I had recently applied for a highly competitive Ph.D. program and, unfortunately, was not chosen. I stated a few ideas I wanted to dig into in my purpose statement. The structured program would provide me with a supportive environment and access to resources, making the research process more efficient and the results more compelling. However, I have realized that I don’t necessarily need a formal Ph.D. program to begin my research and try to solve these challenges.
Modernizing Search Theory
My primary research interest is adapting the classic Search Theory to the increasingly complex digital environment. Most research on search theory focuses on the labor market, but I believe there are new opportunities for more efficient cross-border buyer-seller connections.
Traditional search theory focuses on the intersection of someone who wants something with someone who is offering it. The mathematics of the theory suggests that there is a point where it is no longer valuable, with diminishing returns, for the buyer to keep looking for the item. The buyer must decide whether to purchase the item immediately or continue searching for a better source. focuses on reducing friction between buyers and sellers.
When I first read Dr. George Stigler’s “The Economics of Information, ” he introduced the idea of the value of information via a buyer’s quest to understand the range of prices for a similar item. Dr. Stigler went on to win the Nobel Prize in Economics for his adaption of this theory to finding jobs in the labor market.
Reading this paper and others on Search Thiery brought me back to my business school thesis. I hypothesized that a business could extend its reach and access to a market by using international search engines. Using the internet and local search engines becomes a relatively inexpensive entry mode into new markets. In my original paper, I wrote of my experience selling earthquake preparedness kits in Japanese on a search engine like Google or Yahoo. At this time, my company was the only business with a website in Japanese and the only commercial entity that appeared in Japanese search results.
However, if the exact search is conducted in English, kits from all over the world become available, and the decision factors then become the contents of the kit, price, and availability. My expanded research will focus mainly on removing physical cross-border trade’s price and information friction. There has been limited depth on the benefits and complexity of the rapidly growing digital markets and marketplaces.
Businesses can sell their products through online marketplaces like Amazon, Mercado, or Timo. By doing so, we can consider setting up dedicated distribution, establishing supplier partnerships, or taking advantage of the marketplaces’ popularity to reach a wider audience. This approach could potentially shorten consumers’ traditional search process.
Empowering a Digital Peace Corps
I am firmly committed to the idea that the efficient use of digital technology in least-developed countries (LDCs) can help improve, if not solve, many social challenges and become an engine for their economic growth.
Several times during my time at the Fletcher School, talking to my classmates about their experiences around the world, I kept coming back to the idea of a Digital Peace Corps. This would involve recruiting several young and passionate people to be trained on various digital skills to take back to their villages and help them thrive.
There are two key areas of focus. The first is the simplest: educating these workers on existing technology and how to get locals to adopt it. During many of the debates in class on economic development, my classmates spoke of the frustration of millions of dollars being infused on a location being wasted due to the last-mile implementation. In Indonesia and Africa, there are cases where agricultural marketplaces were created. Still, the farmers either did not have a way to connect to them, or they were complicated to use. These digital specialists can help with connectivity issues and walk the farmer through the process of posting their harvest for sale.
One of my policy papers suggested that the Indonesian government should support investments and initiatives around Indonesia’s 3.5 million warungs (corner stores). These shops, many in the front room of a house, represent nearly 70 percent of the country’s grocery market sales. I wrote this during the pandemic as e-commerce went from a small segment to significant growth. I argued that helping these businesses automate would make them more efficient and open them up to more products and financing, reduce supply chain costs, and help with tax collection. The biggest challenge was getting older owners to adopt and learn technology. My plan leveraged the online training incentives implemented during COVID-19 and employed youth to visit these shops, demonstrate the functionality, and show them the benefits. Recent research from Flourish Ventures indicates that 84% of these mon-and-pop shops have adopted the technology, but only 28% feel comfortable using it. Many surveyed indicated they wished someone could help them better understand it and show them what else is possible.
Tourism is The second area where I see an opportunity with a relatively easy implementation window. I believe some parts of the world have something interesting that would come if people were aware. I am not talking about influencers that descend on a location like locusts destroying the area for the perfect Instagram picture but longer-term sustainable tourism. Focusing on experiential travel, where people are willing to pay a premium for a richer experience. Those in the Digital Peace Corps would be trained in digital marketing, social media, and storytelling, and then they would work with local tourism operators to identify experiences and craft stores to encourage visits. This brings people into the local environment and minimizes the leakage generally associated with more popular destinations, with non-local brands dominating the landscape.
I wrote about this idea in an article titled “Can Sea Slugs Boost Tourism,” which was related to the potential of targeting SCUBA divers and, even more specifically, underwater photographers. These photographers will travel to the far reaches of the earth to photograph large marine animals like sharks, whale sharks, and mantas. These photographers, like myself, love the smaller subjects, critters, often the size of a thumbnail in the dark volcanic sands of Southeast Asia. This form of muck diving generated millions in tourism revenue for Indonesia and the Philippines. The most exciting part of the study was that the vast majority of the divers would not have visited that area of the world were it not for the opportunity to photograph these colorful creatures. Note that this group of divers protects the environment to help preserve these opportunities.
Industrial Policy Leapfrogging
I have never been a fan of doing something because that is how it has always been done or because that is the accepted process. Why must countries follow a traditional development flow from agriculture to industrialization to knowledge workers? My hypothesis is “Why can’t there be a form of industrial policy that enables the creation of skill set hubs in places you may not expect?” It is not a simple process, so I framed it as an Industrial Policy and Leapfrogging. Both concepts require significant change, resources, and support to work.
The simple question is, what policies are needed to upskill rural farmers in drought-prone areas to become programmers? I am unsure this can prevent large-scale migration from these areas, but something must be done. It is understood that not everyone can be a programmer or data scientist, but many can. The key is to start early with a plan that enables learning and facilitates the skills needed for these jobs.
The growth of digital has created a significant need for cloud and AI specialists. I believe governments of LDCs should have a country-level cloud infrastructure strategy. A key part of that strategy will be to create a pathway into these highly skilled and well-paying jobs that will be necessary. We have all seen the benefits of digital transformation and cloud computing, and governments cannot hide from this fast-moving technology. A critical part of digital readiness will be strong institutional, political, and people capacity to reap the benefits of cloud computing and data center management.
There is no magic wand, and you cannot just throw money at it. Doing so will fail. For example, in the US, as the restrictions on coal mining changed, there was a need to reskill the miners. Some suggested renewable energy jobs. The idea was to have the miners create or install renewable energy products. That was clearly a bit of rubbing salt in the wounds for most and few in the region supported it.
Today, on the treadmill, I was listening to the Trade Talk podcast, where a Romanian economist described the success of Romania’s industrial policy to build out their own Silicon Valley in Romania. Faced with brain-drain of their skilled programmers, leaving few opportunities and high taxes, they adopted policy changes to incentivize them to stay and for companies to invest in the sector. Not only was this sector a beneficiary of the policy, but many adjacent businesses benefitted from the success. It spilled over into neighboring countries.
Spending Time on Passions
Those are the three primary hypotheses that I would like to try to work on and hopefully take one or more to some level of fruition. So, while it does not look like these will happen in a formal research setting, I can still pontificate on ideas and write with pleasure. I’ll keep you posted on my progress.