses that enable overseas Senegalese to remit funds and communicate with relatives at home. Telemarketing services for France are another possibility. In hardware, HP is developing derivatives of its Jornada handheld PC to process soil test samples and small-business loans. Yet another project: remote monitoring of U.S. buildings that need security but cannot afford 24-hour staff. Why not have workers in South Asia or Africa watch the video screen? "You don't need somebody who is terribly well-educated to do it, just a reliable telecom line," says Debra Dunn, HP's vice-president for operations.
Dunn says HP will soon unveil pilot projects in these areas. The ultimate payoff is unclear. But you don't get a harvest until you start planting.
By Pete Engardio in New York, with Geri Smith in San José, Costa Rica