Can OLPC Strengthen Local African Technology Sectors?

The One Laptop Per Child (OLPC) project has revolutionized the way the computing industry thinks about the developing world. However, I fundamentally disagree with OLPC's business model. Founder Nicholas Negroponte (NN) spoke at the Fletcher School last night, so it gave me occasion to sharpen my thoughts on improving the project.

via curioslee's photostream

OLPC sells laptops in two ways. First, at the head of state level, and second, at the individual level [the 'Give 1 Get 1' (G1G1) program]. Selling mainly through heads of states is a strategy that Breznev would have been proud of. Just as US food assistance ruins the livelihood of farmers in the recipient countries, OLPC ruins the nascent technology industries in these countries. Instead of surpassing these industries, OLPC could help strengthen them.

(i) Hardware Distribution and Maintenance Industry
OLPC should develop a strategy to integrate local hardware distribution and maintenance providers into the value chain. They could identify five such companies in each country, and allow them to compete with one another to distribute the laptops and provide support. While OLPC should be agnostic about where sales happen [nat'l gov, local gov't, individual], local partners would add value by adding local intelligence on political hurdles, logistical issues, ect.

NN is against this because it would add cost. I don't see this as a liability for three reasons: (i) b/c this would likely lead to more volume over time; (ii) it would better reflect the true cost of the product [w/ maintenance, distribution, ect]; and (iii) it would likely still significantly undercut the cost of the competition [OLPC costs $187, and from what I understand, Intel's Classmate is still well over $200].

(ii) Hardware Production Industry
A bolder idea would be to freely license the hardware design and allow any hardware designers to manufacture and sell the product to schools, businesses, distributors or anyone else. Instead of wealth flowing from national treasuries to one factory in Shanghai, other factories, not only in China, but also in Nigeria and Brazil, could produce the product. [HT: OLPC News]

OLPC would continue to be an educational project, but the technology could be re-branded and sold around the developing world. NN's response is again cost. He legitimately points out that he would lose economies of scale. I wonder if over time, however, freely licensing the hardware designs would lead to laptops in the hands of more children.

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Last night, NN told the story of when former Nigerian President Obasanjo gushed over the project but failed to make a real commitment before he left office. His successor, President Yar'adua, was not interested in Obasanjo's pet projects, so the deal fell through. This alone shows the problems with head of state approach.

I have yet to see actionable plans for (i) and (ii), but I'm wondering if there aren't some earnest business school students out there already working on them.